Leadership - MBA-Arbeit Alonso-Michel, finale Version, 17.04 - i-bcs

Transcription

MBA-Thesis
TITLE
Leadership as a Sustainable Success Factor of Lean Manufacturing
Analysis of Leadership Requirements within the Implementation Process
and Possibilities to Support them as an External Consultant
Dipl. Wirt. Ing. (FH)
Jan Alonso-Michel
Mat. No. 612369
Submitted to the Faculty of International Management Institute at
Ludwigshafen University of Applied Science
in partial fulfillment of the requirements for the degree of
MASTER OF BUSINESS ADMINISTRATION
International Lean Manufacturing Consulting
April, 2008
Leadership as a Sustainable Success Factor of Lean Manufacturing
Analysis of Leadership Requirements within the Implementation Process
and Possibilities to Support them as an External Consultant
Jan Alonso-Michel
ii
I ACKNOWLEDGEMENT
The study would have been impossible without the support of all leaders who took the time to
discuss the issue of leadership with me personally or who openly communicated their opinions to
me in the form of a questionnaire.
I would like to thank Dr. Ulrich Hagenmeyer for his high-quality, challenging supervision and
continuous motivation.
I am grateful to Oliver Ballhausen and Fred Wilbert and all my colleagues of Leonardo Group
GmbH for their professional contributions and for their support in contacting potential respondents
to my questionnaire. I would especially like to thank Reinhard Back, who challenged and coached
me in many projects over the last four years.
Special thanks go to Dr. Bruno Szabo, Andreas Riemer and Jens Klingseisen for their
contribution to my integrated live.
My thanks also goes to all of my MBA course mates for a wealth of fruitful philosophical
discussions, notably the one on the way home after the visit to Toyota Gosei, and sharing a great
time of the last two years.
Furthermore, I would like to thank Maren Barton and Alexander Topmöller for their excellent proof
– reading.
Last but not least I want to thank my dear mother for her continuous support.
i
II ABSTRACT
The objective of the thesis is the analysis of leadership as the factor of success, which will be
analysed using the specific case of implementing the Lean Manufacturing approach.
This necessitates a discussion of theoretical requirements in this context as well as the
possibilities for external consultants to support a company’s management in realising leadership
in this context successfully.
Therefore, the theoretical part covers first of all the genesis and the concept of Lean
Manufacturing. Then the focus shifts to the description of leadership-related issues like human
motivation, the difference between management and leadership, and the authenticity of leaders.
As a consequence, five Leadership Principles are defined. Additionally, the situational leadership
approach, which covers the process of employee development, is described in detail.
The consolidation of Lean Manufacturing and leadership is carried out by describing the three
phases of a Lean Manufacturing Implementation and by assigning the five Leadership Principles
to particular tasks and contents.
Subsequently, the topic of how external consultants can support leadership within the context of a
Lean Manufacturing Implementation is covered.
The practical part describes first of all the methodology of the survey. Then a detailed analysis of
the questionnaire, based on the theoretical part, is carried out. While testing the three
hypotheses, three aspects are compared in terms of differences between theory and practice: the
degree and influence on success of authenticity of management; the application of the five
Leadership Principles; and Lean Manufacturing Implementation training of management. The
limitations and their influence on the survey are discussed then, too.
Based on the practical results, the potential for external consultants to support leadership during
the three phases of a Lean Manufacturing Implementation is discussed, and the thesis concludes
by outlining the findings of this study.
ii
III LIST OF CONTENTS
I ACKNOWLEDGEMENT ...............................................................................................................i
II ABSTRACT ................................................................................................................................ii
III LIST OF CONTENTS ............................................................................................................... iii
IV LIST OF FIGURES...................................................................................................................iv
V LIST OF CHARTS......................................................................................................................v
VI LIST OF TABLES.....................................................................................................................vi
VII LIST OF ABBREVIATOTIONS............................................................................................... vii
1
INTRODUCTION.........................................................................................................1
2
OBJECTIVES AND METHODOLOGY .......................................................................2
2.1
The Hypotheses ................................................................................................................ 2
2.2
Methodology...................................................................................................................... 4
3
3.1
THEORETICAL PART ................................................................................................6
Lean Manufacturing .......................................................................................................... 6
3.1.1 The Genesis ..................................................................................................................... 6
3.1.2 The Concept ..................................................................................................................... 7
3.1.3 The Implementation Process........................................................................................... 10
3.2
Leadership....................................................................................................................... 11
3.2.1 Human Motivation ........................................................................................................... 11
3.2.2 The Difference Between Leadership and Management................................................... 14
3.2.3 Authenticity of Leadership as a Prerequisite for Sustainable Success............................. 15
3.2.4 Consequences for Leadership ........................................................................................ 19
3.2.4.1 Leadership Principle 1: Definition of Values and Direction ............................................ 20
3.2.4.2 Leadership Principle 2: Setting Objectives Focused on Life Systems ........................... 21
3.2.4.3 Leadership Principle 3: Providing Prerequisites ............................................................ 25
3.2.4.4 Leadership Principle 4: Communication........................................................................ 27
3.2.4.5 Leadership Principle 5: Realisation of Results .............................................................. 28
3.2.5 Situational Leading of Subordinates................................................................................ 30
3.3
Leadership Within a Lean Manufacturing Implementation........................................... 34
3.3.1 Phase I - Preparation: Preparatory Steps of Decision Makers for a Lean
Manufacturing Implementation ........................................................................................ 36
3.3.1.1 Carrying Out a Potential Analysis ................................................................................. 36
3.3.1.2 Development of a Vision for the Companies´ Future..................................................... 37
3.3.1.3 Decision to Implement Lean Manufacturing .................................................................. 39
3.3.1.4 Decision to Use External Support ................................................................................. 39
iii
3.3.1.5 Definition of Implementations Objectives ...................................................................... 40
3.3.1.6 Strategic Implementation Planning ............................................................................... 41
3.3.2 Phase II - Physical Transformation: Methodical Support and Encouragement ................ 44
3.3.2.1 Project Preparation and Kick Off................................................................................... 45
3.3.2.2 Current State Analysis .................................................................................................. 48
3.3.2.3 Design of a Future State............................................................................................... 49
3.3.2.4 Project Implementation Planning .................................................................................. 51
3.3.2.5 Physical Implementation and Launch Stabilisation........................................................ 51
3.3.2.6 Project Evaluation......................................................................................................... 53
3.3.3 Phase III - Living the System: Cultural Development of Leadership ................................ 54
3.3.3.1 Maintaining Standards .................................................................................................. 54
3.3.3.2 Kaizen and Kaikaku - Two forms of Improvement ......................................................... 56
3.3.3.3 Development of a Appropriate Culture as the Company’s Foundation .......................... 58
3.3.3.4 Development of Leaders............................................................................................... 60
3.4
External Support Regarding Leadership within a Lean Manufacturing
Implementation................................................................................................................ 62
3.4.1 General Contents of Consulting Services........................................................................ 63
3.4.2 Specific Contents Regarding External Support of Leadership within a Lean
Manufacturing Implementation ........................................................................................ 65
4
4.1
PRACTICAL PART...................................................................................................69
The Questionnaire........................................................................................................... 69
4.1.1 The Structure .................................................................................................................. 70
4.1.2 Description of the Research Method ............................................................................... 72
4.2
Analysis of the Data Gathered........................................................................................ 74
4.2.1 Module 1 of the Questionnaire: Statistical Data............................................................... 74
4.2.2 Module 2 of the Questionnaire: Examination of the Application of the Five
Leadership Principles...................................................................................................... 78
4.2.2.1 Analysis of the Evaluation of Leadership Principle 1: Definition of Values
and Direction ................................................................................................................ 78
4.2.2.2 Analysis of the Evaluation of Leadership Principle 2: Setting Objectives
Focused on Life Systems.............................................................................................. 80
4.2.2.3 Analysis of the Evaluation of Leadership Principle 3: Providing Prerequisites............... 82
4.2.2.4 Analysis of the Evaluation of Leadership Principle 4: Communication........................... 84
4.2.2.5 Analysis of the Evaluation of Leadership Principle 5: Realisation of Results................. 86
4.2.2.6 Conclusion of Leadership Principle 5: Realisation of Results........................................ 88
4.2.2.7 Conclusion of Module 2: Application of the Five Leadership Principles
in Practice..................................................................................................................... 89
iv
4.2.3 Module 3 of the Questionnaire: Authenticity .................................................................... 90
4.2.3.1 Analysis of the Evaluation of the Aspect ‘Self Awareness’ ............................................ 90
4.2.3.2 Analysis of the Evaluation of the Aspect ‘Personal Values’ ........................................... 91
4.2.3.3 Analysis of the Evaluation of the Aspect ‘Motivation Drivers’ ........................................ 93
4.2.3.4 Analysis of the Evaluation of Aspect ‘Supportive Network Building’ .............................. 95
4.2.3.5 Analysis of the Evaluation of Aspect ‘Integrated Lifestyle’............................................. 97
4.2.3.6 Conclusion of the Degree of Authenticity in Practice..................................................... 98
4.2.4 Module 4 of the Questionnaire: Lean Manufacturing Implementation
Management Training ..................................................................................................... 99
4.2.4.1 Analysis of the Evaluation of Training Aspects.............................................................. 99
4.2.4.2 Conclusion of the Application of Training in Practice................................................... 102
4.2.5 Testing of Hypothesis H1 .............................................................................................. 103
4.3
Limitations of the Survey.............................................................................................. 107
4.3.1 General Issues.............................................................................................................. 107
4.3.2 Limitations Concerning the Issue ‘Application of the Five Leadership Principles’ .......... 108
4.3.3 Limitations Concerning the Issue ‘Authenticity’.............................................................. 108
4.3.4 Limitations Concerning the Issue Lean Manufacturing Management
Training......................................................................................................................... 109
4.4
Connecting Theory and Practice Regarding Leadership Within a Lean
Manufacturing Implementation .................................................................................... 110
4.5
Potential Opportunities for External Consultants in Order to Support a
Company During a Lean Manufacturing Implementation, Deduced
From the Outcomes of the Survey ............................................................................... 112
4.5.1 External Support Within Phase I ................................................................................... 112
4.5.2 External Support Within Phase II................................................................................... 113
4.5.3 External Support Within Phase III.................................................................................. 113
5
CONCLUSION ........................................................................................................114
VII APPENDIX.......................................................................................................................... 116
VIII BIBLIOGRAPHY ................................................................................................................ 119
IX CONFIRMATION ................................................................................................................. 125
v
IV LIST OF FIGURES
Figure 1: The Hypothetical Causal Relationships ......................................................................... 3
Figure 2: The Toyota Production System ..................................................................................... 7
Figure 3: Likers “4 P” Model ......................................................................................................... 8
Figure 4: From Isolated Approaches to Common Pace and Values.............................................. 9
Figure 5: Mix of Present-Future Orientation of Leaders .............................................................. 14
Figure 6: Different Objectives of Leadership and Management…............................................... 14
Figure 7: The Journey to Authentic Leadership…....................................................................... 17
Figure 8: Possible Stakeholders which Influence a Company Concerning Decision Making....... 20
Figure 9: Long-Term Destabilising Impact of Demoralisation...................................................... 22
Figure 10: Comparing a Traditional Automation Process and a Lean Automation Process......... 24
Figure 11: Barriers to Empowerment .......................................................................................... 25
Figure 12: The Situational Leadership Approach ........................................................................ 31
Figure 13: Toyota Leadership Model .......................................................................................... 32
Figure 14: Organisation of Leadership and its Tasks Within a LMI ............................................. 35
Figure 15: The Vision Development Process.............................................................................. 38
Figure 16: The Strategic Control Process................................................................................... 43
Figure 17: Exemplary Five Phase Model for a LMI ..................................................................... 45
Figure 18: Project Management Approach for a LMI .................................................................. 46
Figure 19: The Influence of Standards Within a LMI ................................................................... 55
Figure 20: Responsibility of the Certain Leadership Levels Concerning Kaizen and Kaikaku ..... 56
Figure 21: How Kaizen and Kaikaku Interact .............................................................................. 57
Figure 22: Emergence of Symbolic Functions From the Symbolic Value of Consultants............. 64
Figure 23: Stages of Persons Confronted by Change................................................................. 65
Figure 24: The Approach of the Questionnaire in Order to Test the Hypotheses ........................ 70
Figure 25: The Process of Data Analysis.................................................................................... 72
Figure 26: Internal Correlation Analysis of Principle 5: Realising Results ................................... 88
Figure 27: Scaling Translation Approach.................................................................................... 94
Figure 28: The Approach to Test Hypothesis H1 ...................................................................... 103
vi
V LIST OF CHARTS
Chart 1: Industry Classification of the Respondents´ Companies ............................................... 74
Chart 2: Companies’ Turnover per Year ..................................................................................... 75
Chart 3: Number of Companies’ Employees............................................................................... 75
Chart 4: Management Level of Respondents.............................................................................. 76
Chart 5: Distribution of the Disciplinary Responsibility of the Respondents................................. 76
Chart 6: Lean Status of the Respondents................................................................................... 77
Chart 7: ..................................................................................................................................... 78
Results of the Questionnaires´ Statement 7: “The values displayed in the companies’
canteen, corridors and meeting rooms are exemplified by the management.“
Chart 8: ..................................................................................................................................... 78
Results of the Questionnaires´ Statement 12: “The values displayed in the
companies’ canteen, corridors and meeting rooms are lived by the work force.”
Chart 9: ..................................................................................................................................... 79
Results of the Questionnaires´ Statement 17: “Within the LMI the values of the
companies’ culture have been adapted towards the Lean Philosophy.”
Chart 10: .................................................................................................................................... 80
Results of the Questionnaires´ Statement 8: “An annual managerial incentive system
payment impedes a long-term orientation and thus a LMI.”
Chart 11: .................................................................................................................................... 80
Results of the Questionnaires´ Statement 13: “Which of the given issues are the
5 most important to you concerning a LMI?”
Chart 12: .................................................................................................................................... 81
Results of the Questionnaires´ Statement 18: “To control the defined objectives
measurable KPIs have been installed.”
Chart 13: .................................................................................................................................... 82
Results of the Questionnaires´ Statement 9: “All managers involved realise the
prerequisites for their subordinates to enable a successful implementation of the
strategy defined.”
Chart 14: .................................................................................................................................... 82
Results of the Questionnaires´ Statement 14: “The work force has been educated
and trained adequately for the LMI.”
Chart 15: .................................................................................................................................... 83
Results of the Questionnaires´ Statement 19: “The organisational structures of the
company have been adjusted due to the LMI.”
vii
Chart 16: .................................................................................................................................... 84
Results of the Questionnaires´ Statement 10: “Personal meetings on my hierarchical
level concerning the LMI take place in the following intervals.”
Chart 17: .................................................................................................................................... 85
Results of the Questionnaires´ Statement 20: “By means of the defined KPIs the
right measures can be induced.”
Chart 18: .................................................................................................................................... 86
Results of the Questionnaires´ Statement 11: “As a manager I am personally
satisfied with the results of the LMI.”
Chart 19: .................................................................................................................................... 86
Results of the Questionnaires´ Statement 16: “The workforce is able to work according to
the planned standard of work without any problems.”
Chart 20: .................................................................................................................................... 87
Results of the Questionnaires´ Statement 21: "The defined objectives have been
realized and demonstrably proven by the KPIs.”
Chart 21: .................................................................................................................................... 90
Results of the Questionnaires´ Statement 22: “In management I cannot let
professional or personal weakness show.”
Chart 22: .................................................................................................................................... 90
Results of the Questionnaires´ Statement 28: “For my development as a manager
mistakes are necessary.”
Chart 23: .................................................................................................................................... 91
Results of the Questionnaires´ Statement 23: “I can argue the values of my
company because they match my personal ones.”
Chart 24: .................................................................................................................................... 92
Results of the Questionnaires´ Statement 25: “There will be situations in
professional life where compromises concerning the 100% compliance with
my personal values will be necessary.”
Chart 25: .................................................................................................................................... 93
Results of the Questionnaires´ Statement 30: “Please chose your four most
important personal motivation drivers.”
Chart 26: .................................................................................................................................... 95
Results of the Questionnaires´ Statement 27: “It is not difficult for me to take fair
vacations (for instance two weeks) because I can count on a reliable team that
supports me professionally and personally.”
viii
Chart 27: .................................................................................................................................... 95
Results of the Questionnaires´ Statement 29: “For me it makes no sense to
exchange experiences with managers beyond my company regularly.”
Chart 28: .................................................................................................................................... 97
Results of the Questionnaires´ Statement 24: “Although there may be a certain
level of conflict, I satisfy myself, my family, my personal relations as well as
professional requirements.”
Chart 29: Results of the Questionnaires´ Statement 26: “I do not work on weekends.” .... 97
Chart 30: .................................................................................................................................... 99
Results of the Questionnaires´ Statement 31: “Intensive management
awareness training concerning the Lean Manufacturing philosophy and
fundamental principles for a LMI improves professional effectiveness.”
Chart 31: .................................................................................................................................. 100
Results of the Questionnaires´ Statement 32: “Intensive training for
managers concerning the LMI tools and methods have no influence
on the managers’ effectiveness.”
Chart 32: .................................................................................................................................. 100
Results of the Questionnaires´ Statement 33: “On my desk I apply the
5S-Method successfully.”
Chart 33: .................................................................................................................................. 101
Results of the Questionnaires´ Statement 34: “The contents of Lean
Manufacturing training are basically true; however, in my company the
application is difficult for several reasons.”
Chart 34: Comparison Between Trained and Untrained Respondents...................................... 105
VI LIST OF TABLES
Table 1: Phases I – Preparation ................................................................................................. 10
Table 2: Phases II – Physical Transformation............................................................................. 10
Table 3: Phases III – Living the System...................................................................................... 10
Table 4: Overview of the Tested Motivation Drivers.................................................................... 93
ix
VII LIST OF ABBREVIATOTIONS
5S:
The Japanese concept for House Keeping
ABC:
Assumptions, Behaviours, Consequences
BSC:
Balanced Score Card
CEO:
Chief Executive Officer
CIP:
Continuous Improvement Process
EPEI:
Every Part Every Interval
GDP:
Gross Domestic Product
JIT:
Just-in-Time
KPI:
Key Performance Indicators
LMI:
Lean Manufacturing Implementation
MBM:
Management by Means
MBO:
Management by Objective
MBR:
Management by Results
NBC:
National Broadcasting Company
OMCD:
Operation Management Consulting Division
OMDD:
Operations Management Development Division
TPS:
Toyota Production System
TQM:
Total Quality Management
TSSC:
Toyota Supplier Support Centre
VSM:
Value Stream Mapping
WIP:
Work in Process
x
1 INTRODUCTION
Whilst working as a consultant for Lean Manufacturing Implementations (LMI) for four years, the
author has been supporting Lean Manufacturing Projects in various industrial sectors from the
planning stage through to their actual implementation.
From management awareness training sessions for particular levels of a company’s hierarchy to
providing the work force with theoretical and on the job training about tools and methods, the
author observed that the Lean Manufacturing projects generated momentum and usually
reasonable short-term benefits. But the objective, namely enabling the companies’ work force to
apply what they learned and consequently to improve their work environment independently, was
only realized in cases where the management showed strong commitment and through the
visionary leadership of certain individuals in positions of responsibility.
Unfortunately, in the majority of LMIs a sustainable, consistent and holistic approach that touches
the companies’ long-term potentials was rarely realized.
Usually the work force and the managers in charge used the tools and methods to a certain
extent and, although they sustained the system, they rarely improved it further. In some cases the
implemented systems have not even been sustained with the consequence that people fell back
into the formerly used procedures.
Since the Lean philosophy is more than just a toolkit to solve short-term problems and due to his
personal experiences, the author’s deep conviction is that there is a need for a coordinated
leadership approach to support the LMI process and generate sustainable success. That
leadership approach does not necessarily concentrate on just one person within a company but
on a general leadership attitude within particular ranks of a company’s workforce.
In order to support clients more effectively concerning the sustainability and continuous
improvement of their LMIs, the objective of this paper is to analyse the leadership requirements
within a LMI process and to identify possibilities to support them as an external consultant.
1
2 OBJECTIVES AND METHODOLOGY
Within this chapter objectives and the methodology will be discussed as base for the more
detailed explication within the practical part of this thesis.
2.1 The Hypotheses
The verification or falsification of a hypothesis is one of the most important applications of
empirical social research. Similar to natural sciences there is a variety of methods which can be
applied. Due to this large range of methods, the selection of the appropriate one is very important
to avoid wrong conclusions. Nevertheless, the verification or falsification of a hypothesis can only
be temporary, which implies that there is no absolute and final certainty.1
This leads to the critical issue concerning the base of values and the obligation to strive for true
empirical analysis. However, this issue shall be considered as a prerequisite in this paper rather
than in need of discussion within the context of this study.
Based on the following hypotheses, which the author developed, this study will explore the
extend of a leadership attitude and the fulfilment of the theoretical leadership requirements,
constituted by five principles, in the context of a LMI in practice. Beyond that, the author expects
to discover potential for leadership awareness training in the special case of LMIs.
Hypothesis H1:
Sustainable success of a LMI is based on an authentic leadership attitude and role of the
company’s management.
The conviction to change existing structures and procedures and consequently to
motivate people to realise a clear vision will depend on the person in charge. Leadership
attitude depends on authenticity and cannot be taught. It directly influences the willingness
to apply the five Leadership Principles.
1
Diekmann, A., Empirische Sozialforschung, 2006, p. 17 ff.
2
Hypothesis H2:
Authentic LMI leadership can be identified by the degree of application of five clearly defined
Leadership Principles.
The application of all five Leadership Principles within a LMI generates a holistic,
consistent
and
sustainable
process
of
change.
Contributing
factors
are
the
leadership attitude and the know-how to apply the Leadership Principles.
Hypothesis H3:
LMI-leadership awareness training significantly raises effectiveness of the application of the five
Leadership Principles by transferring necessary Lean methodology and tools to a company’s
management.
Educating superior’s at all hierarchical levels before implementing Lean Manufacturing
has a positive impact on the comprehension of Lean Manufacturing and application of the
necessary Leadership Principles within the process of change. However, it is just possible
to intervene concerning the applied tools and methods but not on the person’s degree of
authenticity.
H1
Application of
Leadership Principles
Authentic
Leadership
Attitude
and Role
1. Definition of values and
direction
2. Setting objectives
focused on life systems
H2
Sustainable
success of a
Lean
Manufacturing
Implementation
3. Providing prerequisites
4. Communication
5. Realisation of results
H3
Intervention
Leadership awareness
and method training
Figure 1: The Hypothetical Causal Relationships
(Source: Own illustration)
3
The causal relationship of these hypotheses follows basically the ABC2 approach of human
action: Based on the assumption of a genuine leadership attitude, a person in charge of
subordinates applies certain principles of leadership, with the consequence of a successful LMI.
Intervention in the form of external support can optimize results.
2.2 Methodology
The methodology the author used in the context of leadership within a LMI is based on the
deductive research process.
Since Nason3 mentions that “practical activities are theory dependent” and “observation is theory
laden”, the first objective was intensively to review literature because this is the first base of
information in order to gain a substantial understanding of leadership in the specific case of LMI
projects. The next step was to analyse the research question regarding the fulfilment of
leadership requirements in practice as well as to analyse the opportunities for external
consultants to support it.
So first the concept of Lean Manufacturing will be explained and then the requirements on
superiors in order to lead a LMI. To describe leadership it will be necessary to outline and
differentiate between the terms Leadership and Management as well as roles and responsibilities
of the leaders.
Having described Lean Manufacturing and Leadership the author will combine these two issues
to describe the process leadership within a LMI.
Further issues involved are to which extent the cultural aspect of a company influences this
process, the role of external consultants and the service they contribute to a LMI project.
As a second base of information the author additionally carried out pre-interviews with experts in
the context of LMIs in order to integrate the “body of knowledge in practice” and expert opinion.
These interviews where carried out with persons in leading positions in companies which have
already successfully implemented the Lean Manufacturing approach and succeeded in winning in
special categories of the „Fabrik des Jahres“ and “Ludwig Erhard Preis” awards. In conducting
the interviews, the so called „narrative interview“ type was used because the narrative interview is
considered as a qualitative method and open with regard to the aim. In the given time frame one
discusses the issues that are most important to the interview partner.
The interviews were carried out just by the author and the interviewed person. The author
documented the interview by tape or in handwritten form whilst maintaining the anonymity of the
interview partners concerning their statements.
2
ABC: Assumptions (values), Behaviours, Consequences, Kouzes, J. M., Posner B. Z., The Leadership
Challenge, 2002, p. 64
3
Nason, J., Vinca, D.: Handout Research Methods Module student doc. 5, p. 8
4
Since the number of interview partners was too low to count as a representative sample, the
interviews could not be used for the empirical part, but contributed significantly to the structure
and content of this document.
As an alternative, the author carried out the data gathering via a written questionnaire which was
targeted at persons in leading positions with Lean Manufacturing experience. The objective of the
questionnaire was to provide an overview about the fulfilment of leadership requirements of an
LMI in practice and the potential for external support by consultants. The analysis will be carried
out and further explained in chapter 4 – The Practical Part.
