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Jeff Liker

Jeff Liker: A CEO might be a good at lean but poor at leading change

By Jeff Liker, - Last updated: Friday, July 4, 2014 - Save & Share - Leave a comment

The reality is that if you are making a major change in an organization you are bound to create some enemies. You will be clashing with the interests of some people who either have an opposing viewpoint, or some personal issue with you succeeding, or perhaps fear you are going to make their lives more difficult. Lean has the potential to be very disruptive. Reducing inventory is designed to surface problems, but surfacing problems means that people may fear they will be blamed, or even if they are not, fear incompetence in addressing the problems. We are telling management that they need to change, for example going to the gemba every day and leading problem solving, and they may feel what they are doing is working just fine and they simply do not have time. We are expecting people to learn new competencies and we know from neuroscience that learning new skills is, at least at first, painful. And then no matter what the environment, e.g., record growth, cannot hire enough people, it seems that there will be those in the workforce who fear lean means mass firings.

On the other hand all of us writing for the Lean Edge love what we are doing because we get the pleasure of improving so many people’s lives. We see lean as joyous and exhilarating and our experience is that people are excited by the improvements… when they are involved in making them and when the improvements make their jobs better and they can see performance improve. There are a bunch of “ifs” in there. If we have a highly skilled change agent, if we engage people properly, if we use a good process for improvement, if we allow people the opportunity to experience positive change that leads to positive, visible, measurable results then they are very happy with lean and become allies.

Now we do not know what this CEO is doing right or wrong, but we can at least say with some certainty that if all key stakeholders are unhappy with lean he is doing something wrong. We can certainly understand some stakeholders having concerns and even putting up barriers. Say for example, the focus of the improvement effort is at the factory level in a company with multiple factories. One factory is selected as the first model plant. A competent lean coach is assigned, the plant manager is engaged effectively and onboard and the supervisors in the areas in the plant selected as models are engaged effectively and coached through an effective improvement process. We almost certainly will have strong advocates in the plant manager and those people involved in the changes. BUT, the other plant managers may feel threatened by all the attention paid to this one plant, all other executives who were not involved in the change such as finance, sales, production control may be weary of what is happening as they do not understand it, and the CEO seems too excited about something new and different, and even in the one plant many people who are not involved in the changes will be wondering what this means for them. Contrary to popular exhortations, simply telling people what is in it for them is never enough. Experiencing is believing.

The fact that this CEO is getting everyone upset and resistant suggests that the change agent is not very strong and the CEO is not effective as a leader of change. There can be many reasons for this ranging from the personal style of the CEO, to the approach to implementation which is big changes done to people instead of with them, to changing too much too fast without involvement and understanding, to any of a whole litany of implementation problems. A good sensei would spend time to understand the situation and then figure out how to intervene surgically. By this I mean generic prescriptions for change will not cut it. What is the specific problem in this case with this company and this CEO? What are some actions that could create quick wins that will begin to generate positive momentum? How can the CEO be made to look like a winner and in the process reflect on his strengths and weaknesses?

It is rare, but there are instances where the best solution, short of a new CEO, is to work around the CEO. I did some work for an American shipyard where the CEO was the company founder and owner. When it was a small shipyard he was used to micromanaging with an iron fist. All feared him, but it worked well enough that the company grew to a medium sized shipbuilder. The COO who brought me in warned me that getting him involved was risky as he would dominate, be happy to go to the gemba, and alienate everyone he talked to. I did not believe him until I walked around the yard with the CEO. Turns out the COO was correct and I learned a hard lesson that day. Fortunately that only happened once in my career.

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