Capable Leadership Key to Lean Success

Here is an interesting article from this month's IndustryWeek magazine (January 2009) based on recent study by the Mckinsey consulting firm. The study somewhat confirms the obvious, but sheds light on why according to another leading business magazine study, only 2% of plants have reached world-class manufacturing performance.

The 'Soft Side' of Lean

Companies may be losing half their potential savings from lean programs when they overlook the need for leaders who are capable of implementing continuous-improvement plans.

By Jonathan Katz

Jan. 1, 2009 -- The authors of a McKinsey Quarterly article published in November say companies may be losing half their potential savings from lean programs when they overlook the need for leaders who are capable of implementing and driving continuous-improvement plans.

In the report, entitled "From lean to lasting: Making operational improvements stick," authors David Fine, Maia Hansen and Stefan Roggenhofer write that many companies focus on the "hard" operational tools, such as just-in-time production, but often ignore the "softer side," characterized as the development leaders who can "link and align the boardroom with the shop floor."

Included in the report are characteristics of leaders that the McKinsey authors say are critical to gain buy-in from employees and attain maximum results. According to the report, the "six habits of lean leaders" are:

A focus on operating processes: Senior managers should demonstrate the importance of the process using visible activities and make standardization a habit. As an example, a chief operating officer may conduct regular shop floor visits and quality assurance checks to review milling-machine operating processes and reinforce standards with workers

Root cause problem solving: Instead of providing immediate solutions to problems, managers use them as teaching opportunities. For instance, a plant manager ensures the problem is contained properly and then asks the team to analyze the causes using the "five why" method to determine the underlying cause.

Clear performance expectations: Performance dialogue should be open at all management levels. This may include meetings with employees and team leaders to track productivity and discuss improvement ideas, with productivity metrics displayed prominently.


Aligned leadership: Process improvements don't stop at functional boundaries. In this case, company leaders can create a more open and collaborative environment by offering incentives, such as tying half of the functional leaders' year-end bonuses to the key performance indicators of the entire team.

A sense of purpose: Connections between day-to-day work and long-term goals become tangible throughout the entire company. For example, take workers to an end-user's operation so they can see how their products are used in the real world and the importance of quality.

Support for people: Managers empower workers and encourage them to make important decisions. This shows employees that they're a source of customer value. The report's authors use the example of an area sales manager driving to the head office to pick up a replacement printer that frontline agents need to continue working efficiently.