Beside literature and pre-tests, the author’s personal experience within this field is integrated as a
third base of information.
5
3 THEORETICAL PART
This chapter will describe the concept of Lean Manufacturing, the process of a LMI, the
theoretical approach towards leadership and the role of external consultants in this context.
3.1 Lean Manufacturing
Starting with the explanation of the roots of Lean Manufacturing and describing the concept, the
chapter will also clarify the importance and role of the Lean Manufacturing tools.
3.1.1 The Genesis
The automotive industry is considered as very innovative and pioneering concerning techniques
and methods to satisfy customers’ needs. Therefore, it has greatly influenced industrial
production in general and has fundamentally changed two times within the past century.4
In the beginning, automotives where manufactured by craftsmen and bricolage to be unique.
When Frederick W. Taylor introduced scientific business management, production processes
were broken down into calculable elements which heralded the second era of industrial
production. This transparency, mainly based on standardisation, made it easier to find and
eliminate redundant movements and hidden pauses in the production process. It raised efficiency
tremendously and allowed the assembly line mass production known from Henry Ford’s Model T
- Thin Lizzy.
The third era, which is still on-going, started after world war two borne by the Japanese Eiji
Tojoda and Taiichi Ohno, father of the Toyota Production System (TPS). Their form of production
was influenced by the standardisation approach of Taylor and the flow manufacturing approach of
Ford. Additionally, they focused intensively on customer satisfaction and on building reliable
relationships along the supply chain and with stakeholders.
This form of production is known as Lean Manufacturing and will be explained in more detail in
the following chapter.
4
Womack, J. P., James D. P., Roos, D., Die zweite Revolution in der Automobilindustrie, 1991, p. 25 ff.
6
3.1.2 The Concept
Modern organisations need a design for change in order to serve the customer at any time in the
best possible way. Lean Manufacturing constitutes one option for such a business
reengineering.5
However, the term Lean Manufacturing frequently leads to misunderstanding because of the
association with head-count reduction programs. This might be right in certain cases in the short
term, but in the long run the concept has turned out to be a stable job motor which does not focus
just on profit.6
Nevertheless, the term “Lean” in connection with industrial issues nowadays represents a
synonym of the TPS and a corporate culture focused on long-term waste avoidance and customer
orientation.
7
Best Quality, Lowest Cost, Shortest Lead Time,
Best Safety, High Morale
Just-in-Time
(Right part, right amount,
right time)
People & Team Work
Jidoka
(In-station quality)
Continuous Improvement
Waste Reduction
Levelled Production (Heijunka)
Stable and Standardised Processes
Visual Management
Toyota Way Philosophy
Figure 2: The Toyota Production System
(Source: Liker, J. K., The Toyota Way, 2004, p. 33)
As displayed in figure 2, the concept is basically founded on a clear philosophy and standardised
processes. Due to this stable environment, people can work on permanent waste reduction and
improve the system continually. The figure shows the aspect of customer orientation by the pillars
Just In Time (JIT) and Jidoka which embrace external and internal customers. The result of this
Production System is best quality, lowest costs, shortest lead-time, best safety and high
employee morale.
5
Doppler, K., Lauterburg, C., Change Management, 2005. p. 56
Leone, G., Rahn, R. D., Fundamentals of Flow Manufacturing, 2002, p. 139 ff.
7
Haas, M., Hahn, M., Schurr, M. Mit Konsequenz zur Exzellenz, 2006, p. 26
6
7
The affiliation to a certain branch and industrial sector is of minor importance for a production
system and likewise differentiating factors like a big variety range of products, the degree of
automated or mass production are of minor importance because the objective of consequent
waste reductions still remains the same – zero waste.8
The “4 P” model, shown in figure 3 below, compresses the TPS into its four basic categories:
philosophy, processes, people and partners, and problem solving.9
Based on long-term oriented philosophy, the elimination of waste and the development of people
and their environment is generated by continuous improvement and learning by the organisation
itself. Therefore, Lean Manufacturing provides plenty of tools and methods beside the most
famous like Kanban, Heijunka and Poka Yoke. This variety of applied tools, methods and
standards ultimately should be documented in the companies’ Production System as the basic
form of standardisation and a base for further improvement.
Continuous improvement
and learning
Respect, challenge and
grow them
Eliminate Waste
Problem
solving
People and
Partners
Process
Long-term thinking
Philosophy
Figure 3: Likers “4 P” Model
(Source: Liker, J. K., The Toyota Way, 2004, p. 13)
The Production System should be considered as a living document that shows the development
of the company on its holistic and systematic way towards waste reduction.
However, to implement Lean Manufacturing means far more than just using and documenting
standard tools and methods. It is the people using the tools and methods that make a Production
System work:
“TPS is not a toolkit. It is not just a set of Lean tools like JIT, cells, 5S [...], Kanban etc. It is a
sophisticated system of production in which all of the parts contribute to one whole.
The whole at its roots focuses on supporting and encouraging people to
continually improve the processes they work on.”10
8
Spath, D., Ganzheitlich Produzieren – Innovative Organisation und Führung, 2003, p. 91
Liker, J.K., The Toyota Way, 2004, p. 13
10
9
8
But much more important than the tools themselves are the basic principles of Lean
Manufacturing like customer orientation, waste avoidance, pull production, flow of material and
Takt time. If these principles are thoroughly understood by the whole workforce and its leaders, a
successful application of any tool and method will be the consequence.
Critical factors for the success of implementing such a Production System are basically
management commitment, training and involvement of employees and a common strategic
approach.11
As displayed in figure 4, the results are the development and the alignment of standards and
values that apply to the whole company. The power of single tools and methods is only beneficial
when the context of their use is in concert with having a certain attitude towards work.
Isolated
Common
Common pace
approaches
direction
and values
in stage 1
in stage 2
in stage 3
Before the Lean
While Lean
After the Lean
Implementation
Implementation
Implementation
Figure 4: From Isolated Approaches to Common Pace and Values
(Source: Alonso-Michel, J., Anlagentechnik im ganzheitlichen Produktionssystem, 2003, p. 5)
However, the Lean philosophy is a holistically way of thinking and a total enterprise strategy
which is not constrained just to manufacturing but embraces all enterprise components as well as
administration. Lean addresses improvements especially through the people-centric process.12
11
Fimpel, A., Handout of “Tagung” Launching Lean“, Beitrag “Einführung von Lean Manufacturing”,
Fraunhofer IPA, Wednesday, 10. Dezember 2003, p. 168
12
Cooper, K., "How going Lean made Kell better", Graphic Arts Monthly, July 2006, p. 17
9
3.1.3 The Implementation Process
The LMI process can be broke down into three phases as shown in Table 1-3. Phase I is
considered the preparation phase of the LMI and focuses mainly on the company’s top
management. Before implementing Lean Manufacturing physically, certain steps have to be
clarified beforehand in order to put prerequisites into place that assure a smooth LMI process.
Ultimately the responsibility for the success of implementing Lean Manufacturing lies here.
Table 1: Phases I - Preparation
Phase I - Preparation:
Preparatory steps by decision makers for a
Lean Manufacturing Implementation
1. Carrying out a potential analysis
2. Decision for the Lean Manufacturing
Implementation
3. Develop a vision for the companies future
4. Decision for external support
5. Define objectives
6. Carry out a strategic implementation planning
Phase II, the physical transformation of the company or the selected area, focuses on the
analysis and implementation of tools and methods. Middle- and front-line-management levels are
mainly involved in this phase of the project because they will be supporting and encouraging the
people involved and the stabilize process.
Table 2: Phases II – Physical Transformation
Phase II - Physical transformation:
Methodical support and encouragement
7. Project preparation and kick off
8. Current state analysis
9. Design of future state
10. Implementation planning
11. Implementation
12. Review/Evaluation
Phase III constitutes the never-ending team work phase of all hierarchical levels in order to drive
the continuous improvement process jointly. It constitutes the adjustment of the company’s
culture concerning leadership and mindsets of the work force.
Table 3: Phases III – Living the System
Phase III - Living the system:
Cultural development of leadership
13.
14.
15.
16.
Maintaining the standard
Improvement of the standard due to Kaizen
Develop new leaders
Develop a problem solving culture
10
3.2 Leadership
150 years ago the profession of leader was non-existent because a leadership structure had no
significance due to the fact that most of the economic entities in existence were very small.
A dramatic change came with industrialisation, during which companies’ sizes and economical
power grew significantly until today. In the year 2000, for example, 51 out of the 100 biggest
economic entities were companies, measured by turnover/ GDP.13
As this change has a certain influence on the quality of people’s lives, be it at the workplace or
anywhere else, the responsibility of companies’ management has increased significantly. The
impact that leadership has got on us and the economy itself has already been pointed out in the
1980 by the famous “White paper” broadcast by NBC, with the title “If Japan can, why can’t we?”.
In this context, Deming stated that the prosperity of the American economy depended primarily
on the quality of management. He blamed the managers to be responsible of 85% of companies’
problems.14
On the other hand, the key influence that a company’s management has got on the results can
also have its advantages. Liker15 experienced for example that in at least 90 percent of
successful LMIs there was a plant manager who believed in Lean with a vision and the know-how
of leading. In the remaining 10 successful percent another hierarchical highly placed manager led
the LMI process both with absolute acceptance and without interference by the plant manager.
This leads to the question of how to lead a company and its people successfully, the first aspect
being that of human motivation.
3.2.1 Human Motivation
Organisations consist of people and therefore knowledge of the fundamental rules of human
behaviour and motivation is vitally important for those in leadership positions. The extent to which
leadership affects the motivation of the workforce runs at 7016 percent according to the IES
report. Therefore, the strong correlation between the management’s task of employee
engagement and Lean sustainability is evident.17
The starting point of all motivational approaches is the assumption that human behaviour
basically is motivated. Formerly, work was seen as an affliction which an individual had to be
compensated for whereas modern motivational approaches break with this and assume that
humans are essentially looking to satisfy their needs not just in their spare-time but also at work.
13
Kube, M., Transnational Concerns: Facetten der Globalisierung, Forum Recht, Vol 4, 2006, p. 114-117 ff.
Smith, L. R., The journal of innovative management: The challenge of leading and managing, Vol. 11,
2006, p. 20 ff.
15
Liker, J.K., The Toyota Way, 2004, p. 427 ff.
16
Barber L, Hayday S, Bevan S, IES Report 355, June 1999
17
Lucey, J., “Why major Lean transitions not have been sustained”, Management Services, 2005, pp. 9 ff.
14
11
Nevertheless, motivation theories generally try to clarify the connection between development,
direction, force and duration of certain behaviour patterns and the motives for particular
behaviours. Yet whilst the behaviour patterns of human beings are visual, the underlying reason
for motivation is a black-box and intangible. This explains the existing variety of motivation
theories.18
The author focuses on the theory of needs and the self determination theory approach to cover
this issue.
Within the theories of needs approach are the famous Maslow theory of needs and the two
factors theory of Herzberg. He basically differentiates in his two dimensional approach between
“dissatisfiers” and “satisfiers”. “Satisfiers” he considers issues like appreciation or a positive
experience of achievement and responsibility whereas “dissatisfiers” are for example a certain
corporate policy and compensation payment. Optimizing “dissatisfiers” just leads to a reduction of
dissatisfaction but not to an increase in satisfaction. Heightening satisfaction is just feasible by
optimizing “satisfiers”. Motivation depends in the opinion of Herzberg on factors which are related
to the work content and personal motives of the person.19
This signifies in practice that purely mechanical incentive programs based just on money are
doomed to failure whilst the solution seems to be to focus on designing work systems which
support intrinsic motivation, the goal of the individual, and the organisational objective all at the
same time. Therefore Taylor’s traditional approach which basically consists of simplifying and
shortening work contents to realize higher productivity has to be avoided because the only
motivation trigger here is money as a result of quantity.
An alternative is the development of flexible work systems and enlargement of the scope of work
contents, decision and control. For the workforce, the changes mentioned above imply the
extension of their skill variety and autonomy in the form of work models like job-rotation and team
work. These typical Lean work models also require a change of management due to the
empowerment of subordinates and the demand for frequent feedback sessions.
The result-orientated approach of the self determination theory is to attempt to increase
motivation through the objective itself.20 This seems to be an appropriate tool for management
because setting objectives is one of the main tasks of effective management.
The approach consists of three main steps. First of all, the determination of objectives for an
individual person or a group, including the criteria for measurement, should be implemented. The
second step consists of the analysis of results after a defined period, carried out by both
subordinate and manager. Within the third step the manager demonstrates possibilities for
improvement.
18
Steinmann, H. Schreyögg, G., Management, 2005, p. 535
Steinmann, H. Schreyögg, G., Management, 2005, pp. 558 ff.
20
19
12
However, the management by objective (MBO) approach turns out to be not as efficient as it is
supposed to. MBO concerns the institution as a whole, but it is not effective if not every single
manager follows the same standardized principles. Another point is that implementing MBO
seriously is very time consuming for employees and managers. This is because one has to think
about objectives and develop them as well as specify and discuss them.21
Other problems might be that the complexity of reality is not always easy to illustrate and the
scope of application is limited, for qualitative objectives are difficult to measure. The central
problem, however, is the missing integration into the overall objectives of the company.22
As mentioned already, setting objectives is a duty of effective management but critical in the
application. The traditional MBO-approach, which Johnson and Bröms call “management by
results” (MBR) works as so called mechanistic thinking. They criticise that this practice implies
the idea that a company could be transformed into a profit centre where managers are judged by
higher top managers just on the basis of financial results. To use abstract quantitative targets by
managing results and not considering a company as a human organisation, a living system,
means to lose touch with the natural reality of the organisation one manages and leads people’s
motivation into the wrong direction.23
It may also mean losing touch with ethical values and may result in creating what Herzberg calls
“dissatisfiers”. The alternative in terms of objective setting is a systematic approach which
focuses on the need of a human organisation.
Toyota also uses objective setting in order to define specific, measurable, achievable and
challenging aims. But instead of having one general, all-encompassing solution, Toyota use a
mixture of various motivation approaches which are tailored to its own specific needs in order to
motivate its work force successfully.24 This becomes instantly obvious when one considers how
to motivate a truck driver, a quality manager and a forging worker all with one and the same
motivation concept.
Nevertheless, there is a certain level of illusion that is reinforced by motivation theories, namely
that employees’ motivation may be under management’s immediate control in the first place. It is
not because the social environment of employees is influenced also by its social judgements and
values. Including this into the motivation approach, a manager can influence motivation through
his role as a leader, whose primary function is to create shared meanings, demonstrated by his
daily actions. In this context it becomes clear that influencing motivation depends also on aligning
the values of the environment and the organisational culture in the form of symbolic action and
behaviour of a leader.25
21
Malik, F., Führen Leisten Leben, 2001, p. 177 ff.
23
Johnson, T. H., Bröms, A., Profit beyond measures, 2000, p. 43 ff.
24
25
Shamir, B., Motivation and Leadership at Work, 1996, p. 162
22
13
3.2.2 The Difference Between Leadership and Management
In common usage, the term management incorporates two different perspectives. If one calls “the
management” the institutional perspective is meant. It refers to a group of persons that are
equipped with disciplinary power beginning with the supervisor and ending with the CEO level.
The second perspective on management is the functional one. It focuses, independently of jobposition or person, on the tasks which are necessary for the value creation process which
assures that the company meet its economical objectives.26
The basic difference between leaders and managers lies in the differing extent to which each of
these two are forward looking as illustrated in figure 5. Tactical disciplinarians like a production
supervisor or an operations manager are naturally more focused on the short term whereas
strategic leaders like a CEO or a president are more future-oriented.27
Future
Future
Present
Present
Time
orientation
Tactical Leaders/
managers
Strategical
leaders
Leadership roles
Figure 5: Mix of Present-Future Orientation of Leaders
(Source: Kouzes, J. M., Posner B. Z., The Leadership Challenge, 2002, p. 129)
Figure 6 describes this through the relationship of vision, strategies, plans and budgets.
Vision
Leadership
creates
A sensible and appealing picture of the
future
Strategies
A logic for how the vision can be
achieved
Plans
Specific steps and timetables to
implement the strategies
Management
creates
Plans converted into financial
projections and goals
Figure 6: Different Objectives of Leadership and Management
(Source: Kotter, J. P., Leading Change, 1996, p. 71)
26
27
Kouzes, J. M., Posner B. Z., The Leadership Challenge, 2002, p.129
14
Leadership and management are related in terms of the skills they require but are actually
different things.28 Whereas leadership is about what to do and why, management focuses on the
way to do it – “a manager does the things right – a leader does the right things”.29
Nevertheless, a leader also has to be a good manager in order to turn his visions into reality. The
importance lies within the understanding of how a visionary leadership and a typical management
style work hand in hand because for companies both types are necessary to some extent.30
When changes are failing, the management of a company consists of too many managers and
too few leaders.31
3.2.3 Authenticity of Leadership as a Prerequisite for Sustainable
Success
Ultimately the only valid test if a leader is successful or not is the fact of having generated
sustainable results.32
Sustainable success of enterprises consists of a strategic framework for leading change in a
complex business environment by considering the full range of the business as well as supply
networks, customers and stakeholders.33
Not only to integrating economical objectives but also to integrate ecological and social aspects
means following a holistic approach.34 However, the success of an economic acting entity does
not just depend on the leaders understanding of economics, organisational development or
marketing - decisive is basically the understanding of psychology and how to generate the
connection between the companies’ goals and the individual employees. There is clear evidence,
based on available company statistics that an engaged work force goes in line with better results
with the consequence that sustainability also strongly correlates with employee engagement.35
However leadership constitutes a central factor of imparting sustainability and requires being a
model for sustainable acting by focusing on people.
Basically leadership can be considered as a process of different parties – leaders and followers.
One party, the leaders, persuade the other to do something that they might not do otherwise.36
28
Smith, L. R., The journal of innovative management: The challenge of leading and managing, Vol. 11,
2006, p. 44
29
Doppler, K., Lauterburg, C., Change Management, 2005, p. 76
30
Hegele-Raih, C., “Was ist: Leadership?”, Harvard Businessmanager, 2004, p. 37
31
Kotter, J. P., “Leading Change – Why Transformation Effords Fail”, Havard Business Review, 2007, p. 97
32
George, B., Truly Authentic Leadership, U.S. News & World Report, October 30, 2006
33
Elsenbach, J., M., Rainey, D., L., Sustainable enterprise management: A strategic framework for leading
change ,Die Unternehmung, Nr. 1, (2007), p. 7-24,
34
Preller, E., Controlling und Sustainability, Controlling, Heft 1, Januar 2007, p. 51-53
35
Lucey, J., Why major Lean transitions have not been sustained, Management Services, Summer 2005,
p. 9 ff.
36
Bratton, J., Grint, K., Nelson, D. L., Organisational Leadership, 2005, p. 24
15
But leadership is not simply something a leader does, but comes from inside. It can be described
as a process and an intimate expression of one self that leads to deed, an authentic selfexpression that creates value.37
The question of how is it manageable to realize sustainable leadership then best possible? For it
is a process that copes with people trust plays a basic role. To generate trust, authenticity of the
leaders is the answer.
However the kind of authenticity can differ enormous, a bank manager for instance is authentic
when he states “business is war, it’s killed or be killed”, whereas Anita Roddick, founder of Body
shop, in contrary can authentically state “business is love”. Vice versa none of them would be
considered as an authentic messenger. Not authentic stated messages won’t be believed for if
you don’t believe in the messenger, you won’t believe the message.38
Authentic leaders know who they are and feel "good in their skin". This enables them to impress
and bring people together, generate a shared purpose and a common set of values. The result is
the motivation of the involved to create value for all stakeholders.39
It leads to the question of how to gain authenticity as a leader. Authenticity is caused by the
personal satisfaction. It is generated by his values, passions and motivations. By following ones
values, which works like an internal compass, the leader will be authentic. The consequence of
its authenticity is the generation of trust and the willingness of people to collaborate. On the other
hand, people recognise very quick when somebody is not authentic, by trying to be like someone
else, with the contrary results.40
Authenticity comes from a personal life story. This life story provides the context for the leaders’
lives and guides them in finding their passion and motivation to lead people, to shape their
environment and to make an impact on it.
However, authentic leadership needs development, as it is shown in figure 7. Whilst preparing for
the ‘leadership phase’, the person develops it through education and early work experiences. On
the second stage, the ‘leading phase’, the leader has to master a number of roles successfully
until the peak of his leadership experience. Finally, in the ‘giving-back phase’, authentic leaders
look for opportunities to share their experiences with other people.
To become an authentic leader one has to discard the myth that leadership necessarily equates
to having many supporters who follow their leader’s direction without questioning. Authentic
leadership means empowering others on their own journeys, the shift from “I” to “We”. This
transformation usually takes place in the first two thirds of the ‘leading phase’. However, this
37
Cashman, K., Innovative Leader Volume 6, Number 11, November 1997
Kouzes, J. M., Posner B. Z., The Leadership Challenge, 2002, p. 56
39
George, B., Truly Authentic Leadership, U.S. News & World Report, October 30, 2006, p. 1 ff.
40
George, B., Sims, P., True North, 2007, Introduction, p. xxiii ff.
38
16
development is only possible when leaders stop focusing on the needs of their personal egos.
Overcoming the need to control everything and feeling less competitive towards talented peers,
enables prospective leaders to make better decisions. Therefore it is necessary to abandon the
idea of being a great hero who will lead others towards a great future.
Generativity: Wisdom and giving
back
Peak
leadership
Stepping up
to lead
Leadership
development
Rubbing up against the
world
Character
formation
Age
Preparing for
leadership - phase
Transformation
from „I“ to „We“
30
60
Leading - phase
Giving back - phase
Figure 7: The Journey to Authentic Leadership
(Source: George, B., Sims, P., True North, 2007, p. 16)
The authenticity of leaders has got five dimensions.41
1. Self-Awareness: Where are the strength and development potentials of the leader?
For an authentic leader perfection is not the goal but to be true to him-self while
continuously
developing
into
a
more
effective
leader.
The
building
of
self-
acceptance enables to regulate oneself, the emotions and makes one less
vulnerable. This makes it easier to interact authentically for one is free of having to
pretend something that does not reflect oneself and can focus on pursuing passion
and the fulfilment of dreams.
2. Values: What are the most important values for the leader and the guiding principles of
leadership?
Values are the relative importance of the things that matter in ones life. The
appropriate set of values depends on oneself and supports one to align with people
and organisations that share them. Having defined certain values and sticking to them in
difficult situations shows their degree of importance for a leader and thus his
authenticity.
41
George, B., Sims, P., True North, 2007, p. 65 ff.
17
3. Motivation: What are the driving forces of the leader?
Leading people requires high levels of motivation. The knowledge of the reasons
that motivates oneself leads to the understanding of ones strengths and weaknesses and
to the focus on ones core competencies. There are drivers of motivation, extrinsic and
intrinsic ones. Extrinsic ones concern mainly social status and
prestige
like
monetary
compensation, power, titles and related issues. Intrinsic motivation comes from within
oneself. Examples may be personal growth, helping others to develop or being true to
ones beliefs. However, because both are important it is necessary to find the balance
between the two kinds of motivation.
4. The Support Team: Are there people that support the leader and who he can count on?
Knowing that it is not possible to succeed on their own makes authentic leaders
building strong support teams. The importance is to develop and train them a long
time before a crisis. Due to this the leader shares his vulnerability for in difficult situations
their availability can support him and on the other hand side in cases of success they can
celebrate together.
5. An integrated Life: How does the leader integrate the aspects of life into his own life?
The higher a manager is allocated within the hierarchy, the greater is his freedom to
control his destiny, but the more stressful and time consuming the job will be. The art is
whether avoiding stress or maintain the personal equilibrium.
Integrating ones life while bringing ones personal and professional issues with all
facets together and being the same person in each environment, is a big challenge
when time is short. But this assures to stay grounded and authentic for it avoids
getting too cocky during times of success as well as forgetting ones capabilities in
critical times. Having a happy personal life surely contributes to a balanced and authentic
leadership.
18
3.2.4 Consequences for Leadership
In fact, the roots of the word “lead” come from an Old English word that means “go, travel,
guide”.42 So, leading can be considered a journey that starts with the leader’s challenging
authentic attitude and role with regard to the company’s workforce and that is moving towards the
destination of building the foundation for a holistic, consistent and sustainable success. It means
to treat an economic entity, with its people, as a living organism and taking care that it stays
healthy and able to survive in a turbulent environment.
Leading authentically requires a lot of management attention and resources to supervise the
people who are adjusting existing structures and processes. This essential management capacity
in practice often leads to problems because change processes usually are located between
strategic importance and operative urgency.43
“The leader’s real challenge is having the long-term vision of knowing what to do, the knowledge
of how to do it, and the ability to develop people so they can understand and do their job
excellently.”44
How should we then define the requirements, besides authenticity, of right leadership? Attempts
to describe and define the characteristic traits of a leader’s person have been undertaken both in
the form of a catalogue of characteristics and in the form of empirical approaches, but neither
have been successful. Reasons for this failure are mainly that the studies did not consider the
reasons of why a leader became a leader in the first place. Company-specific factors like a
manager’s age, heritage and consensus of a group make a characterisation extremely difficult.
