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Creating a Culture of Continuous Improvement

An organization dedicated to change must be one that is fundamentally human-centered, that enables people to thrive and grow.

Having an ideal organizational culture (however you define “ideal”) is the white whale for many leaders. This is more than a bit surprising, considering all the books that have been published on corporate culture and on change management. You’d think we’d have that issue solved by now.

And yet we don’t. Newspapers regularly quote CEOs who bemoan their organization’s poor culture—for example, a lack of attention to customer service or rampant sexual harassment of female employees. Then there are organizations with cultures that tolerate (at best) or promote (at worst) actual malfeasance. The Atlanta public school system, where teachers and principals corrected student answers on tests, and Wells Fargo, where employees created fraudulent customer accounts to juice revenues, are two high profile examples of toxic cultures that have surfaced in recent years.

Anytime I read that cultural change is a stumbling block for companies, I go back to John Shook’s reflections on NUMMI. With the same people as those who worked at the GM Fremont plant, product quality in the NUMMI joint venture with Toyota went from GM’s worst to best in one year. Absenteeism dropped from 20% to 2%. Strikes stopped completely. No one was intentionally sabotaging cars. As Shook points out, the union and workers didn't just accept Toyota's system; they passionately embraced it.

If GM/Toyota could make this kind of tectonic change in company culture in one year, why are companies that aren’t starting from such a deep hole struggling so much? Why do so many organizations find improving corporate culture such a challenge?

When it comes to creating a culture of continuous improvement, at least, there are several reasons that companies struggle.

1. Leading with physical paraphernalia. Organizations may have finally let go their obsession with lean tools, but I’m seeing it replaced by an obsession with paraphernalia: kaizen submission cards, A3 forms, visual management boards, 5S checklists, and the like. Without the appropriate management values and attitudes, these accouterments become just more examples of meaningless corporate flotsam and jetsam landing on the workspaces of hard-working staff. When management doesn’t actually support people in A3 problem solving -- not only by coaching the employees, but by giving them time to work on those problems -- then the A3 is just another template buried on the file server. When leadership doesn’t come to the visual management boards at least a couple of times per week to ask questions, learn what people are working on, and provide the needed help, then the boards quickly become moveable wallpaper. You can’t lead with artifacts. Artifacts are only valuable when they follow a change in leadership behavior.

2. Focusing on culture rather than behaviors. Edgar Schein, formerly of MIT’s Sloan School of Management and one of the leading thinkers in organizational development, argues that you can’t really change culture by trying to directly change culture. Changing the way people think is an impossible task. Rather, leaders should try to change how people act in the organization by defining the behaviors that they want, providing training on those behaviors, and then reinforcing those behaviors with appropriate incentives and punishments. As Shook succinctly puts it, “It’s easier to act your way to a new way of thinking than to think your way to a new way of acting.” If you want employees to be more focused on quality, then teach them fundamental problem-solving skills; make time for, and mandate participation in daily QC circles; bring employees to customers so they can hear first-hand how poor quality affected the customer’s business; etc. If you want a more customer-centric culture, then have employees spend time rotating through the customer-service department, or have them join salespeople on customer visits. If you want to foster a more innovative culture, then recognize and celebrate attempts at doing something new—even if it doesn’t work. Gray Advertising, for example, has an annual “Heroic Failure Award,” complete with a ceremony and trophy, for employees who have tried a new approach at winning business. 

3. Lack of investment. Shook reports that in the first year of the NUMMI joint venture, 600 NUMMI employees—anyone who supervised another person—visited Japan for at least two weeks of intensive training. Additionally, Toyota sent about 400 trainers from Japan to the U.S. to work side-by-side with their NUMMI counterparts for three-month stints. That’s an extraordinary investment of time, money and people. Now look at the “investment” most companies make: They set up an operational excellence or kaizen promotion office with a few people; they run workshops on tools; and they lead kaizen events. Sometimes they’ll pay tuition for employees to get a yellow or black belt from an external Six Sigma training firm. To be sure, Toyota and GM are huge auto companies—not too many companies can afford to spend the kind of money needed to send 1,000 people around the world for weeks at a time. But you seldom even see a commitment to investing time on a daily basis for practicing lean and solving problems. An employee at an HVAC manufacturer recently told me that he thought lean was just another management flavor of the month. But when the president told him that he would happily pay overtime so that he could do his daily 30 minutes of kaizen, he knew that leadership was committed. And now he’s one of the biggest supporters of lean in the company.

4. Poor framing. Many companies promote continuous improvement as simply a different way for employees to do their jobs. But it’s more than that: It’s a fundamental shift in the way both workers and leaders must think about their work. The installation of the and on cord at NUMMI is one of the most well known changes that Toyota made when they started the joint venture. Shook says that GM colleagues questioned the wisdom of installing the system at NUMMI:

“You intend to give these workers the right to stop the line?” they asked.

Toyota’s answer: “No, we intend to give them the obligation to stop it whenever they find a problem.”

There are two critical shifts in mindset here. First is the belief that fixing problems is a worker obligation, not just a right. Most companies don’t talk about this obligation. They talk about tools and artifacts, problem solving and respect for people, true north and customer focus. But they don’t emphasize the absolute, non-negotiable responsibility of every worker to stop a process when they see a problem. The second shift is the change in management attitude toward problems. How does leadership respond when employees find them and bring them to leadership attention? It’s a cliché by now, but management’s matching obligation is to cherish problems, to see them as treasures so that employees are willing to accept the burden of stopping the line. Or as Ford’s CEO Alan Mulally once said, “Red is a gem.” This change in thinking on both sides is the linchpin for successfully changing the organizational culture.

Changing an organization’s culture is no small feat. It takes time and persistence. But an organization dedicated to change must by definition be one that is fundamentally human-centered, that enables people to thrive and grow. If we focus less on culture and more on leadership mindset and desired behaviors, it should be easier to create the culture we want.

Dan Markovitz is a Shingo prize-winning author, speaker, and consultant who helps companies accelerate their lean journeys. You can reach him at www.markovitzconsulting.com or @danmarkovitz.

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