FUELING THE ENGINE OF CHANGE

Our past columns have addressed many technical aspects of Lean business practices and companion techniques for improving business processes. They have alluded, directly and indirectly, to the importance of effectively involving people in the continuous improvement effort to realize success. This month we will focus on the critical nature of employee participation in running, growing and improving the business.

Sometimes called the "soft side" of Lean, careful development of a culture of excellence ? or World Class Culture ? is the cornerstone of any sustained improvement endeavor. To help put this concept into practice, we will first define a World Class Culture, discuss it in the context of the technology that it supports, then offer some tips on how to create such a culture.

THE CULTURE

In the past 25 years we have worked with hundreds of companies of all types and sizes and learned that every company's organization has a distinct culture. You can feel, hear and see a marked difference in culture from one group to another.

When we explore our client's needs and detail proposed projects, we invariably talk about both technical and cultural issues ? this is how we roughly gauge the probability of success in a Lean implementation. We have learned that the state of the culture is just as important as core process technologies, facilities design, systems and other technical features. We have found that if technology is the vehicle of superb customer service, culture is the high octane fuel that brings the engine to life.

Upon close examination, it almost appears as if truly great companies were fashioned on a different planet because their technical excellence and cultural differences are so striking. In World Class companies, conversations in the hall, lunchroom and board room are more process and solution-focused. Attitudes are upbeat, progressive and determined ? even when things are tough. Their day-to-day routines are both structured and creative. Everyone is expected to think and participate. This elusive thing we call "culture" penetrates every nook and cranny.

As we have tried to describe these notable cultural differences to our clients, we have found the task difficult. It's a bit like defining love. You know when you are in love, and you definitely know when you are not. The difficulty lies in defining something as elusive as love or a World Class Culture to someone who hasn't experienced it. Notwithstanding the difficulty of the task, here is our attempt at a definition:

A World Class Culture is the set of shared attitudes, values, goals and practices that drive extraordinary levels of performance and continuous improvement in a company. This culture is created and sustained by leaders who are committed to:
? Customer satisfaction, now and in the future
? Employee satisfaction, now and in the future
? Stockholder satisfaction, now and in the future

In this culture, people and team development is believed to be at least as important as the technical implementation of World Class business practices. A key characteristic of this culture is the engagement of every employee and team in daily improvement of the company's business processes.

Note that culture focuses on customers, employees and stockholders, as opposed to technical areas such as engineered layouts, setups, systems or six sigma techniques. Culture is all about human interaction and leadership. A World Class Culture is one in which leaders consciously replace the all-to-common environment where many employees check their heart, soul and brain at the door.

Enlightened leaders also see that culture goes far beyond the here and now. They know that their actions must benefit all parties today and in the future as well.

A SHORT STORY

Employees at a company where one of the authors worked were preparing to welcome a new Division President. Everyone was both excited and nervous. About a week before the new President arrived, he asked for a list of all employees with details about their department, title and longevity. He also asked for photos of every individual. The word immediately went out that he was a people person. This was very different than the past President, who seldom set foot in the factory or warehouse and often forgot the names of managers. The culture was beginning to change, even before he arrived!

A week later, he showed up for his first day of work in jeans and a T-shirt. With no announcement or introduction, he simply walked to the middle of the plant and started cleaning up a particularly cluttered, disorganized maintenance crib. The maintenance team thought he was a temporary laborer and were about to throw him out of their area. Fortunately, they noticed the name on his identification badge. Once they realized who he was, there was a sudden, burning desire to help him clean. Before he left, the area was spotless. It was an instant change of attitude and practice. His final comments were "I expect the area to be this clean every day." The culture took a large step forward.

Employees didn't fully appreciate it at the time, but the new President was laying the foundation for a World Class Culture. There were a lot more changes to come. Structured employee participation and teamwork became the norm. Early team meetings were frustrating and ineffective, but they got better over time and eventually became an invaluable way of life.

Past management practices had inadvertently conditioned employees not to think for themselves. Improvement came when decision making was driven to the lowest possible level. Over time, many of the decisions and responsibilities that had belonged to senior management were delegated downward. Front line supervisors and direct labor employees gradually began to have much more control over their world. The management team spent much more time driving improvement and less time fighting fires. As a result, the rate of improvement began to accelerate dramatically.

