Ask Art: What Is the Biggest Cultural Change Barrier to Lean?

I’ve dealt with this challenge in two main categories: 1) Private equity-held companies where I was an operating partner and chairman of four to five of our portfolio companies, essentially facing the resistance to lean faced by most traditionally run companies. 2) Companies where, as CEO or group executive, I was directly in charge of the strategic direction we would pursue.

How do you get the CEO to embrace lean?

I’ve found that the biggest barrier to adopting lean almost always comes from the CEO. Occasionally you would find that the CEO was uncertain about taking the lean path, and his senior staff proved to be the biggest resistors and could almost always talk the CEO out of making the switch. Their argument that “this will never work here” is hard to overcome, especially when backed with few examples that relate to your company or industry.

This resistance should surprise nobody. After all the CEO and his senior staff succeeded by following a traditional management approach. They were taught by and rewarded for the prevailing operational status quo, which only reinforces their belief that they are on the right track and there is no need to change. Their resistance only grows in the face of lean requiring major change.

The conventional personality type and management style of most CEOs creates additional barriers. In my opinion, approximately half of all CEOs are either insecure individuals or adhere to a rigid top-down management style. They don’t like surprises and if (when) they occur they need someone to blame. While this default mode may work in a traditionally managed company it is totally incompatible with lean. Moving to lean is a constant series of “leaps of faith” where every change you make brings with it the thought of “but what if this doesn’t work?” If the CEO can’t stand surprises, then getting him/her to move to lean is almost impossible.

At Wiremold, we were written up in many articles and influential books like Lean Thinking and Gemba Kaizen after we made some progress. This brought out the industrial tourists and we soon found ourselves giving a lot of plant tours. We wanted to help others, and so while this was fine at first, eventually we found that doing the tours was interfering with running our business. We knew that no company that came to visit would be successful in implementing lean unless it was driven by their CEO. So, we added a simple new rule: you can only come to visit if you bring your CEO. Surprise, surprise, all industrial tourism stopped immediately.

What can you do about this? In the private equity world, when I was chairmen and owner of various portfolio companies, the solution was simple: fire the CEO. This happened quite frequently as our time horizon for an investment was only about five years. We couldn’t wait for the CEO to come around—if they ever would.

Every time I give a talk on lean the first question I get is invariably “How do I get my CEO to implement lean?” My flip answer is “Go get a job with a lean company.” This is only partly unfair, as most of their CEOs will never adopt lean. Even so there are some steps that can be taken that may get their CEO to come around eventually.

Start by trying to educate your CEO about the advantages of lean. There are many great books on the subject, starting with the seminal books Lean Thinking by Womack and Jones, and The Toyota Way by Jeffrey Liker, and even my two books, The Lean Turnaround and The Lean Turnaround Action Guide. Next, get him to visit a couple of lean companies and see what they have done. Then have him attend a weeklong kaizen at another company to see the power of lean firsthand. After that, line up a good lean consultant and convince the CEO to run one or two initial kaizen events in your facilities.

If none of that works, and it probably won’t, the next best thing is to just start lean in an area that you control in your company. For example, a plant manager can start lean in her plant. Don’t make a big deal about this. Do it quietly but just do it. After a while the dramatic improvement in results will start to get recognized, and the CEO will ask how did you do this? Once it is understood that it was due to lean it will be hard to deny “that lean will never work here” and you’ll be on you way.

How do you overcome change barriers when the CEO is lean and the company is not?

This case is more personal to me as I faced this challenge as group executive at the Danaher Corporation, and as CEO of the Wiremold Company. Expect resistance in these major areas: 1) senior management, 2) middle management, 3) shop floor supervisors and 4) the workforce and/or union.

Senior Management

Convincing senior management to move to lean is not all that hard once you lay out the expected results. After all, who is going to argue with the boss that “we shouldn’t try to get better.” Even so, most senior staff will assume that lean is simply a cost reduction program focused on the factory, leading your VPs of sales, finance, IT, engineering, and human resources to resist, arguing that it doesn’t apply to them. That’s not too hard to overcome; put them all on kaizen teams and explain that every part of the company must change. Your biggest issue with this group will be having them work as part of the true teams required in a lean setting. No more sales VPs running into the CEO’s office to complain about manufacturing! It will also mean getting them all to participate and give their opinions on every subject, as opposed to staying quiet when the subject is ostensibly beyond their domain.

Middle Managers and First Line Supervisors

In my experience this is where you will find the most resistance to lean. Lean changes the roles of these people the most, and they typically respond to their world being turned upside down by fiercely resisting. This way of behaving is not done intentionally; it is just that old habits die slowly as they say. To become lean, you must move away from the traditional functional organizational structure and to a lean value steam structure, a change that will cause enormous disruption in terms of jobs, responsibilities, and formal assignments.

At Wiremold, for example we had to pick value stream leaders in our transition to lean. For the most part our traditional functional foremen did not make the cut, but their extensive knowledge and experience were still extremely valuable. We eliminated the production planning department and the purchasing department by combining these functions into a buyer/planner assigned to each value stream leader, who sat on the shop floor next to their equipment. We also broke up our engineering departments and assigned our engineers to specific value streams instead. Lots of change, lots of confusion, lots of opportunity to resist.

On balance this worked very well, despite the disruption. The biggest resistance came from the front-line supervisors, who were used to giving orders, and whose style of leadership conflicted with our emphasis on teamwork and everyone working together. Because this was harder to see it was harder to solve. We addressed this by introducing an annual employee survey that focused 5 of the 30 questions on how your supervisor treated you. The responses highlighted the problems and gave us a chance to have a talk with the individuals and correct them.

The Workforce or Union

Despite popular myths about unions, my experience with the UAW at Jake Brake (our first lean example at Danaher), and the IBEW at Wiremold, revealed these two as cooperative partners. Sure, the union contracts added some extra steps and time, but for the most part the work force was never a barrier. The key was not treating them as “THE UNION”, and instead treating them like people and the key part of the team that they really are. After all, the best ideas for eliminating waste will always come from the people doing the work. Make sure that half of every kaizen team is comprised of hourly employees and that you get all your hourly employees on as many kaizen teams as you can, and you won’t have any problems.

Tackle Resistance Situationally

In a wide range of settings, I’ve found that resistance to lean can occur at all levels of the organization. There are big differences however, depending on whether the CEO is the lean zealot and driving change or whether the issue is getting the CEO to start down the lean path in the first place. Overall, I would say the biggest hurdle is getting the traditional CEO to start down the lean path. Unfortunately, in my opinion, about half of these CEOs will never be willing to take the leaps of faith necessary to become lean. Of course, that is good news for anyone competing against them.