Another reason is that personal characteristics like dominance or initiative could not be clearly
explained because behaviour needs to be considered a product of persons and situations. Beside
that, although one talks about leadership in the singular, this does not imply that there is always
just one person in the position of leader, but rather there is a whole team involved.45 Rather than
this necessarily being a disadvantage, leadership can also be very effective in a team, for
instance as a complementary leadership team.46
The next chapter covers the principles required for an authentic Lean leader to be successful.
“Principles are a set of standards used in leading others, derived from ones values. Principles are
values translated into action.”47
42
Reiß, M., von Rosenstiel, L., Lanz, A., Change Management,1997, p. 6
44
45
Steinmann, H. Schreyögg, G., Management, 2005, p. 646 ff.
46
Miles, S. A., Watkins, M. D., “The Leadership Team”, Harvard Business Review, 2007, p. 90 ff.
47
George, B., Sims, P., True North, 2007, p. 87
43
19
3.2.4.1 Leadership Principle 1: Definition of Values and Direction
Every economic acting entity is integrated in a certain value context within its social environment
to which it sells its products and from where it gets its resources. Therefore, the economical
success is not just determined by productivity and efficiency that result in the bottom line of all
profit and loss calculations. Effects of the so-called triple bottom line constitute an additional
sustainable value added for companies that take economical, ecological and social aspects jointly
into consideration. This is a fundamental issue that is significantly influenced by a company’s
values and the alignment to its environment, which is mainly the task of the top management.48
This leads to a discussion about ethics. Relevant ethical decisions are constantly being made. To
judge an activity in respect of ethics, a procedure is advisable which respects the fundamentals of
every human being, namely their vulnerability and need of protection in a psychological and
physical sense.49
Regarding the decisions made by leaders of an economic acting entity, this means that all
stakeholders ought to be taken into the consideration in the process of value definition, as figure
8 displays.
Public
Employees
Customers
Environment
Company
Shareholders
State
Local
Residents
Management
Figure 8: Possible Stakeholders that Influence a Company Concerning Decision
(Source: Hagenmeyer, U.: Management Consulting with Integrity Professional management consulting
beyond pure business thinking, MBA course documentation, 11/ 2005, p. 43)
This implies that a decision needs to be made concerning where to locate the company’s values
on a scale that ranges from reckless profit maximisation on the one end to an economically
deadly extreme self-limitation on the other end. This thought-process should lead to an
essentially self-limited pursuit of profit and legitimate and successful corporate actions.
48
Kaufmann, L., Ehrgott, M., Reimann, F., Der Nutzen anständigen Wirtschaftens – Was ist… Triple
Bottom Line?, Havard Business Manager, 2008, p. 6 ff.
49
Hagenmeyer, U., Integrität und Unternehmensberatung – ein Wiederspruch?, Unternehmensberater,
2005, p. 26 ff
20
Toyota for example formulates these values in its “code of conduct”. Amongst other points they
quote in this manifesto of their values, they aim to “Respect the culture and customs of every
nation and contribute to economic and social development through corporate activities in the
communities”, to “Pursue growth in harmony with the global community through innovative
management”, to “Work with business partners in research and creation to achieve stable, longterm growth and mutual benefits, while keeping ourselves open to new partnerships”, and to
“Foster a corporate culture that enhances individual creativity and teamwork value, while
honouring mutual trust and respect between labour and management”.50
In order to form a constructive relation between labour and management, it is obligatory for a
leader’s actions to be credible. To become a credible leader, the first step is for a leader to
identify his own values, beliefs and assumptions, his driving forces to form and align the
companies’ values.51
Determining his guiding values is the first thing, but walking the talk in daily business is the real
challenge. What a leader demands of the work force, should be exemplified permanently by the
management by way of constituting a kind of archetype of the company’s values.52
3.2.4.2 Leadership Principle 2: Setting Objectives Focused on Life Systems
Leading itself implies acting purposefully in accordance with the objectives that have been or are
being set. How to set them effectively and to assure that they contribute to the companies’ longterm success is the question. There are corporate managers which are acting like baseball
managers trying to lead their team by looking just at the figures on the scoreboard, based on the
assumption that the financial performance of every part describes the sum of the whole
enterprise.53
This usually leads to short-term results, the contrary to what Shingeo54 meant when he turned the
common profit formula upside down with regard to customer orientation. Instead of calculating
Cost + Profit = Selling Prize, he changed the formula to Selling Price – Cost = Profit. Surely
Shingeo did not mean just to aim for short-term measures like cutting the budgets of research
and development programs, stopping employee training courses or postponing maintenance and
supplier relation programs because just to focus on these actions causes major problems for the
company’s long-term vitality.
The way of thinking in this kind of linear quantitative pattern, which is basically a financial model,
considers just one, artificially imposed, dimension – namely the financial one - whereas nature is
50
http://www.toyota.co.jp/en/vision/code_of_conduct/code_of_conduct.pdf (Accessed 08/04/2008)
Kouzes, J. M., Posner B. Z., The Leadership Challenge, 2002, p. 44 ff.
52
53
Senge, P. M., Profit Beyond Measures, 2000, foreword
54
Shingo, S., Non-Stock Production, 1988, p. 25 ff.
51
21
multi dimensional. This so-called mechanistic thinking is artificially designed and disconnects
parts of the entity, the company, from its environment.55
Displayed in figure 9, Johnson and Bröms, describe how the repetition of mechanistic behaviour
can turn into a vicious circle.
Desired results
(targets)
+
GAP
+
Management
by results
B1
Short-term self
balancing phase of MBR
Actual
results +
-
Delay
R2
+
Tampering
Long-term destabilizing
impact of tampering
Variation +
+
R3
Long-term destabilizing
impact of demoralisation
Demoralization +
Figure 9: Long-Term Destabilising Impact of Demoralisation
(Source: Johnson, T. H., Bröms, A., Profit Beyond Measures, 2000, p. 65)
Johnson and Bröms’ starting point is the difference between the desired results, constituted by
objectives, and the actual results. In order to solve this problem, the balancing loop B1 is initiated.
This then gives rise to the variable “manage by results” and, due to the assumption that the
system is a mechanical one, it leads to cost cutting or raising revenue programs. At this point, it is
usually up to the individual manager of how to cope with the issue. In most cases it leads to a
“saving costs – whatever the price is” solution, focused on short-time results.
One reason for doing so might be the organisational short-term thinking which hands out bonuses
or promotions based on just looking at short-term cost cutting.
The reinforcing loop R2 indicates the effects it has on the results because of the weakening of the
afore-mentioned long-term-oriented internal and external programs and relation building
processes – in other words, the impact on the long-term fundamentals of the system’s health.
The effect is an increased variation of results causing a reduction of the average actual result in
the long run. This reduction of average actual results again increases the gap between the
desired and the actual result.
55
Johnson, T. H., Bröms, A., Profit Beyond Measures, 2000, p. 43 ff.
22
The second reinforcing loop R3 indicates that there are additional consequences apart of the
long-term weakening of the companies’ fundamentals. Demoralization of stakeholders such as
the work force, customers and investors can be the cause of a management’s limited long-term
orientation. Demoralization then has also an increasing effect on variation which again affects the
actual results and puts more pressure on closing the gap between actual and desired results – a
vicious circle.
Driving quantitative results in natural systems with quantitative mechanistic objectives is doomed
to fail because this generates behaviour that destabilizes the system. The destabilization of the
system is demonstrated respectively by the high variation of results and by the variation of
operative income at a lower average level than desired.
The TPS demonstrates an alternative way by developing objectives that imitate those of a natural
living system. The main pillars of the TPS like Takt time, standardized work, Jidoka, JIT and
Heijunka, work as feedback mechanisms that relate to all parts of the system and maintain the
relationship between the system and its continuously changing environment. The effects of
Jidoka and standard work for instance are comparable with a human immune system, which
constantly detects and reacts towards abnormalities that happen within the continuously flowing
metabolic system. This happens without interference by a central system but independently.
There are even similarities between the TPS and the nervous system due to the interaction
among the company and its environment because of the continuous flow that links information to
the relevant systems parts.56
Figure 10 compares a traditional automation process and a Lean Manufacturing one. While the
traditional automation process focuses mainly on costs and quantities, the Lean automation
process aims for a systematic approach. Therefore, the equipment and tools must fit into the TPS
system, support and motivate the people which carry out the improvement and the Lean process
in this human-machine system. By applying self-organising feedback processes, the Lean
process is based on objectives that relate to the system as a whole.
Effective goal setting concentrates on Key Performance Indicators (KPI) that focus on flow and
continuous improvement rather than on quantitative goals broken down alongside the
organisational structure. KPIs like that could be the Takt time, through put time, Every Part Every
Interval (EPEI) and similar flow related issues besides quality KPIs. These can also be broken
down and checked regarding the extent to which the way the system works is synchronised with
the company’s objectives.
56
Johnson, T. H., Bröms, A., Profit Beyond Measures, 2000, p. 97 ff.
23
Unfortunately, the way in which modern controlling systems are still structured supports the onedimensional objective setting approach and the resulting short-time measures because it
encourages companies not to distinguish between objectivity and subjectivity. As an alternative to
the data-based mechanistic approach, there is an interpretative controlling approach which takes
the subjectiveness seriously in order to understand and integrate a living organisation.57
Philosophy:
Low labour cost
Performance measures:
Labour costs, equipment
utilization
Through automation
Tools:
ROI analysis, outsourced
automation
Through automation
Controls:
Labour budget,
equipment utilization
Philosophy:
Meet Takt by flexible, reliable, low cost human machine
system
Principle:
Eliminate labour cost
Through automation
Principle:
Equipment supports
people and process
Strategy:
Evaluate labour saving
job by job
Strategy:
Selectively automate to
support Lean process
Method:
One-for-one costbenefit analysis
Method:
Kaizen manual process
first
Reason:
Replace variable
labour cost with fixed
capital costs; reduce
labour uncertainty
Reason:
Technology augments,
human capability;
supports Lean
philosophy
Effect:
Narrow focus on
labour; job insecurity
Effect:
Automation supports
people and waste
reduction
Performance measures:
Total system cost, quality,
delivery
Through automation
Tools:
Poka Yoke, right sized
equipment, ChakuChaku, SMED,
customized automation
through automation
Controls:
Visual controls, TPM
Results:
Equipment failures, labour management conflict, increased
waste and direct labour costs =
higher total system cost
Results:
Flexibility, reliability, waste
reduction
Traditional Automation Process
Lean Automation Process
Figure 10: Comparing a Traditional Automation Process and a Lean Automation Process
(Source: Liker, J.K., Meier, D., The Toyota Way Field Book, 2006, p. 206)
Nevertheless, no matter if an organisation is managed by MBM, or MBR, ultimately the objective
must be always to stand ones ground in an economical sense, which implies one needs to be
profitable. The difference however is that MBR strives for profit maximisation as the overall goal;
whereas MBM managed entities consider profit as necessary for the companies’ survival but not
as the only goal.
57
Jäger, U., „Wertbewusstes Controlling – Weiche und harte Faktoren integrieren“, GWV Fachverlag
GmbH, 2003, p. 24 ff.
24
3.2.4.3 Leadership Principle 3: Providing Prerequisites
Having defined values and direction as well as objectives, the next step in trying to achieve the
goals is to provide the necessary prerequisites.
It is essential to empower people and to enable them to implement the vision. Kotter identified
four particularly important hindering factors for change processes as displayed in figure 11.58
To avoid a company’s organisational structure systematically blocking the LMI efforts of
employees, it needs to be modified according to Lean requirements into a build-to-change
organisation. Static structures for dealing with people like managing talents and reward systems
have to be made more flexible. Due to that, it is more efficient to address the customers’
requirements internally and externally by developing process-based structures and crossfunctional teams.59
1. Formal structures make it
difficult to act.
4. Bosses discourage
actions aimed at
implementing the new
vision.
Employees understand the
vision and want to make it a
reality, but are boxed in.
2. A lack of needed skills
undermines actions.
3. Personnel and information
system make it difficult to
act.
Figure 11: Barriers to Empowerment
(Source: Kotter, J. P., Leading Change, 1996, p. 102)
In change processes, people are expected to change their habits very quickly despite the fact
these habits may have been formed over a number of years. To enable them to cope with the
new expectations, the training of new technical and social skills is essential. To implement a
sustainable training success, instructors should consider the training as a service and provide
additional follow-up support when the persons they taught encounter problems after the training
course has finished.60
58
Kotter, J. P., Leading Change, 1996, p. 102 ff.
Worley, C. G., Lawler, E. E., Designing Organisations that are build to change, MIT Sloan Management
Review, 2006, pp. 19-23
60
Meier, D., Standardised Work and Job Instruction Training, Lean Enterprise Training Course, 2006, p. 50
ff.
59
25
The purpose of information systems is to support the decision makers. However, the systems
themselves are basically waste because they gather information from various parts of the
company and process them centrally before they distribute them again throughout the company.
Therefore it would avoid these wasteful, time-consuming processes if the decision-making was
decentralised and handed over to those people who can do it best. This new responsibility will
require the employees to be empowered but it will be a considerable motivator. Because the
decentralisation of a system never happens over a short time, it is useful to make this system
gradually more flexible, for instance by turning away from annual budgets towards more flexible
cost controls like activity-based costing which will also speed up the decision-making process
itself.
However, not all information arrives through systems. Staying in touch personally and being
accessible to subordinates is also important to the management.61 Practising Genchi Genbutsu,
the Japanese word for frequent shop-floor visits, considerably helps a company’s management to
up-date themselves with data beyond that delivered by the figure-driven systems.
In some cases there is certain unwillingness within change processes to cope with managers
who undermine the change that is needed. Because blockers who are sitting on a trigger point of
a change process can hinder the needed action considerably, quick solutions are needed to
change their minds or, if necessary, remove them consequently.
Nevertheless, the development of the companies’ leaders is more favourable and a very
important prerequisite for change processes in the long term. Toyota puts much effort in
developing its leaders from the bottom up. These leaders then live the philosophy and culture and
support the people doing their work. An example, therefore, is that even the executives must
experience first hand the actual situations at the work level and really understand them because
this is an integral part of the philosophy. Toyota’s managers think of themselves as not just
managing technology or tasks, but as promoting the culture, which means that they have to
demonstrate commitment day by day.62
Ultimately, it is necessary that leaders support their subordinates by providing any necessary
prerequisites in order to enable their workforce to turn the vision into reality and make it
sustainable.
61
Bossidy, L., What your leader expects of you and what you should expect in return, Harvard Business
Review, 2007, p. 58 ff.
62
Liker, J.K., The Toyota Way, 2004, p.173
26
3.2.4.4 Leadership Principle 4: Communication
Basically, leadership is a dialogue, not a monologue. Therefore, personal meetings are essential
and cannot be replaced by phone calls or email. When leaders provide a clear direction and
feedback along the way, people are encouraged because goals can strongly influence their ability
to achieve more. A story about marching soldiers states that the first group of soldiers, who were
exactly told how far they had to go and where they were during the march, achieved much better
results than the second group of soldiers, who did not get this information.63
Through communication and dialogue with our employees, we build and share the value “Mutual
Trust and Mutual Responsibility” and work together for the success of our employees
and the company. (Guiding Principles 5)64
All values, objectives and prerequisites are useless when not communicated. Therefore, a major
task of management is to provide clarity about objectives. Just that the management is clear
about what their objectives are, does not necessarily mean that these objectives are clear and
distinct to employees. Therefore, it is one of the first tasks of management to ensure that by
means of intense communication clarity is generated amongst the work force and that the
objectives are accepted by them.65
A disciplinarian for instance should personally inform his staff every quarter by explaining
financial results and progress in any operational or strategic initiative. In order to establish the
connection between the objective and the daily activity of the staff, it is much more helpful to
show them the actual figures and explaining them, rather than just to talk about the need for
increasing the cash flow.66
Like internal communication, the external communication, for instance with customers and
suppliers, is important as well. Toyota organises regular meetings with its suppliers. On the
agenda is not just the yearly price discussion but also the exchange of new findings concerning
improved manufacturing processes. To make the meetings fruitful good relationships and trust
are necessary. This is especially true for the supplier who has to have the trust to share his
innovations without needing to fear that he might lose the next order to a competitor who might
use these same improved processes to produce more cheaply.67
63
Kouzes, J. M., Posner B. Z., The Leadership Challenge, 2002, p .15 ff.
http://www.toyota.co.jp/en/vision/code_of_conduct/code_of_conduct.pdf (Accessed: 08/04/2007)
65
Hemel, U., Wert und Werte – Ethik für Manager, 2005, p. 121 ff.
66
Bossidy, L., “What your leader expects of you and what you should expect in return”, Harvard Business
Review, 2007, p. 58 ff.
67
Womack, J. P., Jones D. P., Roos, D., Die zweite Revolution in der Automobilindustrie, 1992, p. 161 ff.
64
27
However, communication depends a lot on roles and responsibilities, organisational stability and
standards. Communication standards could be definite meeting schedules for small teams or
complex stage-gate-models for cross-functional teams.68 The form of communication standards
depends strongly on the number of people and their organisation, and has to be tailored to each
specific case.
3.2.4.5 Leadership Principle 5: Realisation of Results
The four principles already mentioned are prerequisites for the generation of sustainable results,
which are the ultimate mark of a leader. Especially in the beginning of a LMI-process quick
results are an appropriate countermeasure against resistance.69 But just one-off quick results are
not enough because successful results depend much on the steadiness of management,
especially in cases of growing pressure for quick results.70
Training people to achieve results independently is a standard procedure at Toyota. Spear
explains that during the introduction and training of a new American manager at Toyota he
recognized that the company philosophy is to support people observing their environment and
experimenting as much as possible – managers as well as workers. Spear realized that at Toyota
managers act more as trainers and coaches than as specialists. They support people making
their own experiences and contributing to the system. If just managers drive improvements,
details will be overseen and cause an ineffective system. This relationship between managers
and work-force leads to all hierarchy levels being able to solve problems and this is what will
finally generate results.71
There is also a strong correlation between results and controlling, and it is not a question of “if”
but one of “how” to control and supervise. Controlling has to be action-oriented, not informationoriented. An old precept says that “people behave as they are controlled” and therefore the
leading question of controlling should be “what do we need to know about our subordinates” and
not “what are our subordinates doing”.72 This implies a climate of trust. People who are unable to
trust fail because they are forced by themselves to do everything on their own or to supervise the
work of their subordinates so closely that they become over-controlling.73
Courage in business is no matter of life and death, but it is a special kind of calculated risk taking.
Good leaders have a greater willingness to take courageous action as well as to follow a
standard procedure. The process consists of setting primary and secondary goals, distinguishing
the level of importance, developing a favourable power base and striking the right balance
68
Morgan, J. M., Liker, J. K., The Toyota Product Development System, 2006, p. 276
70
Wilbert, F., „Toyotas Kanban-Produktionssystem zeigt Unterschiede zwischen Idee und Wirklichkeit“,
http://www.maschinenmarkt.vogel.de (Accessed 25/10/2007)
71
Spear, S., “Management à la Toyota”, Harvard Business Manager, 2004, p. 36
72
Malik, F., Führen Leisten Leben, 2001, p. 230 ff.
73
Kouzes, J. M., Posner B. Z., The Leadership Challenge, 2002, p. 249 ff.
69
28
between risks and benefits as well as getting the timing right and having an appropriate
contingency plan. Taking these issues into consideration empowers people to make courageous
decisions in favour of both the organisation and themselves.74
To encourage people it is critical to send the right message. A “two steps ahead and one
backwards is ok, no step ahead isn’t”-philosophy can support courage and the generating of
results. One should send the signal that it is acceptable to make mistakes by taking action for
improvement, but that is unacceptable not to act because of the risks of failing.75
74
75
Reardon, K. K., “Courage as a skill”, Havard Business Review, 2007, p. 2 ff.
Womack, J. P., Jones, D. T., Auf dem Weg zum perfekten Unternehmen (Lean Thinking), 1997, p. 331
ff.
29
3.2.5 Situational Leading of Subordinates
Flexible processes and environments also require flexibility concerning the leadership style and
the organisation. The objective of delegating tasks to subordinates and withdrawing the leaders
from day-to-day decision making frees up more time for the leaders to develop strategically
issues.76
According to the “Situational Leadership” 77 approach, which is explained on the following pages,
it is possible to train subordinates in such a way that they can, up to a certain degree, work
independently. Therefore, the leader cannot apply just one leadership style but needs to rely on
four basic ones depending on the development and commitment of the subordinate.
The objective of a manager is to gradually increase the competence and confidence of the
subordinates in order to then be able to apply the less time-consuming leadership styles of
supporting and delegating. In other words, this means to empower the subordinates and it
requires a certain amount of social competence.
First of all the description of the four basic leadership styles is necessary:
Directing: Includes providing specific direction and closely monitoring task accomplishment. This
style is applied when subordinates lack competence but are enthusiastic and committed, for
example new young employees that need to be given direction and frequent feedback.
Coaching: Includes directing and closely monitoring the task accomplishment, additionally
explaining decisions, soliciting suggestions and supporting the subordinates’ progress. This style
is applied to subordinates who have a certain degree of competence but lack commitment. They
need direction and feedback because they are still relatively inexperienced. To build their selfesteem and participation in decision-making as well as to restore their commitment, support and
praise is necessary.
Supporting: Includes facilitating and supporting people’s efforts towards task accomplishment by
sharing responsibility for decision-making with the referring subordinate. It is applied to
subordinates with competence but lack of motivation and confidence. These skilled subordinates
do not need much direction, but support is necessary to strengthen their confidence and
motivation.
Delegating:
Handing over responsibility for decision-making and problem-solving to the
referring subordinate. This leadership style is applicable to subordinates with competence and
commitment. These people are able and willing to handle a project by themselves with little
supervision or support.
76
77
Blanchard, K. Zigarmi, P., Zigarmi, D., Leadership and the one minute manager, 2004, p. 69 ff.
30
Figure 12 demonstrates the four development levels, D1-D4, concerning job competence and
commitment of subordinates. The levels S1-S4 follow the subordinate’s performance curve and
constitute the necessary mix of supporting and directing style provided by the guiding leader.
Performance curve
High
SUPPORTING
S3
High supportive
and low directive
behaviour
COACHING
S2
Supporting
Coaching
High directive and
high supportive
behaviour
Supportive
behaviour
DELEGATING
S4
DIRECTING
S1
Delegating
Directing
Low supportive and low
directive behaviour
High directive and low
supportive behaviour
High
Low
Directive behaviour
High
D4
High competence
Developed
High commitment
Moderate
Low
D3
Moderate to high
competence
D2
Some to low
competence
Variable commitment
Low commitment
Developed
D1
Low competence
Developing
High commitment
Developing
Figure 12: The Situational Leadership Approach
(Source: Blanchard, K. Zigarmi, P., Zigarmi, D., Leadership and the one minute manager, 2004, p. 68)
Following this process in S1 by directing, the next level would be coaching in S2. To get there,
the development of the subordinate’s competence has to increase so the leader could also
increase support and decrease directing. The leadership style will change from a directing one
towards a coaching one. Since a D1 has commitment but lacks competence, the leader needs to
provide direction
In getting from S2 to S3, the subordinate again has developed. This time he increased
competence as well as motivation due to the coaching style. Now the leader can increase
support, decrease directing and apply a supporting style.
31
From S3 to S4, the leader changes styles to a delegating leadership style because the
subordinate again needs less directing as well as less support in order again to increase his
competence and commitment.
At D4, the person with high task competence and motivation is able to handle and organise the
given tasks himself quite independently.
Subordinates of development level D1 and D2 both lack necessary skills and experience to
perform at a high level without supervision, but they differ in commitment. The high commitment
of the D1 subordinate comes from an initial sense of excitement about learning something new,
he also is very confident, although it may be a false sense of confidence. Coaching a D2
subordinate can bring back confidence when he gets positive feedbacks on results.
All subordinates of development level D3 and D4 can handle the given tasks quite independently
without supervision because both have demonstrated the necessary skills and knowledge to
perform at that level. However, the difference between them is commitment. A D3 subordinate
can either have a confidence problem, then he needs support, encouragement and praise or he
can lack motivation, so the leader needs to listen and problem-solve.
An example of the continuous development of its work force is Toyota. „Before we build cars we
build people“ is a commonly heard phrase at there.78 Shown in figure 13, Toyota’s leaders are
respected for their technical knowledge as well as followed for their leadership abilities, for having
a combination of a deep understanding of the work they supervise and of the ability to develop,
mentor and lead people. The two-dimensional leadership matrix of the Toyota leadership model
shows that the focus lies on building a learning organisation by using a bottom-up approach,
guiding and coaching to develop the workforce. In addition, developing its future leaders from
within the company builds the base for a consistently and sustainable acting workforce which
holistically contributes to the company’s objectives.
Due to the situational leadership approach, it is possible to apply the appropriate leadership role
at the right time and place. In order to do that, they develop their subordinates so that they
understand their job and carry it out excellently. The result of developing people in this way
generates a valuable benefit to the company’s competitiveness and long-term success.
