Why Is It So Hard To Sustain Lean Gains?

Dear Gemba Coach,

Why is it so hard to sustain lean gains?

The quick answer is that lean gains are simply unsustainable by nature. If I had a dollar for every visit to the gemba where clients and I had to acknowledge that we’ve slipped back …

Let’s start by defining the problem as a gap between achieving gains and then sustaining them. I believe that gains are achieved once we have an alignment on three key areas:

1. Having properly defined the business challenge (what are the few overall problems we need to solve and become really, really good at to succeed on today’s markets).
2. Having broken it down into specific kaizen topics (sometimes all the way to actual repeatable workshops, not so much to solve the issue but to educate middle-managers and seek new answers to old questions).
3. Driving teamwork so that functions cooperate in working on these two areas.

In terms of sustainability, I think I can now distinguish two different kinds of slippage: (1) we lose focus and the entire effort is in jeopardy or (2) we hit a setback on a specific point and don’t have the knowledge and/or energy to fight back.

Loss of focus mostly occurs when the company engages in strategic maneuvers. For instance, I currently follow two firms that have just been purchased. They are finding that the integration process is a huge challenge to lean work. First, people’s roles are redefined, which creates a lot of uncertainty and politicking. Second, organizations are changed, footprints redesigned, which creates more political wrangling. Third, such large shifts often involve ERP software or reporting, changes, which are enormously time consuming. It’s never fun to be acquired, of course, but from a lean point of view, being the acquirer is also hugely distracting, for the same reasons in the reverse – you’re now poking your nose into every one’s business in a much wider perimeter.

Sure, it’s hard to keep focused on kaizen when you’re fighting for your job, but that’s not the biggest issue. Increasingly, I find that real lean gains (that show up on the top line and the bottom line) stem from teamwork. Increased sales from better product quality are built on engineering and manufacturing working hand in hand to solve technical issues. Surging cash from reducing inventories while improving on time delivery come from planning, production and procurement working better together. Lower costs are mostly an issue of production, engineering, and purchasing looking for smarter assembly solutions and so on. Teamwork, in the lean sense of functions solving problems together, is not a natural state in any organization and requires constant effort from the top to get people to work together – with the occasional banging of heads until they talk to each other. In an environment where individual futures are in question and boundaries are changing without visibility, such teamwork is incredibly hard to maintain. One company I know had spectacular cash improvements year after year from the great teamwork effort of the operations, purchasing, and planning department heads – and lost much of its improvement in the year the company was purchased, only to recapture lost ground slowly as they refocused on working together as opposed to pursuing individual survival strategies.

Stuff Happens

The other frequent form of not sustaining lean gains is the setback. The main point of posting indicators at the gemba is to facilitate the “no retreat, no surrender” discussion between management and workers. Stuff happens, and that’s a fact. Actually, reversal to the mean happens, and that’s a fact as well. I was recently in the shipping area of an automotive supplier where lean workers proudly showed me that they’d finally achieved one week at 100%. They got rather upset because I warned them they would be unlikely to maintain this performance because they had achieved it through effort (good) but they had not yet changed the process, meaning they should be mentally prepared for the rubber band to pull back, which it did the following week. Something always happens: a machine goes down, a supplier goes bust, customers change their mind, people call in sick and so forth. The trick here is to maintain the constant effort to not accept slippage. And this has a lot to do with respect.

Kaizen, whether in the problem solving form or the improvement form is about getting a team to see its problems and work hard at trying new ways to come up with better and better countermeasures. Success is nice, but work is hard, and when the topic IS difficult, kaizen can be particularly frustrating because it’s a case of going back into the ring to get hit again and again until you’ve cracked it – staying power matters more than brilliance. Why would people do it? A few maniacs will tackle the issue for the thrill of solving it, in the spirit of mountain climber George Mallory who, when asked “Why do you want to climb the Everest?” answered: “because it’s there.” Most people aren’t built like that, but they will climb mountain, cross deserts and sail oceans for a leader they respect. In other words, they’ll stick to kaizen when the going gets tough for you. If you show them respect: if you make the effort to understand their constraints and to share with them what you’re trying to do and demonstrate that you can help them help you by taking obstacles off their path. There are many things you can do as a senior executive that don’t involve investment to clear barriers from people’s path so that they can experiment with their ideas and come up with innovative solutions.

