The role of the CEO in developing a lean culture

The role of the CEO when developing a Lean Culture in

large organisations

August2016

Topics

•  WhatisLeanandaLeanCulture?•  WhatisWaste?•  Iden8fyingtheneedformoreefficiency•  WhatdotheHeadsofDepartmentthink?•  WhatarethemainthreatstoaLeanCulture?•  HowcantheCEOsuccessfullysupportthestrategytowardsaLeanCulture?

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WHATISLEANANDALEANCULTURE?

Leanisasystema+capproachofelimina+ngwasteso

everystepaddsvaluefortheCustomer

ALeanCultureisonewheretheen+reteamfromtoptobo;omareintolerantofwaste,strivingto

con+nuouslyimprovequality,reducingcostandfocussedondeliveringvaluetotheCustomer.

ExperimentandLearn,replaces‘Blame’.


WHATISWASTE

Wasteisanyac+vitythatconsumes+me,

resources,orspacebutdoesnotaddanyvaluetotheproductorservice.


Iden8fyingtheneedformoreefficiency

ThereissurelynotaCEOorBoardontheplanetthathasn’tatsomepointoffluctua8ngtrading,growth,decline,economic,investororcompe88vepressuresetc.iden8fiedtheneedtogeneratemuchmoreefficiency,inordertodriveperformance.OOenthismoment(s)getsaccompaniedwithastrategytoachievesuchaposi8on.Astrategy,thatquiteoOenturnsintoaseriesoftac8calmeasures(reduceinventory,decreaseover-produc8onorextraprocessing,evenreducingemployeemo8onand8metodeliver).


Iden8fyingtheneedformoreefficiency(cont)

Manyhowever,alsos8ckstead-fasttoimplemen8ngtheimprovementstrategyasawhole.Realisingthataseriesof‘tac8calimprovements’wouldbejustatemporarys8ckingplasteroveradeepwound.ButeventhensomeCEOsandBoardsgoontodelegatetheimplementa8onanddevelopmentofthestrategy,intoaseniorteam,beforetakingaback-seatrole.Inlarge,complexorganisa8ons,theCEO’sroleispivotaliftherequiredchangesarea)goingtoworkandb)goingtos8ck


LET’SCONSIDERWHATTHEHEADSOFDEPARTMENTTHINK?

Inarecentsurveyofthetop1000companiesintheUK,HeadsofDepartmentwereaskedwhattheyconsidertobethemainconstraintsonperformanceimprovement:•  LackofFunds 43%•  LimitedResources 42%•  LackofTime 40%•  LackofQualifiedPersonnel 32%

NowconsiderthosesameHeadsofDept.above,beinghandedanefficiencystrategybytheBoard/CEOtodeliver!Onewouldassumethatwouldbelike‘pouringpetrolontotheblame-culturefire!’

WHATARETHEMAINTHREATSTODEVELOPINGASUCCESSFULLEANCULTURE

•  Awaste-tolerant,blameculture•  Dis-engaged,change-resistantanddemo8vatedstaff•  Lackofknowledgeregarding(evolving)customerneeds

andexpecta8ons•  Generalstructureandprocesses‘setinthereways’•  Lackofinvestmentintokeytechnologicaladvances•  Lackofstaffdevelopment•  Lackofleadership,direc8onandcommunica8onof

visionintothenewcompanygoals/targets–‘CEO/Board’


HOWCANTHECEOSUCCESSFULLYSUPPORTTHESTRATEGYTOWARDSALEANCULTURE

TheC-LevelExecu8veswithinanorganisa8onseekingtoimplementaLeanculturecanguaranteeonething:theywillmeetresistance.Tosucceed,theywillneedtheteamwiththem.AcultureisonlyeverLean,ifithasachievedit’sgoals(improvedquality,eliminatedwaste,reduc8onin8meandoverallcosts)ANDissustainable.Employeesneedtounderstand,co-operate,getinvolvedandbeopentoimprove,foraculturetochangeposi8velyandindefinitely.


HOWCANTHECEOSUCCESSFULLYSUPPORTTHESTRATEGYTOWARDSALEANCULTURECONT)

TheCEOandBoard’sroleatthispointdefineswhetherthevaluestreamsiden8fiedandleanculturetransforma8oncanbearealityornot.Aclearprogrammeofimplementa8onneedstodeliver:•  Keystakeholdersandseniormanagementselectedonto

thestrategicimplementa8onteam•  Clearcommunica8onofWhytheLeanCultureis

required(theHowandtheWhatarethereturnsmustbedeterminedinconjunc8onwiththeimplementa8onteam)



•  Acollabora8veandinterac8veenvironmentisrequiredtogaintrustandinvolvement,includingfullengagementintodeliveringtheoverallGoal.

•  TheCEO,whilstretainingthecollabora8veimplementa8onteam’sopenandengagedworkflow,needstoreleasethereignstothekeystakeholdersintermsofresponsibilityandaccountabilityfortheirareasofdelivery



•  ThestrategyofdevelopingtheLeanCulturerequiresaprojectplaninvolvingexcellentcommunicatorstointroduce,engageanddeveloptheworkforce,tothechangesrequiredwithinthestrategytodelivertheGoal.TheCEOhasahugeresponsibilitytomakesurethispartoftheplanoperatessmoothly,asitisinthiskeyareawherethemajorityofLeanStrategiesfalldown,duetoeithertheCEO/Boarddistancingthemselvesatthecrucialmomentornothavingdevelopedthemanagement,tothelevelrequiredtoengageanddeveloptheirownstaff.



The challenge of identifying key Value Streams, developing a Lean Culture and in particular engaging employees along

the way, present today’s CEOs with some of the biggest problems they face.

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The role of the CEO in developing a lean culture

Leadership & Management

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