78
32
“Toyota’s continued success at implementing these tools [JIT, one-piece-flow, Jidoka, Heijunka,..]
stems from a deeper business philosophy based on its understanding of people and human
motivation. Its success is ultimately based on its ability to cultivate leadership, teams
and culture, to devise strategy, to build supplier relationships, and to
maintain a learning organization.”79
Top-down (Directives)
Bottom-up (Development)
General Management Expertise
In-depth Understanding of Work
Builder of learning organisations
Group facilitator
„Here is our purpose and direction –
I will guide and coach“
„You’re empowered“
Situational
leading
Bureaucratic manager
Task master
„Follow the rules“
„Here is what to do and how – do it“
Figure 13: Toyota Leadership Model
(Original source adjusted: Liker, J.K., The Toyota Way, 2004, p. 181)
The concept of the situational leadership of subordinates follows the flexibility that a modern
economic acting entity requires and it provides an appropriate method for responsible leaders to
enable their subordinates to cope with the demanding tasks that are encountered during the
changes a LMI process evokes.
79
33
3.3 Leadership Within a Lean Manufacturing
Implementation
Chapter 3.3 focuses on merging the chapters Lean Manufacturing and Leadership in the context
of a LMI process.
Ultimately, the top management is responsible for the result of the LMI process. It has to
determine the direction, make final decisions, support and communicate with people. The quick
removal of organisational barriers and quick decisions about necessary investments are also very
important to keep the motor of the Lean initiative running.80 Nevertheless, for a successful and
sustainable LMI process it is necessary to integrate and align all hierarchical management levels
concerning their leadership approach.81
The design of an effective leadership structure and clearly assigned responsibilities forms the
core for a LMI. Figure 14 displays the approach for such an organisation.
On the left side of the figure are the leadership tasks of all the hierarchical levels displayed. The
influence on structural and long-term changes decreases the lower the hierarchical level is. For
the top management this means that it is responsible for the whole span of leadership tasks,
beginning with the responsibility for the vision including the definition of values and direction and
ending with communication as a form of feedback loop. Consequently, the span of leadership
tasks at the level of directors to a certain extent still includes the definition of values and direction
and ends with communication, but their focus is more on the company’s systems. The functional
managers’ focus is on delivering processes. Their responsibility in terms of leadership tasks
concentrates mainly on objective setting, providing prerequisites, the realisation of results and
communication. The allocation of leadership tasks definitely depends on the organisation’s
structure and size.
From the supervisors’ level on, the operative tasks increase, for they ensure schedule attainment
on a shift-by-shift basis. They have a profound knowledge of cost, quality, safety and morale in
order to fulfil customer needs and lead their teams within the continuous improvement process by
setting objectives and putting prerequisites in place.
The realisation of results and communication constitutes the focus for team leaders due to
compliance with standards. They ensure that standard work procedures and 5S are being
followed. They also ensure the achievement of the schedule attainment on an hourly basis and
80
81
Laureau, W., Lean Leadership, 2000, p. 273 ff.
Liker, J. K., “The Toyota Way: People and Partners”, Lean Enterprise Training Course, 2006, p. 6 ff.
34
are responsible for the correct identification of problems. Independently of the hierarchical level,
from the corporate presidents’ level down to the team leaders, realisation of results and
communication can be considered as the responsibility of all leaders.
It is important that all hierarchical levels are focusing on the operator and provide the necessary
prerequisites in order to support him and enable him to do his job.
Quality, cost, productivity, safety, morale
Allocation in the
hierarchical pyramid
Management level
Just In Time
In-Station process control
Leadership tasks within each
hierarchical level
Compliance
Operator
Team Leader
Front-LineManagement
Containment
1) Definition of values
and direction
2) Setting objectives
3) Providing prerequisites
4) Realisation of results
5) Communication
Process
Supervisor
Functional team
managers
Middle
Management
Systems
Vision
Directors
Corporate – President /VP
Top
Management
Level production
Equipment reliability
Figure 14: Organisation of Leadership and its Tasks Within a LMI
(Original source adjusted: VanderZwaag, J. D., Designing and Leading Work Groups, Lean Enterprise
Training Course, 2006, p. 8)
The leadership’s tasks and the responsibilities of the hierarchical levels follow the LMI process
follow the LMI process, which has already been broken down in Table 1 in chapter 3.1.3
Implementation Process.
35
3.3.1 Phase I - Preparation: Preparatory Steps of Decision Makers for
a Lean Manufacturing Implementation
Phase I contains preparing the steps for a LMI. Generally, the company’s top management is
responsible for this task because it makes strategic decisions.
The duration of this phase depends on the determination of the decision makers and
environmental factors like stakeholders and economic urgency for change.
The application of the principles and the responsibility is mentioned at the end of every stage.
Principle 4 “Communication” and principle 5 “Realisation of results” will not be explicitly explained
because communication and result-orientation refer to the daily work of a leader.
3.3.1.1 Carrying Out a Potential Analysis
The objective is to identify internal and external potentials and to create a base for the
development of the companies’ vision.
Knowing about potentials is essential because companies where the management sees no major
problems suffer from the so-called “cockaigne-depression” which causes low performance and
highly unmotivated employees.82
The potential analysis is based on a standardised concept that contains an analysis of KPIs and
certain tools like waste check lists and, of course, the Value Stream Mapping (VSM), which in
Chapter “3.3.2 Phase II – Physical Transformation: Methodical Support and Encouragement” will
be described in more detail.
Besides quality figures, KPIs such as through put time, work in process (WIP) and stock turnover
will be closely analysed because they show the degree of material flow, which is one of the
fundamental principles of Lean Manufacturing and an indicator for waste. The potential analysis
takes all important internal and external enterprise disciplines into account, for a Lean enterprise
consists of much more than just a Lean Manufacturing or assembly process. It is necessary to
analyse departments like purchasing, engineering, finance, human resources and the supply
chain in order to arrive at a holistic impression of the current state and the potentials of the
company.
Especially in highly innovative industrial sectors like, for instance, the automotive industry, the
analysis of the product development process is an obligation because it is considered as a core
competence that is fundamental to the company’s success.83
82
83
Haas, M., Hahn, M., Schurr, M., Mit Konsequenz zur Exzellenz, 2006, p. 16
Morgan, J. M., Liker, J. K., The Toyota Product Development System, 2006, p. 8
36
The analysis process is preferably carried out by independent external consultants with expert
method knowledge. Nevertheless, they need support regarding accessibility of data and internal
expert know how. Therefore the management should identify the prerequisites for the analysis
and inform the works council and all subordinates involved in the analysis process in order to
build trust and to avoid unnecessary friction. Because the outcome of the analysis depends very
much on the quality of data, the management should encourage the internal specialists to
prepare and distribute the data required. Based on the data generation, the consultants can then
carry out the analysis from their neutral point of view.
The “potential analysis” - stage mainly depends on the Leadership Principle 3 “Providing
Prerequisites” for a LMI and lies within the responsibility of the leading top management.
3.3.1.2 Development of a Vision for the Companies´ Future
“The leader’s real challenge is having the long-term vision of knowing what to do, the
knowledge of how to do it, and the ability to develop people so they can
understand and do their job excellently.” 84
A company’s vision contains an ideal and unique image of the company’s future as well as its
values. A clear and focused vision works as a long-term objective and encourages management
as well as employees to put in the effort for it to become true. When an unforeseen situation
occurs, it should empower the company’s workforce by providing guidance.
The development of a vision according to figure 15 starts by determining the company’s core
competencies and the business the company is part of. The vision of the leadership team as well
as the vision of stakeholders should finally match and a comparison can be made by
benchmarking world class companies.85
Based on the results of the potential analysis, the leading top management and the stakeholders
simultaneously and in consensus develop a company’s vision based on long-term objectives.
This includes determining the key processes of the company and is part of the responsibility of
the top management. It leads to the question of what the customer requires and in what respects
the company has yet to achieve excellence and to generate competitive advantage.
Besides the technical and economic determination of visions, the social part in the form of values
has to be defined as well, because a company is a people’s organisation in a people’s
environment. Once the vision has been developed and documented, it has to be communicated,
in order to become an accepted and practiced part of the organisational culture.
84
85
37
According to Kotters seven principles of communicating a vision, the following issues have to be
taken into account. The vision must be communicated clearly and understandably to everybody in
the company, if possible by using metaphors. The content should be distributed through various
forms of media in a formal or informal way. This could be a speech, a meeting, company
newsletter or company television as well as in the regular chit-chat between employees. New
ideas sink in more deeply if they have been heard or encountered various times. Seeming
inconsistencies should be explained to ensure that the vision is credible and that communication
is a two-way process. Last but not least, leadership by example is worth more than a thousand
words.86 Breathing life into a vision means that, first of all, the leaders have to demonstrate the
determined values and objectives day by day. This might be the “Achilles’ heel” of the
organisational journey towards a sustainable Lean enterprise, where more is at stake than just
the Lean Manufacturing implementation. If the leaders are not able to live passionately and to
developing the enterprise towards the vision, the whole undertaking will not get much further. All
depends on an organisational leadership that truly lives the vision.87
What are our core competencies?
Benchmark the
competition macroprocesses
Compare
your result to
world class
What sounds
good to you?
What’s the
management’s
objective?
Talk to lots of
customers and
suppliers
What’s the
objective of
external
stakeholders?
Talk to lots of
employees, singly
and in teams
What’s the
objective of
internal
stakeholders?
Document the vision
Figure 15: The Vision Development Process
(Original source adjusted: Laureau, W., Lean Leadership, 2000, p. 174)
The “visions development” - stage mainly depends on the Leadership Principles 1 ”Definition of
values and direction” and 3 “Providing Prerequisites”. It lies again with the responsibility of the
leading top management.
86
87
Kotter, J. P., Leading Change, 1996, p. 85 ff.
Laureau, W., Lean Leadership,2000, p. 172
38
3.3.1.3 Decision to Implement Lean Manufacturing
The decision for implementing Lean requires absolute commitment to leadership from all
managerial levels within the enterprise. It has to be a commitment to change both with regard to
holistically redesigning the enterprise and with regard to the company’s long-term outlook by
taking customers, people, processes and the learning organisation into account.88 It requires a
considered decision for a systematic and proactive reengineering approach in order to realise a
sustainable change process instead of doing reactive point kaizen.
The objective of the decision for a LMI - stage follows Leadership Principle 5 “Realisation of
Results”. Like any important decision, this strategic one has a major impact on the company’s
workforce, processes and general appearance has to be taken by the company’s leading top
management.
3.3.1.4 Decision to Use External Support
At the beginning of a “Lean journey”, the question of external support within the LMI process
becomes evident. At that point, the company usually has no internal Lean experts who would be
able to support and steer a transformation of production sites or even a whole company. For a
company in the production sector, a fundamental restructuring of the enterprise is not likely to be
seen as a core competence.
To avoid trial and error over years with negative effects on output and motivation, one should
consider additional support by consultants. Due to their expert knowledge of an LMI process and
change management, they are able to support internal Lean Manufacturing knowledge to create
up and so create the base of a learning organisation.89
The preferable type of consulting involvement should focus more on change methodologies than
on pure process consulting because the experts of the processes are the process owners in the
company.
The ultimate objective of this external support is to enable companies to act independently from
external consultants, but it can be of enormous benefit to use them for a limited period of time to
support processes being implemented and the work force being qualified.90
Nevertheless, there should be no doubt about the fact that the responsibility as well as decisions
that need to be taken with regard to the consultants’ proposals and actions always remains in the
hands of the company leaders.
88
Liker, J.K., Meier, D., The Toyota Way Field Book, 2006, p. 25
Spath, D., Ganzheitlich Produzieren – Innovative Organisation und Führung, 2003, p. 107 ff.
90
Haas, M., Hahn, M., Schurr, M. Mit Konsequenz zur Exzellenz, 2006, p. 116 ff.
89
39
However, as in the case of Toyota, a qualified work force can lead to the creation of several
internal consulting services like its Operation Management Consulting Division (OMCD), Toyota
Supplier Support Centre (TSSC) or Operations Management Development Division (OMDD).
The “decision of using external support” - stage combines several Leadership Principles that
mainly have to be covered by top management. Based on the principle of “Setting objectives
focused on life systems”, issues like the tasks, duration and targets of the consulting services
have to be defined. By hiring consultants, the principle “Providing prerequisites” concerning a
professional LMI process is realized. Responsibility for this decision lies with the leading top
management.
3.3.1.5 Definition of Implementations Objectives
Usually during change projects, the management first looks for short-term performance, as
expressed in the profit and loss statement, whereas the overall improvement for growing
competitive strength and the long-term health is of minor importance to leading top
management.91 In the case of a LMI there are generally two major mistakes that are made. The
first one is that the holistic approach is rarely applied which often causes friction and waste at the
process interfaces. The second mistake is that the focus, when applying Lean Manufacturing, is
too often placed just on technical issues like short throughput times, low costs and low scrap rate,
target costing and TQM approaches. The employee-focused leadership, the prerequisite for
success, is often disregarded.92 Whereas KPIs for technical and financial issues are relatively
easy to generate, usually it is difficult to measure KPIs concerning workforce-related issues like
high flexibility, dealing with conflicts, more responsibility, motivation, quality awareness and a
proactive workforce.
To create a balanced approach between the hard and soft facts mentioned and define objectives,
the “Balanced Score Card” (BSC) approach, developed by Kaplan and Norton, could be
applied.93 The BSC is a tool to balance short- and long-term objectives by building a performance
measurement that integrates necessary production metrics, corporate performance and
employee development-related objectives.94 It constitutes a tool for sustainable leadership
because it does not just focus on KPIs such as profit, turnover and cash flow but leads to a
holistic approach. Especially the employee perspective leads to a learning organisation, the
necessary infrastructure for all four perspectives and a successful realisation of objectives.95
91
Imai, M., Kaizen, the key to Japans competitive success, 1986, p. 203 ff.
Horváth, P., Effektives und schlankes Controlling, 1992, p. 132 ff.
93
Jäger, U., „Wertbewusstes Controlling – Weiche und harte Faktoren integrieren“, GWV Fachverlag
GmbH, 2003, p. 24
94
Biddle , J., Lean talk doesn't equal Lean walk, Manufacturing Business Technology, 2006, p. 36
95
Arnold, Freimann, Kurz, Sustainable Balanced Scorecard (SBS): Strategisches Nachhaltigkeitsmanagement in KMU, uwf Umwelt Wirtschafts Forum, 2001, p. 5 ff.
92
40
Breaking down the BSC perspectives into the companies own strategic targets, measurement
figures, target values and strategic actions generates a corridor for consistent thinking.96
Although some adjustments to the common accounting and controlling systems will be
necessary, by applying Lean principles the objectives contain enormous potential. Based on
benchmarking, it has been found that for instance by developing a continuous flow with customeroriented pull effects it is feasible to double the productivity of the whole system dock-to-dock and
to decreases throughput times as well as stock by 90 percent. Other examples show that, due to
a more transparent environment, the scrap rate and accidents at work could be halved, costs
reduced by saving production area and by selling equipment and machines additional income
could be generated.97 In the administrative area, order lead times can decrease from 4 days to
lesser than 1 day, preproduction lead times from 44 days to 32 days and purchasing times from
18 days to 15.5 days.98
Nevertheless, to define objectives realistically, the leading top management first needs to be
trained on Lean philosophy, principles and tools to gain reasonable Lean expertise. Once a
certain degree of Lean knowledge has been reached, the objectives can be worked out,
preferably supported by experienced consultants.
The “Definition of Objectives” – stage focuses on the principle “Setting objectives”. It is the
responsibility of the leading top management and constitutes the base for the necessary next
step, the development of a strategic implementation plan to realise these objectives.
3.3.1.6 Strategic Implementation Planning
Ultimately, a LMI, constituted by a Production System, is meant to design internal processes and
the leadership system of a company to fulfil the objectives of the financial and customer
perspectives.99 But since Production Systems are usually developed over a period of several
years, the evident danger is that by continuously adding elements the systematic approach may
be lost.100
“Developing a plan that envisions the results of your Lean implementation is the key”101
96
Currle, M., Lean Manufacturing I - Value-Based Controlling, MBA course documentation, 2005, p. 68
Womack, J. P., Jones, D. T., Auf dem Weg zum perfekten Unternehmen (Lean Thinking), 1997, p. 31 ff.
98
Keyte, B., Locher, D., The complete Lean enterprise – value stream mapping for administrative and
office processes, 2004, p. 96
99
Röhrle, J., „Von starren Strukturen zum JIT-Produktionssystem“, Ganzheitlich produzieren – Innovative
Organisation und Führung, 2003, p. 150-154
100
Bohn, F., Erfolgsquellen in deutschen Unternehmen, REFA Nachrichten, 1/2007, p. 21-22
101
Liker, J.K., The Rocky Road to Lean Manufacturing, Modern Material Handling, March 2006, p. 13
97
41
In recent years, the trend has been towards applying Lean principles like Kanban, Kaizen
workshops and similar tools of the whole Lean Manufacturing concept, but these have mostly
focused on the short term. These short-term actions have generated rapid improvements, but in
order to take advantage of the whole potential of Lean Manufacturing strategic implementation
planning, which follows the company’s vision, is necessary.102
The strategy is supposed to function as a guardrail by giving a clear direction for operative action.
Therefore, factors like a vision, core competencies and holistic long-term objectives are
inevitable.103 “Lean thinking is not constrained to only manufacturing but a business strategy that
involves the entire company”.104
The VSM-approach is a useful tool to support the development of a Lean way regarding a
company’s material flow and process synchronisation. With VSM, every process within the flow
can be defined and isolated from the structural tangled mass of the enterprise. To take up the
position of a value stream perspective means to work on a holistic concept.105
Generally, it is wise to generate quick wins and therefore to start the change of the value stream
as close as possible to the customer. To start at the final assembly or production will have the
quickest results for the customer and the greatest benefits for the company.
But to decide the starting point and a to put in place a logically structured implementation which
follows the VSM concept by carefully identifying the integration of departments as well as the
selection of the appliance of tools and methods, is just one part of the challenge. Surely, the other
part of the challenge and the prerequisite of a LMI is to take into account the reorganisation of
several core functions of the company’s foundations.
In practice, it is hardly a rare occurrence MRP systems are touched despite it should be done.
Likewise, it is the planning team who should consider adjustments to the payment system
concerning the change from piecework, which generates a non-synchronic working system,
towards flexible teamwork according to pull systems. Related to the flexible work systems,
flexitime models as well as changes to the incentive programs for managers and the shop-floor
work force are required then.
Another essential adjustment is the modification of the organisational structure to support a
strategic Lean leadership. To build a steering committee made up of a company’s top leaders
and a coordination team made up of middle management leaders, which reports to the steering
committee could be an alternative for the implementation itself. Changing the organisational
structure towards a product-oriented organisation might be a long-term objective.
102
Takeda, H. Das synchrone Produktionssystem, 2002, p. 15 ff.
Niedereichholz, C., Unternehmensberatung, 2004, p. 231
104
Cooper, K., How going Lean, geographicartsmonthly.com, 07/2006, p. 17
105
Wiegand, B., Sehen Lernen, Lean Management Institute, 2004, preamble
103
42
To cope with the fear of the work force regarding dismissals, as a result of the LMI process, a
clear statement about no dismissals documented in the labour-management contract would be
helpful.
Regarding the external environment, an intensification of supplier relations and strategic
cooperation can support a stable development of the supply chain enormously.
Preferably, all those issues which necessarily have to be changed during the LMI process should
be documented in a labour-management contract, bearing in mind that these issues are just
some of many possibilities.
In cases of slaughtering sacred cows like the system of payment, MRP and organisational
adjustments, it becomes evident why LMI has at all costs to be located on the company’s
hierarchical top level in order consistently to set the stage for a holistic and sustainable working
system.
The LMI strategy planning process also includes controlling tasks. A strategic planning process is
strongly affected by the uncertainty and ambiguity that spring from assumptions rather than clear
information.
The objective of strategic control therefore assures that the strategy and the
implementation are permanently monitored with regard to their feasibility in order to avoid
disasters.106
Strategy monitoring
Strategy premises control
Strategy implementation
control
t
Strategy determination
t0
t1
Strategy implementation
t2
Figure 16: The Strategic Control Process
(Source: Steinmann, H. Schreyögg, G., Management, 2005, p. 280)
As shown in figure 16, the strategic planning process starts in (t0). With setting premises in (t1) a
substantial instrument for structuring the decision process has been put in place.
The setting of premises does not guarantee that all eventualities have been taken into
consideration, but it covers the most important evolutions that can be foreseen in (t1) and the
premises will eventually be adjusted if necessary. In (t2) strategy implementation control is set up.
106
Steinmann, H. Schreyögg, G., Management, 2005, p. 277 ff.
43
By means of defined milestones, it gives feedback regarding the strategic course status. This
works like a permanent comparison between the current state and the planned state. Premises
control as well as strategic implementation control are embedded in the strategy monitoring which
serves as a backup control. In interaction with each other, named types of control will form the
strategic control system.
Within the “strategic implementation planning” stage all Leadership Principles become evident in
the form of “Definition of values and direction” by showing commitment to the Lean philosophy,
“Setting objectives” by formulating the strategic goals and thus “Providing prerequisites” for the
LMI process. “Realisation of results” and “Communication” are implemented by discussing and
confirming the strategic Lean implementation plan.
Since this step is likely to touch on issues that affect middle management, they should become
involved in the discussions. Nevertheless, the responsibility remains in the hands of the leading
top management.
3.3.2 Phase II - Physical Transformation: Methodical Support and
Encouragement
Phase II constitutes the physical Lean Manufacturing transformation of a company and the
implementation of tools and methods. Based on the prerequisites and with support and direction
provided by the leading top-management, the process is carried out mainly by middle and shopfloor management. However, it also has to be defined how representatives of the necessary
interfaces and defined competencies can be integrated into the project team during this phase.
Leadership is more important in times of uncertainty than in stable times.107 Therefore and in
order to create a sustainable system that works to Lean principles, it is beneficial that the future
leader of the area reorganises and leads the Lean implementation team from the current state
analysis onwards. Due to his personal involvement, he will generate a deep understanding of and
relation with his new area.108 This will lead to the leader having a clear idea of the future state of
his area and the ability to formulate it precisely. Based on a trustful relationship to his
subordinates he permanently has to show initiative to make it happen.
107
108
Kouzes, J. M., Posner B. Z., The Leadership Challenge, 2002, p.177
Takeda, H. Das synchrone Produktionssystem, 2002, p.123 ff.
44
3.3.2.1 Project Preparation and Kick Off
Based on the strategic implementation plan the team usually starts with the preparation of a pilot
project. This requires the structuring and planning of the project and the definition of schedules
and responsibilities. This is because without these preparations the Lean initiative will generate
as little improvement as countless quality circles and TQM efforts before.109 To organise the LMI
process, a planning procedure which consists of five main stages can be applied.110 Stage one
focuses on breaking down the work to divide the global task into phases, segments and finally
into work steps, as exemplified by figure 17. In addition, the tools that will be implemented should
be defined during this stage. Whereas for instance VSM, standard work and Kanban are used to
restructure a model line, the extended restructuring of an enterprise requires tools like supplier
development or milk runs.111
Phases
Kick Off/
data collection
Definition
scope
time table
project team
Product team
Tasks and BOM structure
worksteps
Process team
VSM
Synchros
AT
Verification
Calculation
General
Process team
DC definition
Product def.
Process link/de-link
Product team
Kanban data
Pull sequences
Replenishment
Mixed Model
calc.
First Linedesign
Product team
Kanban
quantity
bin definition
Logistics/ Dispo
Distribution/
Process team
Warehouse
First Line Calc.
print Kanban Resource Structure
labels
Linedesign
Line Live
Process- and
Process- und
Product team
Product team
Final
Linedesign
Move plan
Organizationalintegration
Training plan
Figure 17: Exemplary Five Phase Model for Lean LMI
(Source: 5 Phasenmodel Leonardo Group GmbH, Trainingsunterlagen “Die Flexible Fabrik”, 2008)
Stage two contains the logical sequencing of the broken down contents and a feasibility check.
Within stage three a detailed time plan will be elaborated on, stage four deals with the necessary
capacity planning and stage five contains a cost estimation of all the actions that will definitely be
undertaken.
109
Laureau, W., Lean Leadership,2000, p. 275
Niedereichholz, Phase 3 of the consulting process, 09/2006, p. 9 ff.
111
110
45
It cannot be overestimated how important the participation of the leading top management within
the LMI initiative is. Consequently, a fitting steering organisation is necessary, which serves the
main leading and commitment building purposes, as well as a project management structure to
encourage action while forcing the managers of the respective business unit to get thoroughly
involved in the LMI initiative.
Figure 18 shows a possible form of an executive steering committee, which usually consists of
the company’s leading top management. This committee is responsible for the success of the
LMI. It supports and steers the technical experts and the carefully selected members of several
work groups.
Recommend
Direct
Executive steering
committee
Recommend
Direction
Decisions
Lean implementation
teams
Teach & coach
Experts
Manage the project
Focus on results
Provide process insights
Coach the installation of a self-sustaining system
Result tracking
Results
Tactical implementations
Figure 18: Project Management Approach for a LMI
(Source: Laureau, W., Lean Leadership, 2000, p. 275)
Besides their involvement in the purely organisational project planning and tool selection, all
persons involved as well as the works council should be kept informed intensively in order to
make the process transparent and to avoid fear of the unknown and possible friction. In this way,
doubts concerning the feasibility of the methods and tools as well as inaccurate rumours can be
overcome straight away.112 The work force involved should also be informed of the objectives of
the change in form of KPIs and this has to be realised a reasonable amount of time before the
kick off.