As I noted, lean gains are unsustainable by nature. Any company works, after a fashion: put equipment and people in any one place, and they’ll produce something. The ball rests naturally at the bottom of the bowl. Sometimes this is enough to make a profit, until there’s a crisis or a new competitor drives you out of business. Lean, on the other hand, is about constantly stretching oneself to push the ball the higher up the slope that we can, and of course, like in the Greek Sisyphus myth, every stumble brings the ball back down again. Lean is about exploring what is possible in order to discover the satisfaction frontier for customers (what makes them SMILE) and the productivity frontier for operations. There is no steady state. Lean gains are generated by constant lean effort.

Lean practitioners and their bosses often find it difficult to forego the Taylorist myth that processes are “broken” and can be “fixed.” In this worldview, a process improvement team should have sustainable results because, having carefully analyzed the process, it has come up with a better mousetrap which it will implement and will perform better for now until judgment comes. But does that really square with what you see at the gemba? Have you ever seen a process walk the shop? Is it real if you can’t kick it? What I see is people working with equipment trying to follow set sequences of steps and constantly fighting with the entropy of whatever new problem the world throws at them. Process performance comes from cultivating individual ability to spot issues early and tackle them more than process design. I’m not saying that process design doesn’t matter, and certainly having less complex flows and more flexible equipment help, but if there’s one gemba lesson I’ve learned the hard way (mostly by ignoring it and kicking myself for having done so) is: motion kaizen, then equipment kaizen THEN process kaizen.

Process performance is the outcome of individual competence (mostly the ability to do the job in unforeseen circumstances) AND teamwork (the ability to work together across barriers).  Lean gains are hard to sustain because both these drivers are in constant flux. One way of looking at this is visualizing individual competence and teamwork as two stocks that deplete naturally by attrition and need to be constantly replenished. The replenishing mechanism is, of course, kaizen. Through kaizen, people are challenged both individually in trying to solve new problems or do things better than before, and as a team in making greater efforts to work together.

Designed for Teamwork

How can we sustain lean gains then, knowing that companies will restructure and operations will go wrong? What you first need is a defensible position: a kaizen event that the company, as a whole, acknowledges is directly link to its effectiveness. In the automotive company I previously mentioned, they’ve narrowed it down to three events:

1. Flow and layout workshops in assembly
2. SMED for the injection presses
3. Target cost workshops in engineering

These kaizen events are specifically designed for teamwork. For instance, the flow and layout workshops ALWAYS involve manufacturing engineers because the purpose of the workshop is not to make instant productivity but to increase the company’s ability to be more productive ongoing, which is about getting production supervisors and manufacturing engineers to better work together.

Of course, the company does many other lean things such as pull system, dojos, etc. but the core agreement is that the schedule of events will take place. This is no kaizen blitz. These events are formal workshops in which the same issues are tackled time and time again to change minds about the real sources of productivity (they’re “katas” to use Mike Rother’s terms). The aim is to increment the number of repeated cycles at looking at the same typical problems until we find breakthrough solutions.

Having this stake planted in the ground, it’s possible to fight the real sustainability issue of management attention. The workshops deliver global gains as long as senior management stays committed to go and see and to practice the cycle of:

1. Visualizing activities.
2. Formulating problems.
3. Seeking root cause.
4. So we can study countermeasures.

Real company-wide gains occur every time a senior execs has an “aha!” moment by seeing what one of the kaizen teams has come up with and changes his or her mind. Whenever the CEO changes his or her mind, consequences WILL follow.

Lean gains are the result of a dynamic of constantly striving to kaizen and to understand how the countermeasures coming out of kaizen impact our wider challenges. There is no steady state where lean gains are achieved and we can move our attention elsewhere. There are no “gains” as such, just moving the ball higher up on a slippery slope, where it takes constant creative effort to keep it there. Yes, overtime, some competences and shared practices are acquired. And no, it’s never stable, as you’ll see at every upper management change: new exec, new learning needs, and new educationprocess.  The trick is to be clear on:

Because no one (none that I know, for sure) can either foresee or control larger events, the one thing you can do is stick to your regimen of training. Just as you can’t control the state of the economy but you can commit to your morning jog, you have to accept you can’t control strategic maneuvers or anticipate every operational setback, but you can commit to a program of regular kaizen events (read: learning practice).  You’ll find that if you’ picked wisely which event to focus on (an event that makes you better and better at your trade), maintaining the steady practice of stretching understanding and teamwork will maybe not stop you from falling back down the mountain when you misstep, but will hold you pegged so that you don’t scramble all the way down to the bottom: Sisyphus’ lean curse can be defeated like everything else, through regular practice.