Management Mantra..
Managing the Turmoil with maturity…..
Search Magazine, July 08
Ashok Puri
Director Kaizen Institute India
June’08
When I visit companies these days or meet the management representatives in some of the forums , I can feel some kind of uneasiness in their minds.
Auto sector cos. are sensing the growing competition ;fall in profits ;increase in input costs; unreliability in supplies; low machine and labor productivities ;high manpower attrition and high manpower costs; hostile employee behaviors and above all difficulties in satisfying growing customer requirements.
Situation in other sectors is no better ,with growing threats from China in the Engineering and the Electrical/Electronic sectors.
Services sectors, particularly the IT , ITeS and the BPO sectors have an issue of high manpower instability and mobility, particularly at times when their client fee structures are tumbling.
And this is the situation despite many companies having spent enough resources both internally and externally, to revive the situation by introducing various initiatives like TQM; TPM ; Six Sigma; Lean Mfg, but with low to moderate returns, excluding a few claiming very good results.
The companies are getting impatient and are looking for magic solutions, which can bring positive results at lightening speed or rather instantly; results which are not only substantial but also which sustain for a longer period. But these companies also realize how difficult it is to expect such results.
I encounter such demands very often from my existing or prospective clients. And I am asked to offer a remedy. My approach to such clients is always to make them understand the serious nature of the treatment their organizations need. There is no short cut, as we have to comprehensively look at three distinct areas ; the processes ,the people and the current culture …a legacy of the past deeds of the founding/earlier leaders of the organization.
In this column let me focus on the people side of the organizations .
Usually ,whenever a possibility of change is seen in a company ,the focus immediately turns towards the improvement of the processes, without considering much attention to the other core resources of the company particularly the people and the technology. Though the changes do take place, but they are not either substantial or sustainable.
Our experience with the Indian companies on the sustainability front has been a mixed one .
Kaizen, continuous Improvement as a part of change management has to be seen by the Top management as one of the important strategies. In fact ,for sustainability ,this becomes our starting point…recognizing change as a critical corporate function. This is the only way perhaps , you can ensure management commitment to bring about change for improvement. This way you have better chances of breaking most of the resistance barriers that may come your way at various levels and at various stages of the change journey.
According to my studies ,management while committing itself to the change should seriously analyze its manpower at all the levels .Because for sustenance ,this is the second big reason…. Why the people are preferring to leave ;why they are not satisfied; where is the problem .
Many Japanese companies led by Toyota, tackled a similar situation in a different manner. These companies believed in creating an ideal environment for implementing change techniques and tools by :
…Fostering an atmosphere of continuous improvement and vigorous learning
…Making the employees competent to solve their problems…making them problem solvers
…Grooming Leaders from within rather than bringing them in from outside
…Focusing on elimination of waste from all the processes, particularly the critical ones
…Simply satisfying all of their customers
…Ensuring quality right the first time
…Working for growth together with suppliers and the partners for mutual benefit.
We address here, as in the first three points above, the important factor of literacy of employees…creating a productive , serious and happy environment thru education of ones employees. I believe education definitely contributes in changing people’s lives. The concept of developing capable and exceptional people is thus very important for the organizations.
Recognizing change as an important function, we need to develop people to manage this function.. The standard practice is to have one committed and dedicated ( 100%) employee, called Kaizen Practitioner, for every 100 employees. In addition we need to have one coach ( a Deptt. Head or senior supervisor) for every 20 employees .Coach spends 25 % of his/her daily time on Change management.
How important is this issue . And how many companies try making sincere and serious efforts in this direction .There are training departments in the companies, which try doing this ritual in a rather casual manner. This needs to change. Managements need to take much more serious steps , if they want sustainability of the changes and also less attrition of employees.
Toyota claims that it receives around 40 kaizen suggestions per employee per year! So much so that the management goes to the extent of saying that the DNA of Toyota is Kaizen . Its in the blood of the people there. When asked ,how it is possible ,their answer was ….Toyota values education of its employees, more than anything else . Unless employees are consistently trained , educated and challenged ,you cannot expect them to remain motivated to continuously think and bring about improvements in their processes. The second world war famous US army concept of TWI – Training Within Industry, was unleashed by Toyota ,after it was dumped of no use even by many US companies. The Morale of the people in late 40’s in Japan was generally very low , as also in Toyota. The feeling was that the Japanese cannot manufacture quality cars in competition with the Big three of the US and many more manufacturers of Europe. But then Toyota leaders had their own vision and ways. Education of employees was considered important and was given its due importance. Today Toyota is considered as Toyota university.
The performance of an employee is a function of three factors ..Knowledge; Skill and Attitude. After doing a current assessment exercise at each level on these parameters , a plan is drawn to fill the gap between the desired levels and the current levels. It may look easy but its quite a challenging task. Sometimes it takes years to educate and mature employees .And when so much effort has to go in ,then it becomes important to retain them also .Otherwise you land up educating and training your people for your competitors.
To build the knowledge base at all the levels, we need to identify exhaustively the requirements . To do this a series of brainstorming sessions are conducted and the knowledge modules are specifically designed at the department /process levels.
At the practitioner level education programs ,we need to focus on basics of Kaizen ; Just in Time ;Total Productive Maintenance TPM, and Total Service Management TSM.
According to my experience with the Indian industry, 80% of the processes can be improved with the initial implementation of simple concepts like standardization and 5S,rather than bringing in complex tools like SPC, Jidhoka, DOE, FMEA, Six Sigma etc( may be you can have them for the final 20% improvement).You tend giving your employees ,what I call , an education shock, if you insist on having first the complex tools. Try the simple tools first .
We try making employees understand their processes ; what’s wrong with them and where . The concept of 7 Mudas becomes very handy with practical muda walks thru various processes, to make people understand the value addition concept.. Let them also understand Mura and Muri ; and the 5M’s ..Man /Machine / Material /Methods/Measurements ,the critical elements of total resource management.
Extensively they are also taught all the problems solving tools like 5W1H, PDCA , Ishikawa or Cause and Effect or Fish Bone Diagram/ 5 Why analysis.
Exposure to 5S and Standardization is equally important…you can talk of Process Operation Standards, Quality Standards , Maintenance Standards, Material Stds ,.Inventory Stds, Skill stds.
The education must include both theory and practice at the workplace.
As far as attitude building goes, the leaders ,at all the levels , have a strategic role to play . They will have to play a key role in nurturing the energies of their team mates and will have to be truly Gemba ( the place where value is added) friendly. They will also have to hold regular Kaizen events in a planned manner. I will discuss in more details about these events in my column next month.
Once employees get into that gear of education and caring by their mentors/coaches ,one can begin to see the difference …..difference that it is not all that necessary to depend on monetary incentives alone to sustain the improvements and retain people.
So the recipe to overcome the current turmoil is simple ,but needs a committed and a missionary approach. Recognize change as a corporate function, develop change leaders and assign them the task of change management ;nurture employees thru extensive education and serious mentoring by the leaders. Just try this recipe and see how your employees turnaround.