Exchanging ideas to create the well-being advantage

I’ve been struck recently by how widespread the application of Lean Management principles has become in the UK economy – both in the private and public sectors. Traditionally reserved for the manufacturing and retail sectors, Lean is a model for managing organisations in a way that focuses only on delivering exactly what the customer wants, when they want it. In other words, there is no slack or waste in the system and this allows businesses to keep costs to an absolute minimum. The current trend for using these principles pre-dates the credit crunch, but the shortage of cash in the economy makes them more relevant than ever.

However, these are not new ideas. In fact, the American Edwards Deming pioneered many of the techniques associated with the Lean approach when he exported this way of thinking (which became Total Quality Management and Just-In-Time manufacturing) to the Japanese car industry in the ‘50s – a time when US car manufacturers were on top of the world – rich, comfortable….. and complacent. This complacency came back to bite them over the next forty years as leaner foreign manufacturers gradually eroded their market share. And the effects of this abide to this day, as I’m reminded by the proliferation of Japanese cars I see every time I return to the States!!

The claims made for the efficiency gains that Lean processes can deliver sound impressive – with 50% improvements in performance and quality being perfectly achievable in relatively short timescales. But are we to believe that there are no negative consequences to such major change? Think about it for a minute – even if the costs vs. outputs balance better on paper after the changes are made, removing cost generally means removing people (often in significant numbers) as well as other resources. How can removing hundreds of people from an organisation not affect morale, motivation and employee engagement?

As a result of such changes, the workload of some people grows exponentially which, in turn, puts pressure on work relationships, communications and employees’ ability to maintain quality under pressure. For some this will change what work feels like forever in terms of the nature of the relationship they have with both their job and their employer. These people may feel that their employer has broken the psychological contract and the risk of the best people leaving is increased. All of this is against a new background of relative job insecurity that has accompanied new economic times and this is a particularly unusual feeling for public sector workers who in the past have been immune to such concerns. But these days, given the current climate, we can all justifiably ask ourselves the question “Will I be next?”

It’s here that the spotlight falls upon leadership and internal communication. Because I’m not saying that there’s anything wrong with the Lean model, just that this kind of ‘all or nothing’ cost-based approach requires extremely high levels of leadership skill and ability if it is to be a success. Apart from managing the aftermath of the change process itself, this is fundamentally about culture change and the trick is not to lose all of the good aspects of the old culture while bringing in the new ways of thinking and acting. For example, I have talked before about discretionary effort – something which has been given willingly in many organisations where in the past there has been space and time to go beyond the current task. But one of the likely side-effects of the Lean approach is a new employee mindset that sees spending time thinking about the bigger issues as a waste of time in a world where it’s only important to focus on the essentials of the next deliverable. Of course, organisations can manage impressions to the outside world so that it looks like they are becoming leaner and fitter for purpose, but inside these things can quickly take on a life of their own and before you know it you have a completely new culture! This is fine if you want a completely new culture and weren’t fussy about what you lost from the old one, but most organisations have positive differentiators that are worth holding onto – cherishing even.

Radical change always has consequences. Lean is a very efficient way of finding the dead wood, but it can be a brutally blunt instrument so the changes it suggests should be thoroughly evaluated for sustainability and implemented wisely. Above all, it should only be considered if a leadership group is confident and talented enough to pull it off.