How Can Lean Thinking Help Organizational Change?


Position Statement

Change is an inevitable part of organizations. Change can be a significant catalyst for business success and growth, yet can create a financial burden through productivity loss, passive and active resistance, or worse, attrition of valuable staff. The key to initiating meaningful change is to coach people to uncover what’s broken. It is about understanding processes within your organization (how do you deliver what you do? How do you create value for your customers?) and fostering a continuous improvement mindset to plan for your future. Lean thinking—a mindset driven by creating greater value and eliminating waste—can help.

Evidence Overview

Lean
Toyota manufacturing is credited with developing Lean concepts in the 1930s and then more intensely after World War II to provide continuity in process flow and their variety in product offerings. But leveraging Lean for change is not about imitating how to build cars. It’s about using what you know and learn to produce continually better results. Industries outside of manufacturing, from aviation to health care to construction, have adopted Lean thinking to improve how they deliver services.

Part of that process is successfully dealing with crisis, even to the point of welcoming it. A well-managed crisis can help spark innovation and eliminate complacency.

“…The biggest crisis, from the perspective of Toyota leaders, is when associates do not believe there is a crisis or do not feel the urgency to continuously improve the way they work.” (Liker)

Leaders at Toyota developed a hierarchical model to help illustrate the steps to becoming a learning organization capable of achieving continued success. This aligns with the concept of regenerative business from Carol Sanford (2017) that calls for making the process of change a routine cultural component. Because when “everything is always changing,” it becomes a guide to improve what you do every day.

Source: Toyota Way 4 P Model (Likers)

In the figure above, the base is understanding that transformational change is a long-term philosophy. There may be short-term losses on the journey to long-term goals. Next, is understanding the process in order to eliminate the things that don’t create value for you or your customer. The team most capable of uncovering waste are the people and partners responsible for the work. When an environment of vulnerability and transparency is created the result is a solid foundation of trust and respect. The last step in the model is problem solving, we should never be satisfied that our current state is the best we can be. If an organization adopts the mindset of continuous improvement and learning they will never become obsolete.

How does Lean thinking apply to organizational change?

Change Management
Studying change began in the 1900s, but the concept of Change Management didn’t emerge in business conversations until the 1980s. Several authors and researchers formalized concepts on change and helped spearhead conversations on the topic. By the mid-1990s to early-2000s consulting firms began to surface as thought leaders and experts in implementing Change Management. Today several universities and firms offer education, training and certification in Change Management practices.

All of the research and education has led to the conclusion that the decisions people make determines if things change or they don’t. Thought leaders have developed various methods to train change management leaders how to implement change. One method at the forefront is Prosci’s ADKAR® model for Individual Change.

Source: Prosci©

Prosci’s method highlights that organizational change occurs at the individual level and includes speed, utilization and proficiency as part of ultimate adoption. Managing change must be adapted to the type of change (moderate, extreme, or somewhere in between) and the change readiness of the organization—is improving in their DNA or do they fear change?

Applied In Practice

Approach
Change is difficult at any level and it should not be approached alone or without a roadmap. HKS uses Lean thinking and the Prosci methods as a guide to engage, enable and empower change.

To bring about effective change, it is important to first understand what the organization is today—how it works, how it solves problems, the extent to which it is change ready. Following the Lean concept of Gemba (‘go to the place’), we recommend spending time where the work is being produced/experience is being had and with the people producing/experiencing it. Only then can you effectively uncover what needs to change and expose the root cause of the issues. This is best accompanied by using a diverse team that begins to resolve the issues that were exposed and empathizes with the end user population the change will ultimately impact.

Once the changes are identified, we create a plan to prioritize them and an outline for rolling them out:

  • Start with leadership communication of how the change supports the organization’s business goals and why the changes are important.
  • Implement the simplest changes first—trying to do them all at once will exhaust your resources—small wins will start to build momentum for the transformation and build the required change in behavior at a deeper level.
  • Establish a process to check-in on improvements, celebrate what’s successful and adjust what isn’t. Remember, not all suggested improvements are going to be instant hits; practice is part of the journey of building change competency within an organization.

Case Study
Understanding the need for change, who the change affects and how it affects them, and including them in the process, are key elements to a successful transformation. The relocation of the HKS Chicago office began with an alignment session to understand the current state. Designers for the new space did not want to assume they understood pain points in the current office and desires for the future location. Before putting pen to paper the team took time for onsite observation and root cause analysis to be certain the design solved the real problems.

Throughout design and construction, the team tested their improvements (through mock-ups and evaluation) and provided regular progress updates to the office to prepare staff for the change. As a result, HKS Chicago selected a leased space that was not originally on our radar for our new office. It had a smaller footprint but greater opportunity to grow without construction and an amenity-rich building that allows employees to use diverse shared spaces, which frees valuable real estate in the HKS office. There was also a 78 percent increase in employee satisfaction because of access to nature and light even though it was an urban site.

At its core Lean thinking is engaging with the people responsible for the work or experience to make it better, and at the heart of Change Management is helping people find success with change. The HKS Chicago project is a good example of the connection between Lean and Change Management to identify what’s broken and provide the tools to fix it.

References

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Author https://www.business.com/articles/a-guide-to-changing-workplace-culture/
Author. The Irrational Side of Change Management
Author. Understanding Fear of Process Improvement
Author. Turning the Ship Around: A Guide to Changing Workplace Culture
Author. How is Technology Impacting the Changes in the 21st Century Workplace
Author. Harvard Business Review. (2012) https://hbr.org/2012/09/understanding-fear-of-process-improvement
Liker, J.K. (2004) The Toyota Way. McGraw-Hill (page 51)
Liker, J.K. (####) Change Management and Lean Transformation
Maslow, Abraham. Hierarchy of Needs.
McKinsey. https://www.mckinsey.com/business-functions/organization/our-insights/the-irrational-side-of-change-management
Prosci. Best Practices in Change Management, 2018 Edition.
Rogers, Carl. Theory of Self.
Sanford, Carol. (2018) The Regenerative Business
Skinner, B.F., Reinforcement.
Van Gennep, Arnold. Three States of Change.
Womack, James P. and Daniel T. Jones. (1996) Lean Thinking: Banish Waste and Create Wealth in Your Corporation.