At the Danish Lean Forum there has been a survey on the critical success factors when implementering Lean. The result is now a MBA dissertation focusing on the critical success factors in a lean transformation.
Read a summary of the dissertation below!
Enjoy!
Critical success factors in a lean transformationby Christian Kløve
During the last ten years lean journeys have been initiated in great numbers across Europe, some with success and others with failure. Lucey, Bateman and Hines (2005) highlight in their article “Why major lean transformation has not sustained” that around 75% of all major lean transformations are not sustained. This is a very high numbers hence it raises the interest to investigate what the critical success factors (CSF) during a journey has been and will be for those who succeed.
What is success in a journey?Many companies who have fail have done this because they have jumped into the execution part and have forgotten to slow down and identify what the success or the objectives of embarking would be. The best definition of success has been given by Linker (2004). He identifies it as reaching a stage where the company has “Operational excellence as a strategic weapon”. This definition is a more long-term definition where those who embark on a lean journey for short-term gains would use a more monetary wording like “Return on investment”. By doing this the journey becomes a project with a start and stop which never will lead to reaching long term operational excellence. As we all know Chrysler the US car manufacture has entered in to a chapter 11 bankruptcy. In the morning of the 30th of April 2009, Fiat has announced that it would be willing to take over part of the shares, but Fiat has no founding to do so but the offered their lean knowledge in return of their shares this. If they succeed in this it could be claimed that they have definitely used their lean transformation as a strategic weapon.
Phases in a journeyBefore an organisation reaches the above definition they will have to go through a series of phases. The out-come of these phases are a change in both appearance and behaviour. When this is reached the journey has become a none-reversible process and regardless of what internal or external factors that is pushing the organisation it will never return to its original stage. This can be illustrated with a frog that is born as a fish with gills but end up with lungs and can therefore not return to its former appearance or behaviour as a tadpole (figure 1). In biology this is called a metamorphosis. In the figure the 4 terms through a journey is illustrated. Many companies focus very much on the appearance through lean events etc. and tend to forget the behaviour; hence their effort will be lost in the end and the effort becomes a project and not a metamorphosis.
Figure 1 Metamorphosis model (Source: Christian Kløve based on Wikipedia definitions)
Reviewing the current literature
In the lean literature there are two poles or schools. One is the pure Lean tool school that believes the success arrives from the lean tools only. Opposite is the change management school that almost believe that the success can be achieved even without using the lean tools. Of course there is also literature in between and base on the findings from the survey conducted in relation to the article the truths lies there. In the below model the CSF from the most common literature are collected and structure according to the metamorphosis model above.
Figure 2 The CSF mapping and ranked in the phases Almost anybody can cook some sort of food, but making real Michelin star food requires time but also lost ingredients in smaller or bigger doses. The same goes for succeeding in lean journey. During the survey it was identified that there was no significant proof that one of the CSF had a bigger role in achieving success than others hence none of the above can be neglected but of course some of them weighs more.
Recommendation for reaching metamorphosis
In 2005 Craycraft created the model for “Sustaining lean” when Wirlpool had embarked on their lean journey. This model covers most of the CSF for a lean journey but in order to capture all of the CSF and also the failures the model has for the recommendation in this article been amended some. In the Craycraft’s model there were only 3 outcomes: success, failure after the change phase and failure or flattening after the transformation. Based on the findings in the paper a fourth failure has been identified in connection to the metamorphosis phase.
Additionally, the axes were time and improvement opportunities, in the below model it has been changed to phasing and sizing of operational excellence. In each of the phases the CSF can be identified as to different types. One is the “goal keeping” CSF that ensures that the achievements are maintained. The other CSFs are the catalyst that will ensure that the journey moves upwards and into the next phase.
Figure 3 Sustaining lean with CSF from the survey (Source: Adapted from Craycraft, Wirlpool to illustrate the recommendation of the finding)
Building a good platformClimbing Mount Everest is not something that you just decide and then do the next day. At least if this is the approach then the probability of failure is very high. Prior to a climb you prepare. The same is also the recommendation of the paper.
In order for succeeding in a lean journey it is important that you need to have sponsorship from the top management and key managers in the organisation. Secondly clarity of the direction and third a easy understandable vision is needed. To support them CSFs such as alignment and translation of vision into strategy and tactical plans also need to be present together with a sense of urgency of why to embark.
