FEATURE – The lean house can be seen as a blueprint for a transformation. But what happens when CEO or other senior leaders are not aligned with the vision expressed in the roof?
Words: Sharon Visser, CEO, Lean Institute Botswana
According to Harvard Business Review, only 23% of US employees agree that they can apply their organizations values to their work every day. Let’s think about this for a second.
As lean practitioners, we recognize that “lean house” as the blueprint of a lean transformation and the medium for communicating organizational values. Indeed, we believe that alignment on what appears in the roof of the house is vital for the success of the transformation.
Whenever we need to choose the way forward, we should consult with our blueprint and ensure that we are sticking to the plan. Recently, while working on changes that were being made to a lean house strategy and helping an organization develop its own blueprint, I had a lightbulb moment. It was the simple recognition that this actually is a house and that a well-designed house like a Frank Lloyd Wright house is seldom changed. When living in the house it fits the needs of the people who live in it. It is considered as being timeless in its functionality.
How much the owner likes the house will depend on how authentic the early-stage design was, early-stage being the owner’s brief. For the brief to be faithfully executed, communication has to be honest and open. If the building of the house is aligned with the owner’s brief, she will be comfortable. If not, she will start knocking down walls, changing colors and tiles, adding on rooms until they find it comfortable – even if it ends up looking nothing like the original design.
The greatest enemy of design is a lack of authenticity. When a brand is not authentic, we all feel more than a little cheated. The lean house essentially represents the branded strategy of the leader. Steve Jobs is an obvious example: his uncompromising attitude with what he wanted is what turned Apple into a brand. He was uncompromisingly authentic in his demand for alignment.
One of the dangers of team leadership and lean interventions is hijacking a CEO into a strategy that is not part of their personal convictions. Doing this with even the best of intentions will at best slow down a transformation and at worst doom it to failure, depending on how big the gap is between the blueprint and the CEO’s convictions.
There are times when the CEO’s beliefs align with the house, but some of the senior leaders do not have the same convictions. There can be many reasons for this, let me focus on self-preservation and promotion as two of the most common. This ambitious personality type is skilled at avoiding situations that can reveal their flaws. This is part of their strategy. Lean is a threat to them, as, by nature, it is revealing. It is lean’s job to allow one to see problems. Motivated by their agenda, they respond the way they have always done – showing compliance, even enthusiasm.
You might see green charts and flawless 5S in this compliance environment, and you will eventually hear some gentle jibes about Lean Thinking. I see the gentle jibes as fishing lures thrown out into the water to see if they can catch one for the team. It is in this space that a division is slowly being created. A place where one is labeled team players or not.
Whoever is doing well with the lean transformation will be applauded in public but be subject to gentle jibes about their inability to be a team player or possibly labeled as one of the lean geeks. Note that this small gang of “team players” can do just as much damage to the lean transformation as the CEO, so learning to recognize them is very important. In many ways, they are worse as the damage is purposeful, whereas, with the CEO, it is often done unwittingly with a lack of understanding of the consequences.
Holding this thought in mind, I want us to look at the house in the picture above. In this article, it refers to a fictional Motor Group.
Let’s see where things can go wrong. The house has clarity and direction. It says all the right things, but does it reflect the CEO’s vision? Or have we built a thatched cottage for a person who loves sleek modern design and convinced him or her that it is the way forward?
Maybe in their experience and vision, the owner is happy to see 100 percent market share with 3% net profit on turnover because that is how the business was built. Maybe he has gone along with the house design because it worked for someone else, and he wants to see the same results in his organization, or he was not even present when it was designed and left it to a consultant who deals with the writing of value statements. Maybe he thinks that a value statement is just window dressing.
Well, the roof of the house is about to be tested when a buyer for a large company comes to one of its vehicle dealerships wanting to buy 150 vehicles. The buyer is requesting discounts that will mean that the dealership will earn a 1 percent profit margin on vehicle sales, bringing the overall turnover down to a 3% net profit over the quarter.
If the dealership does the deal, they will be out of alignment with the approved numbers in the house’s roof but align with the CEO with whom they have worked for many years. Knowing the CEO well, they do the deal.
They are penalized for not making the 5% at the next assessment meeting, even though they had increased market share. It is a little frustrating to be in trouble with the financial manager. Still, the CEO is happy with the unspoken improvement in market share, and the Dealer Principal silently gains the CEO’s approval for being a go-getter. Nothing speaks louder than positive body language and a smile.
Now we have got to the place where we then start to see the destruction of alignment as the other Dealer Principals could not help but notice the silent approval and understand that the blueprint is not authentic. Hence, they start regressing to the old business model.
With a lean transformation, some things will work, but the change will depend on the engagement of the leadership as they influence their teams. This requires employees to believe that this is what the CEO and senior management team want.
When the blueprint is not authentic, the transformation is disrupted because people are unsure of the goal. They are uncertain of the consequences, so they will always default back to what they know the CEO or a senior leader wants.
This lack of truth impacts every lean tool that is used, especially A3 problem-solving. Kaizen is part of the foundation of the house, and it requires A3 thinking. True kaizen is a response to a problem, right? Let us say the Sales Manager is asked to address the profit percentage on turnover, missing the target, as it has been identified as a problem by the financial manager.
So, he starts to fill in his A3, and the very first box is the “ultimate goal” of 5% net profit on turnover. The “ideal goal” is 5% and “the current” is 3%. He scratches his head a little and fills a countermeasure in the last box. He understands that the CEO or his Dealer Principal does not believe in the ultimate goal regarding the net profit. He puts a creative answer in the countermeasure box and designs a story to explain the countermeasure. He doesn’t have a choice if he wants to be a team player. It’s not like he can throw the CEO or the Dealer Principal under the bus, is it?
It’s much harder to be creative, but he eventually puts down his pencil and thinks to himself, ‘I hate lean, it doesn’t make me feel good, and it’s a lot of extra work creating all these A3’s’. He communicates this to other team members. They, too, lose faith.
He is correct. Lean doesn’t work if you can’t tell the truth. If the truth is not available, everything becomes a lie. The visuals might look perfect, the 5S sleek and tidy but all lean has done on these occasions is create extra work and stress that is ultimately unsustainable.
The CEO is ultimately responsible for the blueprint of the house; that’s his job. The buck stops with him or her. He or she is also the person that can rectify the leadership issues when he understands them. As lean leaders, it falls onto us to protect the transformation by ensuring that the blueprint genuinely matches with the CEO’s vision and convictions, that it is authentic and not a PR project when taking on a new organization. By making the CEO aware of the importance of signing off on the blueprint, one can at least address concerns. At times the CEOs will change, and this will be a “go back to start” card. Sometimes, in their need to increase revenue, they will not be honest with you, thinking that the roof is not a problem.
Whenever you find a lack of alignment, it is worthy of research to find the root cause to see where it really comes from. Recognition of the root cause will always require one to be honest with the CEO reminding them of the consequences of a false statement on the top of the house. Honest feedback might lose you a job, but at least you will know early on where the problem is and recognize it as waste. Be brave!
Sharon Visser is the CEO of Lean Institute Botswana.