You must work out what to do with your lean savings before you get them
When Efficiency Works gets engaged by a client to implement lean or Competitive Systems and Practices, it is always because they want improvement. Finding waste is never an issue, but before you start on a lean journey you need to work out what you are going to do with the extra resource you will have as a result of the improvements.
Why? If you don’t your people will be fearful. For many, the very name lean conjures up visions of cutting and shrinking. If your people believe that your initiative will lead to a lower headcount – why would it get their support? It is not in their best interest. You will have to guarantee that the improvements will be used to grow the business or at worst provide an ability to maintain the status quo in the short term.
The picture below shows two different paths that can be followed once the waste has been removed you can
turn the waste to cuts and bank the money or
turn the waste into growth.
There is clear evidence that the freed up resource should be turned in to new sales, higher service levels and greater value for your customer i.e. growth not cuts.
Turning your waste into growth ensures the future of your staff and is clearly worth supporting. Also, turning your effort to growth has a very big upside. You’re only limited by the size of the World market for your product or service. Sure, if you make cuts you get to bank the savings but you only get to do that once. After that, your people won’t be engaged and may actively work against improvement. Savings through cuts are also much more limited. You can only shrink so much, eventually you have no business.
What if you are a government operation or not-for-profit? The reality is that we are nearly all in a competitive environment, the measures of success are just different. By freeing up waste you will be able to deliver more to your clients\members\public and ensure your livelihood and future.
Don’t leave people in doubt as to what you are going to do with your savings. Don’t leave it to chance. If you are silent don’t hope they’ll infer your good intentions, they may infer the opposite of what you intend.
What if your situation is truly desperate? What if things have deteriorated to the point where the company’s future will be compromised if labour cuts aren’t made? If you’re truly at that point then make the cuts before you start your lean journey. Being lean isn’t the reason you’re cutting staff but it will probably be the only way you will be able to find your way out of trouble.
When we start a lean consulting or Competitive Systems and Practices engagement we tell people that they need to talk about what they are going to do with their savings early. We believe that you need to guarantee that people will not lose their jobs as a direct result of their improvement initiatives and allay the natural fears that they will have. If you do that you have a better chance of people giving lean their all.
With the guarantee you’re a chance of maximum improvement. You don’t want people improving just enough to avoid being noticed or worse still blocking improvement. You want an environment where people feel comfortable striving for excellence and exposing waste.