Other changes included the ways in which employees were recruited and trained and the methods for communicating expectations. In addition, performance evaluation and reward systems were enhanced and disciplined to ensure that the company was measuring and rewarding desired behaviors. The net effect was an internal cultural revolution that positioned the company to effectively access powerful Lean, Six Sigma and related improvement tool kits. They now dominate their industry.

HOW IT'S DONE

As stated in our definition, "A World Class Culture is created and sustained by leaders," anyone can achieve a mediocre culture, without trying. A World Class Culture requires enlightened, hard-working leadership. There is no exact, "one-size-fits-all" approach to developing the culture that we need; but there is a distinct pattern employed by leaders who are successfully creating World Class organizations. This pattern is a continuous loop characterized by new ideas and on-going experimentation. When something works, it is adopted into the culture. This constant effort and experimentation keeps the cultural improvement process alive and well. The basic pattern follows:

1. Benchmark ? It has been said that wisdom begins with wonder. Look for the best cultures in any industry (not just your own). Read about them. Visit companies who are further along than you are and focus on what is good about their culture. Steal shamelessly those practices that you believe will work for you.

2. Plan Carefully ? Next, you need to carefully plan the development of your World Class Culture. We find it very helpful to start by examining the current culture and comparing it against World Class Culture practices. Once that is done, you will need to plan out exactly what to work on and in what sequence. This can be daunting because every situation is different, but the effort is well worth it. Simply put, you need to know where you are now, where you are going in the future, and how you will get there.

3. Lead by Example ? The third step is a vital test of character because it requires the leader to change also. Once your plan is set, you need to communicate your new vision and set the example. You must first change yourself, your own behavior. For example, if you advocate teamwork, you have to require and allow for it with your direct reports. You will also need to be directly involved in facilitating teamwork throughout the organization by participating on Kaizen teams and attending routine management meetings. Telling everyone they need better teamwork in not enough. "What you DO shouts so loudly in my ear that I can't here what you SAY!"

4. Change Expectations ? Sharing your new vision is important. You will have to be sure that changes in expectations are communicated in detail throughout the company. The logic here is simple. Your people can't hit a target they can't see. The process of communicating new expectations can be cumbersome, but it is absolutely necessary to overcome inertia and the human tendency to resist change. New expectations, expressed as clear cut goals and supporting plans will create a positive change in culture faster than anything we know of.

5. Encourage Progress ? The next step is to encourage progress and support those who buy into your new vision of the culture. Be especially aware of the early adopters and make sure they are recognized quickly and often. You want to make it exciting and socially rewarding to do things the new, enlightened way. Please don't forget those who progress more slowly; as long as progress is being made, you will want to encourage and support them.

6. Communicate! Communicate! Communicate! ? It is a bit of a cliché, yet we seldom communicate as often as we should. Communication keeps the cultural change process alive, and lack of communication will kill progress quickly. Human nature is such that if you don't communicate factually about the state of affairs, people will create their own stories. The stories they create are seldom positive and supportive of your effort. Don't let the "grapevine" send out or distort your message.

CONCLUSION

Developing a World Class Culture is certainly not easy. It takes years of effort and is never completely done. Through it all, however, there is some very good news. A World Class Culture actually makes life as a leader much easier. Once teams and individuals are trained and properly engaged in the improvement process, it takes a lot of pressure off the leader.

Leaders can now "row less and steer more." As a result, the rate of improvement accelerates. The benefits growing out of the implementation of Lean, Six Sigma and other technologies are realized more quickly with attendant improvements in performance and profitability.

We believe that creating a World Class Culture, as defined herein, is as important as mastering the technical aspects of Lean and Six Sigma. Great companies don't make this investment because it is an interesting social experiment or just to be benevolent; they do it because it is a better way to run a business.

David Dixon is the executive vice president of Technical Change Associates and a registered professional engineer with more than 35 years of experience in lean manufacturing, Six Sigma and other improvement initiatives.

Glenn Jensen is the vice president of Technical Change Associates' Human Resources practice area, with 25 years in fusing World Class Culture with continuous improvement techniques. For more information, visit www.technicalchange.com, or call 801-621-8980.