In contrast to the bad practices described in the previous post, today I will discuss a spectacular real-life example (the do’s) of a cultural transformation which helped a troubled company implement its new strategy and become successful again. The leader’s role in this transformation has been hard to overrate. I have found this story on a fantastic blog, which I strongly recommend to anyone interested in management.
After several years of mediocre performance that culminated in losing an important tender, the top management of a Japanese company realized that they needed to take radical steps to keep the company afloat. The executives showed good judgement when they turned for feedback to the company which has just turned their offer down. By doing this, they demonstrated that they were willing to treat failure as a learning opportunity, and that approach does not seem common in the corporate world. After all, it’s easy to find a scapegoat and punish him, or at least put the blame on unfavorable objective circumstances. It’s difficult and sometimes risky to acknowledge accountability for a setback, conduct a fact-based analysis, and follow the findings even if it means leaving your comfort zone. On the other hand, it takes humility and courage to rewrite your strategy based almost exclusively on actual client feedback, even when this client is a large and successful company. Incidentally, almost all companies these days maintain that customer (client) satisfaction is a key goal for them, but only few follow these declarations with actions that are actually driven by the Voice of the Customer. Instead, managerial decisions often appear to be based on preconceived notions or a political consensus. Which would be just fine if only these factors were good reflections of reality, which, as we know, is not always the case.
The struggling Japanese company avoided these pitfalls as its leaders sacrificed their egos, and followed the advice given to them by their would-be client. One of the pillars of the new strategy was the introduction of the lean 5s principle. In fact, the company decided to follow 3s, which are Sort, Straighten, and Sweep.
Thus began what the company calls their “production revolution.” The Revolution has four components: a clear vision, exhaustive 3S, a new production system, and a new operations management system.
Now, lean manufacturing methods have been on the agendas of CEOs for years, so what is so special about this company? The answer is, few of those CEOs took their own agendas as seriously as the CEO of this company did. Consider Sweep, for example, which in short means that the workplace and equipment should be kept clean by all the employees (benefits include early detection of defects). The picture below shows the company CEO cleaning up the office floor in the morning. It was not a one-time event, he does it every day.
In fact, almost all of their employees work on cleaning the entire building, including sweeping the road out front, for thirty minutes each morning.
Now there is 3S activity every morning from 8:20 to 8:50. The managers clean the toilets.
Regarding the first S (Sort) and the second (Straighten, which, to simplify things, can be thought of as an efficient flow of work, which helps eliminate waste, or non-value-adding tasks), the company has also gone out of its way to put them into effect. However, outstanding leadership became especially visible in promoting a somewhat unconventional “standing policy”, which, by the way, was driven not by some ideology but by highly rational motives.
they decided that everyone must stand up. Operators, technicians, engineers (…) They discovered that the ergonomics of standing are better than sitting, especially for production operators who need to twist to grab parts out of bins. Workplace health issues decreased.
But most importantly they found that standing creates action. When you’re sitting you have a tendency to put off going to the gemba, to see what’s going on, to go talk to people. When you’re already standing it takes less effort. It’s hard to daydream standing up so overall productivity goes up.
It is easy to imagine that this change was met with considerable resistance. Again, the CEO and other executives left the staff no pretext for excuses when they gave up their chairs themselves:
That’s the president standing at his desk in the back, on a freshly-cleaned floor I might add. And in the same room, standing at their desks, are his directors of various core business functions. All standing, all in the same room, talking to each other, making quick decisions, looking at the same data on the boards surrounding them.
This approach may seem extreme, but what matters is that it has been extremely rewarding – for the shareholders, employees, and for those who made the seemingly impossible change happen – the company leaders. Surely, it is hard to imagine a better illustration of successful leading by example. To paraphrase an infamous statement made by Richard Nixon when grilled about the Watergate affair, “When the president does it, that means that it is not impossible”.