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Continuous Improvement Development Guide

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Continuous Improvement Development Guide (TM)

VOLUME II: Committing

Basic Volume Information

There comes a point in every company’s existence that it questions how it does business. There are a variety of reasons for this. It could be as simple as an individual pushing for change. Maybe she has experience in an alternative method from another company or learns about something new and sees an opportunity.

It could be something more pressing that spurs change. Perhaps the company is battling an upstart competitor that is rapidly gaining market share or sees the writing on the wall related to obsolescence of a key product line. It might even be a run-of-the-mill, good old financial crisis.

Regardless of the reason, though, the company faces a decision, and the decision is never an easy one. They have to sift through countless options and weight the costs, benefits, and risk of each one. And in the end many companies simply choose the status quo even though they recognize that it is not sustainable in the long term. Changing can simply be too hard to commit to.

If the company does decide a change is necessary, though, the commitment phase is far more than just announcing a change. The leadership team has to thoroughly investigate what a continuous improvement culture is and what kind of structure they need to create to support it. A strong business management system is critical to continuous improvement success, but it is not easy to develop and it cannot be created overnight.  

The leadership team also needs to prepare for the change. That means updating the budget. It means figuring out staffing. It means deciding on the source of training materials. It means making the decision about how to manage change. They could bring in help (i.e. a consultant), managed the change themselves, or they might even hire somebody with continuous improvement experience.

There are schedules to make and announcements to craft. In short, there is a lot of work that goes into the process of committing to a major change.

 

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Detailed Volume Information

Purpose

The purpose of this volume is, to be quite candid, to weed out the people that are unlikely to be successful down the road. If the leadership team can navigate through the sections of this volume and are not deterred, the chance of them sticking with their transformation later is much higher. They will start the journey with better information and a greater understanding of the costs they will incur along the way.

The secondary purpose is to give those companies that have already started their Lean journey a way to check their foundation. Even if you feel like you’ve made some progress on your own, this practical guide can be used to confirm and strengthen your commitment. Go through the steps that make sense but skip the ones that don’t. If you have been making progress for a year or two, it’s unlikely that you need to cover the Lean overview or worry about how to announce changes to your team. But you can still benefit greatly from many of the sections.

Boundaries

The committing phase starts with the first rumblings of a continuous improvement program and ends with the communication of the decision to begin a Lean journey.

Timeline

The committing phase has the most variation of any part of the continuous improvement transformation process. That is because some companies take years to decide to take on the challenge of creating a business management system. The progression from when they first hear about the potential of Lean to the actually choosing to move forward can proceed at a glacial pace. The reasons are varied. There may be infighting. A key leader may leave the company, taking momentum with her. The boss may see the need for change, but may be risk averse and scared to take a leap. Worse yet, some get mired down in deciding what to do, but never actually take action.

On the other hand, there are those that instantly ‘get it’, and make the leap without hesitation. Even in these cases, it might still take a few months to work through all the sections and get the core leadership team on the same page.

So the bottom line is that in the best of cases the committing phase will take about two months. In the worst case the decision could drag out for a year. Generally if a year passes and you are still talking about making a change, inertia has won. The leadership team is unlikely to be successful at the much more challenging phases if it takes them longer than a year to commit to creating a business management system.

Key Principles

  • Build Relationships: A successful business management system has many moving parts. Those parts—the different groups of people with their own needs and personal objectives—have to work together effectively of the system will fail. While the impact of these relationships is most profound in later phases, the groundwork for these relationships has to be laid early.
  • Develop Trust: A large component of relationship building is trust. Trust goes far beyond just relationships. And it goes both ways. Leaders have to believe that their teams are competent to handle the challenges of a continuous improvement culture. And perhaps more importantly, teams have to believe in their leaders. They can’t worry about whether the boss is looking out for them or just using them as tools to make a profit.
  • Develop Leaders: Without strong leaders, there is little hope to build a successful business management system. They have to be able to overcome resistance to change and get people operating outside of their comfort zone. They have to be willing to establish stretch goals that have a high risk of failure. They have to be able to stand up for what is right even when it’s not popular or not easy. One of the challenges is that this leadership is not generally readily available in the job market. The company has to cultivate it on its own. Fortunately, a strong business management system built upon a continuous improvement culture makes a fertile field. There are plenty of opportunities to mentor leaders in this environment.
  • Show Respect for People: One of the reasons that Lean has a bad reputation with many people is that this principle is frequently violated. In fact this is one of the reasons that there is an ongoing battle between workers and businesses. When people are treated as commodities or means to an end, it is no surprise that they don’t feel valued. The truth, though, is that there are two good reasons to show respect for people within your company. The first is that it is simply the right thing to do. Work, though valuable and often filling, is a means to an end. Saying things like, “its just business” is plain wrong. Business doesn’t give you a justification for casting aside your morals. The second reason is that respecting people is good for business. Engaged, satisfied employees do better at their job and go above and beyond what is expected of them. That’s good for business. One final thought: respect goes both ways. It is often looked at as managers respecting employees. When workers are disrespectful to their bosses is more than just insubordinate. Bosses are people too. Treating them poorly is just as morally bankrupt as when a manager disrespects his team.
  • Think Long Term: The modern stock market has helped businesses grow through the ready access to investors. Unfortunately, becoming a publicly traded company is something of a double edged sword. Once a company shows up in the stock market, the pressure to provide ever increasing quarterly returns is relentless. But becoming a strong Lean company takes time. This disconnect can make for hard choices by leaders. For example, there can be pressure to lay people off in slow periods, but those people, in a Lean company, have had countless hours of management coaching invested in them. Leaders have to recognize that chasing short term profits is exceptionally costly in the long run.

