As companies implement lean management the responsibility of leaders is critical to successful change management. All significant change in the culture of the organization requires strong and dynamic leadership and this must come from not only the single leader, but the leadership team as a cohesive model for the organization.
I have coached many senior management teams and observed their norms of behavior. Of course, they are diverse. However, in many companies the job of the senior management team is not clear. The quality of problem-solving and decision-making is often not what it should be. And, despite good intentions, the senior leaders often do not know how to provide leadership to a change process. So, the following are a few suggestions for your senior management team.
Membership: Does the Leadership Team Represent the Core and Enabling Processes?
Who should be on the senior management team? I am not asking about personalities – that is another discussion – but what is the role and responsibility of each member? I suggest you do a high level, from thirty thousand feet in the air, map of the core and enabling processes of the organization. If I said, as I have, “You can use only ten or twelve boxes, now arrange them in terms of the flow of work that represents the entire organization – no details, just the big blocks of activity that add value,” what would that look like? Believe it or not I have seen senior management teams spend hours debating what are the big processes, the big sets of activities, that comprise the value adding work of the organization. I have had a CEO turn to me during this discussion and say “It’s amazing that we don’t even know what do that is important!”
The senior management team should be comprised of the senior executive of each of the most important core and enabling processes. Core processes are those that actually produce the product or service for customers. Enabling processes are those that enable the core process, such as HR, IT, etc. The leaders of each of these processes should be on the senior team and be accountable for the effectiveness of those processes.
What is the Value-Adding Work of the SMT?
In too many cases the senior management team spends most of their time looking in the rear view mirror, evaluating yesterday’s performance, looking over the work of others and paying little attention to their own work. Reviewing financial reports and other data on yesterday’s performance has value, but it essentially sitting in judgment rather than doing anything pro-active. What does the senior team do themselves that creates value?
Here is a rule of thumb: 25% of the time that the SMT meets they should be reviewing data on the performance of others in the organization. 75% of the time they should actually be using their minds to create value going forward.
Every team in the organization, from the first level production teams to the senior management team should own at least one process, they should measure the performance of that process, eliminate waste, and improve the value created by that process. Too often management teams don’t know their own processes and do not apply any discipline to improving them.
I was coaching the senior management team of a major oil company when it came time to begin the annual strategic planning process. They began to discuss how to move forward with their strategic planning and it became clear to me that they had no agreed upon process, even though they did this every year. I asked them how it went last year. They agreed that it took too long and there was a lot of wasted time. I asked if they had reviewed the process they had used last year and agreed to make changes in the future. They had not. And, they were just glad it was over! They were not engaged in continuous improvement for what may be the most important process for which they are responsible.
We began by mapping out the process we thought was used last year and then mapped what we thought would be the “ideal” process this year. We agreed to review learnings from the process as soon as it was completed this year and create a proposed map for the following year.
Continuous improvement is not something that should just be done on the shop floor. Every team, with every process, should be engaged in systematic continuous improvement. This is simple process management and it is lacking at the level of most senior management teams.
So, what are the value-adding processes that are owned by the SMT? Here are some that may be relevant for your senior management team:
The one process that may have the greatest overall impact on the long term performance of an organization is strategic planning. This is owned and should be directly done by the senior management team. There are three component processes that are often overlooked and they are not something you do as singular events during the year. Rather they are ongoing processes and they must be managed as the on-going work of the SMT.
Assessing the Strategic Landscape:
This may be considered part of strategic planning but it is an on-going process in itself. This is intelligence gathering. It is knowing what your competitors are doing that represent either threats or opportunities. Every organization lives on a landscape and that landscape is dynamic and never static. It is in motion. New technologies are being developed. Legal or regulatory changes present new threats and opportunities. Changing market preferences and new marketing and distribution channels are presenting opportunities. These are all changes on the landscape and the winner of market competition is the organization that best senses and responds to these changes. This is the job of the senior management team.
Capability and Culture Strategy:
There is too much strategic wishing and not enough strategic planning. To set a goal of growing by twenty-percent or to become the market leader in a market segment is merely a wish. A genuine plan must include a definition of current organization capabilities and how those capabilities will be leveraged to achieve the goal; and a plan to develop those capabilities that are lacking but essential to succeeding in a market. This is capability strategy.
A close corollary of capability strategy is culture strategy. What are the characteristics of the future culture that will enable us to succeed in our markets? Do we have the cultural characteristics today? What is the plan for creating the optimum culture that will allow us to compete for talent and to stimulate the creativity and dedication to quality and customers that will lead to market success? Defining this and executing a plan to create these capabilities is the work of the senior management team.
This is not simply budgeting to the current year’s goals. Strategic financial management is a five to ten year assessment of investments that are required to create growth and to build the organization capabilities that will make your organization the market leader. This may seem obvious, but I can assure you that this type of financial planning is very frequently lacking in even large corporations. Many organizations are not clear on where they are going and the financial investments that will be required to get there. This is also the work of the senior management team.
Be the Change: The Model of Who We Wish to Become
The oldest and most simple definition of leadership is to provide a model, to exhibit the behavior you desire in others. The members of the organization are more likely to follow your example than your words.
For most of my career I have helped organizations implement team management, not just self-directed teams at the first level, but effective teams at every level of the organization. I have learned to impose a rule on my clients when implementing a change in the culture. I ask the senior management team, and the CEO in particular, “Are you willing to be the model team – to do what you will ask of others?” I tell them that if they say yes, I will consider it my job to not only work with them, but to give them the most frank and honest feedback on their own performance as a team. I hold them accountable.
Why is this important? Most of the behavior that makes teams effective at the first level are equally important at the senior levels. It is important that all teams have a charter that defines their responsibility as a team. It is important that all teams develop a balanced scorecard. It is important that all teams learn to solve problems in a way that is both systematic – following a PDCA or A3 model – and to do so in a way that is genuine dialogue within the team. It is important that every team map their processes and seek to eliminate waste and variances. The senior team can and should model these behaviors.
On many senior management teams power overcomes intelligent dialogue. Rather than seeking to engage in dialogue around important decisions or problems, too often there is a pack-leader and other team members follow the leader and his pack, suppressing their own genuine ideas and beliefs. This is extremely dangerous and leads to the Abilene Paradox. Many leaders of senior management teams are not skilled at bringing out the best ideas and reaching consensus in the team. Too often members leave the team meeting and talk among themselves about why the decision just made was wrong. This absence of honest dialogue cripples the senior team and will inevitably result in the waste created by poor decisions.
Many senior teams recognize the need for coaching and training the teams below them. However, too many are unwilling to acknowledge the need for their own training and an independent coach who can provide feedback on their group process and leadership.
It is the job of leaders to create unity of energy and effort. There is power in unity and the leader of every army understands the impact of unified effort and the destruction that results from disunity. I don’t know how else to say this, but on too many senior management teams there is a lack of love. Yes, I said that. A lack of genuine affection and appreciation, mutual respect, that allows a team to work together as a unified body. The power of this unity of effort is obvious on the football field. Teams running different plays, failing to work as one cohesive body, are sure to lose. The same is true in the meeting of the senior management team.
As organizations implement a change in culture, particularly in the direction of effective teamwork, it will be essential that the members of the senior team can speak openly about how their own team has grown, improved their own process and become a more close and high performing team. Teams below will be looking at their leaders, asking if they are practicing what they are preaching to others.
Lean management implementation requires this type of team development at the top.