Treating the executive team as ‘customers’ in improvement initiatives

Fully engaging the executive sponsors is vital in sustaining the success of any improvement programme, writes David Mann

Proactive engagement by executives is essential for the sustained success of large-scale improvement initiatives. Engagement means going beyond reporting on occasional endorsements, messages,
or visits to encourage frontline workers. In this article, I’ll explain why engagement is important and describe an approach that makes it meaningful and valuable to executives as well.

I will start with an example from personal experience, following this with an important characteristic of improvement initiatives. 

Case study of a lean initiative

About 10 years ago, I was leading an internal consulting team supporting an ‘office’ lean initiative. At 18 months, we had coached people from 50 cross-functional business process improvement projects, involving individuals from sales, marketing, distribution, customer service, order entry, database, engineering, procurement, legal, tariff compliance, and finance groups. We focused only on business process that crossed at least one internal boundary. Many of the projects we worked on tackled longstanding problems – 20 years-plus in some cases – that remained unresolved despite repeated efforts. 

On average, the improvements across these 50 business processes involved a halving of end-to-end timescales and of delays, errors and reworking, and handoffs. There were direct cost savings of approximately $5m, and substantial capacity freed by reducing non-value-adding activity. By any objective criteria, our team was successful. 

I met monthly with my boss, a Corporate Officer, Vice President, and one of four of the CEO’s direct reports who sponsored our team’s work. Meeting at 18 months, she told me directly: ‘David, you have a problem!’ She explained that she and her executive peers had roughly an 18-month attention span for programmes such as the office lean initiative, and that despite our success so far, our executive sponsors were losing interest. ‘After that,’ she continued, ‘we start looking around for the next thing to drive improvement. You have to find a way to involve us!’ 

With initiatives such as lean, six sigma, quality, and safety improvement programmes, it takes two or three years before results show on corporate financial statements. I’ve worked in lean transformation for more than 25 years. Lean ‘tools’ produce improved process performance right away, whether in healthcare, administrative, service, technical professional, or manufacturing processes. Just ask the people who’ve been involved in the projects! But for those improvements to accumulate to corporate-level impact takes time. 

Performance pressure on senior executives is intense; and the aforementioned savings over 18 months, in a Fortune 500 company, amounted to a ‘blip’, not an amount that made a discernible impact on corporate financial statements. 

So, after 18 months of support with nothing showing on the financials, they begin looking for the next big thing. 

I thanked my boss for her candour, and took her news back to my team. We stepped back and followed our own advice: ‘Value is defined from the point of view of the customer,’ is the first principle in lean. We hadn’t thought of our executives as customers, though in fact they were. What we’d been delivering to them – visits to project teams and activity reports – had not met our executive sponsors’ criteria for value, or for involvement. 

Like many other improvement disciplines, lean, a term coined to describe Toyota’s business during the late 1980s, has its own language, approach, and terminology. Much of its terminology is in Japanese, reflecting the influence of Toyota’s lean production system. None of our executives spoke Japanese. 

Lean business process improvement teams used value stream maps which make visible the movement of information and material through process steps and between departments, especially useful in business processes that cross internal (and occasionally external) boundaries. No aspect of these maps is intuitively obvious; business processes do not appear on organisation charts, and none of our executives was a fluent interpreter of value stream maps and their related measures (for example, process time as a percentage of total cycle time).

We wanted to teach our executives about lean as we had learned it, through exposure to lean applications by project teams. So, we arranged executive visits to meet lean teams in their work areas. The team would make a presentation, sometimes prepared, sometimes off the cuff, but always using terms and tools unfamiliar to the visiting executive. On our part, we did nothing to prepare the executives for the visits other than naming the project, walking them to the area, and introducing the team. 

Our executives were socially skilled and used to making conversation. After listening to these nearly opaque presentations, the executives thanked the teams for their efforts, and then turned to more familiar topics, such as the state of the business, sales wins, or enquiries about people’s families.

When our team reviewed the records of these executive visits during the year we had been running them, we found exactly half had been cancelled and never rescheduled. Clearly, our executives were not finding value in visiting lean projects. If you added that to no significant financial impact, no wonder we were losing their interest.

