Lean leadership: A tale of two companies

Darren Dolcemascolo
Tags: lean manufacturing

Why do some organizations seem to find success on their lean journeys more quickly than others? Why does it appear that employees are eager to participate in lean at some organizations and are not so excited about lean at others? Based on my observations, I believe the single biggest factor in lean successes is leadership.

Let’s consider two companies, ABC Corporation and its biggest competitor, XYZ Inc. Both of these organizations began their lean journey about one year ago, but one has found much more success than the other. 

Both companies put together “lean” core teams that were thoroughly trained in the Toyota Production System methodologies, and both had the same lean (outside) teacher who performed the training and facilitated the first value stream mapping and kaizen activities at each.

ABC Corporation, within the first few months, made substantial gains in productivity on the factory floor and reduced work-in-process by more than 80 percent; within the first six months, ABC had begun reducing finished goods and had a plan in place to reduce their FGI by 60 percent before the end of 2007. Employees at all levels were beginning to make suggestions for improvements and were asking when they would be able to participate in a kaizen event. The vice president of operations and factory-floor employees are on a first-name basis, and the VP of ops has made a concerted effort to talk to employees about lean, its importance to the company and its value to them as individuals. Not only did he do this in a formal setting, but he does this regularly on the factory floor.

XYZ, on the other hand, has completed some kaizen events that have identified improvements, but the improvements have not “stuck.” XYZ’s vice president of operations, after three months, had considered halting the program because he believed that the employees were not ready for lean. In contrast to his ABC Corporation counterpart, this VP almost never visits the factory floor, and many of the operators are not even sure who he is.

After studying both organizations, I’ve compiled a list of some examples of actions ABC’s management has taken that have contributed to its success in contrast to those things that XYZ has done.

ABC Corporation

XYZ Corporation

Had all executives trained in lean; vice president persuaded the division president of lean’s benefits.

Held brief overview of lean for executives. Most were OK with the idea as long as it did not impact their organizations negatively.

Division president and the VP of operations attend kaizen event kickoffs and reports-out.

President never interacts with low-level employees. The VP of operations occasionally does, but never on the shop floor.

Clearly communicated what lean means to all employees, not only at formal meetings but on an ongoing basis.

Communicated lean benefits to the organization at employee quarterly meeting.

Rewards employees for their lean ideas and participation

Expects participation from all employees; rarely recognizes an employee’s contributions to lean.

VP of operations visits the factory floor daily and talks with operators

VP of operations rarely visits the factory floor.

Top management backs up its support of lean by stating that participation in lean events supersedes all other meetings/activities.

Top management stated that lean was a high priority, but many kaizen events are cancelled or poorly attended due to more pressing issues.

VP of operations actually participates in events on occasion, and the team members (including operators) are very comfortable with that.

If the VP of operations participated in a kaizen event, it would likely be a one-man show.

Management stated that no layoffs would occur due to a lean improvement, and it has backed up that claim.

Management said that lean was necessary to keep the factory in the U.S., but made no promises. Employees are skeptical.

While both organizations had identical training and very similar business models, the results they achieved are markedly different. Leadership style and approach to lean are key to creating a lean culture. Without a lean culture, some success is possible, however it is impossible to achieve the kind of breakthrough improvements you might read about in case studies.

About the author:
Darren Dolcemascolo is an internationally recognized lecturer, author and consultant. As senior partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS and ASQ. He has a bachelor of science degree in industrial engineering from Columbia University and an MBA with graduate honors from San Diego State University. To learn more, visit www.emsstrategies.com or call 866-559-5598.