Training the workforce beforehand by means of basic method training, several hands-on training
sessions on the shop floor and advanced trainer education will support the LMI considerably.113
Finally, turning the kick off into an event will generate attention and momentum for the LMI
initiative.
112
113
Stürzl, W., Lean Production in der Praxis: Spitzenleistung durch Gruppenarbeit,1992, p. 200 ff.
Haas, M., Hahn, M., Schurr, M., Mit Konsequenz zur Exzellenz, 2006, p. 116 ff.
46
Within the “Project preparation and kick off” stage, again all Leadership Principles become
evident: in “Definition of values and direction” by selecting certain Lean tools and principles,
“Setting objectives” by assigning the several tasks and work contents to responsible teams and
persons and thus “Providing prerequisites” for the LMI process. “Communication” and
“Realisation of results” are implemented by discussing and confirming the project preparation and
carrying out the project kick off.
47
3.3.2.2 Current State Analysis
The objective of the current state analysis is to get a deep understanding of how the selected
area is working at present. Mapping the current state constitutes the baseline for benchmarking
and further analysis because waste will be visualised.
The VSM is the predestined tool for visualisation. Due to its standardized symbols, the method is
capable of displaying complex circumstances in a transparent way. This simplifies the
identification of problems and makes it possible to develop solutions. KPIs like throughput time,
cycle time, work in process, capacity usage of machines, changeover time, lot sizes and so on
will be integrated into the current state map and obstructive issues concerning the material flow
can be identified.114
There are certain principles that need to be followed while developing a current state map.
Therefore, a value stream manager, possibly the future leader of the area, should take over
responsibility and lead the team in technical and disciplinary matters.115
The real power of this method comes from the organisational intervention of the decision makers
involved. Once they acknowledge the gap between the current state and the realistic futures
state, they can take counter measures.116
However, it is necessary to integrate all key players who are dealing with the selected process.
This simplifies the work for the value stream manager and his team who are responsible for
gathering the data directly on the Gemba, the Japanese term for shop-floor, by walking the
material flow from customer ramp up to supplier ramp and who are also in charge of checking the
aforementioned KPIs directly by taking the time to count at every station.
Based on the VSM, a variety of useful analysis tools, such as for instance an ABC/XYZ-material
analysis, Cause and Effect Diagrams, Sequence of Events analysis, or the Six Sigma approach
for data analysis, can be applied additionally. By applying these tools, a deep understanding of
the value stream, which is important for the analysis phase, will be developed.
Within the “Current state analysis” the focus is on developing a base for further communication
and thus the groundwork for “providing prerequisites” and “objective setting”.
It should be realised mainly by the leading shop-floor management who have inherent technical
knowledge about the process and by the leading middle-management which cooperates closely
with the leading top management whenever necessary.
114
Von Langsdorf, Philipp, Handout of “Tagung” Launching Lean“, Beitrag “Vorstellung der Methode
Wertstromdesign”, Fraunhofer IPA, Wednesday, 10.11.2003
115
Rother, M., Shook, J., Sehen lernen – Mit Wertstromdesign die Wertschöpfung erhöhen und
Verschwendung beseitigen, 2004, p. 12 ff.
116
48
3.3.2.3 Design of a Future State
Once the area has been analysed and a deep understanding of it has been achieved, the design
of the future state comes next. The purpose of the future state is to create a long-term-oriented
Lean solution that focuses on customers’ needs.
The tools and methods, besides the JIT concept, are no Japanese invention, but are generally
applied more rigorously and holistically there.117 Nevertheless, the objective is to create an
improved flow of the elements material and information within the system. The designated leader
of the area and its team, which already has gained a deep understanding due to the current state
analysis and an expert knowledge of Lean principles, now has to ensure the application of the
necessary Lean principles.
During this stage it is recommended to consult Lean Manufacturing professionals with in-depth
expertise to support the process.118
Usually waste is not eliminated but shifted elsewhere in the system. This happens because
usually it is not possible to implement the prerequisites needed at all the same time. Therefore, it
is necessary to consider all necessary tools and methods in a so-called ‘road map’ and align
them with the company’s specific vision. As a result, the implementation of that holistic approach
can be realised gradually in steps.
The concept of Takt time supports the work place design and provides the prerequisites for a
stable and transparent Lean system.119 Yet, levelling cycle times and calculating the number of
work stations in order to archive the required customer Takt time in a selected system is one
thing, but using Takt time as the rhythm to align all components of a company is another thing
altogether. Linking functions like logistics and purchasing to the assembly Takt, scheduling
maintenance activities to fit in with this, and finally designing the whole product to a Takt time
assembly creates a holistically flowing low waste system and, through the transparency needed,
leads to work force self-control and supervision.
To support transparency the application of Visual Management Systems is very helpful.
Standardised colour codes for material and tool location as well as display panels to visualise the
current production status are some forms of this approach. The visual management ensures
quality and enables the work force to act with self-control.120
117
Shingo, S., Das Erfolgsgeheimnis der Toyota Produktion, 1993, foreword p. 15 ff.
119
120
Takeda, H. Das synchrone Produktionssystem, 2002, p. 95 ff.
118
49
To make the system work, employee development is necessary. Developing “employees to
[become] entrepreneurs”, with the purpose of integrating experience, expertise and engagement
into the system, requires three prerequisites. First of all the employees have to be willing,
secondly they have to be able to “become entrepreneurs” and thirdly they have to be allowed to
do so. The third point is the most critical one for managers because they often see it as a loss of
power.121
A usual obstacle occurring during the design phase of the future state is a certain resistance by
some team members. To overcome this problem, the application of the 20-60-20 model is useful.
At the beginning of a change process there are usually three kinds of persons. Enthusiastic ones
who want to change something make up about 20 percent, observant ones about 60 percent and
opponents of change also amount to 20 percent of those involved. It is important that a leader
does not pay too much attention to the opponents but intends to turn the observant and
indecisive ones into enthusiastic ones.122 To avoid unnecessary delays and bad influences on the
rest of the team, as an ultimate and consistent measure some of the most obstructive opponents
may have to be laid off. Quick decision taking is the key to generating momentum at this stage.123
Within the “Design of a future state” stage the Leadership Principle “Definition of values and
direction” in order to design the future working environment is implemented by the shop-floor-,
middle- and top-management leaders jointly and this results in the application of the Leadership
Principle “Setting objectives”.
These objectives then form the foundation for the next stage, the project implementation
planning.
121
Röhrle, J., Integration von Mensch, Organisation und Produkten, Handout, 23/Okt, 2006 p. 2
123
Womack, J. P., Jones, D. T., Auf dem Weg zum perfekten Unternehmen (Lean Thinking), 1997, p. 330
122
50
3.3.2.4 Project Implementation Planning
Based on the future state map, the project implementation planning deals with turning the
designed future state of the project, which usually involves just a part or a pilot of the whole LMI
process, into reality. This includes the physical reorganisation of the area as well as providing
intensive information for and preparation of the work force. Following the strategic implementation
planning, time, resources and investment requirements will be defined at this stage. The
implementation planning mainly consists of standard project planning techniques that will not be
discussed within this paper. The most important objective of the implementation plan is to
communicate the objective and generate commitment to this plan.
However, in this stage the commitment of the management involved should be verified. If some of
these staff members are found seriously lacking commitment concerning the realisation of the
future state, then this issue has to be solved quickly by means of top management intervention in
order to sustain the motivation of the project team.
Within the “Project Implementation Planning” stage the Leadership Principles are evident in form
of “Definition of values and direction” by showing commitment to the Lean philosophy, “Setting
objectives” by formulating the goals of the project and thus “Providing prerequisites” for the LMI
process.
Involved in this step is mainly the relevant shop-floor- and middle-management together with final
supervision of the leading top-management.
3.3.2.5 Physical Implementation and Launch Stabilisation
The beginning of the implementation starts with workforce education, for it enforces the
sustainability of the implementation. Training and preparation are also very important especially
in the case of a fundamental change from a self-focused piece work system to a flow line with
flexible workforce.124 In this context, the support of a coach who prepares the group for the new
system during a defined period should be considered strongly.125
Based on the preparatory training, the implementation of the planned future state contains the
physical reorganisation of the area and the appliance of tools.
After the physical transformation, the real work begins with a quick stabilisation of the
implemented system to keep up the workforce’s motivation and commitment.
If one lets too much time to pass without sticking to the standard procedures, this endangers the
whole implementation.
124
125
Dailey, K. W., The Lean Manufacturing Pocket Handbook, 2003, p. 40
Stürzl, W., Lean Production in der Praxis: Spitzenleistung durch Gruppenarbeit,1992, p. 132
51
In order to stabilise the system from the beginning of the launch curve on, permanent target
controlling by means of clear KPIs generates transparency and indicates the gap between the
planned and realised system. Easily understandable and clearly defined KPIs like “hours per
produced product”, “products without errors per day” or the number of “work in process (WIP)”
products will generate transparency and thus commitment to improvement efforts. Besides that, a
permanently available stabilisation task force supports workers by training them and by
documenting problems and countermeasures.
In the stabilisation phase, daily management attendance and quick intervention when necessary
is very important because it is at this time that the implementation team usually faces most of the
problems and needs support. The frequent presence of a leading top-manager does not just
strengthen the position of the department leader in charge; it also generates a deep
understanding within the management of the problems that are currently being encountered.
There is an exemplary story of a top-manager who was totally convinced of the Lean approach
and showed this both by working hard on it as well as by communicating that there would be no
discussion of going back to the previously used batch production. Because of his leadership role
and enthusiasm, he generated commitment and finally exceptional results.126
To generate this commitment and trust from the shop-floor work force, top-managers should
review the previous day’s KPIs on a daily basis and call for countermeasures during the
stabilisation phase if needed. To facilitate the differentiation between right and wrong, forms of
standardised visual management have to be installed and followed right from the beginning.
Once the system runs, about 80 percent as it was planned to, the responsibility can be handed
over to the process owner who improves the system with its team continuously.
Dissolving the implementation team too early is a frequently made mistake and it is often the
reason for not achieving the forecast results. The physical implementation and launch are led
mainly by shop-floor and middle management. Nevertheless, the leading top management has to
be present every day to provide the support needed for following the launch curve as planned. It
is particularly important that they bear in mind the Leadership Principle “Providing Prerequisites”.
Within the “Physical Implementation and Launch Stabilisation” stage, the focus is on the
Leadership Principle “Realisation of Results” by implementing the physical components.
However, the physical transformation is the easy part of this stage, the challenging and important
part is to generate a certain stability of the new system.
126
Womack, J. P., Jones, D. T., Nach Toyota: Das neue Streben nach Perfektion, Havard Business
Manager, 11/1997, p. 91
52
3.3.2.6 Project Evaluation
Based on the documented data of the former current state, the project outcome has to be
evaluated based on of the selected KPIs by means of the balanced score card approach.
However, a usual problem occurs when evaluating typical Lean improvement impacts like
reduced floor space, reduced lead time, reduced inventory or fewer late deliveries. In some
cases, they may have no or even a negative impact on the measures noted in the accounting
system. The reason is that the usual measures are not designed for Lean impacts and there is
little information available concerning actual expenditure for various activities that are partly or
entirely allocated to the overhead. Some costs like rework, overtime and scrap are tracked
inaccurately or not at all.127
An example of this dilemma is the inventory cost calculation. Because inventory itself is a balance
sheet item, it does not show up directly on the profit and loss statement. Nevertheless, inventory
causes estimated costs that are given as a percentage of the inventory. A percentage of 18-25
percent is a quite reasonable figure and covers interest expenses of opportunity cost, material
handling, scrap, warehouse space and inventory transactions, because these components are
typically minimized by LMIs.128
In order to realise a LMI, turning objectives into quantitative figures requires a paradigm shift
towards an adjusted accounting system. This requires a different mindset that people will have to
get used to and it means addressing the fact that it is much more difficult to change the
managerial culture and habits than the accounting processes itself.129
In this context, product development optimisations definitely play an important part, too. Up to 30
percent of the cost reductions depend on the process planning and product development, but this
can be considered a long-term objective because it usually takes much longer than the
implementation project.130
Within the “Project evaluation” stage, all hierarchical levels are judged on the basis on the extent
to which they have implemented the Leadership Principle “Realisation of Results” based on the
forecast objectives.
127
Arnsdorf , D., Lean Accounting, Lean Enterprise Training Course, 2006, p. 9 ff.
Leone, G., Rahn, R. D., Fundamentals of Flow Manufacturing, 2002, p. 180
129
Dwyer, J., Accounting for waste, Lean Manufacturing Research report, 2007, p. 10
130
Takeda, H., Das System der Mixed Production, 1996, p. 272 ff.
128
53
3.3.3 Phase III - Living the System: Cultural Development of Leadership
Having implemented the new system is just the beginning on the Lean journey.
After the physical LMI has been realised, phase three consequently encompasses the
challenging cultural Lean transformation of the company and the stabilisation and improvement of
the implemented tools and methods.
From this point onwards, the real challenge of a leader begins because he has to live and
develop the system himself and carries the responsibility that his subordinates are also able to
live and develop it. The previously described Situational Leadership approach provides the
methodical foundation necessary to change the existing culture by focusing on adjusting the
system to people and not vice versa.
3.3.3.1 Maintaining Standards
A standard represents the best way available at the present moment to perform a task. Within the
LMI process some standards will have been adopted from the former system, others will have
been newly developed.
It is relatively easy to develop and document standards, yet the process of maintaining them in
everyday life is extremely difficult. If there are no standards, there are no problems and no waste
– or at least they are not transparent. To make sure that the people in charge can recognise the
problems, standards have to be visualised. This can, as mentioned with regard to Takt, take the
form of rhythm or just by colours for standardized material locations and quantities.131 As an
important tool for this "visual control" or "problem visualization," Toyota plants apply a board
system called "Andon". It allows shop- floor operators to identify problems quickly and it can lead
in certain cases to stopping a production line.132
Issues like quality or scrap rate limits, productivity benchmarks and safety standards can be
monitored based on a KPI-system. But it is necessary to explain the KPIs to the workforce they
affect as well as to define internal responsibilities for monitoring.133 A standard procedure for
cases where the defined limits have been breached also has to be defined and permanently
updated. However, it will certainly not be helpful to document and standardise everything
because the system is made up of and run by humans and, therefore, variation up to a certain
degree should be allowed as long as it does not cause problems for the system.
131
Takeda, H. Das synchrone Produktionssystem, 2002, p. 138
http://www.toyota.co.jp/en/vision/production_system/jidoka.html (Accessed 2008/02/06)
133
132
54
Figure 19 shows standards as an integral part of the system. Standards work as a block that
prevents the value creation of production and administration from regressing to a lower level.
It is the responsibility of management to review the current standards and make sure that they
are followed. If the management is not able to get people to follow the standards, the rest of its
work will not produce much result.134
Human
infrastructure
JIT
Vallue creation
of production
and
administration
Standards
CIP
Quality focus and robust
processes and products
Figure 19: The Influence of Standards Within a LMI
(Source: DaimlerChrysler Production System, System description, DCPS_English_Jan_19_2001, p. 8)
The review of standards beside KPIs can be carried out in form of an audit. It is a very effective
method for a manager to audit standards in a structured and regular way, on the shop floor during
the so-called “Go-and-see”. In this way he gains an in-depth understanding of the problems on
the shop floor and can start structured counter measures. By means of the audit, management
creates a prerequisite to make problems transparent. While communicating them, they lead the
workforce and so make them follow the standards.
The importance of “Maintaining the Standards” is evident because it comprises the Leadership
Principles of “Definition of values and direction”, “Providing prerequisites” as well as
“Communication” which serve as an orientation point for the workforce. Additionally it is “Setting
objectives” by clearly sticking to them and it contributes to the “Realisation of results” by
embracing all hierarchical levels.
134
Imai, M., Kaizen, the key to Japans competitive success, 1986, p. 77
55
3.3.3.2 Kaizen and Kaikaku - Two forms of Improvement
Basically, there are two kinds of improvement. The first one is Kaizen, the improvement in small
steps mainly borne by the motivation and attention of workers and front-line leaders. The second
one is Kaikaku, the leadership-driven big changes that usually are technology- and investmentintensive.
One example for an organised Kaikaku approach is Toyota’s OMCD approach. They actively
implement the big changes requested and driven by hierarchical top leaders.135
With Kaikaku, the technological part is comparatively easy to implement. The subsequent step
focuses on the workforce who will require day-by-day leadership by a dedicated continuous
improvement leader is necessary.136 Similarly, Kaizen also requires substantial managerial
commitment of time and effort. Investing in Kaizen means that a company is investing in people
because it is a people-oriented process of continuous improvement.137
Top-Leadership
KAIKAKU
Responsibility
of
Improvement of processes
(KAIZEN)
Front-line
Leadership
Focus
Figure 20: Responsibility of the Certain Leadership Levels Concerning Kaizen and Kaikaku
(Source: Rother, M., Shook, J., Sehen lernen – Mit Wertstromdesign die Wertschöpfung erhöhen und
Verschwendung beseitigen, 2004, p. 8)
An extensive study of five DuPont plants found that over two-thirds of the reduction in production
costs over a thirty-year time period were brought about by minor technical changes rather then
major ones.138 Bearing this in mind, leaders should strengthen the Kaizen philosophy and
encourage their workforce to solve the small daily problems and thus to contribute to their
companies’ success.139
135
Liker, J. K., “The Toyota Way: People and Partners”, Lean Enterprise Training Course, 2006, p. 2
Leone, G., Rahn, R. D., Fundamentals of Flow Manufacturing, 2002, p. 145
137
Imai, M., Kaizen, the key to Japans competitive success, 1986, p. 27
138
Hollander, S., The Sources of Increased Efficiency: A Study of DuPont Rayon Plants, Cambridge,
Mass.: MIT Press, 1965
139
See Kouzes, J. M., Posner B. Z., The Leadership Challenge, 2002, p. 293
136
56
One option of dealing with Kaizen improvement is to select a value stream manager who reports
directly to the plant manager. This person within the line allocation would have the ability to
suggest changes regardless of functions and departmental borders and this would be a clear
advantage over a staff function.140 This value stream manager could press ahead independently
with those tools and problem solving methods which external consultants had already trained
internal staff members in.141
Nevertheless, it is important to have both elements together in a system as well as to practise
both every day in a very consistent manner. In this context, standards are very important to
sustain the achieved status. Figure 21 shows the interaction of Kaikaku and Kaizen. After a
considerable Kaikaku reorganisation, the system needs the continuous Kaizen approach to
consolidate itself.
Improvement
Standard 2
Kaikaku
Standard 1
Kaikaku
Kaizen
Kaizen
Base line
Time
Figure 21: How Kaizen and Kaikaku Interact
(Source: Imai, M., Kaizen, the key to Japans competitive success, 1986, p. 27)
The “Improvement of the standard due to continuous improvement” is as important as the
maintaining of standards. It also constitutes all Leadership Principles. The “Definition of Values
and Direction” is applied because of the permanent strife for improvement and thus consequently
“Setting objectives” and “Providing prerequisites” for the “Realisation of results” and requires a
certain degree of “Communication”. The leading at this stage is the responsibility of all
hierarchical levels.
140
Rother, M., Shook, J., Sehen lernen – Mit Wertstromdesign die Wertschöpfung erhöhen und
Verschwendung beseitigen, 2004, p. 8
141
57
3.3.3.3 Development of a Appropriate Culture as the Company’s Foundation
A corporate culture usually undergoes a continuous process of change due to new techniques,
products, forms of organisation and generations of employees. However, the linchpin is always
the work force, which has to cope with the change and actively improve its work environment.
Developing a culture of change and enabling the work force to handle it, is the responsibility of
leadership.142 Therefore, the cultural aspect should not be underestimated. Toyota leaders have
to teach their subordinates the Toyota Way and its long-term philosophy, which implies that they
themselves have understood it and are living it.143 Therefore, the term corporate culture can be
defined as “a phenomenon which exists in every social entity and which is formed by the total of
organisational members with respect to kind and content”.144
“Toyota kept telling me that these tools and techniques were not the key to TPS. Rather the
power behind TPS is the company’s management commitment to continuously
invest in its people and promote a culture of continuous improvement.”145
Toyota leaders go and see the shop-floor regularly in order to really understand the current
situation at the work level because they are not just managing technological tasks but also
promoting the culture. The Toyota philosophy focuses on supporting people doing their work and
management has to demonstrate their commitment to this philosophy day by day. One
consequence of this is also that leaders have to be developed rather than “purchased”. The
problem with a “purchased leader” is that he usually causes a sudden radical shift in the
organisation’s culture. Similar problems are caused the common habit of many European
companies to change department leaders every two years. Due to the inconsistent environment
that results from this habit, it is difficult to teach values and direction as a base for leadership
development and continuous learning.
A research report confirms the very importance of aligning the behaviour of leaders with the
values and the culture of an organisation. Today it is not enough just to meet targets, in addition,
it is vitally necessary to connect with people and motivate them.146
The objective is to build a sustainable learning entity with a problem solving culture and people
able to handle continuous change using the available toolbox in order to eliminate waste.147
142
Liker, J.K., The Toyota Way, 2004, p. 173 ff.
144
Dülfer, E., International Management in Diverse Cultural Areas, 1999, p. 394 ff.
145
146
147
143
58
The “Development of a Culture as the Company’s Foundation” mainly focuses on the Leadership
Principle “Definition of Values and Direction” and concerns all hierarchical levels in order to make
them walk the talk on a daily basis and develop a problem-solving and permanently learning
culture.
59
3.3.3.4 Development of Leaders
Despite the fact that a general list of attributes for a leader cannot be formulated, for the special
case of a Lean implementation, some cornerstones for a leader’s training can be established.
There are basically five main characteristics which a Lean leader should have.148 First of all is the
issue of job knowledge. He should have an in-depth knowledge of the processes and tools his
workforce uses. Depending on the hierarchical level, the leader should posses the technical skills
up to a certain degree to operate the machinery in his area. So he knows if the workforce carry
out their operations correctly or not. Secondly, he should be aware of his responsibility and role
his job entails. This implies that a leader understands the policies and procedures of the company
and is able to communicate them to his workforce. The third characteristic is the continuous
ability to improve. The leader must constantly analyse his dedicated area and identify possible
items for improvement. The fourth characteristic is the leadership ability itself. A leader needs to
lead and this is only possible if he has got followers.149 Therefore he has to be able to work with
people. Only on that basis, can he accomplish the company’s objectives with regard to coaching
and supporting his subordinates as well as planning and scheduling such matters as training
sessions and projects. The fifth characteristic is his ability to teach because one of the major
duties of a leader is the training of the workforce.
Designated leaders at Toyota have to observe in practice and document by themselves every
single detail of the Production System during the course of their development– the so-called
Genchi Genbutsu. The reason for this is to learn how to improve the system quickly by
understanding it. Later the leader will be able to coach his subordinates and encourage them to
experiment and try new methods to improve the system. Usually they are supported during the
education programme by a Sensei, the Japanese word for teacher, from one of Toyotas internal
consulting departments. The essence of their learning is that the main task of a leader is not to
arrange improvements himself but to develop a cadre of excellent team leaders who learn and
improve by continually experimenting.150 Although it is quite time consuming, learning from a
Sensei is a very effective method to develop new leaders. A Sensei is a very experienced
individual who has gained in-depth experience of the systems. The Sensei provides challenges
for those he trains while he himself steps back in order to observe and let the student try. This
implies that in some cases the student will fail, but they will learn more from this than through
mere observations.
148
VanderZwaag, J. D., Designing and Leading Work Groups, Lean Enterprise Training Course, 2006, p.
88 ff.
149
Liker, J., K., The Toyota Way, 2004, p. 428
150
Spear, S., “Management à la Toyota”, Harvard Business Manager, 2004, p. 36 ff.
60
The frequency of Sensei training sessions depends on the circumstances. Usually it is not fulltime coaching; rather it tends to be a couple of days per month. In any case, team leaders and
supervisors need to focus on other aspects during the course of their leadership development
than functional managers although they all require the Production Systems basics and values.151
The importance of thinking in terms of the company’s processes and understanding these
processes increases with every step on the hierarchical ladder. The leader’s expertise of
processes, trigger points and effects is his fundament for being able to lead the implementation of
counter measures.152
Ultimately, an organisation has to attract enough people with the potential desire for leadership.
This can, for instance, be brought about by using internal leadership training programs, mentors,
executive coaches or academia. Nevertheless, the key to a successful Lean leadership
organisation is the creation and maintenance of an appropriate cultural atmosphere, the cradle of
leadership.153
The “Development of Leaders” clearly focuses on the Leadership Principle “Providing
prerequisites” while contributing to the long-term development of everyone within the company so
that they can adopt change, prosper and grow. Developing future leaders is the duty of all leaders
of the hierarchical levels involved in the training process.
151
Liker, J.K., Meier, D., The Toyota Way Field Book, 2006, p. 437 ff.
