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business, culture, deming, improvement, lean, lean thinking, management, tps, transformation, Uncategorized

Innovation: Without it, You’re Not Doing Lean

There seems to be a common misconception that lean thinking and innovation somehow conflict with one another. Many companies approach innovation as something completely separate from lean in order to prevent concepts like standardization and stability from stifling creativity.

This is unfortunate because innovation not only fits but is actually a significant part of a lean system. Failure to integrate innovation into a lean journey will lead to missing out on many of the big gains that are possible with the strategy and hurting the organization’s long-term competitiveness.

THE CONCEPT OF IMPROVEMENT

At its most basic level, improvement consists of two elements: problem-solving and breakthroughs. Problem-solving involves addressing a drop in performance with the objective of returning to the way things were before the problem occurred. This is critically important for maintaining performance by increasing the stability of processes and systems. Most organizations, however, stop their lean efforts there and fail to significantly improve because of a lack of attention to improving performance and raising the standard. As important as stability is to performance, raising the standards to new levels are just as important to long-term competitiveness.

Breakthrough or kaizen thinking deals with this to continually drive the organization’s performance to new levels. The successful application of kaizen into an organization requires the type of innovative thinking and creativity that many organizations are missing, have stifled in team members, or address completely separate from lean.

MANAGEMENT PROBLEM-SOLVING

Breakthrough can come from two sources: the vision and ideas from team members to make products better and work easier. An effective vision provides direction regarding how the company wants to perform in the future to be successful. It must be grounded in reality to some extent but also provide enough of a stretch to energize people to apply the creativity to make it happen. From this perspective, a comparison of how the company currently performs and how it is expected to perform 5 or 10 years in the future should provide a gap that needs to be addressed through creative problem-solving, or breakthrough. As a general rule, this should consume about 20% of the organization’s resources, and the closer to the customer or the company’s main business activities (i.e., the factory floor, service counter, wellhead, etc.), the more the focus on the other 80%, or operating and maintaining processes to meet performance targets, and conducting problem-solving when targets are missed. It should be noted, though, that the needs of every organization are different and the split must be adjusted to fit individual situations.

Driving breakthroughs to close the gap to the vision is basically management problem-solving and is where leaders need to spend a significant portion of their time. This is one of the many reasons why micromanagement of team members is damaging to an organization. Besides the negative effects on motivation, micromanagement shows that a leader is not developing those on his or her team to handle day-to-day problem-solving in to free up the leader to focus improving the system.

CHANGING THINKING

Problem-solving and breakthrough both usually reprogramming in the way most people think. The typical reaction to problem-solving is to immediately jump to the countermeasure. This is often due to an overloaded schedule, the need to look smart, arrogance, or many other factors that are influenced by geographic and company culture. The problem with this is that, without understanding the problem clearly, or determining the most likely root cause, the countermeasure can be incorrect and worsen the situation, or even if it does happen to work, the team misses a valuable opportunity to learn more about the product or process involved.

Reprogramming thinking to improving problem-solving requires developing the analytical skills to clarify the problem, break it down to determine when, where, and how often it happens, and using a structured way to discern the most likely root cause. Basically, people need to learn to become detectives to determine what changed since the process was meeting the standard.

Breakthrough thinking requires developing innovative or creative thinking. This involves developing the ability to clarify the need as the difference between current performance and what it needs to be to meet the new target (similar to problem-solving). It also requires learning how to reflect and observe to see what is keeping performance from improving beyond its current level and teaching people to challenge their own assumptions to better understand whether they are real or perceived, and if they are blocking new ideas from being devekioed. Breaking down the walls that protect one’s beliefs about the work is a key to increasing the flow of ideas and creativity.

Although improvements will occur throughout the journey, patience and a good deal of effort is required to develop problem-solving and breakthrough thinking because it involves reprogramming the way a person has likely thought and approached work for decades.

LEAN THINKING INVOLVES BOTH

As an organization is undergoing a transformation toward lean thinking, it is critical to think about the whole system, which includes closing gaps to the standard as well as raising the standard. Considering problem-solving only and keeping innovation separate from the effort tells people to that their ideas are not valued and to only focus on getting processes to operate to current standards.

Integrating the creativity of breakthrough thinking with the stability of standardized work and problem-solving, however, can enable the organization to tap into the big gains that most companies fail to achieve. Like most of lean thinking, however, it is a simple concept that requires patience, vision, and effective leadership to make happen.

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About Gregg Stocker

Gregg Stocker is a lean advisor for Hess Corporation. He possesses over 20 years experience in a variety of disciplines including operations, manufacturing, human resources, quality, and strategic planning, and has worked in manufacturing, service, and oil & gas industries. He has extensive international experience, including successfully leading an $65 million business in The Netherlands. He authored the book, “Avoiding the Corporate Death Spiral: Recognizing & Eliminating the Signs of Decline,” (Quality Press, 2006) and was a contributing author to "The Lean Handbook," (Quality Press, 2012). Gregg is a frequent speaker and recognized expert in business and performance improvement having been interviewed on television, radio, and in a number of newspaper and magazine articles including The New York Times, Washington Post, BusinessWeek, and InformationWeek. Gregg has implemented change in organizations ranging in size from $10 million to more than $100 billion. He is a team-oriented leader who achieves results by improving teamwork, focus, and communication throughout the organization.

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