The Psychology of Lean Improvements

Why Organizations Must Overcome Resistance and Change the Culture

Chris A. Ortiz

• Publisher: Productivity Press
• Year: 2012
• Print ISBN: 9781439878798
• eBook ISBN: 9781466562288
• Topic: Business
• Subtopic: Operations
• Index: Business

Fear of change we all experience it. Some accept change immediately, some gradually adapt, while others may never get there. Whether it's poor leadership, the inability to change, or pure ego, this Shingo Prize-winning book explores this perplexing commitment to inefficiency.Winner of a 2013 Shingo Prize!The Psychology of Lean Improvements: Why Org

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The Psychology of Change

Fear of change. We all have it. We all deal with it differently. Some of us accept change immediately, some take a little time, others never get there. I really want you as an organizational leader to look within yourself as a potential change agent for your company. Before you can get an understanding of the psychology behind Lean and waste, you have to deal with the way you think as a small/medium/large business owner or company leader. This chapter helps prepare your mind for Lean and leads you toward being a more forward Lean-thinking torch bearer.

Perception of Change

Change is never easy. Even in micro amounts, we as humans avoid change. Some are great at change, but you first need to change your perception of change and possibly what is it inside of you as a business owner or leader that is stopping change in your organization. Small business owners are great examples to use in this because (I am one, so I can relate) it is often the small business owners who strenuously avoid continuous improvement. The reason is that, as an entrepreneur and small business owner myself, we first have to admit that this little “baby” we created may not be all we think it is.

As a small business owner, you came up with the idea, started the business, grew it over the years, and feel that no one else really knows your business. I encounter this a lot in my travels.

Small business owners have a close connection to their companies that even executive leaders of corporations or other business entities do not. You can compare it to parenting. I have two wonderful sons. They are my babies; my wife and I are raising them in a certain way, and, of course, as parents we have a major stake in their success as humans. Even the most experienced nanny or babysitter, who may have been with us for years and knows the in and outs of our children, will never have that connection. Small business ownership is similar.

So in a small business, the first major obstacle in starting a Lean journey is the owner (owners). If you are a small business owner, you need to start thinking about continuous improvement, and maybe the way you have been operating will need to be changed in some form. As I have grown Kaizen Assembly over the years, I have become more and more open to changing how we operate. I struggled in the beginning as I hired people and gave them a say in how I ran the company. I noticed over time as I let go of that hold I had on my “baby” that things began to improve. It was a very fulfilling experience.

Small business owners often need to have their hands in everything and, in many cases, their decisions can hurt the company. Here is a good example.

A few years ago I met with a company that was in the business of assembling military equipment for the government. Most of its operation was true assembly as it really did not manufacture anything. Minor fabrication was performed once parts came into the plant, but mainly the staff were assemblers. It was a small facility and owned by someone we will call Paul.

From a psychology of change perspective, Paul appeared serious about turning his assembly operations into a Lean organization. When we had our initial meetings, I did not see any major obstacles in making internal improvements. Part of the early Lean assessment was to evaluate his company’s supply chain. The company had a few suppliers that provided welded parts, powder-coated parts, and electrical components. Paul’s welding supplier was someone he had been doing business with for many years and, during the early years of the business, the relationship made sense.

Volumes were low from the military equipment side and the small welding vendor could keep up. Due to long setup times and internal inefficiencies at the welding company, Paul was stuck with buying in large quantities and storing them in his small facility. It would take weeks before the lot of welded parts was consumed and it created obstacles for his assemblers. It was just messy. Sometimes the welded parts were incorrectly made and the welder would have to create new ones to replace the defective parts. Lead times were long because the welder could only be set up to work on one job at a time.

Paul also was required to pick up the parts because the welder did not deliver, and they both wanted to save money on delivery costs. So, Paul would have one of his assemblers leave the work area and drive to the vendor. This relationship was probably just fine in the beginning, and as Paul hoped, business picked up. The business elements around him began to change, but, oddly enough, nothing changed internally to adjust.

Paul’s product offerings began to change, so he needed the flexibility of quick changeover to different product lines and faster deliveries from his vendors. Paul had a small facility; thus he did not have space for large lots of vendor parts.