Risk

Extreme.

It is extremely easy to get derailed during the committing process. For the most part during this phase, executives have little vested in creating a business management system. There is little emotional attachment to the program. That means if they change their mind or fail to commit there is very little cost to write off.

The decision-makers they also be deterred by the knowledge they gain. As they learn more about what will be expected of them and of their employees under a robust business management system, they may be discouraged. The truth is, this is somewhat by design. We want companies to have a full understanding of the degree of work that will be required to make this fundamental change in how they manage the company. We would much rather someone chooses not to even attempt this change than two begin it halfheartedly with a great chance of failure.

The risk we are talking about here is that companies will not commit to a full rollout of a new business management system. There are still many great tools that can be used effectively, even without a formal management structure in place.

Core Team

Senior Leaders

Major Activities

  • Commit to creating a continuous improvement culture.
  • Study what the development of a business management system requires.
  • Assess the organization.
  • Identify mentors, if needed.
  • Educate and rally support of middle management.
  • “Sell” the need to change to team.
  • Commit resources to journey.

Key Prerequisites

  • Mission statement
  • Core values
  • Strategy

Key Deliverables

  • Pre-Lean Assessment
  • Announcement to team

Managers

Major Activities

  • Prepare to manage change in frontline teams.
  • Study managers’ role in the development of a business management system requires.
  • Discuss concerns with team members about coming changes.

Frontline Leaders

Major Activities

  • Listen for issues with frontline teams.
  • Begin studying continuous improvement principles and tools.

Frontline Teams

Major Activities

  • Communicate concerns with leaders.

Infrastructure

Resource Team

The resource team will be selected later. At this point, senior leaders and managers should identify potential candidates.

Resource Area

  • Select a project area.
  • Identify suppliers for project area. Create a list of required materials.
  • Budget for resource area.

Knowledge Management

  • Select / develop training materials.

Forms & Tools

  • CI Contract

Mentorship

Internal Expertise

  • Hire/identify employees with continuous improvement expertise (or potential).
  • Select a ‘program leader’ to navigate the company through this practical guide.

The ultimate goal is to create a strong cadre of individuals with continuous improvement expertise to lead the organization. In mature Lean companies, there is often a migration back and forth between leadership and continuous improvement roles. In fact some companies use continuous improvement positions as a development opportunity for future managers.

At this point though, it is unlikely that you will have a high level of experience with continuous improvement. It is entirely possible though, that you have a handful of individuals who have worked in other Lean companies and bring talent to the table. It is important to identify those individuals as well as others with the right characteristics to develop in the future.

External Coaching

Experienced coaches can make a fairly accurate assessment about whether the company is ready to commit, and what is holding it back. There are some warning signs that companies display when they are not fully ready to commit. A good coach can help break down those barriers and prevent wasting resources when there is a reduced chance of success.

  • Decide on level of external support required.
  • Identify coach.

Support Team

Human Resources

Major Activities

  • Coach leaders on change management.
  • Support hiring internal expertise.
  • Manage personnel issues.
  • Support communication plan.
  • Do personnel review for special situation / potential problems.

Information Technology

The information technology department is not heavily involved in the commitment phase, but they may have a fairly long lead time when it comes to creating systems or hiring talent. One of the requirements of Lean efforts is that changes should happen very quickly. Many IT departments are fairly slow and have a long list of backlogged projects.

Senior IT leaders should look over this program and think through how they will need to change their capability and capacity. That is not to say you should go out and start hiring people in adding equipment at this point. What it means, most likely, is that they will need to adjust their plan.

Some potential information technology needs of a business management system are:

  • Macros and other program automation to improve administrative processes
  • Customization of ERP style systems
  • Internal website development.
  • Networked and on systems and other production control tools.
  • Mobile device app development.
  • Programming for automated poka yoke devices.

The point is not to be all-inclusive with this list. It is more of a warning order to allow senior IT managers to alter their hiring plan to bring in talent with a wider range of expertise. Planning ahead now can save costs later.

Facilities

The facilities team will take on a much greater role in supporting production when the company focuses on continuous improvement. They will do more movement of machinery and equipment. They will build more customized benches and shelving. And they will be asked to do more things with a shorter lead time.

During the commitment phase, there is not a lot of need to make changes. What is important, however, is that any schedule changes take into account future needs. And any hiring decisions should keep in mind the additional role the facilities team will play continuous improvement.

Tooling

The tooling department will face an increased load when a team is focused on continuous improvement. Requests for poka yoke devices, right-sized machines, and a wide array of improved tools and fixtures will cause a dramatic spike in their demand. This will taper off somewhat in the later phases, but will still remain significantly higher than before the continuous improvement culture was developed.

Tooling teams will need to look closely at both their capability and capacity to determine how well they will be able to support the rising demand.

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