Bohn, F., Erfolgsquellen in deutschen Unternehmen – Warum ein Produktionssystem alleine nicht
ausreicht, REFA-Nachrichten, 1/2007, p. 20 ff.
153
Lucansky, P., Potapchuk, L., Burke, R., “Lean Leadership…A Model for the New Millennium”,
http://www.vipgroup.us/articles.shtml (Accessed 2008/02/07)
152
61
3.4 External Support Regarding Leadership within a Lean
Manufacturing Implementation
If there was no obvious demand for economical entities to change, due to factors like
globalisation and the transition from the industrial era to the information era, one could believe
that the transformation of the management paradigm from order to change was a development
brought about by the consultancies. However, the consultancy branch itself becomes a qualitative
and quantitative motor of the change management process.154
But what does supporting a change process towards LMI mean for leaders?
Consulting basically is a contractually clearly defined relationship between a customer and an
independent consultant who provides a professional service.155 It constitutes a service of superior
quality and requires higher educational qualifications.156
Categorized LMI consulting, referring to Niedereichholz157, is a procedure with standardized tools
and methods in the sense of business reengineering. Nevertheless, Lean Manufacturing is more
than just a business reengineering concept or a consulting product. It is a philosophy which has
to be lived by the people on a daily basis. Therefore, it is necessary that LMI consulting does not
only focus on the technical and organisational reengineering process, but also considers how to
convey the necessary way of thinking to the people. The objective is to support the generation of
leadership within the hierarchical levels in order to bring about the transformation of the corporate
culture in the spirit of the “Lean”-philosophy.
Usually the competence in the beginning of a change process, like an LMI, is provided by
external consultants, but ultimately it should become a substantial internal element of the
company itself.158 With regard to the service by external consultants, it is an important issue that
the consultant in charge guarantees that the consulting service will encourage autonomy.159
In this context, the first task of a leader is to scrutinize the demand for consulting services and its
integrity, for instance by the guideline Hagenmeyer160 provides. His “Ten golden rules” contain
the most important issues for those in charge in order to deal with consulting services. Firstly,
examining the willingness of the decision makers to deal with externals, secondly, inspecting that
the external’s consulting philosophy is transparent, endorses ethical matters and is common
welfare-oriented and, thirdly, differentiating between capacity complementing and real consulting
service are just three of the ten rules.
154
Jarmai, H., Change Management, 1997, p. 172
Hauser H-G., Egger, E., Worauf Berater achten, 2007, p. 26
156
Niedereichholz, C., Stage 1 of the consulting process , 2005, p. 6
157
Niedereichholz, C., Unternehmensberatung, 2006, p. 5
158
159
Hagenmeyer, U., Integre Unternehmensberatung, 2004, p. 106
160
Hagenmeyer, U., Ethik in Beratungsprozessen: Leitlinien für Kunden, 2005, p. 36
155
62
3.4.1 General Contents of Consulting Services
Basically, the contents of LMI consulting services and other consulting services do not differ
regarding the main aspects. Consultants basically provide the following three services to the
customer:161
−
Complementary capacity
−
Interpretation of data
−
Knowledge transfer
For a consulting company it always is a critical issue to provide complementary capacity due to
the fact that this is not a core competence of consulting but of body leasing. However, if we are
talking about the capacity of experienced experts in situations of urgency and lack of qualified
personnel, it is a reasonable issue.
The interpretation of data is based on the assumption that external consultants have an external
point of view, maintain neutrality and do not get involved in the daily business. Due to these
prerequisites, they will be able to interpret data from a neutral perspective. Especially in the
beginning of the consulting process, for instance within the potential analysis, this difference of
perspective can be very beneficial. However, the interpretation of the gathered data, done by an
experienced expert, will always be necessary to make sure that the right measures will be taken
and to avoid falling back into the “old way of doing things around here”.
Knowledge transfer is the most obvious service that consulting in general can provide. It consists
of factual, contextual, technical and values knowledge. In the particular context of LMI consulting,
the factual knowledge might be, for instance, specific knowledge about the industry. However,
because Lean principles are generic rather than industry-specific, it is the contextual and
technical knowledge that is of major importance within a LMI. Knowledge about the Lean
philosophy and Lean principles, for example, might be considered contextual knowledge while
the know-how about tools and methods like Pull, Kanban, Poka-Yoke, Takt Time and levelling
falls in the category of technical knowledge. Nevertheless, the latter constitute the core of the
knowledge transfer form external consultants towards a leader during a LMI.
161
Hagenmeyer, U., Integre Unternehmensberatung, 2004, p. 99
63
Pellegrin-Boucher162 considers the symbolic value of consultants, represented by certain
functions, also as a part of their service. Symbolic functions like legitimation, signalling and
sense-making can have a certain economic effect on a consulting project. Applied specifically it
can generate momentum within the process.
Economic functions of
consulting firms:
Symbolic value of
consultants
The three symbolic
functions:
- Legitimation
- Signal
- Sensemaking
Figure 22: Emergence of Symbolic Functions From the Symbolic Value of Consultants
(Source: Pellegrin-Boucher, E., Symbolic functions of consultants, Journal of General Management,
2006/2007, p. 10)
The function of legitimation is requested by a company’s management especially in situations
that require decisions that are difficult to accept. In these cases, consultants enforce the power of
management. The function of signal is adopted, for instance, when the positive symbolism of a
consulting company is used by management to demonstrate a modern, forward-thinking stance
of the management. This effect applies within the organisation but also with regard to the
customers’ and suppliers’ reactions. As an additional result, opposing groups may find
themselves in a weaker position when consultants are contracted in.
The function of sense-making is tied up with managers´ needs for recognition and reassurance.
The recent boom in management consulting is an indicator for this demand by managers for
recognition and attentiveness, weather it is positive or not.
This symbolic function can facilitate action and foster change due to present best practices and
success stories.
162
Pellegrin-Boucher, E., Symbolic functions of consultants, Journal of General Management, 2006/2007,
p. 1 ff.
64
3.4.2 Specific Contents Regarding External Support of Leadership
within a Lean Manufacturing Implementation
The LMI consulting process is usually planned for a limited period to avoid compromising the
consultants’ independence and neutrality. However, this leads to a clear conflict: In order to
support a sustainable, holistic and consistent leadership a coaching and monitoring process
which usually lasts longer than the LMI project itself is required, besides leadership training and
special projects.
Following the structure of a LMI as mentioned in chapter 3.3 “Leadership Within a Lean
Manufacturing Implementation”, the consultant’s objective is to support the managerial levels
involved because the definition of leading is that the management need to know the direction and
guide others in this direction. This implies first of all that a methodical and philosophical
knowledge transfer towards the leaders is needed to prepare them for the change process
displayed in figure 23. It describes the stages a leader encounters within a change process.
Building on these stages, the leader needs to know which form of support is useful, for example
which method can be used for solving technical problems or which behaviour is recommended in
dealing with people.
7. Conviction
& Integration
Perceived personal competence
(example)
High
2. Denial
6. Cognition
5. Try out
1. Shock
3. Realisation
Low
Beginning of change process
4. Acceptance
Time
Figure 23: Stages of Persons Confronted by Change
(Source: Reiss, M.; Rosenstiel, L. v.; Lanz, A. Change Management: Programme, Projekte und Prozesse,
Stuttgart, 1997, p. 237)
65
The first stage “Shock” describes the experience of the work force when a change is announced
and they are confronted with the new objectives. Usually people are surprised because of the gap
between reality and misjudged, self-perceived competence. The second stage “Denial” is the
most difficult within the change process. In this stage the perceived personal competence of
workforce members has increased due to palliation of the situation and competence. This
behaviour could explain so-called “dinosaurs” within the leading levels who stick to experienced
methods and reject any kind of change. To overcome this resistance, leaders need in-depth
methodical knowledge of the new procedures. The third stage “Realisation” implies that one
realises that one is incapable of performing certain aspects of work contents. The perceived
personal competence of workforce members decreases considerably during this experience and
even further in stage four, “Acceptance”, while the reality and difference of the new situation is
gradually accepted.
This situation requires the work force to develop abilities that are little or not at all developed yet
and support is required. The best way to overcome this situation is to “Try Out” the new methods
and procedures. During this stage, new strategies and structures are implemented. In stage six,
“Cognition”, the reasons are provided why certain behaviour leads to success and in which
situation they are useful to apply. This learning process requires frequent reflexion and feedback
from the leader. The last stage “Integration” contains the selection of problem-solving methods
that were successful in stage five and have been accepted in stage six. Problem-solving methods
which have not proved successful will be avoided in future. This leads to a success-failure-recipe
and is a fundamental part of a leaders work. But this is not the end because, due to the learning
organisation and life long learning, stages one to seven will become a permanent routine.
The forms of support within this process, visualized on the x-axis of figure 23, basically follow the
situational leadership concept. However, it is obligatory for the leader to apply the five Leadership
Principles.
Because the focus of Phase I lies on the preparatory steps for leadership within a LMI, it deals
with generating understanding of the Lean philosophy and awareness as well as acceptance of
the company’s potential at the company’s decision-making level.
Linking the pattern of figure 23 to the LMI process, the shock comes in Phase I with the externally
interpreted data of the potential analysis. To overcome this phase quickly, leaders have to be
trained in advance in an intense education programme possibly delivered by experienced Lean
consultants. The knowledge transfer is supposed to link theoretical knowledge with practice.
Therefore, Lean simulation games can contribute a lot in order to clarify how to apply the newly
learnt content and to show the possible results. When leaders are enabled to carry out a top
down knowledge transfer in the form of a cascade qualification programme which follows the
66
philosophy that every pupil is also a teacher, usually generates lasting results.163 Especially the
teaching of the already mentioned VSM can be considered one of the most important tools for
leaders because it supports the main issues a leader has to cope with, such as providing
direction, setting means and the demand for realising prerequisites.
Further benchmarking visits at consultants’ reference projects generate momentum due to the
three symbolic functions of sense-making, signalling and legitimation and prove the feasibility of
the planned implementation.
In phase I, a permanent presence of external consultants is not necessary because the required
support is usually provided more effectively within well-prepared workshops.
Phase II, the methodical support and encouragement, deals mostly with middle management and
front-line leaders that were possibly not involved in the preparation process. Then the pattern of
figure 23 usually repeats itself during the actual LMI. Therefore, at the denial stage, the clear
commitment of and leadership by the top-management helps to overcome this problem swiftly.
But in order to create a sustainable system, the corresponding leaders of Phase II need to be
enabled through intensive training in the form of knowledge transfer which is absolutely
obligatory. It is, after all, fundamental to the implementation process that the leading force
understand and apply the basic concept, methods and tools of Lean Manufacturing as well as the
five Leadership Principles
Beside the off-line knowledge transfer, the implementation initiative should also be supported by
external consultants that are available to the LMI team daily in order to support the team
methodically and to help to stabilise the system. Additionally, external consultants naturally fulfil
another role, namely as internal team members, and should not be seen as pure additional
capacity. The necessary project management skills, comprehensive expertise about Lean
methods and tools, as well as the ability to deal with resistance to change can often be provided
by an external consultant who may also cause much less friction than an internal staff member
would.164
Concerning the kick-off meeting for the project preparation, the symbolic value of an external
consultant can be helpful to signal that the top-management is serious about the LMI project. This
may be especially useful in persuading those who are critical to the project.
The objective of this phase is the development of the middle-management and so-called front-line
leaders to improve and sustain their new system. To foster commitment and sustainability it may
be very helpful at the beginning of Phase II to name the future leaders of those areas that the LMI
project covers.
163
164
Spath, D., Ganzheitlich Produzieren – Innovative Organisation und Führung, 2003, p. 110 ff.
67
Based on the stabilization effort of Phase II, Phase III focuses on the cultural development of
leadership and continuous learning. This means that a corporate culture with defined leadership
qualities needs to be encouraged so that in the future the company can internally raise potential
leaders by promoting them through the ranks. To achieve this, experienced leaders will need to
support potential leaders in adjusting their behaviour so as to minimise or even remove the shock
and denial phases. In cases of problems, the leading personnel need to realise and accept the
problem and work on the removal of its root cause, as is suitable for a permanently learning
culture.
External support can be provided in this phase in form of audits. Auditing the maintenance of
standards in order to increase transparency for the leader of the area usually vitalizes the
momentum for Kaizen actions and improvement. Without the shock and denial phase, a fruitful
communication about how to support the necessary actions can take place. While applying the
contents of phase II and with consideration of the strategic implementation plan, the training and
stabilisation of the leaders can follow. Repeating this process creates a problem-solving culture
and generates new Lean leaders, who can eventually handle not just Kaizen but also Kaikaku
actions independently, and it finally develops the company’s own Lean leaders.
Within this phase, again, a permanent presence of external consultants is unnecessary because
the support can be provided in well-prepared workshops as and when required.
Basically external consultants contribute to supporting leadership within a LMI process by
interpreting data, and providing for knowledge transfer and symbolic functions. The symbolic
functions of a consultant should not be underestimated because it can be interpreted as the
leader’s will to change – if the leader demonstrates it authentically.
Nevertheless, the knowledge transfer in the form of training in the philosophy and tools is a
central issue because it enables the leaders to understand the interpretation of data at the
beginning of the project, to learn to do it himself and then lead the LMI and the follow up projects
into his visionary direction.
68
4 PRACTICAL PART
In the following, practical part, the author intends to verify three hypotheses which are based on
the theoretical part and concern the leadership approach within a LMI.
The questionnaire was written in German and distributed to German-speaking managers largely
within Germany.
The target group for this undertaking was defined as people in management positions with
practical Lean experience. The data was gathered by means of a questionnaire which was
provided in paper or digitally via email or a download.165
For the statistical analysis the author used only a range of self-generated primary sources.
Objective of the intentionally selected respondents to the survey is the construction of a sample
which is designed to constitute a small-scale representation of the general statistics within the
population.166
To find suiting managers, the author attended the “Lean Production & IT Kongress” on march 4.5. 2008 in Ludwigsburg/Germany, which was organized by the Leonardo Group GmbH.
Another source was the “Lean thinking” forum of Xing167, where practioneers and experts shared
information about actual Lean issues and problems.
Additionally, the author had the kind permission of the Leonardo Group168 to ask customers of
actual and former LMIs.
Last but not least, the author used his personal network.
4.1 The Questionnaire
The advantage of a questionnaire is that the respondent can take their time as well as the
absence of any influences by the interviewer.169 Another positive is that expenses are much
lower compared for instance to a personal interview.
However, there are also some disadvantages such as not having the possibility to ask in case
anything is unclear, so questions might be misunderstood or misinterpreted. Another
inconvenience is the generally low response rate, which has to be improved by time-consuming
follow up actions. It is also uncertain who really filled in the questionnaire.170
165
http://www.softworx.de/fragebogen/Fragebogen.Fuehrung&Lean.Manufacturing.JAM.20080402.xls
Braun, N., Materialien zur Vorlesung „Methoden und Techniken der empirischen Sozialforschung
Sommersemester 2004, April 2004, p. 120
167
https://www.xing.com/net/Lean/ (Accessed 25.03.2008)
168
http://www.leonardo-group.com/ (Accessed 10.04.2008)
169
Diekmann, A., Empirische Sozialforschung, p. 438 ff.
170
Braun, N., Materialien zur Vorlesung „Methoden und Techniken der empirischen Sozialforschung
Sommersemester 2004, Universität München, Institut für Soziologie, April 2004, p. 158
166
69
4.1.1 The Structure
The logic of the questionnaire to test the three hypotheses consists of four modules and is
displayed below in figure 24.
Module
1
Examination of the respondent’s statistical
characteristics
Module
2
Examination of the application of five principles:
Module
3
Module
4
Result: Base for
comparability
Principle 1: Definition of values and direction
Principle 2: Setting objectives focused on life systems
Principle 3: Providing prerequisites
Principle 4: Communication
Result: Classification
figure for the application
of principle 1-4
Principle 5: Realisation of results
figure for the application of principle 5
Examination of authenticity
Examination of the effects of training on
leaders
figure for authenticity
figure for training
importance and
application
Test of
hypotheses
H2
Test of
hypotheses
H1
Test of
hypotheses
H3
Figure 24: The Approach of the Questionnaire in Order to Test the Hypotheses
Module 1 of the questionnaire provides a base for comparability due to statistical issues like
branch, yearly turnover, number of employees, hierarchical position of the leader, disciplinary
responsibility of people and the actual state of the LMI.
Due to the statistical data a pre-selection of respondents was undertaken. Respondents who do
not match the requirements of a leader, for instance because of not having disciplinary
responsibility, were not taken into account. Neither were respondents considered who are still in
the planning phase because at this stage they could not possibly make conclusive statements
concerning results.
Module 2 tests the respondents attitude towards the statements regarding the LMI process itself
and is split into the three categories of leader, employee and process. Every category contains
one questions on each principle described in chapter 3.2.4 Consequences for Leadership.
However, the answers of the fifth principle – realisation of results – will be examined separately
for it is the critical issue of the examination. The result is a classification figure for the application
of these five principles.
70
Module 3 deals with the examination of the authenticity of the respondent by testing the five
dimensions of authenticity of leaders – described in chapter 3.2.3 Authenticity of Leadership as a
Prerequisite for Sustainable Success. For each dimension, the author has formulated two
questions except for the dimension of motivation. Here the respondent can chose his four
favourite motivation drivers. The result in this case is a classification figure for the authenticity of
the respondent. The testing of authenticity is located in the second third of the questionnaire. This
location is considered best for the most important questions because it balances the importance
of having some ice-breaker questions in the beginning with the decreasing concentration over
time.171
Module 4 examines the value of training sessions for leaders within a LMI-Process by means of
five questions. The results outline the importance of training and the application of the learned as
well as describing the difference between the generation of results by trained management and
management who have not been trained.
171
Diekmann, A., Empirische Sozialforschung, 2006, p. 414
71
4.1.2 Description of the Research Method
Phases of the data analysis process:
1. Codification and
data transfer
2. Error checking,
adjustment and
exclusion of faulty
or incomplete data
3. Recodification,
translation of data
into scales
4. Statistical
analysis
Figure 25: The Process of Data Analysis
(Original source adjusted: Diekmann, A., Empirische Sozialforschung, 2006, p. 547)
Step 1 is the codification and data transfer: In order to assure anonymity, all incoming
questionnaires were coded and transferred to an excel-sheet which then formed the base for the
data analysis.
Step 2 includes a pre-selection of the returned questionnaires on the basis of usability. Relevant
data was verified on the statistical Module. If the answer to question five showed that the
respondent was not in charge of any personnel, the questionnaire was excluded from the
analysis. This is because without being in charge of personnel he cannot respond to certain core
questions of the questionnaire and therefore will not be able to contribute to the testing of the
hypotheses. The same problem occurs within question six. If the respondent has chosen that his
LMI is situated in the planning phase concerning the Lean status, he will not respond to any
questions on results and therefore also had to be excluded. These questionnaires have not been
included in the data analysis, and neither were those with faulty or incomplete data. In total eight
respondents couldn’t been integrated into the analysis.
In this context, the process for missing items also needs to be discussed. In some cases there
has been an item-non-response. The most item-non-responses have been in the statistical
Module with regard to selecting the companies’ yearly turn-over. Through internet research, most
of the missing values could be filled in by the author afterwards.
At question 13 within Module 2, the respondent had to choose his five most important issues for a
LMI. Here the problem was that the respondents mentioned less than five issues. Because the
total result of this question represented the non-weighted average of all five answers of question
13, in the case of missing answers the author divided by the number of available answers. Due to
this process, comparability could be maintained.
Questionnaires with too many missing items were excluded.
72
Step 3 contains the recodification and translation of data into prepared scales. The rating scale is
a set of categories designed to find information about a quantitative attribute in social science.172
For the majority of the statements in the questionnaire, the author has selected a 1-to-5 oddnumbered Likert response scale.
This response scale is an easy and often applied method to quantify respondent’s attitudes to a
particular question. The scale makes it possible to test hypotheses empirically because of the
structure of the answers. It is recommendable to change the scaling poles for questions by
reversing items, in order to test if the scaling model has been understood and to keep up
concentration concerning the reading of questions.173
Within the modules all questions carried the same weight. The comparison of the modules, in
order to test the three hypotheses, was based on the average of each module.
One exception was the testing of hypothesis H1, the average of Module 3 was compared with the
average of the answers of question 11, 16, and 21, which constitute the three categories of
principle 5: Realisation of results. Question 11 constitutes the classification of the leaders’
realisation of results, while question 16 refers to employees and question 17 to the process
concerning the classification of the realisation of results.
Step 4, the statistical analysis, mainly concerns the verification of the three hypotheses.
Generally, the correlation is a statistical technique which can show whether and how strongly
pairs of variables are related and it is used to lead to a greater understanding of the collected
data. There are several different correlation techniques. To test hypotheses H1-3, the author
chose the linear (Bravais-Pearson174) correlation coefficient.
Some statisticians state that one cannot use correlations with rating scales, because the
mathematics of the technique assume the differences between numbers are exactly equal.
Nevertheless, correlations with rating scales are frequently used by survey researchers, because
the results usually reflect the real world.175
A correlation results in a correlation coefficient “r”. It ranges from -1.0 to +1.0. The closer r is to
+1 the more the tested variables correlate, the closer r is to -1 it is inversely correlated. If r is
close to 0, it means there is no relationship between the variables.
172
http://en.wikipedia.org/wiki/Rating_scale (Accessed: 22.03.2008)
Diekmann, A., Empirische Sozialforschung, 2006, p. 208 ff.
174
Scharnbacher, K., Statistik im Betrieb, 1999, p.168 ff.
175
http://www.surveysystem.com/correlation.htm (Accessed: 22.03.2008)
173
73
4.2 Analysis of the Data Gathered
4.2.1 Module 1 of the Questionnaire: Statistical Data
The basic population of leaders was estimated based on the number of employees
(about 4 000 000) within the German industry in companies which employ over 250
employees.176
Based on the personnel structure of a typical German mechanical engineering company 51% of
the work force are salary earners. Of these about 3 % are in technical and about 4% in
administrative positions with personnel responsibility.177
This amounts to 280000 persons who potentially apply Lean methods. However, the author
estimates the number as a fifth of this, because not all companies apply Lean methods and the
administrative area usually remains untouched.
By comparison, the usable questionnaire response rate178 was 22% and the finally evaluable
number of questionnaires was 49, therefore the analysis of the collected data contained 49
respondents (N) and 35 questions (M) and resulted in a data matrix with N*M = 1715 issues.
Chart 1: Industry Classification of the Respondents´ Companies
11; 22%
Automotive
23; 48%
Electrical industry
Machinery and equipment
Others
9; 18%
6; 12%
The statistical module started with the definition of the branch of the respondents’ companies. As
shown in chart 1, the majority were part of the automotive branch (48%), followed by the ‘others’
classification (22%). Among the ‘others’ category where branches like food, pharma and semi-
176
Based on 2004:
http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/DE/Content/Publikationen/Querschnittsve
roeffentlichungen/WirtschaftStatistik/IndustrieVerarbeitendesGewerbe/StrukturdatenVerarbeitendesGewerb
e,property=file.pdf (Accessed: 05.04.2008)
177
VDMA, Kennzahlenkompass, Ausgabe 2005
178
A: Response rate, I: Evaluable questionnaires, B : Initial sample (before nonresponse and exclusion of
ineligibles) 190 online, 40 hardcopies, S: Not evaluable questionnaires. A = ( I / ( B – S )) *100 = ( 49/ (230
- 8))*100 = 22%
74
conductors. From the ranks of machinery and equipment (18%) and the electrical branch (12%)
one can see that Lean Manufacturing, which stems from the automotive industry, already has
been adopted by various other industries besides the major ones.
However, chart 2 shows that, at least within this survey, the Lean Manufacturing has not yet been
applied proportionally in companies with a turnover below 50 million €. One reason for this might
be the investment that a holistic LMI can cause.
Chart 2: Companies’ Turnover per Year [mill]
1; 2%
16; 33%
< 50
< 250
< 500
26; 53%
> 500
6; 12%
Beside that, it seems that LMI also depends on the companies’ staff number, as shown in chart 3.
Companies with less than 300 employees show a considerably lower representation than the rest
of the companies which are almost evenly represented.
Chart 3: Number of Companies’ Employees
6; 12%
14; 29%
<300
11; 22%
<1000
<5000
>5000
18; 37%
Chart 4 shows the distribution of the respondents with regard to their hierarchical levels within the
company.179 Top management refers to corporate– and vice presidents, middle management to
directors and functional team managers. Lower management is represented by supervisors and
team leaders. The functions represented within the survey are production, assembly, purchasing,
process planning, logistics, continuous improvement, facility management, controlling, production
scheduling and quality.
179
http://www.businessdictionary.com/definition/top-management.html (Accessed: 22.03.2008)
75
As one can see, middle management prevails in the survey. One explanation might be that they
have a great interest because they constitute the interface between top- and shop-floor
management and shoulder the biggest burden within phases one and two of the LMI.
Chart 4: Management Level of Respondents
2; 4%
12; 24%
Top Management
Middle Management
Lower Management
35; 72%
Chart 5 shows the distribution of respondents regarding their disciplinary responsibility without
taking their hierarchical levels into account.
