The key to a successful Lean transformation: we journey as far as our people take us
A brief recap
In my last two posts, I recounted the journey of an automotive retail customer in crisis. Struggling with spiraling customer complaints, safety & quality issues and a distribution center unable to handle growing volumes, the retailer was in trouble.
As a third-party logistics partner brought in to turn things around, our first step was triage. Once we’d stabilized the operation, the second step was to build the foundation for a Lean culture. Step 3, the focus of today’s post, shifted our attention to talent: how the company hires, trains, reviews and cultivates its talent.
A curious thing happens when you stabilize a shaky operation. As stability returns and an operation matures, remaining issues are thrown into sharp relief. With new tools and systems in place, roles, requirements and expectations mature. So do the skills required to meet those higher expectations. Sudden improvements often reveal that staffing isn’t where it should be. You see gaps in skills and education, strained planning systems and the need for new tools, systems and ways of measuring performance.
That’s exactly what happened at the third stage of our retail turnaround. Performance was being measured individually, in silos. There was no way to measure operational performance for the team or operation as a whole. Clearly, we needed to extend the Lean improvements that had been applied to stabilize distribution center processes to the people component. Moreover, we had to raise the bar we were using to measure our performance against our potential for operational excellence vs. incremental improvements.
Lean: a journey, not a destination
While perfection is elusive, if not impossible, in any Lean journey, the important thing is to keep trying. For our retail customer, the third phase of our transformation focused on empowering people with the goal of:
1) Gaining a competitive edge:
While many operations approach Lean as something you do, the truly successful operation approaches it as something to live and breathe every day – a culture-enabling tool and way of being, rather than doing.
2) Improving continuously:
Never stop pursuing perfection and never stop improving. From a talent perspective, this means meeting qualitative and quantified goals so you know you’re headed in the right direction in your Lean journey.
3) Fostering independence:
The goal is to empower people so that they can perform at a very high level on their own. You know you’re “winning” when employees don’t need coaching to do what’s required. They handle Lean requirements on their own as second nature. Ideally, the vast majority of kaizen opportunities come from the grassroots level rather than from senior leaders.
Top 5 ways to cultivate talent in a lean environment
Good news! You’ve stabilized a struggling operation. Now you can turn your attention to cultivating talent. Consider these five steps to giving “power to the people”:
- Get executive buy-in:
You can’t change a culture without sponsorship from the top. If leadership believes that success means just keeping the operation afloat, that’s as far as you’ll go. Once you have a balanced scorecard and value stream map, start working on culture change that raises the bar. And that starts with executive sponsorship, a formal level set of what success looks like in a Lean environment.
- Upgrade the tools and systems you use to grade talent:
Once you’ve reset expectations and have buy-in from the top down, update your assessment tool(s) to reflect the new environment, culture and expectations. Compare actual performance to those expectations. For example, what have your employees accomplished in line with your Lean tools and systems? What does success mean for your entire department? What behaviors do you expect of Lean leaders?
- Document, communicate and review:
With new expectations and the right measurement tools in place, the next step is to set up systems for reviewing and communicating performance expectations. Say leading by example is a behavior you’d like to encourage. Update your performance review documents to call out examples of leading by example, complete with illustrations, examples and requirements.Then schedule semi-annual reviews with team members. Explain what leading by example looks like. Review performance against those benchmarks. Ask team members “what have you done to lead by example” – including specific examples – and grade them based on how they meet clearly defined goals.
- Set up formal systems for education:
Once gaps in skills and education are identified, set up formal systems to close them with education and training. For example, say your financial team members don’t have the acumen or experience to understand P&Ls in a lean environment.Draw up a talent map detailing the skills your team needs to be successful. Arrange formal training, either teacher-led or virtual. Enable employees to select classes and get the skills they need to be Lean leaders. When they have the skills they need and execute them, business naturally improves.
- Celebrate success in a public way:
Incentive and recognition programs are one of the most effective ways to foster desired behaviors. The key is recognizing outstanding performance in a public way and celebrating the whole team, no matter how big or small. Some examples:
- Quarterly reviews that recognize employees with verbal praise
- Town hall meetings where team members share wins they’ve achieved
- Team-building outings to reward good performance (e.g. a family fun day)
- Employee of the month recognition programs
- Boards on the floor displaying safety or quality wins
However you recognize your employees, this final step closes the loop and ties all of the other steps together. You’ve set expectations, measured and communicated them, trained employees. Now, reward them to keep that good thing going.
By empowering your people using these five steps, our automotive retailer was able to take performance to the next level. Could a Lean culture help you increase morale, productivity and employee engagement? Learn more here.
Written by Jimmy Fitzpatrick, Group Director of Operations at Ryder. Jimmy is a Lean Operations professional with 15 years of experience in distribution management, manufacturing operations, and behavior-based Lean philosophy. Throughout his career, Mr. Fitzpatrick has played an active role in leading network optimization, talent growth and operational excellence turnarounds for Ryder’s Retail and Consumer Brands customers.