Reflecting on this, we reached several conclusions that we used to restructure and resuscitate the project visits to make them meaningful to the executives. We assessed what we knew about our executives, recognising that they were bright, fast learners, with a high need for achievement. They tended to be competitive (having probably aced every test they’d ever taken), thirsty for hands-on influence in improvement initiatives and accustomed to being prepared by their staff members for unfamiliar situations. We recognised we were putting our action-orientated executives into passive roles that were not to their liking.

We had standards for lean management behaviours, practices, and tools in well-functioning lean areas from my book, Creating a Lean Culture. We based the new executive visits (called gemba walks) on the standards, creating a predictable, executive driven, repeatable process, with a clear agenda, content focus, and structure on a one-page gemba worksheet per standard. 

The revised visits had questions for the executives to answer, from their observations, and conversations around the project area. Importantly for our competitive, high- achieving executives, the new approach included a test: how accurately did executives rate the project on the criteria included in that visit’s lean management standard? 

We were sure we had an improved gemba walk process. As a final step, we made explicit the rationale for executives’ participation; we were sure they would find this meaningful in their own terms.

Senior executives have two unique managerial responsibilities: responsibility for strategy, and responsibility for the integrity of their chain of command. Most executives endorse a lean strategy essentially on faith, based on the advice of trusted advisors and examples of similar organisations’ successes. They lack experience of implementing Lean, and are not interested in gaining it. They’ve been persuaded lean will help reach their organisation’s goals, so they sign up. 

They receive reports (abstracted and sanitised) describing lean activities. They see no impact on the financials. And, they don’t know how to assess for themselves the true status of the initiative and how it’s actually supported within their organisations. 

Here, the tools, behaviours, and practices of the lean management system come to the fore. The management system was developed to support and sustain the underlying, and more technical, lean production system. The state of the management system reflects the health of the production system. Therefore, learn to assess the health of the management system, and you’ve learned how to judge directly for yourself the adequacy with which the production system is being implemented, and the integrity of its deployment down your chain of command. 

Executives learning to assess the adequacy of the lean management system readily develop a keen and accurate eye. In practice, most executives master each management system standard by the second gemba walk on it. Part of the mechanism for this is the test. As we’re leaving the area, I (or another internal lean resource) ask the executive how he or she rated, say, visual controls in a project team’s area. He or she usually assigns a rating of four or a high three (on a self-describing five-point scale). 

Such a rating is rarely warranted early on in the lean initiative, and the visited area is usually chosen because it needs improvement. The competitive, high-achieving executive has not passed the test. This opens a 90-second window for teaching, during which the lean resource explains what he or she saw, what better practice looks like, and why it’s important. In my experience, most executives are single-trial learners, quickly grasping what good and poor practice look like. 

With this knowledge, executives can assess the state of the management system at the frontline, getting first-hand knowledge of the health of the lean strategy they’ve endorsed on faith. And they can assess, first-hand, the integrity with which their chain of command is deploying the lean strategy. 

Consider when an executive asks a frontline worker or supervisor to explain an aspect of the management system (virtually all of which is visually displayed), and the answer is ‘I don’t know,’ or ‘we were just told to do this, but I don’t see how it’s helping’. The executive learns two things: First, somewhere up the chain from the frontline, there’s a lack of integrity, a weak link not reinforcing the lean strategy. Second, the lean strategy is in trouble, at least in the area visited. 

Responding to situations like this is uniquely an executive responsibility. He or she should explain to the supervisor or frontline worker why the particular element of lean management is important, and how it’s supposed to help, and then move on. 

The problem, a serious one, is elsewhere. Find the subordinate manager who is the weak link, walk an area with him or her, and explain what you expect to see and why.

Go back in two weeks’ time in a different area within the remit of that subordinate with him or her. If the same problem shows itself again, a more pointed conversation should ensue.  

For my team, the end result was a happy one. Not a single restructured executive gemba walk was cancelled and, over the next four years the lean team remained in place. Lean in the company’s offices is deeply engrained in a revitalised corporate culture, literally ‘the way we do business here.’ Executives have the knowledge to judge for themselves the health of lean business process operations. Cumulative results of widespread focus on improvement are visible in the corporate financials.

David Mann is the author of Creating a Lean Culture: Tools to Sustain Lean Conversions. The book was awarded the Shingo Prize for Operational Excellence in 2006. Mann is a frequent consultant, trainer and speaker on lean leadership and management, and earned his PhD at the University of Michigan.

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