As the Lean journey progressed within Paul’s company, the lightbulb began to come on. He couldn’t maintain the same supply-chain process. The welder was still requiring large lot orders, kept making mistakes, was consumed in long setups, and did not want to deliver. Soon Paul’s buyer began to get a little vocal, as did the operations manager. “Are we doing Lean or not?” they would ask. It was time to meet with the welder and discuss a change in the agreement. Paul was quite nervous because he had been using this buyer for some time and did not want to burden him or hurt his feelings. Paul returned with no good news. Nothing would change. The welder was not willing to make any changes and placed the pressure back on Paul to deal with it. Paul agreed with the welder because he was scared of hurting the relationship.

Keep in mind that I am a major proponent of healthy, long-term business/personal relationships, but this vendor was hurting the long-term growth and profitability of the company. What happened? Paul rented storage space for the extra welded parts, rented a delivery truck to pick up the parts, and the welding supplier continued as usual. Not good. When the economic downturn of 2008/2009 occurred, Paul’s company began to get cash strapped. There were more reasons than just a poor supply change; however, the moral of this story is that small business owners are guilty sometimes of keeping relationships with people or processes that are not helping them—either out of guilt or ego. If this welder was a long-term ally, he was doing Paul no service.

Now, as a company leader (not necessarily a business owner), you have to take the same approach to managing the company. You probably have less or no emotional attachments to the business, but you do have a stake in its success. First, admit that there is room to improve on a large scale and even in small increments. Maybe you need to question your own leadership ability and how you perceive change. I realize it may take time, but change your perception of change. Don’t be scared; fear will get you nowhere. When you open your mind to change and continuous improvement, doors will open everywhere and there are endless possibilities of where you can take your organization.

Victimizing

One of the elements of Lean and the perception of change is overcoming the concept of victimizing. Some of you who are experienced in Lean will know precisely to what I am referring. As you begin to change your perception of change for the better, a similar paradigm shift will have to happen with your employees. Victimizing is an early occurrence in Lean journeys and we see it in all work environments, especially in administrative functions. Victimizing, at least within Lean, is the sense people have that the company is reducing waste for no real reason; basically, making change just for the sake of it. It almost borders on a feeling of being personally attacked. A very common example is when Lean implementations include reducing the amount of tool or supplies to get better organized and to reduce cost. The Lean concept of 5S (sort, set in order, shine, standardize, sustain) or the visual workplace is a good example of this. I will discuss this in greater detail in later chapters, but the visual workplace is created to provide a clutter-free, aggressively organized work area where tools, for example, are on vertical shadow boards and easily accessible. The first step in getting there is sorting through the area and identifying what is needed to perform the job. As the 5S team is sorting tools and removing what is deemed unnecessary, I often hear from resistant workers, “What are YOU going to do with MY tools?”—You, Me, You Guys, Us, Them, etc. These types of comments are a clear sign of victimizing and why the bigger picture of Lean is not yet clear in the culture.

People become very attached to their space and, oddly enough, to things they don’t own. In an office cubicle or in a production workstation, there is a sense of oneness with the “stuff” at their disposal. Often it is the only place at work that they feel they have control over. Office workers are much more attached to their surroundings than production workers or even maintenance technicians.

You can sense the anxiety in people when their work area is being changed and, more severally, when they feel that there is no real reason why (at least in their minds). Victimizing can be reduced in your organization once you become metric driven and instill a sense of purpose. The end of this chapter shows you how, but until then be ready for the finger-pointing to begin.

Letting Go

Some call it delegation, I call it letting go. Letting go as a leader is difficult. There is a difference between delegation and letting go. Delegation is simply the allocation of the proper resources to get a job complete so that you can focus on other things. I delegate the printing and creating of training booklets to my project coordinator so that I can focus on running the business and supporting our clients. Creating training booklets is not below me as a business owner. It is an important aspect of the business and I could do it if needed. However, that is a responsibility I simply delegate to the coordinator, and she is good at it—so even better for the company.

Letting go is different. It is the releasing of the emotional attachments to the business that are hurting its ability to improve. More importantly, it’s the letting go of your resistance to change. A good example of this is a client we have in Bellingham, WA. The company is a supplier of various military, diving, and other outdoor products and owned by a husband and wife. They started the business some 30 years ago, and it has grown into a market leader in its industry. The owners are nearing the end of their time with the business, and their involvement is decreasing every year. When initially contacted by the company, we were approached by the operations manager who was tasked with finding a Lean consultant to assist them. After our initial meeting with the operations manager, CEO, and CFO, we knew that these three people were running the day-to-day operation, but the owners were still involved. I wondered how the owners’ involvement would affect the early stages of the Lean journey, hoping they would not be another “Paul.”

