The Management Brief in August examined challenges confronted by those learning and performing value-creating work, and how leaders often fail to understand the work and respect the workers, derailing lean transformations. This month’s articles — by Jacob Stoller, Josh, and John Shook, LEI senior advisor — present lean alternatives and new approaches to enhance value-creating work and counter misguided cost-cutting, siloed thinking, and the isolation and mundanity of frontline associates when doing their jobs and confronting problems on a daily basis.
Focus on Value-Creating Work
Most organizations are myopically focused on financial performance. That’s not an entirely bad thing, but it cannot be the only thing. They view long-term vision setting and annual strategic planning as singular events for which the primary purpose is to deliver near-term financial results that are tied to profit targets and budgeting cycles.
When leaders don’t get the results they need, they instinctively look for ways to be more financially “efficient.” That, wrote Jacob, leads to harmful outcomes, including excessive production to boost utilization rates; localized efficiencies that fail to impact overall business performance but damage quality and morale; an organization structure that promotes self-interests over those of the whole; and an overemphasis on eliminating visible costs, with headcount being a prime target. “Executives who see nothing but the financials assume that there’s nothing else to see. This leaves them blind to the waste, defects, chaos, and poor morale that their efficiency initiatives might create.”
Jacob pointed to the flawed management thinking described by W. Edwards Deming that when individual areas of the organizational pyramid are made more efficient, this makes the entire organization more efficient. The problem is the “pyramid does not reflect how work gets done in an organization, and, furthermore, that this segmented approach creates conflict between the company’s objectives and people’s own selfish interests.”
Lean transformation, unlike an efficiency campaign, is rarely if ever a short-term effort. “What companies should pursue is the overall efficiency by which they deploy all available resources to deliver the quality products and services that customers demand. The word for that is ‘productivity,’” wrote Jacob. Total factor productivity measures unit output relative to all the resources that go into its creation (rather than measuring only the financial efficiency of each component). As such, organizations need to develop a culture that focuses on and rewards value-creating work. This takes time.
John wrote that lean is the “essence” of work and lean is about elevating, celebrating, and “working on the work.” He cited the many ways that organizations fail to do this, such as leaders who demean the work, including those doing it while claiming people are their most important assets.
“Lean thinking is about, more than anything else, rethinking, reimagining what work can be,” John wrote. “To do so, we have to start with the purpose of the work. We ask, “Why are we doing this, what problem are we trying to solve?” You, as the owner or CEO, have a problem you are trying to solve, which has brought you to this position of gathering together dozens or thousands of individuals on a daily basis to do this work, to create this value together.” Work, he added, should be defined and designed around solving customer problems, with deep respect for both the work and the people doing it.
The opportunity to improve value-creating work across industries is enormous — but possible — and Josh offered a unique concept to get that underway. His idea was sparked by a comment from Jim Womack to the leader of a large retail company: “You lead one of the largest educators in the country in terms of how people work.” What if we in industry recast entry-level roles as training grounds for lean habits, lean leadership, and problem-solving instead of just low-skill work?
“In the lean community, we’ve spent decades working to improve systems and grow capability across industries,” Josh wrote. “We often talk about getting lean thinking into schools. But what if there’s another opportunity hiding in plain sight: What if we made frontline jobs the classroom?” With retail and hospitality industries employing 63 percent of 16- to 19-year-olds in the U.S.1, that would be a good place to start.
Improve Value-Creating Work
What would it look like if those companies employing the most young people took the lead on lean training, as Josh suggested? If those jobs were designed with lean thinking in mind, he wrote, the conditions for success would include:
- Teaching new frontline associates clear standards for what good work looks like and how those standards relate to customer needs and desires.
- Equipping frontline associates with proven methods to uphold the standards and meet if not exceed customer expectations.
- Having leaders present with the time and expertise to teach the standards and methods.
- Ensuring that standardized work makes problems detectable — any disruption is an indicator of a problem.
