Sustainability Requires both the Hard and Soft Stuff

Many leaders worry that their change efforts are not sustainable and they are too often right!

Twenty years ago I worked with the Merck Cherokee Pharmaceuticals plant to design a team based organization. It has sustained over the past twenty years. Of course, it has been modified and evolved. But it has sustained. I know of dozens of cases of significant and positive change that have been sustained. I also know of dozens of cases in which they have not been sustained. The reasons are not complicated.

To understand sustainability we might look at larger changes in culture and ask why they are sustainable or not.

The American Revolutionary War transformed not only the system of governance; it also changed the culture of the former colonies. Our Civil War again changed the nature of our culture and system of governance. Yet, in neither case where those changes complete or final despite their significance. Yet, they were sustained. Why have those changes been sustained? In both cases there were changes on two levels. First, there was a change in sentiments, beliefs, leading to changes in personal behavior and leadership. This is the soft stuff. Second, there were significant changes in systems and structure that embedded the principles of the new culture in a practical process. This is the hard stuff. Both are necessary.

Before the Revolutionary War there was a process of dialogue among the colonists in which they debated the value of being loyal to the King of England versus the value of declaring independence. They openly discussed their grievances and pamphleteers, particularly Thomas Paine, argued the case and created a vision of a future country independent of England. But, once the war was engaged, pamphlets and sentiments were not enough. A Continental Congress had to be created and elections conducted. Following the war it became clear that the mandate of the Continental Congress was inadequate and a Constitutional Convention was formed to write a new Constitution that would define the new system of government.

My hometown, Annapolis, MD, where James Madison, Alexander Hamilton and other representatives met and called for a Constitutional Convention

My hometown, Annapolis, MD, where James Madison, Alexander Hamilton and other representatives met and called for a Constitutional Convention.

I live in Annapolis, Maryland, where in 1786, twelve delegates from five states met to call for a Constitutional Convention. The formal title of the meeting was a Meeting of Commissioners to Remedy Defects of the Federal Government. The defects they sought to remedy were the trade barriers that limited and slowed commerce between the largely independent states.[1] In other words, they recognized that the silos of the organization structure of the states interrupted the flow of the commercial process through the newly formed nation. Sound familiar?

The Constitutional Convention was a design team, designing a structure that would balance the rights of individuals, states and a central government while eliminating barriers to commerce. They got it partly right, but it would be repeatedly modified with a Bill of Rights, and in the subsequent years, amendments giving full voting rights to women and ending slavery.

The ability of the government of the United States to be sustained was not based on trust in personalities, personal skills or sentiments. A new culture was embedded in the structure and systems, the process and principles of government. In both the early days and the final days of a culture personalities tend to dominate over principles and process. In maturity, principles and process take precedent over personalities. Reliance on personalities is never sustainable.

Examining large sustainable systems, as well as our experience changing the culture of organizations, what are the key lessons that we have learned for sustainable change management?

1. Don’t leave the System out of Toyota Production System:

Roland Sullivan, one of the original thought leaders of organization development, recently commented that too many OD professionals have left out the organization from Organization Development.[2] Similarly, too many lean or Toyota Production System consultants and writers have left out the system part of Toyota Production System. Too many lean change agents are comfortable with the tools such as 5S, the PDCA cycle, and process mapping, but have not understood the impact and importance of the structure and systems that embed the culture.

If you leave the old systems in place, such as how people are hired, trained, the definition of jobs, particularly management jobs, the information systems and organization structure, you will have left the old constitution and laws in place while trying to change behavior. The mechanisms of resistance to change are not simply the sentiments, skills or habits of people. The mechanism of resistance is the law the Constitution, the formal systems that define decision-making, information flow and rewards. Change is not sustainable as long as this misalignment remains in place.

2. Allow for Amendments and Adaptation

Imagine what would have happened if there were no provisions for amending the Constitution. Women would still not have the right to vote, slavery would still be legal, and a President could be re-elected without end. Without a process of amendment it would have required a true revolution to make changes.

Some years ago my consultants did a whole-system design project in a Corning Fiber Optics plant. We always worked in partnership with an internal change agent. Five years after the original design the internal change agent came to one of our monthly consultant team meetings and gave a presentation on what had transpired in the five years after the initial design. He described how they had reformed the design team twice to make changes and improvements to the design. When I recently worked with Merck we formed a design team to recommended changes to their system. At VON Canada, the Implementation Steering Team, which meets regularly to assure implementation of their design, has made a number of small changes to the original design.

All living things are sustainable to the degree that they can adapt to changes in the external landscape and incorporate internal learning. The failure to adapt, to amend the system, will result in rigidity and rejection, and ultimately rebellion.

3. Leadership Continuity is Critical

If you have read the Harvard Business Review article by Steven J. Spears[3] on how Toyota develops leaders it will be clear that Bob Dallis (a fictional name used in the article) will not assume his job as plant manager and impose His Way on the organization. He has been thoroughly indoctrinated in the Toyota Way and he will be responsible for implementing that culture and that system while seeking continuous improvement.

Perhaps the single most common reason for the failure to sustain change is a lack of leadership continuity and the dominance of ego over the establishment of a system.