Last but not at least a full time dedicated full time team, is needed to accelerate the organisation on their lean journey, through facilitation in the beginning and later more as a centre of excellence. The way of how to facilitate is depending on the change path chosen that again depends on the size of the resistance in the organisation. The optimal way is the pull path where the change is being moved forward by the organisation it self, but is the resistance is great and the direction is clear then a pull path needs to be chosen.
Starting to climbDuring the change phase the lean tools are started to be used but these are not CSF they are means or tools to reach the CSF. These can also be referred as being visual artefacts that will push the culture to change. The top priority is to ensure that the skills level of the organisation is present. In this case there need to be lean and change management skills available in the organisation. It should be noted that the word organisation is used instead of just the team that will facilitate the journey. It’s important that also the organisation is trained in lean and change management because of two reasons. First, this will bring awareness and second later it need to be a self driven process where the aim is to reduce the dedicated team. Both of the reasons have their roots in the reason of using the change management instead of just a lean approach. The aim of the journey is to change the culture and thereof the behaviour of the organisation.
The second CSF for the change phase is to communicate the vision to the organisation. A vision on paper will never be realised, but when it is communicated and accepted by the organisation it becomes the guiding star of the journey.
Third are the small wins. It is important that the journey has a good start that generates a lot of positive motivations in the organisation. The small wins need to be planned and delivered.
The fourth is that discouraging behaviour is dealt with. If resistors are not dealt with they will become road-blocks or dead weight that in the worse case can drag the organisation back to their starting point.
The fifth is the alignment of the short terms wins with the long term goal. In the lean sustain model (Figure 3) the drops in the curve are due to limited alignment and thereof a creation of activities that at later stages need to be changed as they do not fit into the long term objective. One of the most spectacular and know examples of these events is when one team is working towards one direction and another event who works towards the opposite direction, like layout events where kanban is created but at the same time cell building with one piece flow is on the event list.
The sixth is to use the momentum when it is present and roll-out the change with a spearhead strategy in order to penetrate and convince the organisation that this is the right way.
The last two CSF for the change is the structure change and the system change. In order to embed the change into the organisation, the structure need to be changed and further more the systems supporting the organisation such as bonus systems, KPI systems etc should all be aligned and reflect the desired lean behaviour. If this is not done the organisation will not behave in the new way and there will be a higher probability that the organisation will revert to the original shape.
If these CSF are not reached there will be a chance that the journey will stop and there will only be a short term gain and the organisation will return into the original stages.
Good base campHaving succeeded and coming through the change phase the base camp is almost established for being able to do the transformation where the behaviour change will be anchored. In order for this to take place 3 CSF are important.
First the management still needs to back the lean journey up. At this stage the pay back and a large degree of physical changes have taken place and it is often seen that the management drop the lean journey because either the pay-back have been at a level that they had expected or as the second CSF indicates that the lean journey gets forgotten due to new projects being rolled out. The result of this can be that the lean journey continues on the same level in the same area and the full operational excellence is never reached. Another outcome can be that if the journey gets forgotten and the change that has been created so far will disappear. At this point of time it is important that the third CSF is introduced as this focus on spreading out the lean journey to the rest of the organisation while the momentum is present.
The fourth CSF is the introduction of the CSF “Empowered teams” as this will continue the change of the behaviour in the organisation.
The final climbAt this point of time the organisation has been achieving and there has been a great deal of financial reward to the company. At this stage there can be a risk that the original sense of urgency that initiated the lean journey is forgotten. This could lead to a drop back towards the how the original company was. This does often happen if there are still so called concrete heads left in the organisation that believed that past was better than the present or if the teams that initiated the journey are all out of the organisation and newcomers do not understand why the journey was embarked. If neither of these groups are corrected and if they have so much power in the organisation that they can drag the organisation back to the past then the whole journey is lost.
The third and the fourth CSF are there to move the organisation up the operational excellence path. The first is the CSF ”lean learning is expanded to the whole value chain”. According to Womack et all, (1990) the biggest potential lies outside of own organisation hence curve during the metamorphosis is almost exponential.
The last CSF is that the organisation becomes a learning organisation that will continue to develop and become better and smarter. If this does not take place there will be no forward moving force that will ensure that the wheel does not start to roll down the hill again and the competitors will overtake the lead in the operational excellence.
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