- When a problem is experienced, frontline associates know how to ask for help and know — and learn to trust — the leader-led process for problem solving that their call for help triggers.
John advised to define work based on the value it provides the customer and how it solves the customer’s problem, and build the work so that whoever is doing the work can do it perfectly every time: “And when the inevitable problem arises … he/she knows how to (1) observe that there is a problem, (2) devise a quick response to make the immediate situation better, (3) come up with some ideas for making the situation better next time, and (4) give those ideas a try and judge how well they worked.”
One reward from this approach, he added, is that in solving problems workers get comfortable knowing that another problem, a different problem, absolutely will occur. Another reward is that rather than wait on the next problem, they will create it. “By learning to see ‘problems’ merely as ‘gaps’ between the way things are now vs. the way they should or could be, we can start to see every situation as a problem waiting to be solved.”
Fortunately, there’s great examples of these practices occurring across industries. Josh noted the work at:
- Sam’s Club: In partnership with the Good Jobs Institute, the retailer undertook a major overhaul of store operations that included simplifying product offerings; eliminating low-value tasks; improving technology to create capacity for frontline employees to focus on what matters; and making strategic pay and staffing investments to increase team stability. “The result was teams who stayed longer, delivered higher sales, and higher productivity.”2
- O.C. Tanner: A housekeeping team described how they track the problems they experience, experiments run experiments, and work with other teams to introduce countermeasures, generating millions in cost savings. “Leaders like Gary Peterson at O.C. Tanner have developed operating systems with integrated management systems that deliver the capacity and capability for problem solving. As a result, teams like the one I visited in housekeeping have pride and ownership in their work. Every day, they make things better, and that energy ripples across the organization.”
Leader’s Responsibility in EnhancingValue-Creating Work
The August contributors rejected the notion that certain jobs are inherently low skill or unworthy of investment. As John noted, factory labor, retail stocking, or street sweeping all can be made meaningful if designed and supported properly. Menial does not have to exist without meaning.
“Making things is in its essential nature a meaningful thing,” wrote John. “It is among the most meaningful of the many ways we humans can choose to fill our time. Factory work — whether job shop or assembly line, carving picture frames or fabricating steering brackets — is a way we organize ourselves to make things. It is immensely rewarding, meaningful work. Or it can be if we choose.”
And when leaders don’t make this choice, employees — especially those just starting their careers — sense the lack of respect and begin to believe that help will not be on the way when a problem arises and that it’s no one’s responsibility to make things better or to even ask the question of why things are the way they are. “Instead of teamwork and leadership, we teach people that work is mindless and endless,” wrote Josh. “These beliefs aren’t often challenged later in life. They harden into workplace habits — and sometimes, into leadership behaviors. Then the cycle repeats.”
It’s the responsibility of leaders to design the work so that people can improve their own capabilities and careers while they succeed at detecting and solving problems and continuously improving their organizations. This means creating environments where issues are surfaced and addressed rather than hidden or accepted, and the individual worker and their work is respected and not treated as interchangeable and disposable parts.
“Executives who see their people as replaceable entities on an org chart are also too easily convinced that technology, and AI in particular, can readily replace their people,” wrote Jacob. “On the other hand, companies that understand the interdependence of production processes and strive to develop the full capabilities of their people will, like Toyota, be in a stronger position to get a solid ROA from their technology investments and create better opportunities for their people.”
Josh applauded the work of Zeynep Ton and the Good Jobs Institute in helping leaders and companies to fully develop their employees. “They show leaders the real costs of underinvesting in frontline work: in terms of lost sales, misplaced inventory, low productivity, turnover costs, difficulty adapting, and others — helping companies shift their mindset from ‘we can’t afford to invest in our people’ to ‘we can’t afford not to.’ To start creating the conditions for success on the frontline, they help leaders make different operational choices to free up time for employees to focus on value-creating tasks, and investment in people to create stability and increase tenure.”3
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