Many lean initiatives begin with 5S and visual display in the production area. These have become common starting points because they are highly visual and we are motivated by visual stimuli. We visualize waste. It is easy to see and measure in the warehouse; piles of work-in-process between work stations; and it is seen as re-work or defective goods. There is nothing wrong with addressing that which we can see. But, we may be blind to even more significant forms of waste that are not easily visualized.
We often don’t see the impact of large processes, those that flow through the entire organization but which may fail to match customer requirements or employ new technologies. We don’t see the impact of poor teamwork and problem solving at the executive level. We don’t see the waste that comes from the failure to reward individual initiative or the loss of energy from punishing comments for consequences. And, we don’t see the waste that comes from information systems that fail to provide information to teams who are expected to take responsibility for performance. Or, we fail to see the impact of human resource systems that are not aligned with the needs of a lean organization. Each of these is likely to be far more costly than a pile of work-in-process; but you don’t see them.
There are two words that are keys to eliminating invisible waste in organizations. These are adaptation and alignment. The failure of organizations to adapt to the dynamics of the external landscape and the failure to align internal systems and behavior both result in wasted energy.They both cause friction, friction between the organization and the environment and friction between members of the organization. Whether it is in a mechanical system or in a human system, friction is wasted energy.
All living things adapt or die. It matters little whether the living thing is a plant, a bug, or a company. As the environment changes they must change with it. Each living thing is a sub-system of a larger system and the larger system demands adaptation. Humans living in northern climates developed the engineering and construction skills they needed to survive in cold winters, while those close to the equator didn’t waste their energy in that pursuit. As the environment changes, you will adapt or die. Too many companies are too slow to adapt.
Henry Ford’s model of simplification of production started with the assumption that you could have the Model T “in any color you want, as long as it is black.”That worked for a while. But then other companies offered cars at equal quality and cost in multiple colors and suddenly there was friction between Ford’s strategy and market demands. Ford’s business declined rapidly until he adapted to the changing demands of the market place. Steve Jobs, in one of his numerous mistakes, believed that there was no reason for personal computers to display images in color. That worked for a while and then he chose to adapt rather than die. The history of business is the history of companies adapting to changes in the external landscape or dying. As Dr. Deming said “You don’t have to change. Survival is not mandatory.”
The marketplace is a vast ecosystem, a jungle, if you like, in which new organisms (companies) are born every day and others die off. There are numerous reasons for the decline of companies but the most common is the failure to recognize the need for adaptation. The longer it takes for a company to adapt to external changes the more wasted energy and effort.
Too often, lean implementations are too slow to address significant issues of adaptation to customer preferences. Many lean consultants assume that using the PDCA cycle on the factory floor is the answer to becoming lean. But, often they are working on processes that should be eliminated entirely or need to be restructured, re-organized, or changed in large and rapid ways.
In the ideal system adaptation would be instantaneous. The moment a new healthcare technology or treatment was developed it would be instantaneously adopted by every healthcare provider. But, of course that doesn’t happen. We suffer from the law of inertia (a property of matter by which it remains at rest or in uniform motion in the same straight line unless acted upon by some external force). The law of inertia applies to human behavior just as it does to physical objects. We tend to stay in our current place or state because it requires less energy than change. The path of least resistance is the path that we are on, even if that path ignores external realities and leads to a cliff. However, the degree to which we are on a path that diverges from the needs of our customers, that degree represents wasted energy. Every measure of energy spent diverging from the demands external realities, whether technologies or customer preferences, is wasted energy.
The Law of Adaptation:
Organizations progress and are sustainable to the degree that they are capable of sensing shifts on the landscape (economic changes, technology changes, regulatory or political shifts, and changes in social or customer preferences) and then capable of developing those capabilities that will satisfy the market in the future landscape.
Corollaries to the Law of Adaptation:
- It is natural for organizations to remain on their current path and this inevitably leads to wasted energy and market dissatisfaction.
- The speed of changes on the landscape (technology, etc.) defines the necessary capacity to transform the internal capabilities of the organization.
- Transformation toward future capabilities requires transformational leadership, the impulse to foresee external changes and to drive internal adaptation by overcoming inertia.
Principles or values have the power to create alignment and alignment creates unity and reduces friction in a system.The failure to seek alignment to principles is a failure of leadership.
Some years ago I was about to begin a project to design self-directed teams in a Corning Fiber Optics plant. As I toured the plant with the plant manager we were discussing the needs of the plant and the objectives of the design project we were about to initiate. I asked how the hourly employees were compensated. He immediately told me not to concern myself with that; he had another consultant who came in every year to adjust the hourly compensation model. They were paid on a piece work incentive. I immediately stopped him and said “So, you want us to develop great self-motivated teams, but they are paid on individual piece-work incentives?” He said, “Yes, that’s right.” I immediately told him that was impossible. You can’t have one system of motivation pointing people in one direction, and a structure that asks people to behave in a different way. The systems and structure must be aligned. Along with the design of the team process we designed and aligned the compensation system, information flow, job titles and every other element that would reinforce its success. The process proved to be sustainable. It was sustainable because we reduced friction by aligning systems and structure.
I am confident in stating that the majority of lean implementations are crippled by the misalignment of systems, structure, symbols and skills. Lean management is a “whole-system” and each sub-system (HR, IT, etc.) must be aligned to reinforce the same type of desired behavior.
Alignment does not happen by accident. When Honda came to the United States they carefully designed all their internal systems to be aligned to the same principles. For example, one of their principles was the Unity Principle. It is not an accident that everyone wears the same uniform, indistinguishable by rank or work assignment. It is not an accident that everyone is referred to as an “Associate.” And, it is not an accident that there are no private offices. These were all intentionally designed as components of the social system of the organization to create alignment with their principles.
Friction is the result of misalignment. If you are told that the front-line team is to be an empowered, self-directed team, but the job definition and title of the supervisor hasn’t changed, you have created a state of misalignment. If are asking management teams to take responsibility for business performance, but those management teams do not receive the financial and other reporting that would engage them in the business game, you have created misalignment. If the process of hiring and on-boarding are not aligned with the principle of respect for people you are most likely creating misalignment and friction.
The Law of Alignment
The degree to which all of the systems, structure, skills, style and symbols of the organization are aligned to the same principles and purpose they are aligned with each other and friction (wasted energy) is minimized and sustainability is enhanced. The degree to which there is misalignment there is wasted energy and the organization is less sustainable.
Corollaries to the Law of Alignment:
- Different functions operating within their own structure tend to create processes and systems that are misaligned from those created by other functions and operations.
- Those working within a function or operation will tend to believe that other functions and operations should be aligned to their function or operation and not the reverse.
- Therefore, alignment is only created as an act of intentional leadership and system design.
These principles and laws are neither complicated; nor are they obvious to those working within organizations. Yet, a large percent of time consumed is wasted energy, particularly by managers, a direct result of both the failure of adaptation to the external realities and the failure of internal alignment. Too many managers and too many change agents, internal and external, are too timid to address the presence of this waste.