A few years ago, I lamented about the most common excuses our Affiliates hear from executives for not investing in training their people and improving their business (see the President’s column in this issue of The LEAN Executive).

The top four I mentioned then:

1. “Our people aren’t ready for change”
2. “It requires too much time from management”
3. “We’re too busy to improve”
4. “Maybe after we’re finished with our [pick one: ERP / MRP / CRM / Automated Warehouse / Cost Accounting / Labor Reporting / RFID] implementation.” (See Mark Graban’s post, “RFID as a Workaround” for a great example.)

I recently ran across Tim Goshert’s article “Yeah, but we’re different” in Reliable Plant magazine and I realized that I failed to list this top five excuse.

Rounding out the top 10 (not in order):

6. “It’s not in the budget”

7. “Maybe after we hire that lean champion we’ve been looking for”

8. “Maybe after (month, quarter, year) end when volumes are lower”

9. “We’re already tried lean and it didn’t work.

10. “We’re already lean”

As a change agent, how do you address these excuses?

During Mark Graban’s interview with Jim Baran, owner of Value Stream Leadership, a leading recruiting firm that specializes in Lean talent, Mr. Baran discusses the value of professionals who bring more than a knowledge of the tools – effective lean change agents know how to navigate through the inevitable organizational resistance in a positive, inclusive manner that leads their people to make a real, sustainable difference.

Regarding #3, I’m reminded of a favorite Shigeo Shingo quote that shows that even he had to deal with excuses:

“Are you too busy for improvement? Frequently, I am rebuffed by people who say they are too busy and have no time for such activities. I make it a point to respond by telling people, look, you’ll stop being busy either when you die or when the company goes bankrupt.”

I sense that Shingo’s style is more direct than many American change agents, but he makes his point.

Taiichi Ohno once said that the heart of the Toyota Production System is “management’s commitment to invest in its people to promote a culture of continuous improvement”. Lean and TPS are powerful – but waves of downsizing, employer demands, job disenchantment and technologies that keep employees plugged into their jobs both day and night have taken their toll.

If recent surveys are any indication, more than half the workforce is fed up. Pollster Gallup has found that 40 percent of American workers feel disconnected from their employers, with 19 percent being “actively disengaged” from their workplaces. Disenchanted workers pull down productivity, increase churn and darken the morale of the people around them. The annual economic costs are huge: as much as $350 billion in the United States alone.

How can management reduce the losses caused by an anxious and demoralized workforce?

Emerging research suggests that workplace toxicity and anxiety are the major impediments to employee morale and performance. The top reason people leave comes down to their relationship with their boss and not having a clear understanding of what’s expected of them. Indeed, less than one-third of managers are perceived as strong leaders.

So, rather than implementing a technology-based solution or installing new equipment to improve performance, first look at your own management team. Examine the effectiveness of the people who are tasked with leading your employees:

· How often do they communicate with their direct reports?

· What is the quality of their interaction?

· Do they have a process to convey your business objectives to their team in an effective, meaningful way?

· Do they understand how to connect with their people and lead?

· Are their conversations transforming – or merely transactional?

· Do people leave meetings with their superiors feeling energized – or sapped?

Our recommendation: Be sure that on-going management development and coaching are an integral part of your company’s lean transformation. Have resources available for managers to learn and get help. Consider on-demand 1-to-1 management coaching that’s provided on a confidential basis. Offer your supervisors assistance with facilitating their team meetings to demonstrate a positive approach for team learning.

All of these elements are a bit on the soft-side, but they’re often the missing pieces when we learn why a lean transformation has failed.

While assessing an organization’s readiness for a lean transformation, our rule of thumb is that an employee attrition rate over 10% is a red flag; anything over 5% is a yellow flag.

Developing a culture of excellence in an environment of high attrition like trying to develop a culture in an elevator: people don’t know you, don’t trust you, and they’re leaving before you can make a difference.

You see, 95% of lean is developing your people. But how can you effectively train your people when many of them will leave in a short while? An attrition rate of 10% means that after three years, over 27% of the original crew has left. We recently spoke to a COO of a company that has an overall attrition rate of 30%…which means that after 3 years, almost two-thirds of his current workforce will be gone!

Does this mean that organizations who suffer from an elevator culture are a lost cause? No, just realize that they FIRST need intensive care with the help of organizational development professionals and executive coaches to identify the root causes of their high turnover.

Once this is addressed, then we can begin the work of engaging people in the continuous improvement.

I made a day trip to the Assembly Technology Expo in Chicago last week. What an adventure. After all, here’s an event dedicated to the latest automated innovations for manufacturing: Over 600 leading suppliers were there, from AGI Corporation (tooling and automated handling for PCB assembly) to Zierick Manufacturing (interconnection devices). I’m always fascinated with the latest technology for manufacturing, and it was fun to put my business card in all of those fish bowls and hope that I won something.

But as I looked over the Technology Pavilion and saw all of that equipment from all of those large companies, I couldn’t help but wonder…

What if American industry spent just a fraction less on material handling equipment, and just a fraction more on improving their process flow?

What if American industry spent just a fraction less on “Machine Vision Systems” (it looked really cool), and just a fraction more on teaching their people with how to see waste?

What if American industry spent just a fraction less on automated storage and retrieval systems, and just a fraction more on creating level pull and reducing inventories?