I had a chance to meet with the owners over lunch one day. I could tell right away they were not going to be an obstacle. They were extremely open to change and trusted the people they had hired to take on the emotional side and the implementation side of change. Although with some minor bumps along the way, they are slowly turning into a Lean organization from top to bottom. Improvements are ongoing, results are showing, and the owners are just paving the way. They have let go of their emotional attachment to the business and thus make sound decisions.

This company also has a very large administrative function of sales, marketing, graphics, customer service, accounting, and purchasing. This openness to change is seen in every function of the company. Now, of course, as owners, they won’t let the shop sink and get derailed; they have embraced change and are allowing the improvement to happen. Things could have been the opposite, with the owners making all the decisions and holding on to old ways of thinking, but they have refused to do this and, therefore, the sky has become the limit for their company. That is letting go.

Lean Is a Battlefield

Our psychological analysis of Lean and change now heads into the trenches of your organization. When company leaders break their emotional hold on the business and steer it toward a path of continuous improvement, the people below them now need to do their own soul searching. Word on the street may be that the company is embarking on a Lean journey, but the employees will get their own taste during the actual projects. We now find a unique psychological battle.

There are two responses you will get from your employees when it comes to waste reduction. The first one is the fear of job loss. Improved productivity and reduced cycle times may be perceived as less work, and then less jobs. Unless the company is nearing complete bankruptcy, Lean is not intended to eliminate jobs. Second, you will find instant buy-in.

Resistance to change will come in a variety of forms, and we as consultants can see it at all levels. Frontline workers may or may not see Lean as “Leaning people out.” The philosophy of Lean truly should be used to help grow the organization, secure and create jobs, become more competitive, and, most importantly, satisfy the needs of your customers. One of my favorite sayings to production workers when I explain why the company is going Lean is, “Your customers require it.” It places them right in the face of those people and companies buying product or service products from them.

A key implementation technique in Lean is kaizen events. Kaizen means continuous improvement in Japanese; thus, a kaizen event is a continuous improvement event. It involves a scheduled timeline, such as five days, a selected team, a selected work area, and goals for improvement. During kaizen events, the teams are quite busy making changes. They might be rearranging the work area for better flow of product, implementing a visual workplace, creating procedures, developing new fixtures, designing special tool holders, building shadow boards, etc. Lots of multitasking, evaluations, hard work, and results happen during a kaizen event. The result could be that of improved productivity, reduction of floor space, and reduction in inventory. Kaizen teams are generally exhausted because the amount of work done is compressed into a short time frame. Afterward, kaizen teams will provide a tour of the new area and show off their results. And, rather than stepping back and really taking in what just got done, you hear, “Why did you pick blue bins instead of red ones?”

This is a good example of what you will have to deal with. People often find something “negative” or out of place to recognize, and not the good things. This is just part of the resistance to change even if it does not involve the person making the comment.

Change can be difficult. Even though positive transformation can result, changing paradigm, breaking old habits, and discarding established routines can be tough transitions for anyone—management included. We, as Lean practitioners, have been preaching for years about the importance of getting management’s commitment to change. The necessity is as old as the Lean philosophy itself. Nevertheless, lack of commitment from management is the one, definable reason why Lean implementations fail. This is a well-known fact and, yet, many company leaders embark on a Lean journey with initial zeal, only to allow it to fall apart, like every other new idea or program.

Why does this occur? The answer is simple—maintaining the status quo requires very little effort. Business is good and the customers seem to be happy. Profits and cash flow are good, employee turnover is under control, manufacturing processes are running well, and operational conditions appear stable. It is when things are going well that companies often hesitate to implement something new, not wanting to risk what they feel is already a good thing.

If you think you may be perceiving your organization in this way, you must know that you have one, very large group of supporters out there, supporters who want you to maintain your established methods of operating and eliminate any thought of continuous improvement initiatives: your competitors. Your competit...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Introduction
• 1 The Psychology of Change
• 2 Leading the Lean Journey
• 3 The Psychology of Waste
• 4 The Psychology of Dysfunction
• 5 Making Change Happen with 5S
• 6 Making Change with Lean
• 7 Keeping the Lean Fire Going
• Conclusion
• Glossary
• Index