Chart 5: Distribution of the Disciplinary Responsibility of Respondents
12
10
10
10
8
6
6
4
4
4
3
2
3
2
2
2
1
1
1
0
0
20,4%
20,4%
4,1%
8,2%
4,1%
0,0
8,2%
6,1%
12,2%
6,1%
.
2,0%
2,0%
4,1%
<10
10-20
20-30
30-40
40-50 >50<100 < 100
< 150
< 200
< 250
< 400
< 600
< 700
< 800
The majority (59%) of the respondents have partially implemented Lean Manufacturing tools and
methods which equates to Phase II - Physical transformation: Methodical support and
encouragement.
76
Chart 6: Lean Status of the Respondents
4; 8%
Partially realised
16; 33%
Continuously improving
LMI completed
29; 59%
A third is still continuously improving the LMI and therefore has reached Phase III - Living the
system: Cultural development of leadership. The remaining 8% consider the LMI completed. The
Lean status ‘LMI completed’ does not really exist in Lean philosophy and is a doubtful status
concerning leadership. It should rather be considered a manager’s fulfilled task. Nevertheless,
the data is still included because it does not interfere with the testing of any hypothesis.
77
4.2.2 Module 2 of the Questionnaire: Examination of the Application of
the Five Leadership Principles
4.2.2.1 Analysis of the Evaluation of Leadership Principle 1: Definition of Values
and Direction
Interpretation of the results of statement 7 of the questionnaire:
Chart 7: Results of the Questionnaires´ Statement 7:
“The values displayed in the companies’ canteen, corridors and meeting rooms are exemplified
by the management.“
20
Number of ratings per level
18
17
18
16
14
12
10
8
6
6
4
4
1 = Strongly
disagree
2 = Disagree
4
2
0
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation of the statement is 3.37 and as one can see from the
histogram, more than a third is undecided and another third agrees only partly with that
statement. However, the conclusion from the histogram distribution is that the companies’
management generally tend to exemplify the values defined (49%).
“The values displayed in the companies’ canteen, corridors and meeting rooms are lived by the
work force.”
35
33
30
25
20
15
9
10
6
5
1
0
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
78
The arithmetic mean of the evaluation is 3.1, which means that 67% of the managers neither
agree nor disagree that their work force has been affected by the values which were defined and
announced. Only 20% agree more or less strongly with the statement. It seems that the Lean
virus has not yet reached the shop floor because management has not yet noticed it.
“Within the LMI the values of the companies’ culture have been adapted towards the Lean
Philosophy.”
19
20
15
11
11
10
5
5
3
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 2.92. Since there appears to be no obvious tendency,
the author has summed up the number of ratings per level and has built blocks of the agreeing
and disagreeing parties. 45% of the respondents tend more or less strongly to disagree with the
statement, while 22% neither agree nor disagree. The rest, 33% agree more or less strongly.
Notable is that the most frequently chosen scale-figure is that of disagreement. This again
illustrates the tendency towards no cultural adjustment in the Lean sense which corresponds with
the virtual absence of a perceivable attitude of the work force.
Because in the majority of companies there are no adjustments towards a Lean culture
constituted by values, like for example long-term growth and mutual benefits, it is comprehensible
that there has no significant change that management could exemplify by walking the talk in a
daily business. Comparing the results of question 7 and 12 by means of a correlation analysis180
leads the correlation coefficient of r = 0.6 and a positive correlation between the leading manager
and his work force. In other words, the managers’ behaviour does have an positive impact on the
behaviour of the work force when following the values announced within the LMI process and
vice versa. But because there are no general changes in the culture the management cannot
exemplify much.
180
To test the correlation coefficient, the author applied the formula of Bravais-Pearson
79
4.2.2.2 Analysis of the Evaluation of Leadership Principle 2: Setting Objectives
Focused on Life Systems
“An annual managerial incentive system payment impedes a long-term orientation and thus a
LMI.”
19
20
15
13
9
10
7
5
1
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 2.14. 39% of the respondents did strongly disagree with
the statement and 27% just did not agree. In total over two thirds of the respondents disagree to
some degree that annual incentives have any negative impact on long-term orientation.
“Which of the given issues are the 5 most important to you concerning a LMI?”
45
41
Occurence
40
35
30
30
25
25
24
20
23
21
20
19
16
15
7
10
9
6
3
5
1
0
0
n
io
ct
g
s
du
sin
e
e
r
is
s
M
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t
t
s
d
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r
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da
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st
ve
La
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de
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re
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The arithmetic mean of the evaluation is 4.08.181
181
Few respondents marked less than the five required issues, so 9 points are missing. This was taken into
account when calculating the arithmetic mean.
80
The respondents marked their five most important issues which were summed up in chart 11.
The issues where weighted concerning their long-term orientation.182
The most frequent issues are process stabilisation, standardisation, CIP and increase of quality.
The first two issues are defined by the author as mid-term orientated, while increase of quality is
considered a long-term objective in the sense of customer orientation. Other long-term orientated
objectives, concerning the work force, supply chain optimization and increased flexibility are
judged to be of lesser importance by the respondents, except for the issue of the lifelong-learning
culture. The integration of product development with its huge potential generally still seems to be
neglected. It shares the last positions with typical short-term measures like reduction of labour
cost, the reduction of standard times and capacity utilisation of available resources.
Basically the respondents tend to focus on mid-term related issues while the long-term objectives
are located mid-field as regards their importance.
“To control the defined objectives measurable KPIs have been installed.”
16
15
14
14
14
12
10
8
6
4
3
3
1 = Strongly
disagree
2 = Disagree
2
0
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 3.6. 29% strongly agree and 31% just agree with the
installation of measurable KPIs. The tendency towards the installation of useful KPIs is obvious.
The three most frequently mentioned issues of statement 17 can be controlled very well. This
might be an explanation for the respondents’ tendency to see no problem concerning annual
managerial incentive system payment and objectives. In contrast, the long-term orientated
objectives concerning the work force, supply chain optimization and flexibility generally are found
to be of lesser importance. Maybe because they are much more difficult to quantify, the selection
of objectives was more focused on the processes side then on the human side of a life system.
182
Evaluation of choices: 5 for long-term orientation, 3 for mid-term orientation, and 1 for short-term
orientation. Integration of product development = 5, Employee training = 5, Increasing of employee
contentment = 5, Increasing of quality = 5, Supply chain optimization = 5, Increasing of flexibility = 5, Life
long learning culture = 5, Process stabilisation and standardisation = 3, General cost reduction = 3,
Continuous improvement process= 3, Capacity utilisation of available resources = 1, Labour costs
reduction = 1, Reduction of standard times = 1
81
4.2.2.3 Analysis of the Evaluation of Leadership Principle 3: Providing
Prerequisites
“All managers involved realise the prerequisites for their subordinates to enable a successful
implementation of the strategy defined.”
16
15
15
14
13
12
10
8
6
4
4
2
2
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 2.78. This is in line with the histogram that almost
follows the Gaussian distribution. The most frequent selected evaluations are again the indecisive
one and the disagreement. Each makes up 33%. 27% agree with this statement. This result
again leads to an unconvincing conclusion by the responding managers. That implies that
realising prerequisites for a sustainable and successful change process has not yet been widely
implemented.
“The work force has been educated and trained adequately for the LMI.”
18
16
16
13
14
13
12
10
8
6
4
4
3
2
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 3.02, but the statement seems to polarise the
respondents. Nevertheless, 27% are still indecisive while 33% agree and 27% disagree generally
with the statement. Striking are also the 8% which strongly disagree with the statement. While
82
having a closer look at the data matrix, no identification of a specific sample of answers between
the different hierarchical levels is possible. The answers seem strongly dependent on personal
experiences.
“The organisational structures of the company have been adjusted due to the LMI.”
20
18
18
16
14
12
10
10
10
7
8
6
4
4
2
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 2.69. Only in about 29% the companies´ organisational
structure has been adjusted. In the majority of cases, 37%, nothing, or at least nothing notable,
happened, while 14% disagree and 20% strongly disagree with the statement.
Considering the realisation of fundamental prerequisites for implementing a sustainable
organisational system that supports the Lean philosophy, it leads to no clear conclusion.
However, as soon as the linear trend line of the process statement is taken into account, it leads
to the conclusion that in most cases extensive strategic adjustments, like mentioned in chapter
“3.3.1.6 Strategic implementation planning” have not yet been realised.
83
4.2.2.4 Analysis of the Evaluation of Leadership Principle 4: Communication
“Personal meetings on my hierarchical level concerning the LMI take place in the following
intervals.”
25
23
20
15
12
10
6
5
5
3
0
1 = Not any
2 = Quarterly
3 = Monthly
4 = Weekly
5 = Daily
Degree of Agreement
The arithmetic mean of the evaluation is 3.43. 47% of the respondents carry out a weekly
personal meeting on their hierarchical level, and 10% even a daily one. This shows a strong
interest concerning the LMI of almost 60% of the respondents.
Shown in the statistical block, 59% are located in Phase II - Physical transformation and have to
provide methodical support and encouragement and 33% are in Phase III - Living the system
where cultural development of leadership within the work force is necessary. Both tasks are timeconsuming and need a lot of communication. Just 8% think they have already implemented Lean.
As a consequence, the remaining 92% of respondents should communicate frequently.
It seems that there are two parties of LMI leaders because a mere 57% actually do that. Over
40% seem not really to focus on the LMI outcome because they are involved in personal LMI
meetings only monthly or quarterly intervals or even not at all.
Interpretation of the results of statement 15: “Employees, not being in charge of people, do not
need to be informed about the long-term objectives of a LMI.”
The arithmetic mean of the evaluation is 4.78 because it was poled negative and translated for
the comparison. 82% strongly disagreed, and 16% disagreed to the statement. Therefore the
respondents confirmed that the whole work force needs to be informed about the long-term
objectives within a LMI. Due to this clear result, the author chose not to chart the results.
Principle 4: Communication seems to be fully applied by the respondents, at least towards the
work force.
84
“By means of the defined KPIs the right measures can be induced.”
25
21
20
17
15
10
6
5
2
3
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 3.45. When deviations happen, 12% of the respondents
strongly agree and another 35% agree that they are able to select the right counter measures
using the chosen KPIs. 43% neither agreed nor disagreed, and in total 10% disagreed with the
statement. However, there is a positive trend notable that the chosen KPIs, another form of
communication, support the selection of appropriate countermeasures.
The communication, although often criticized, appears within this sample of respondents
generally positive. Although there is a lot of communication, its effectiveness in order to react
adequately seems to be insufficient like shown by the striking high percentage of the undecided
fraction of statement 20 (40%) concerning the effectiveness of communication due to KPIs.
85
4.2.2.5 Analysis of the Evaluation of Leadership Principle 5: Realisation of
Results
“As a manager I am personally satisfied with the results of the LMI.”
18
16
16
13
14
11
12
10
8
6
5
4
4
2
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 3.00.183 In this case, the histogram again nearly follows
the Gaussian distribution. A majority of 33% neither agree nor disagree, 31% disagree and 35%
agree more or less strongly with this statement. It seems that the responding managers
themselves are generally not totally confident with the already realized results which can be seen
from the high level of indecisiveness. Notable is also the relatively high fraction of those who
strongly disagree. This segment amounts to about 10%.
“The workforce is able to work according to the planned standard of work without any problems.”
30
27
25
20
15
12
10
7
5
2
1
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
183
Due to no available data the items of two respondents were not considered in the correlation analysis of
statement 11 and 16.
86
The arithmetic mean of the evaluation is 3.14. In this case, there is again a remarkably high
undecided fraction which makes up 55% of the respondents. 14% do no agree and 2% do
strongly disagree with the statement. Just 29 % agree that their workforce is able to carry out
their work without any interference. This can be seen, beside other factors also as a classical
consequence of the low realisation of prerequisites. The work force is just not able to carry out
their job for example because of missing training and an insufficiently adjusted structure.
“The defined objectives have been realized and demonstrably proven by the KPIs.”
25
20
20
15
12
10
7
6
5
4
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 3.41. In this case the tendency shows clearly that the
respondents mostly agree (41% agree, and 14% strongly agree) to the statement. The undecided
fraction shrunk to 24% and the opponents where divided into 12% who disagree and 8% that
strongly disagree. The process outcome, represented by the KPIs, seems astonishingly good
compared to the opinion of the management and the work force evaluation concerning the ability
to work without interference. Therefore it is to surprising that the respondents generally do not
seem to be completely confident about the already realised results of the whole LMI nor with the
realised results concerning workforce enabling in particular.
87
4.2.2.6 Conclusion of Leadership Principle 5: Realisation of Results
As mentioned, the realisation of results is split into three categories, namely leadership, work
force and process. For statement 11 (leadership category) combined with the statements 16
(workforce category) and 21 (process category), is critical to the test of hypothesis H1, the result
without any tendency might complicate the correlation calculation. As one can see from figure 26,
statement 11 almost correlates with the process statement, 21, because r = 0.49. But either the
employee-related statement statistically does correlate with the others beside the fact that the
arithmetic means of the categories management, workforce and process are close to each other.
The figures of the arithmetic means, which all cluster around 3.00, show no trend but rather an
indecisiveness concerning the outcome of the LMI in general.
Statement
11
_
X = 3.00
r = 0.31
Statement
16
_
X = 3.14
r = 0.49
r = 0.17
Statement
21
_
X =3.41
Figure 26: Internal Correlation Analysis of Principle 5: Realising Results
Comparing this result with question 6, the Lean status, one reason might be that 59% have only
partially implemented appropriate Lean tools and methods and therefore are not yet satisfied.
88
4.2.2.7 Conclusion of Module 2: Application of the Five Leadership Principles in
Practice
The most striking aspect was generally high percentage of indecisiveness of the respondents
towards the statements. The lowest percentage in this context related to statement 8 which dealt
with annual managerial incentives (18%). The rest all fell in the bracket from 20% up to a high of
67% (for the statement 12 which dealt with the companies’ values being lived by the work force).
As mentioned in the specific interpretations above, the principles in general seem not to be
holistically applied. With regard to changing the culture and values as well as realizing
prerequisites for a Lean system, no fundamental changes can be observed. With reference to the
objectives, the long-term orientation and emphasis on a life system is not distinctive but at least
respondents focused on mid-term issues, which is a huge step in the right direction away from
short-term thinking. Regarding communication, the willingness of a majority of the respondents to
the LMI is visible, but there is also a great number of indecisive managers. The last principle,
realisation of results, is the consequence of the application of the four other principles.
A reason for the indecisive results might be that the managers are not independent in terms of
their actions and they find themselves in the middle of an area of conflict. The collaboration with
other departments, for example, requires making concessions which has effects on the outcome
and quality of the LMI. Additionally, a change process needs time and, as mentioned before,
most of the respondents have as yet only partially implemented Lean Manufacturing tools and
methods or are undergoing continuous improvement.
Nevertheless, if the answers of statement 7, namely whether the management exemplifies the
values, are taken into account, it seems that management lack the general willingness and
commitment to the change process, as constituted by the LMI, and that the results mentioned
above are likely to be the consequence of this.
89
4.2.3 Module 3 of the Questionnaire: Authenticity
Module 3 intends to measure the respondents’ degree of authenticity by checking the five
dimensions discussed in chapter 3.2.3 Authenticity of Leadership as Prerequisite for Sustainable
Success. For each dimension the questionnaire contains two questions.
4.2.3.1 Analysis of the Evaluation of the Aspect ‘Self Awareness’
“In management I cannot let professional or personal weakness show.”
17
18
15
16
14
12
9
10
8
6
6
4
2
2
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 2.67. Summed up, 47% of the respondents didn’t agree
with the statement, while roughly third remained undecided. Only roughly 22 % agreed.
“For my development as a manager mistakes are necessary.”
21
20
17
15
10
5
5
2 = Disagree
3 = Neither
agree nor
disagree
5
1
0
1 = Strongly
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
This statement polarized more, so the arithmetic mean of the evaluation resulted in 3.98. Almost
80% of the respondents considered mistakes beneficial to their development in leadership.
Nevertheless, at first sight the distribution of the two statements seem to be consistent because
90
statement 22 and 28 should exclude each other and result therefore in a negative correlation. It
turned out however, that the correlation coefficient184 of r = - 0.22 proves that there is no
correlating evaluation of the respondents concerning the two statements.
4.2.3.2 Analysis of the Evaluation of the Aspect ‘Personal Values’
“I can argue the values of my company because they match my personal ones.”
30
24
25
20
16
15
10
6
5
1
2
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 4.06. Over 30% of the respondents agree strongly and
almost 50% agree with the statement that their companies’ values are matching their own beliefs.
Altogether in over 80% the companies’ values match those of the respondents. By comparing the
arithmetic means of statement 23 (4.06) and 7185 (3.37) of Module 2, a notable difference
becomes obvious. An explanation for this gap might be that statement 23 refers to the
respondents’ personal point of view regarding themselves while statement 7 refers to the
companies’ managers in general. Nevertheless, the comparison leads to a correlation
coefficient186 of 0.43, and thus no correlation. It means that in this context the evaluation of the
values of management and those of their companies´ management in general is not
systematically evaluated worse than the respondents’ own values.
184
Statement 7 of module 2 of the questionnaire: The values displayed in the companies’ canteen,
corridors and meeting rooms are exemplified by the management.
186
185
91
“There will be situations in professional life where compromises concerning the 100% compliance
with my personal values will be necessary.”
20
20
15
9
10
9
7
5
4
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 3.47. 42% agree and 18% strongly agree with that
statement. Just 22% disagree and 18 % sit on the fence. Comparing the evaluation of statement
23 with 25, the following becomes obvious: there still is no 100% compliance with both the
respondents’ personal and the companies’ values. One could argue that it is inconsistent if a
manager does not stick to his personal values. On the other hand, this could also be seen as a
sign of him supporting the company’s standards and taking on responsibility for the whole entity.
Apparently, management seems to be aware of its main responsibility - to support a continuous
change process by designing and improving standards and values from their point of view.
What seems to be, at first glance, almost a contradiction turns out, after closer examination, to be
a driving force for the whole change process and a fundamental part of leadership.
92
4.2.3.3 Analysis of the Evaluation of the Aspect ‘Motivation Drivers’
Based on a selection of intrinsic and extrinsic motivation drivers187 the author tested the tendency
of the respondents’ motivation. Table 4 shows the possibilities offered to select from. Additionally,
the questionnaire contained two, rarely used, empty rows for entering individual, personally
chosen motivation drivers which where assigned by the author to the appropriate type of
motivation.
Table 4: Overview of the Tested Motivation Drivers
Extrinsic motivation drivers (evaluated with 5)
Intrinsic motivation drivers (evaluated with 1)
1) Power
1) Supporting other people
2) Social standing
2) Enjoying work
3) Money/compensation
3) Personal development
4) Social prestige
4) Sticking to one’s own principles
“Please chose your four most important personal motivation drivers.”
The arithmetic mean of the statement resulted in 1.94 and as one can see, the intrinsic motivation
drivers prevail in management.
25
25
20
15
14
9
10
5
1
0
0
1 = Strongly
intrinsical
motivation
2 = Tendency
towards
Intrinsical
motivation
3 = Balanced
4 = Tendency
towards
extrinsical
motivation
5 = Strongly
extrinsical
motivation
Degree of Agreement
To compare it with the other aspects of authenticity a scaling translation has to be carried out,
which provides the comparable value 2.88 on the 1-to-5 Likert rating scale. 51% show a tendency
and 29% show a strong tendency towards intrinsic motivation.
The approach and formula of the scaling translation was developed by the author. A balanced
motivation is considered as an integral part of authenticity.
187
George, B., Sims, P., True North, 2007, p. 107
93
For in the scaling system A the most favourable value is 3, which signifies balance of extrinsic
and intrinsic motivation drivers, it has to be translated into scaling system B to compare it with the
other statement ratings of the authenticity on a1-to-5 Likert scale.
The formula for the scaling transformation is: y = - 2 * | 3 – x | + 5
Scaling system A
1
x
3
5
Scaling system B
1
2
y 3
4
5
Figure 27: Scaling Translation Apprach
Just 18% of the management respondents exhibit a balance concerning their motivation which is
theoretically considered as one of the prerequisites of authenticity, discussed in chapter 3.2.3
Authenticity of leadership as prerequisite for sustainable success. One reason for this result
might be that, going back to chapter 3.2.1, Human Motivation, extrinsic motivation drivers are
considered as dissatisfiers188, and are therefore not a real motivation for people in leading
positions, who have already reached a particular pyramidal level regarding Maslows theory of
needs. This might also be the reason why incentive systems are not thought an impediment to
long-term orientation and thus a LMI.189
188
Chapter 3.2.1, Human Motivation, Herzberg
Statement 8: An annual managerial incentive system payment impedes long-term orientation and thus a
LMI
189
94
4.2.3.4 Analysis of the Evaluation of Aspect ‘Supportive Network Building’
“It is not difficult for me to take fair vacations (for instance two weeks) because I can count on a
reliable team that supports me professionally and personally.”
21
20
17
15
10
7
5
3
1
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the statement is 4.1. An overwhelming majority of almost 80% agree with
the statement by confirming that they can count on a reliable team of experts within their
professional environment which is able to substitute them if necessary. Just 8% of the
respondents have doubts.
“For me it makes no sense to exchange experiences with managers beyond my company
regularly.”
30
29
25
20
15
10
8
6
5
3
3
4 = Agree
5 = Strongly
agree
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
Degree of Agreement
The arithmetic mean of the statements is 1.84.190 For 76% of the respondents it is therefore
important to maintain a network for professional interchange beside the company one. Although
190
For the statement was poled negative, the value for the arithmetical mean was recalculated and resulted
in: 4,16
95
12% of those interviewed do not see any necessity for an external network and another 12% are
undecided, generally there is a strong tendency at management level for supportive networks. In
this context communication plays an important role, which is also reflected by statement 10191 of
Module 2.
191
Statement 10: Personal meetings on my hierarchical level concerning the LMI take place in the following
intervals
96
4.2.3.5 Analysis of the Evaluation of Aspect ‘Integrated Lifestyle’
“Although there may be a certain level of conflict, I satisfy myself, my family, my personal
relations as well as professional requirements.”
19
20
19
15
10
6
5
5
0
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the statement resulted in 3.47. Almost 50% of the respondents claim to
be able to balance work and private life while just 12% put the emphasis on work. Again, the
indecisive fraction is notable with almost 40%.
“I do not work on weekends.”
The
19
20
arithmetic
mean
of
the
statements is 3.51. 59% agree
with that statement while just
15
10
5
10
9
8
under
22%
disagree.
This
statement was designed as the
test-statement
3
for
verifying
statement 24.
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
Degree of Agreement
4 = Agree
5 = Strongly
agree
The tendency of the results of
both statements seems to be
clear, despite there being no
statistical correlation. The majority of people working in management manage tend to a balance
between professional and private life. Because of the inhomogeneous number of respondents
between the three hierarchical levels, the author has not analysed more advanced differences
with regard to this result.
97
4.2.3.6 Conclusion of the Degree of Authenticity in Practice
With regard to self-awareness, there is a general tendency by the respondents that errors are
beneficial to one’s development, as the arithmetical mean of 3.98 shows. Yet, they feel
uncomfortable to make their errors transparent in their contemporary environment. A reason for
this might be that the related confidence for the development of a learning culture is still in the
fledgling states and, as a consequence, respondents might feel that they would be judged on
their mistakes.
Differences between personal and company values, which seemed at first glance to be a
contradiction, can be regarded after closer examination as a driving force for the whole change
process and a fundamental part of leadership. Because there are no fundamental differences
between personal values and those of the company observed, it seems to be a fruitful
coexistence and a permanent development, whereby the management can input and adjust.
Concerning motivation drivers, the extrinsic motivation drivers are obviously underrated, which is
constituted by an arithmetical mean of 2.88 concerning authenticity. Weighted against a
maximum value of 5 concerning authenticity it seems to be a case of Social-DesirabilityResponse-Set.192
This phrase describes a tendency to evaluate statements, for example of a questionnaire, in
relation to whether they are thought to be socially preferable.
Regarding a supportive network, management generally has understood that within their
environment not everything can and should be controlled by just one person, and therefore has
successfully developed a sustainable countermeasure – sharing power and building a reliable
internal network. The arithmetical mean of 4.1 underlines this. Besides that, management is also
closely connected to a supportive network outside the company, which provides momentum and
inspiration.
The integrated lifestyle, the source of power for the challenges of daily work, can be considered a
means of satisfying one’s own needs. However, management with a claim to leadership still
struggles in this respect because the arithmetical mean is 3.47 with a tendency towards no
decision.
The arithmetical mean of all five aspects of authenticity was 3.52. This shows the marginal
tendency towards an authenticity of management. Another reason might be that the theoretical
approach in real work life is difficult to apply and obviously constitutes a fine line. The practical
application of theoretical issues depends significantly on the companies’ culture. Regarding an
integrated lifestyle and networks, some requirements of authenticity have been realised yet, while
others need more development and leadership of the management itself to realize the necessary
prerequisites and adjustments of the company’s culture.