I like cool new technology just as much as the next engineer, but I sense that most companies could make much more progress by shelving their next automation project and spending that next dollar on processes, management systems, and developing people.

Review the following list of symptoms:

• Silence, withholding
• Gossip: he said/she said
• Real issues are surfaced offline, avoided in meetings
• Blame, finger-pointing
• Email bombs
• Polite chit-chat in meetings vs. open, honest debate & dialog
• Character assassination
• Loss of respect for one or more key players
• Team dynamics distract everyone from delivering high value to customers and shareholders
• Everyone thinks it’s someone else’s fault
• No one knows how to fix it
• Loss of morale

If any of this sounds familiar, you’re not alone! Executive teams are like families: without the right structure and tools, they have a tendency to devolve into dysfunctional dynamics. One team that I worked with identified the above behaviors and added a truckload of their own, then hung dollar signs on the cost, in lost deals (top line) and lost profitability (bottom line). It was in the millions, and we were only looking at the past year!

Dysfunction is on a continuum: your team’s may be mild, or it may be catastrophic. Either way, it needs focus and attention to fix the issues. By far the most effective way to address team dynamics is to bring in an outside coach. “Yeah, right,” you say – “she’s just trying to drum up new business!” At the risk of sounding that way, let me make a case.

If I am a part of the team, even a team leader (CEO for an executive team), it’s difficult for me to intervene effectively. Why? Because I am a part of the problem! I have participated in the past dynamics of the team; therefore, I am a part of those dynamics. I contribute in some way that is unclear to me – it’s in my “blind spot” so to speak. As a part of the problem, but not wise regarding how, my temptation is to take the “authoritative parental stance,” i.e., “You guys better shape up!” Or, I may take the “co-dependent stance,” i.e., “I’m sure it will all magically work out somehow.” I haven’t powerfully addressed the dynamics; I’ve merely squelched them or denied them.

As the group’s leader, if I knew the right tools to apply, I would have done it already. But I “don’t know what I don’t know.” So, the first step in healing dysfunctional teams is for the leader to admit the need for outside help.

Fast forward to the first day of intervention. From the moment a third party enters the room with your team, a change takes place, immediately. Simply the presence of a stranger shifts the dynamic. First, people behave differently with someone new in the room, at least they do at first. They put their best foot forward, not wanting to appear to be the person who is causing the problem.

In that moment, there’s an opportunity: for growth, for new ways of looking at old problems and best of all for the hope that things can improve. If the coach quickly establishes rapport and respect with the team, there’s a foundation in place. A sense of “emotional safety” replaces the old feelings of distrust. People start to open up. Issues are aired with new directions taken to resolve them.

This is called “pattern interrupt.” In team dynamics, the old patterns must be interrupted, then new ones introduced. A good outside coach can quickly identify the team dynamics that need to be interrupted - then offer new tools to replace old behaviors.

A good coach engenders respect because the team senses that he or she intends to support the greater good, not look for a scapegoat. The team also quickly senses the experience level and competency of the coach and that inspires trust. A deep exhale permeates the room.

With a combination of facilitation and training, the coach leads the team through “practice” and skill-building, using their actual business issues as “grist for the mill.” At the end of the day, the team feels empowered, strengthened, and hopeful. Success! One or two good team-building days can literally launch a team in an entirely new direction so that they create significantly higher value for shareholders and customers.

Nina Atwood, M.Ed., LPC, is a LEAN Affiliate executive coach who works with CEOs and owners of small to mid-sized businesses to help them lead major change initiatives – such as a Lean Enterprise Transformation. Nina leads our Managing Resistance to Change program that we offer for removing the waste from leadership communication and empowering mangers with the tools needed to align teams during times of organizational change. See www.ninaatwood.com for more information.

When you boil it all down, the essential element in lean manufacturing success is manufacturing talent. If the folks running manufacturing operations are smart and committed, you’re probably going to do OK. If they’re not, you will fail. Most of the companies I come into contact these days have plenty of commitment and enthusiasm from their manufacturing leadership team, but they are so far off the mark from a knowledge and skills perspective that lean is a pipe dream.

Companies would never dream of hiring someone in Accounting, IT or Engineering unless that person has a college degree and strong experience. Yet they routinely fill just about every operations position from within, putting hard working and dedicated people from the shop floor into positions of supervision, team leadership, planning, scheduling and buying. More often than not, these folks have a high school diploma and an in depth knowledge of how things have always been done in the plant … and nothing more.

Most glaring is the near universal tendency to put such people in planning and scheduling jobs. Lean is all about flow, yet management has so little appreciation for the knowledge and skill required to optimize factory flow that the people responsible are often the least educated, least outside experienced people among the salaried ranks of the company. More often than not, these folks are little more than MRP mechanics, who know how to put data into the system and extract it as needed to push paper onto the factory floor, but wholly ignorant of how the system works, why it does what it does, or how lean principles differ from their current methods.

Before launching a serious lean transformation, I would suggest that the top executive have HR do a little analysis and figure out for each department within the company, what percentage of the staff is degreed and what percentage has significant outside experience in their technical area.

The reason the factory is not a whole lot leaner should be pretty obvious when the exercise is complete. You get what you pay for, and if the company policy is to pay top dollar for highly qualified financial talent, but to run the factory with the cream of the local high school’s graduating class, lean isn’t going to happen in the very near future.