1. Making lean sustainable over time: culture and management Jose Ferro Bangalore November 2014 1

2. Lean brings business results!! Significant manufacturing improvements New products faster, better and more profitable Higher profitability Market share gains Substantial growth A continuous learning organization 2

3. Time Performance 3 Initial stages of the lean transformation

4. Sitting on top of a pile of gold! Double the production volume with the same resources.... or..... reduce the need for resources by half... 4

5. 6 Time Performance But many times it is hard to sustain Why does this happen too often?

6. This may occur because of the way we traditionally implement lean 7

7. Lean tools are great for improving the processes and develop capabilities – VSM, A3, Problem Solving/Kaizen, Flow, Pull, SW, Visual Management etc etc 8

8.  New leadership style and a new way of thinking are essential if we want to make it sucessful over time 8 But if we want sustainable results, we have to go beyond

9. Changes in leadership, management and culture should be considered up front How do those issues usually appear in the initial stages? 1. Senior management/CEO not engaged? 2. Middle management resisting the change? 3. Supervision not wanting to change their command and control attitude? 4. Direct workers not wanting to do more and different? 9

10. 1. Senior management/CEO not engaged? Senior leadership and CEO engagement is essential But are the CEOs the real problem in your LT? If we rely too much on an overbearing CEO to be successful, that might be a problem 10

11. We want to change the leadership style So, if we rely on an authoritarian CEO to promote the lean changes, that could be a new problem in itself Perpetuating a leadership style we may want to change...... 11

12. 2. Middle management resisting the change? If we rely on lean coordinators (or change agents) to promote (and push) the transformation, they may resist Mid Management might not understand (and agree upon) what is the problem being solved and may have different priorities Middle managers don´t have the lean knowledge in the beginning  learn by doing They have to be engaged and take a core role They have to become lean coaches and develop their people capabilities However, there may be some not willing to learn and change..... 12

13. 3. Supervisors not wanting to change their command and control attitude? It is usually hard for them to understand their new roles They need the middle management support and coaching But oftentimes they are proactive and supportive (their lives improve as the results and performance) 13

14. 4. Direct workers not wanting to do more and different? I have rarely seen this, even in highly unionized environment On the contrary, they tend to respond with enthusiasm as they: – have to focus on value adding activities – work conditions improve – have more voice – know what to do (work, solve problems, improve, ask for help etc) – are more respected 14

15. What kind of leadership do you want? Lean Leadership  Follow me Not top down, not bottom up 16

16. Organizational Structure Costumer 15 Process X Process Y Process Z

17. Lean Coaching: an essential practice Learning to ask the right questions Learning to listen Gemba and real practice oriented Making people think ? ? ? ? ? ? ? ? ? ? 17

18. Changing the culture The essence of culture: the basic assumptions (invisible) and the values (what is said) Changing the culture is hard and slow But we can start implementing the new practices and begin to expose some of the basic thinking; and change what is blocking our progress 19

19. Values Basic assumptions Practices

20. What kind of culture do you want? Hide or expose the problems? Short term or long term? Trust and believe in people or people are bad? Use the scientific method or fight fires? 18

21. How to take a company to a new level of performance? Time Performance What needs to be done in order to move the organization to perform better and better, all the time? 20

22. What do we have to do in order to make the lean transformation successful in the long run? 21

23. A transformation strategy that sticks (LTM) Focus on the priorities of the business (hoshin kanri) Improve the processes (VSM, SW, OBC, flow, visual management etc) Develop people capability (A3,versatility matrix, SW, kaizen) What type of leadership (lean coaching) Question the basic values and assumptions - culture (lean coaching) 22

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26. THANK YOU!! ferro@lean.org.br