192
http://www.lrz-muenchen.de/~wlm/ilm_s15.htm (Accessed: 29.03.2008)
98
4.2.4 Module 4 of the Questionnaire: Lean Manufacturing
Implementation Management Training
The objective of Module 4 is the examination of the effects of training for leaders.
The results of Module 4 are the foundation for the comparison with Module 2, the application of
the five principles and the possible influences on them – in particular the realisation of results.
4.2.4.1 Analysis of the Evaluation of Training Aspects
“Intensive management awareness training concerning the Lean Manufacturing philosophy and
fundamental principles for a LMI improves professional effectiveness.”
35
33
30
25
20
15
15
10
5
1
0
0
1 = Strongly
disagree
2 = Disagree
0
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 4.65. 67% strongly agree and 31% of the respondents
agree to the statement. This means that a total of 98% of those surveyed see Lean
Manufacturing philosophy and fundamental principles trainings as inspiring and as beneficial to
increase their effectiveness at work.
Since in management the emphasis tends to be on conceptional and organisational work
contents and not on tool specialisation, a basic knowledge of how to apply certain tools and
methods is also important and covered due to statement 32.
99
“Intensive training for managers concerning the LMI tools and methods have no influence on the
managers’ effectiveness.”
35
32
30
25
20
14
15
10
5
2
0
1
4 = Agree
5 = Strongly
agree
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
Degree of Agreement
The arithmetic mean of the evaluation is 1.45. The respondents majority of 65% strongly
disagreed with the statement. In total 94% refused the statement. Because statement 32 was
poled negatively, a negative correlation coefficient193 of r = -0.64 occurred and shows a
correlation between both statements. This means that respondents who argue for a positive
effect on their effectiveness, while attending Lean Manufacturing training concerning the
philosophy and the fundamental principles, also argue for the positive effect of tool and method
trainings for managers.
“On my desk I apply the 5S-Method successfully.”
20
20
15
12
11
10
4
5
2
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation resulted in 3.73. 65% of the respondents agree more or
less strongly with the statement. However with a correlation coefficient194 of r = 0.15 to statement
193
194
100
32, there is no discernible correlation between the importance of tool and method training and the
realisation of the basic method 5S, housekeeping by the managers themselves.
“The contents of Lean Manufacturing training are basically true; however, in my company the
application is difficult for several reasons.”
20
18
18
16
14
12
12
10
10
8
6
5
4
4
2
0
1 = Strongly
disagree
2 = Disagree
3 = Neither
agree nor
disagree
4 = Agree
5 = Strongly
agree
Degree of Agreement
The arithmetic mean of the evaluation is 2.88. 8% of the respondents strongly disagree, 37%
disagree and 24% are undecided concerning the statement. The distribution of those who support
the statement is divided into 20% who agree and 10% who strongly agree with the statement.
As the chart 33 shows, the distribution of agreement and disagreement with regard to this
statement is not homogenous with 44% generally disagreeing and 30% generally agreeing with it.
For the majority of the respondents, almost half of them, it is difficult to implement the Lean
Manufacturing approach within their company. Since the author has no data regarding the
reasons of why it is difficult to implement Lean Manufacturing training contents in spite of the fact
that the contents were considered true, there is some scope for interpretation which will form part
of the final conclusion.
Interpretation of statement 35: “As a manager I attended a Lean Manufacturing training for LMIs.”
82% of the responding managers have attended Lean Manufacturing management trainings
while 18% have not despite their implementing Lean Manufacturing.
101
4.2.4.2 Conclusion of the Application of Training in Practice:
Training and education concerning the philosophy and fundamentals of Lean Manufacturing, in
addition to method and tool training, are considered a very important factor in increasing the
efficiency of management in terms of leadership. However, the personal application of the
learned points stands in contrary. It seems to be difficult for management to walk the talk, for
instance by applying the 5S-method. Yet, this appears to be a general problem since the contents
of LMI trainings are considered basically right, but are, for several reasons, difficult to implement.
The high percentage of managers who have not taken up the relevant education and training is
also notable because they are, after all, supposed to be Lean leaders and the driving force of the
LMI process, considering the Lean status.
102
4.2.5 Testing of Hypothesis H1
H1: Sustainable success of a LMI is based on an authentic leadership attitude and role of the
companies’ management.
To test hypothesis 1, the results of Module 2, Principle 5: “Realisation of results”, and the results
of Module 3: “Examination of authenticity” will be checked regarding their correlation. The higher
the single respondent’s total value of authenticity is, the higher the total value of realisation of
results is expected, if H1 is true. The total value consists, in the case of authenticity, of the
arithmetical mean of the five categories of authenticity. In the case of result realisation, the total
value consists of the arithmetical mean of the three categories of result realisation. The logic is
shown exemplarily in figure 28.
The base for the correlation analysis195 is the data of each respondent.
Personal satisfaction of
respondent on the LMI
results – statement 11
Evaluation of respondent
concerning the work
force’s ability to generate
the planned results –
statement 16
concerning the results
measured by KPIs –
statement 21
+
+
Total value Testing the
of
correlation
realisation of coefficient
results
of each
respondent
- part of
Module 2
Total value
of
authenticity
of each
respondent
- Module 3
+
+
Degree of selfawareness
+
Degree of living
one’s personal
values
+
Degree of balance
of motivation
drivers
+
Sharing vulnerability
and building a
supportive network
+
Degree of personal
equilibrium due to a
integrated lifestyle
Figure 28: The Approach to Test Hypothesis H1
The result is a correlation coefficient of r = 0.05 and thus a falsification of the hypothesis H1,
based on the survey data. This result, quite near 0, signifies that there is no correlation between
the degree of realising results and the degree of being authentic as a leader. Reasons for that will
be discussed in more detail in chapter 4.5 Limitations of the survey.
The range196 among the statement evaluations is considerably high. The range of authenticity is
2197, and of realisation of results even 3.
195
Bamberg, G., Baur, F., Statistik, 2001, p. 20
197
SP= max xi – min xi , authenticity: max 4,5, min 2,5, realisation of results: max 4,66, min 1,66
196
i
i
103
The testing of hypothesis 2 “Authentic LMI leadership can be identified by the degree of
application of five clearly defined Leadership Principles”, is realised by means of a comparison
between the results of Module 2 and Module 3, including all five principles, concerning their
correlation.
The higher the single respondent’s total value of authenticity is, the higher the total value of the
application of the five Leadership Principles should be if H2 is true. The total value consists, in
the case of authenticity, of the arithmetical mean of the five categories of authenticity. In the other
case, the total value consists of the arithmetical mean of the application of the five Leadership
Principles. The logic is shown exemplarily in figure 29.
The base for the correlation analysis198 is the data of each respondent.
Principle 1:
Definition of values
and direction
Principle 2: Setting
objectives focused
on life systems
+
Principle 3:
Providing
prerequisites
+
Principle 4:
Communication
Principle 5:
Realisation of
results
Degree of selfawareness
+
Total value
of the
application
of the five
leadership
principles of
each
respondent
– Module 2
Testing the
correlation
coefficient
+
+
Total value
of
authenticity
of each
respondent
– Module 3
+
Degree of living
one’s personal
values
+
Degree of balance
of motivation
drivers
+
Sharing vulnerability
and building a
supportive network
+
Degree of personal
equilibrium due to a
integrated lifestyle
The result is a correlation coefficient of r = 0.08 and thus a falsification of the hypothesis H2. This
result, near 0, signifies that there is no correlation between the degree of applying the Leadership
Principles and the degree of being authentic as a leader. Reasons for that will be discussed in
more detail in chapter 4.5 Limitations of the survey.
The range of authenticity is 2199, and of the application of the Leadership Principles 2.3.
198
199
SP= max xi – min xi , authenticity: max 4,5, min 2,5, realisation of results: max 4,59, min 2,29
i
i
104
The testing of hypothesis H3 “LMI-leadership awareness training significantly raises the
effectiveness of the application of the five Leadership Principles by transferring necessary Lean
methodology and tools to a company’s management”, is realized by means of a comparison
between the results of Module 2 and Module 4, divided into the groups of trained and untrained
managers, concerning their correlation.
Application level of principles/ level of result realisation
Chart 34: Comparison Between Trained and Untrained Respondents
4
3,55
3,5
3,3
3,07
3
2,63
2,5
Realisation of results
2
Application of leadership
principles
1,5
1
0,5
0
Attended management
trainings
Attended no management
trainings
First of all, the author analysed the group of respondents who had already attended LMI
management and method training sessions. The arithmetic mean of the respondents concerning
realisation of results was 3.3 of 5 points on the Likert response scale. Using the same scaling
system, the application of the five Leadership Principles was rated as an arithmetic mean of 3.55.
Based on the same scaling system, the analysis of the group not having attended any LMI
management or method training were rated with regard to the realisation of results on 2.63 points
and concerning the application of Leadership Principles 3.07.
As one can see from chart 34, the realisation of results of an LMI tends to be higher with a trained
management, in this case about 25%, than if the management has not been trained. This
tendency is similar to the application of the five Leadership Principles. Trained management
applied them more consistently than untrained management (16% more).
105
To support these findings, the author tested the relationship between the application of the four
first Leadership Principles, shown in figure 30 and the Leadership Principle realisation of results.
The outcome of the correlation analysis200 was a coefficient r = 0.73.
This indicates a strong correlation between the application of the Leadership Principles
mentioned and the realisation of results.201
Principle 1:
Definition of values
and direction
Principle 2: Setting
objectives focused
on life systems
Principle 3:
Providing
prerequisites
Principle 4:
Communication
+
+
+
+
Total value
Total value
Testing the
of the
of
application correlation realisation of
of these four coefficient
results
of the five
of each
leadership
respondent
principles of
– part of
Module 2
each
respondent
- part of
Module 2
+
+
+
Personal satisfaction of
respondent on the LMI
results – statement 11
concerning the work
force’s ability to generate
the planned results –
statement 16
concerning the results
measured by KPIs –
statement 21
Ultimately this signifies that when tailored LMI management training is carried out, this has a
positive impact on the application of the Leadership Principles and thus generates an increase in
performance of leadership within a LMI. Consequently, hypothesis 3 has been verified.
200
The four principles of leadership displayed in figure 29, are not efficient without the fifth principle of
leadership, realisation of results. However, in order to get a worst case tendency, the author decided not to
compare all five leadership principles with the outcome, realisation of results. But calculating it exemplarily
the outcome of the correlation coefficient was 0.85 which, although it is considerably higher, it does not
change the general tendency.
201
106
4.3 Limitations of the Survey
4.3.1 General Issues
Because potential respondents were contacted at Lean-themed events, namely the Lean
Manufacturing and IT Congress as well as the “Lean thinking” forum, there is a risk that the
author may have inadvertently influenced the sample and hence the results of the survey. It might
be that the Lean Manufacturing applying management population in general is not represented by
leaders who attended the Congress or are a member of the “Lean thinking” forum.
Nevertheless, the author found a tendency towards abeyance especially in the evaluation of the
statements of Module 2, which covers the application of the five Leadership Principles. This
usually is a sign of respondents not having the time or the interest to think and evaluate calmly.
However, in this survey the respondents where unsolicited and the return rate fairly high, which
means that low interest can be disregarded as a factor.
Because of the positions of the 49 respondents and the resulting disproportional distribution of
the hierarchical levels, middle management is predominant in the survey, making up 72% of the
respondents. As a consequence of this fact and the comparably low number of samples
concerning the whole Lean management population, it is not possible to extrapolate from this
limited sample to the whole Lean management population as a whole and generalise. However,
the findings can be used as an orientation point regarding the leadership status of middle
management within LMIs.
Last but not least, people’s perception, the basis for the evaluation of the statements on the
questionnaire, is necessarily relative and depends to a large extent on the background and
history of the individual as well as on the companies’ environment. The subjectivity of their views
is therefore natural and needs to be accepted as unavoidable.
107
4.3.2 Limitations Concerning the Issue ‘Application of the Five
Leadership Principles’
First of all, the author had neither the possibility nor the intention to test the quantitative results
and instead relied on the qualitative statements of the respondents, whose personal perception is
influenced by the former state and the current state after the LMI. It is therefore quite difficult to
compare or benchmark an individual with other respondents by means of the questionnaire.
In the conclusion of the realisation of results, it already turned out that there is no homogeneity
among the evaluation of the three categories of results: evaluation of outcomes by the
management themselves, work force performance evaluation, and process evaluation by means
of KPIs. But the detailed single correlation analysis of each result category and authenticity leads
to a significantly different result.
Another issue in this context might be that just 41%202 can make a statement on results
because they have reached the continuous improvement status, while 59% have only
partly and not holistically realized the LMI which as a matter of course influences the
results of the LMI, and therefore the evaluation, considerably.
4.3.3 Limitations Concerning the Issue ‘Authenticity’
Within this module, respondents’ self-perception and their perception by others has not been
compared with each other. The statements just covered the self-perception of the respondents.
This might be a reason for the results of authenticity, which with the overall arithmetical mean of
3,52 show a marginal tendency towards being an authentic leader.
However, the strong tendency towards intrinsic motivation is striking. This can be interpreted as
follows: At the time of this study, a strongly controversial social discussion is taking place in
Germany which focuses the perceived recklessness, income maximisation and power generation
by management. Therefore, the responses on the questionnaire with their emphasis on intrinsic
motivation drivers may be considered an obvious tendency – and a sign of the Social-DesirabilityResponse-Set.
It is important to point out that the result of testing hypothesis H1 and H2 depends strongly on the
results of authenticity and therefore on the applied measuring system and process. Because
scientific studies of the authenticity of leaders are very much still in the fledgling stages, the
following issues need to be taken into consideration along with the findings of this thesis.
202
8% have completed the LMI, 33% are in the continuous improvement process, 59% have completed the
LMI just partially.
108
Firstly, the reason for that no relation could be established between the degree of authentic
leadership and the outcomes of a LMI or the degree of applying the five Leadership Principles,
might be that the base for a comparison was just not valid. It might be possible that due to the
chosen methodology the degree of authenticity of leaders has not been captured. This leads to
the next question: Is it even possible to capture and measure authenticity of leaders with a
quantitative voluntary disclosure of confidential information at all? Finally, although the author
acted in good conscience, it is, with hindsight, disputable whether the chosen methodology that
divides the issue in five categories and tests them with ten questions is the best approach to such
a complex aspect of human nature.
4.3.4 Limitations Concerning the issue Lean Manufacturing
Management Training
Within Module 4, the author just tested if the respondent had attended any LMI management
training or not. There has not been any check concerning the duration or contents of the training
or how long ago it took place.
The Social-Desirability-Response-Set also becomes evident within this module because LMI
management training in the philosophical and fundamental principles as well as training in tools
and methods have been evaluated by all respondents as very important, whether or not they had
actually received the training.
109
4.4 Connecting Theory and Practice Regarding Leadership
Within a Lean Manufacturing Implementation
Since most of the respondents of this survey belong to the middle- and shop-floor management, it
became obvious in this study that they generally position themselves between sticking to the
actual standards of the company and suboptimizing their areas according to their own ideas and
visions. This happens as a result of a lack of a general company strategy concerning waste
elimination, provided by the top management. This is an easy statement to make, but one also
needs to consider the situation of top management. It is confronted with a permanent conflict
between mostly short-term shareholder claims, which are supported by the board of directors,
and a generally much more beneficial and socially favourable long-term orientation.
Nevertheless, it is the task of top management to convince all stakeholders that the long-termorientation will be more profitable for everyone involved in the long run.
Authenticity in one’s everyday working life is an on-going process without an on-switch. This gets
obvious, for example, with regard to the fact that for the majority of the respondents it is difficult to
acknowledge professional mistakes. On one hand, they forget that they are merely human, too,
and management nowadays is such a complex affair that no one could claim to be an all-rounder.
On the other hand, being authentic requires a culture that enables one to be authentic and which
appreciate that errors are necessary and beneficial for the learning process – or in other words, it
requires a permanently learning culture.
As the survey shows, the corporate culture, as constituted by values and direction, seems to be
one of the major challenges. The management’s leadership in terms of adjusting the culture to
the Lean requirements clearly has not been convincing because it has not achieved the
integration of the work force into the culture yet.
Establishing or re-defining a culture takes time and requires commitment to the value of long-term
orientation whereas the survey shows a focus on mid-term objectives. But since at least the
typical short-term objectives, which lead to the vicious circle already mentioned, were not
considered as relevant by the respondents, an important step in the right direction has already
been taken – namely to pursue objectives which are based on an organic, human-based system.
Providing the necessary prerequisites seems to be a critical problem for management and LMI
leaders, especially when interfaces are transgressed and other leaders become involved. This is
evident from the evaluation of statement 34 which deals with the commitment required of all of
the company’s leaders, beginning with the board down to the shop floor leader, in order to pursue
the objectives, which need to be clearly defined. For a holistic LMI a lot of personal motivation of
110
all leaders is required to try new tools and methods, change structures and, of course, maintain
them.
Regarding communication, the survey shows a high percentage of low communication among
leaders while, on the other hand, the communication with the work force seems generally
positive. However, effectiveness of communication provides great potential. Maybe the balancing
act between, on one hand, the amount of communication and involvement required during the
LMI process and, on the other hand, the daily workload is one of the major problems for it.
The lack of qualified supporting and leading resources is also one of the stumbling blocks for the
realisation of results. This is a problem not just in terms of numbers but also in terms of
qualification. As the survey shows, almost 20% of the management is not sufficiently trained and
prepared for a LMI. This shows that the development of an effective LMI team cannot happen in a
flash, it needs time and effort which often collides with the challenging objectives.
Beside that, having undertaken the training does not necessarily enable leaders to apply the
training contents immediately and properly. Therefore, it is sometimes useful to avoid the
resulting period of trial-and-error by getting external support instead, which can avoid both,
unnecessary costs and time consuming.
-
111
4.5 Potential Opportunities for External Consultants in
Order to Support a Company During a Lean
Manufacturing Implementation, Deduced From the
Outcomes of the Survey
Based on the differences between theory, covered by the theoretical part, and practice,
investigated by means of the survey, some areas could be observed where companies would be
able to optimise and accelerate results by engaging external consultants. Following the three
phases of a LMI, the author highlights several possibilities.
4.5.1 External Support Within Phase I
In case of what comes first, LMI management training or the potential analysis, one faces the
hen-egg-problem. Nevertheless, both of these aspects are necessary. Usually a particular person
or group within a company has taken over the responsibility of leadership by starting the LMI
process. Then the objective for the consultant is to support the development of a leadership
culture during the three phases.
Starting with LMI management training, the external consultants’ value basically lies in the
knowledge transfer. As exemplified within the survey, a huge potential of almost 20% of the Lean
leaders can be identified for basic training, not taking into consideration the whole potential of
advanced LMI management trainings, and therefore implement Lean values and direction from
the beginning on. Supported by the consultants’ symbolic value, which signifies the willingness of
the top-management regarding the change process which should not be underestimated, it sends
a clear signal to internal and external stakeholders and thus contributes enormously to the
company’s culture.
Within the analysis of the potential, external consultants are invaluable for the interpretation of
data, which will serve as the foundation for the strategy development, because of their
experience of other projects. As pointed out within the survey, developing a clear LMI strategy
and streamlining the whole management towards the further actions by means of a strategic
implementation plan provides still a lot of potential in practice.
112
4.5.2 External Support Within Phase II
Within phase II issues like LMI management and work force training, the interpretation of data in
line with the analysis of the potential of a specified area as well as the symbolic function recur,
however they recur not on the company’s strategic level but on the operative project level.
For this phase the responsibility lies mainly with middle and front-line management, who made up
the vast majority of the respondents to the survey. In addition to the tasks mentioned, practice
shows the following additional requirement: LMI-result-stabilisation. As the survey demonstrated,
there is a huge potential especially in enabling and leading the work force to meet their
requirements after the physical change. One could argue that this might be a form of
complementary capacity, which is not considered a favourable consulting service, but the author
believes that this ultimately is the prerequisite for achieving phase III. Within the stabilisation
process, middle but especially front-line-management will be trained in how to lead the work
force. This could happen, for instance, by applying the situational leadership to the target group,
to stick to the defined standards and tracing problem-solving measures to provide prerequisites in
case of evidence. This is a way of practising the necessary Leadership Principles and thus finally
meeting the defined results. That there is a considerable demand in practice to support the
management in charge in this case proves statements 9, 14 and 19.
4.5.3 External Support Within Phase III
Once a stable system working to Lean tools and methods has been put in place, this can serve
as the foundation for the adjustments that are necessary during the transformation into a
permanently learning culture.
From this phase onwards, the LMI tools and methods should be used and led independently by
the company’s management by means of consistently applying the five Leadership Principles.
However, this does not mean that external consultants become redundant. Since the Lean
journey never ends, new challenges concerning tools and methods as well as benchmarks and
audits continually occur for which the consultants can be helpful.
Nevertheless, the objective of the customer has been fulfilled once he can apply Lean
Manufacturing independently and therefore the customer’s requirements have been met to his
satisfaction.
113
5 CONCLUSION
The theoretical requirements of leadership for a successful LMI process are authenticity of
management, as the fundamental source for leadership, and the consequent application of the
five Leadership Principles.
Via the survey, a tendency of management towards authenticity was detected in practice, but it
could not be determined whether authenticity has any positive or negative influence either on
leadership, constituted by the application of the five Leadership Principles, or on the results of the
LMI process.
However, there might be a relation between the degree of realising results or between the
application of the five Leadership Principles and the degree of being authentic as a leader, but
within the scope of this survey and the chosen methodology this issue could not be resolved. It is
also doubtful if the complex human issue of authenticity in the special case of leadership within a
LMI can be measured by means of current measurement processes to provide the statistically
required validity. This leads to the conclusion that there another scientific measurement process
to test the authenticity of leaders needs to be developed which is sufficiently accurate in terms of
its statistic validity.
However, LMI management training sessions have a significant positive influence on results as
well as on the application of the five Leadership Principles.
Ultimately, this means that training the management through LMI training sessions covering the
five Leadership Principles increases leadership behaviour and thus provides the prerequisites for
the sustainable success of a LMI, not taking authenticity of management into consideration.
It turned out in the survey, that almost a fifth of the management, carrying out an LMI, is not
trained for it. In this context, it is important to stress that the holistic and consistent education of
the whole management, including all three hierarchical levels, is necessary to avoid isolated
solutions and thus suboptimal results. As the survey shows, the companies’ actual practice
indicates a lack of management and leading commitment which ought to be avoided at all costs,
even if this means that commitment needs to be demonstrated through uncomfortable but
unavoidable actions such as the substitution of hindering managers – the responsibility of top
management.
Because in the survey the cultural aspects of leadership, namely the transmission of values and
direction, was much more critical than the process issues, appropriate training sessions in the
Lean Manufacturing philosophy of waste reduction and the appropriate tools and methods need
to be tailored to the companies’ requirements and target groups.
114
The survey also showed that a LMI is considered a short- or midterm-project in far too many
cases. Yet Lean Manufacturing claims to change a company’s culture and is thus absolutely long
term orientated.
From the results of the survey it became clear that there are a lot of possibilities for support by
external consultants because a company should be able to focus on their core competencies,
and implementing Lean Manufacturing usually is not one of the core competencies of companies
within the industrial sector.
First of all, there is a huge potential for knowledge transfer through the training of all hierarchical
levels of companies’ management as required. Then there is, of course, the core task of external
consultants, the support in interpreting data and finding solutions.
But in the survey it also became evident that in practice the LMI stabilisation support in the form
of applied leadership training in order to ensure sustainability obviously is a highly required
service.
However, the absolutely positive aspect of the survey was that the respondents did not embellish
the facts or gloss over problems. Instead they appear to have a realistic view of the actual status
of their LMI and know that there is much still left to do. This suggests that they are already
motivated to improve their current state actively by living their personal leadership skills and
permanently improving them.
115
VII APPENDIX
Appendix A: Page 1 of the questionnaire:
116
Appendix B: Page 2 of the questionnaire:
117
Appendix C: Attached is just Module 1, the statistical part of the survey, to give an overview. The
matrix with the data analysis was too huge to exhibit adequately.
118
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http://www.leonardo-group.com/ (Accessed 10.04.2008)
http://en.wikipedia.org/wiki/Rating_scale (Accessed: 22.03.2008)
http://www.surveysystem.com/correlation.htm (Accessed: 22.03.2008)
123
http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/DE/Content/Publikationen/Querschnittsve
roeffentlichungen/WirtschaftStatistik/IndustrieVerarbeitendesGewerbe/StrukturdatenVerarbeitendes
Gewerbe,property=file.pdf (Accessed:05/04/2008)
http://www.businessdictionary.com/definition/top-management.html (Accessed: 22/03/2008)
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J., “Why major Lean transitions not have been sustained”, Management Services, 2005
124
IX CONFIRMATION
I, Jan Alonso-Michel, confirm that I have written this thesis entitled “Leadership as a Sustainable Success
Factor of Lean Manufacturing - Analysis of Leadership Requirements within the Implementation Process
and Possibilities to Support them as an External Consultant” independently and without any unauthorised
assistance. All publications used in the writing of this thesis have been cited accordingly as sources and
noted in the bibliography.
__________________________
__________________________
Place, date
Signature
125

Leadership - MBA-Arbeit Alonso-Michel, finale Version, 17.04 - i-bcs

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