When I was working at the New Jersey refinery of one of the major oil companies it was explained to me how the management development process worked. There were two classes of people: those on the management fast track and the permanent residents of the refinery. The fast track managers were on two year assignments. They had to demonstrate some substantial change during their two years and then they would move on to a different location. They cared little about improvements that came before them. They had to stamp their name on some change. The permanent residents understood the process very well. They knew they had to nod their heads in approval and act like they were implementing the change. However, they kept on doing their work as they always had, knowing their manager would disappear before he realized he had accomplished nothing. This was their survival strategy. The game went on and everyone played their roles. The young fast-track managers never stayed long enough to experience the lasting consequences of their changes.

In many large companies, plant managers or similar mid-level leaders, have a typical two to five year period in their job. They are strongly motivated to demonstrate how they have personally made change, rather than reinforcing a company culture and company system. The changes at the Merck plant sustained for twenty years, not simply because of the five plant managers that rotated through during that period, but because the system had been embedded in the union contract, it had been designed by the people in the plant, and it was continuously improved. The ego of any manager was subordinate to the system.

4. Every System is a Sub-System of a Larger System

I began my career working in North Carolina prisons where I established the first free economy behind prison walls. It was an experiment. We created a luxury, quality, standard and efficiency dorm and the inmates had to pay rent accordingly. They were paid a salary, by check, for the work they did in the work areas. The check was for “points” not real money. Their pay was determined by the skill level of the job they did. It worked. We nearly doubled production in the work area. It was working like a real economy. Good behavior resulted in good consequences and they were learning to earn.

All my inmates were in the 16 to 21 year-old range. I ran the system for three years and there was a plan for them to earn their way out of this medium security prison to a minimum security prison and then on to parole, all based on their demonstrated performance. That was the plan. However, one day I showed up at the prison and my entire population was being sent to other prison units while this one was being populated with 50+ year old convicts. It blew up my entire plan! A new Governor appointed a new Commissioner of Corrections and he knew nothing about what we were doing and decided to re-allocate the prison population.

The prison, like a corporate facility, was a sub-system of a larger system. The entire correctional system was a sub-system of a larger socio-political system. My experiment, as worthwhile as it may have been, was not sustainable without creating change in the larger system of governance.

Far too often this exact same story is played out in our corporations. Worthy experiments producing positive results are overwhelmed by the larger corporate system. It is not true that small and successful experiments will then be adopted by the larger system. We wish that were so, but I can provide dozens of examples that prove the opposite.

A well-known author of books on lean management recently explained to me that his system of change was to take a model work cell on a line and implement the PDCA cycle and demonstrate results, hoping that this would be recognized and then lead to further adoption. My experience is that this will not work. Every manufacturing plant or facility is a village, a culturally cohesive unit. The village culture will most often overwhelm cultural deviations within the village. For a very long time I have refused to implement experiments within a village. Change the whole village together! The larger the system in which you can create change, the more likely that change will be sustained. Do not under estimate the force of cultural cohesion.

5. Develop and Reward the Habits of Continuous Improvement

Much of this blog and my books are focused on designing the systems of the organization, but that should not diminish the importance of developing the skills and habits, the Kata,[4] of continuous improvement.

In addition to redesigning systems, it will be important to train every team in the new organization to work as a team, engage in daily problem-solving, track and understand their data, and become experts in eliminating waste and variances from their process. I have outlined a complete process of team development in order to develop these habits in two workbooks.[5] These workbooks present learning modules that are each paired with deliverables, actions, that themselves are the source of learning. This is an action-learning model and has proven successful in the development of hundreds of teams.

Team Progress ChartThis is an accountability or progress reporting diagram that indicates where a team is in their progress toward becoming a high performance team. With every team in the organization developing the same skills and practices, the culture will change and those habits will become the norm. But the leaders must both practice these skills themselves, and they must reinforce these behaviors in others.

6. Build Internal Change Leadership Competence:

Having been in the consulting game for forty years now (I’m ashamed to say!), it is very clear to me that the major consulting firms structure their business to perpetuate additional contracts, rather than to build internal competence and independence on the part of their clients. As a business strategy, this is perfectly understandable.

I am not anti-consultant. After all, I are one! However, I feel that the goal should be to partner with clients in a way that builds their internal competence in managing change.

The longer a client is dependent on a consultant the less likely it is that the consultant is transferring his or her competence to the client organization and building capacity within the client firm. The less internal change management competence is developed, the less sustainable will be change efforts.

I recently completed an assignment at a manufacturing plant where seventy one teams are implementing lean practices in every department and function and at every level of the organization. Everyone is involved. My role was to work with the senior team of the plant and to train and coach fourteen internal coaches, both salaried and hourly, who serve as coaches to all of the other teams.Who learns the most in this scheme? Of course, the internal coaches who have to turn around and train all of the other teams. They now have the capacity to carry on the process indefinitely. As a team of coaches they meet and learn from each other. This is building internal capacity.

I am sure that there are other keys to sustainability. But in my experience the most important key is to align the formal systems with the landscape and create internal system alignment; and then, to provide for modification and adaptation over time. It works!

[1] Richard B. Morris, The Forging of the Union, 1781-1789 (1988) p. 255.
[2] See LinkIn Whole System Transformation discussion forum.
[3] Spears, Steven J. Learning to Lead at Toyota. Harvard Business Review, May, 2004.
[4] Rother, Mike, Toyota Kata. New York, 2010, McGraw-Hill, New York.
[5] HealthCare Lean – The Team Guide to Continuous Improvement, Miller Management Press, LLC, 2012. The Team Guide to Continuous Improvement, Miller Management Press, LLC, 2013.