Lean and the corporate culture

LinkedIn's Lean groups currently host several discussions about the cultural dimension of change in organizations in general, and Lean implementation in particular. This topic attracts many comments, but they rarely address such basic issues as what we mean when we say "culture" and how we expect to change it. I will try to address this gap here.

What is a culture?

Webster's has 12 definitions, of which two have some relevance in business:

1. The behaviors and beliefs characteristic of a social, ethnic or age group.
2. The ways of living built up by a group of humans and transmitted from one generation to another.

The employees of a company are a social group, and the first definition applies to them in a strict sense. The second one is broader, encompassing what people do throughout their lives, including rituals like weddings and funerals, that are beyond the scope of corporate life. But the idea of transmission between generations applies, albeit from senior employees mentoring their juniors rather than from parents to children.

The second definition is also relevant to the extent that a business organization, whether a factory, R&D lab or commercial office inherits the culture of the society at large in which it is located. It does not exist in a cultural vacuum, but the influence of this cultural context can easily be misjudged, and varies with the decision under consideration.

Corporate versus national culture

When working with existing plants, I have always found generalizations based on national culture to be counterproductive. I work with individuals on projects, and find that differences in personalities far outweigh whatever traits they may inherit from a group.

I had a conversation recently with an aerospace executive who decides where to locate factories, and he was saying “China this…” and “India that…,” which struck me as the thinking in stereotypes that I avoid. Then I realized that the kinds of work we do gave us different perspectives. When he decides to build a plant in a location, he does not yet know who will work in it, while I help people who are already there.

If you are scouting locations for a new plant, all you have to go by on the available human resources is what you know of the ambient culture. Will the work you offer command respect in this society? Will it be a source of pride or embarrassment? What level of formal education can you expect to find? Does this society go back 200 years in manufacturing or 20?

On the other hand, if you are considering a project for an existing facility, the ambient culture takes a back seat to the corporate culture the employees have been working in, and you know them as individuals.

A Japanese car maker sets up plants in the US, and chooses a location where they can recruit a work force from the local farm economy and train it from scratch to work their way. Fast forward 15 years, and the local employees are no longer a group of "malleable farmers." They are instead Terry, Rick and Kevin, all experienced professionals, steeped in the company culture, and each with individual talents.

In this kind of context, I have never seen national or even regional culture used as anything but an excuse. It's always "It won't work here because we are...," and you can substitute American, Russian, Italian, French, or Argentinian. It is to the point that, the minute an executive brings up national culture, you know exactly why.

I remember a manager who always had a reason why nothing could be done. The proposed solutions violated local labor laws or fire codes, and, if he couldn't make that point, they just wouldn't work with local workers. In a meeting, he interrupted a presentation by just saying “It’s not allowed!” with great conviction, at which point the other managers laughed and it was the end of his obstructions.

This is what I have seen in manufacturing. You might say that the people who decided to offer wine at restaurants in Disneyland-Paris used national culture to drive an improvement. But that is an entertainment park, not a manufacturing plant. Wine is actually served at lunch in factory cafeterias in France. It is an accommodation to the national culture, but I do not believe it enhances the quality of the work or the safety of the shop.

In an existing plant, when it comes to organizing people, materials, equipment and processes to produce globally competitive products, you should neither expect the national culture to give you an edge nor accept it as an excuse. National culture is as relevant to assembly lines as it is to soccer.

If there is one lesson to learn from Japan, it is the willingness to abandon tradition and apply good ideas from elsewhere. In the mid 19 century, when confronted with American and European powers, the leaders of Japan boldly and deliberately adopted their technology, business structures, education systems, and legal systems, as a result of which Japan became a world power within 50 years of opening its doors, a performance unmatched by any other country in Asia or Africa.

Local managers should focus on making products that worldwide customers want to buy, and on creating brands that are recognized and respected. The national soul can express itself in books, paintings, music, movies, foods… It does not need to on the shop floor of soap or helicopter factories. There, you always need to improve in order to be competitive. It is true whether you operate in the US, Japan, Russia, or Sri Lanka. It requires intense efforts over time and it can be undone.

When corporate and national cultures clash

Let's say you work for a multinational company with an equal opportunity, meritocratic culture. The proudly proclaimed corporate philosophy is that your ethnicity or gender do not matter and that your career is entirely determined by your talents and achievements. Now, to better serve a local market, you decide to set up a plant in a country that has a tradition of discrimination, which is presented to you as being "part of the culture." Should you go along with it, or should you stick to your own values, even if it means walking away?

The ethics are obvious; the pragmatics, less so. Back office or shop floor operations do not involve interactions with society at large, and the discriminatory practices of local companies give you the opportunity to tap into the talent they ignore because of their prejudices. For this, bucking the local customs is a way to secure a motivated, loyal and capable work force. In sales or customer service, on the other hand, the same companies often humor the prejudices of customers rather than take a stand and lose business.

The kind of cultural sensitivity that needs to be shown even in internal operations has to do with common courtesy, foods served in the cafeteria, awards and ceremonies, restroom layouts, etc. In other words, all activities except the work itself. To do the work, the same process must be executed the same way in Milwaukee, Manila or Mumbai. And it goes for management practices as well.

For example, some cultures mark social status by differences in dress. In plants, supervisors wear an overall of a different color than operators; higher-level managers, suits and ties. If your company culture is instead to have the same dress code or even a uniform for all employees regardless of rank, it is a vital part of your corporate culture and should trump national culture.

How do you change a culture?

The difficulty of changing the culture of an organization is often underestimated, by managers who keep trying ineffective methods. Strategies based on communications -- through slogans, banners, announcements and training courses -- do not change "the way we do things."

Some managers - possibly influenced by a superficial reading of Sun Tzu - think that firing a few managers is the way to let the organization know they are serious. Such acts do change the culture but perhaps not in the intended direction. For example if, following Deming, you want to "drive out fear," you will accomplish the opposite.

There is, in fact, no method by which you can directly change the culture. The culture is the perception of "the way we do things," shared by all members of the organization, and the only way to change it is through the reality of the work. When you change the way people work, you also change the way they perceive it and think about it. And it doesn't work the other way around: you cannot change the culture first in order to change the work.

Of course, when you attempt to change the work, the existing culture is in the way, but to varying degrees in different departments and shops. That is why the challenge at the outset is to identify the opportunities with the most favorable ratio of benefits to cultural resistance.

Current state assessments usually focus exclusively on technically "low-hanging fruits," meaning local projects that can quickly yield massive improvements for the business as a whole, in quality, productivity, lead time, or inventory, with a minimal investment. See, for example, Bodo Wiegand's analysis of steel making and pharmaceutical processing.

These assessments assume that the process owners will pursue these projects with diligence, but it is by not a foregone conclusion. It depends on how much of a stake they have in the status quo, how involved they were in the design of the current approach, and what they personally have to look forward to as a result of the change. The best projects may not be the ones with the highest technical potential but the ones with the most supportive managers.

Their success then inspires others and lowers the barrier to implementation in the rest of the organization. These projects change the work for the better in a small number of areas. The managers report it to their peers in meetings, and so do the operators during breaks and social interactions outside of work. Changes in the reality of the work drive changes in perceptions. This is how "the way we do things," also known as the culture, begins to move, in the direction you want it to.

I am not implying that Lean implementation consists of uncoordinated, local initiatives. It has been tried and is known as a "popcorn implementation," and Bodo Wiegand's article describes how it fails. There must be a strategy, but this strategy must consider cultural obstacles and ways to overcome or bypass them.

Photo: Robert Churchill/the Agency Collection/Getty Images