Lean Taking Root: It Depends on Culture and Leadership

Will Lean practices take root within an organization and lead to transformational change? That depends on the organization’s culture and the role that leadership plays.

Within a traditionally structured organization, ideas and direction flow primarily from top to bottom, or executive to worker level. This may be expedient in some ways, but it also can impede communication, creativity and the capacity for solving problems.

Organizations that have truly embraced Lean at the cultural level have adopted a leadership model that counters limitations of the traditional top-down paradigm. Still present in many companies, a traditional leadership pyramid resembles the illustration in Figure 1.

Figure 1: Traditional Leadership Pyramid

In this traditional model, the executive suite not only owns vision and strategy, but also is responsible for improvement ideas and tactical decision-making. The organization does not adjust to change unless the order for movement is issued from above.

Flipping the Leadership Pyramid

In a Lean environment, the organizational pyramid is flipped upside down and the focus converts to people actually adding value across the enterprise. This inverted design seeks to maximize key communication paths critical for creating an adaptive and responsive team:

1. Communication between external forces (i.e., customers, suppliers, markets, etc.) and the organization.

2. Spread of ideas for improvement laterally across the internal boundaries within the organization.

3. Communication of requirements/needs up and down the leadership chain to match resource allocation with external realities.

It is difficult to identify benefits of the traditional structure in today’s marketplace, but there are a few reasons cited for its existence:

1. A belief that only a few highly skilled people can understand the complexities associated with large-scale management of people and processes.

2. The assumption that decision-making is accelerated when information flows from top to bottom enabling quick reaction to a changing environment.

3. The notion that the highest salaries on a team should carry this burden (i.e., the big earners are paid to deal with the big stresses associated with change).

In a nutshell, the traditional model of leadership has not provided the anticipated advantages. Even healthcare is faced with the complexities of an evolving market environment, which include shifts toward outpatient surgery, reimbursement challenges, increased competition and “healthcare tourism” as consumers go abroad in search of lower costs and comparable quality.

The Leanest corporations and firms in the world have long abandoned the top-down approach. They have invariably flipped the pyramid in a successful attempt to harness the full capacity of their workforce. Figure 2 shows an example for healthcare.

Figure 2: The Inverted Pyramid in Healthcare

The inversion simply states that executive leadership is not the most vital element within the group, with the focus resting on people adding value as defined by the customer. They will ultimately determine if the customer continues to spend money with the organization. The workers reside at the top of the organization and it is everyone else’s job to ensure they have what they need to succeed.

Flipping the pyramid does not complete the picture, however. Communication must be gathered from the workforce and the organization must allow this information to flow smoothly. The structural mechanisms in a Lean institution convert best practices and voice of the customer (VOC) to requests for support so they can be implemented and sustained. This underscores the critical roles executives play in a Lean environment: supporting the sharing of information and the implementation of ideas coming from the workforce.

Importance of Hospital Leadership

Recent events at a midsized hospital provide excellent examples of the differences between traditional and Lean approaches to leadership. A hospital executive sponsored a Lean Kaizen event to improve logistics processes for a nursing unit within the hospital. The executive empowered two cross-functional teams comprised of nurses and supply personnel to work together and make improvements based upon their experience and customer needs.

The executive provided the vision and promised support, but did not suggest a solution. This simple act of delegation seemed to infuse energy into the Kaizen participants and both teams produced substantial wins within two days. It was obvious they had not been entrusted with this type of responsibility before – they relished the opportunity to work together and improve their own processes. The executive reaped significant gains from this simple act of trust.

Ironically, the largest hurdles surfaced in the form of other functional executives at the hospital. In the process of optimizing a supply room, the team ran into hurdles that would require modest support from management to resolve. A second senior executive caught wind of the issues and approached the team with an immediate opinion on the situation – “stop the improvement process and go back to the old situation.”

The second executive’s reaction appeared to be an emotional response to the first executive’s effort to flip the leadership pyramid that existed in the hospital. His opinion on the issue was rendered without detailed information on the team’s problem. He did not offer ideas or support for resolution of the problem. Ultimately, the teams’ issues proved to be trivial and the team continued on its improvement path unabated.

The second Kaizen team was charted with improving a logistics process and faced a similar situation. Shortly before the team was slated to pilot their new process, they were advised by management to limit the trial period of their pilot process to two to three days. This made process validation nearly impossible and diminished the power that had been delegated to the team – once again traditional leadership structures were working counter to the wishes of the true process experts. The risks posed by the new process were insignificant. The Kaizen team was adamant that the new process be tried for several weeks in order to give the best estimate of its effect on performance. The team was ultimately given the time, and the new process was proved to be a significant improvement over the previous process.

‘Crisis of Impending Competition’

These examples illustrate the culture clash that can occur when an organization is attempting to flip the pyramid. People can and will struggle with their new roles. Some have speculated that in order for a true Lean transformation to take hold, the organization itself must be faced with a “change-or-die” situation. While not every organization faces a change-or-die dilemma, but every organization is subject to a “crisis of impending competition.”

Staying ahead of marketplace changes requires a depth of knowledge and expertise that transcends the limited capabilities of a handful of organizational leaders. The ultimate challenge is to flip paradigms and tap into the people who are most familiar with the processes and customers. Encourage communication and harness the necessary resources to support improvement.

Establishing a vision cannot be delegated. But with an empowered workforce – with input and feedback from the people that actually provide value for the customer – leaders have the best chance of plotting the least disruptive and most efficient course to obtain that vision.