Hitachi Consulting: Lean SixSigma needs lasting change

24 October 2014

Lean and Six Sigma techniques have over the past years been adopted by many industries; however 50% - 70% of initiatives fail to reach their full potential, ‘hitting a wall’ after initial improvements. To achieve tangible business value from continuous improvement initiatives, companies should move beyond the primary focus on method and tools, says Jonathan Gray from Hitachi Consulting.

The central tenets to real business transformation are threefold:

1. Role-modelling Lean Leadership behaviour which truly empowers employees;
2. Ensuring improvements are connected by aligning initiatives to core business strategy;
3. Creating targets that go beyond cost reduction to time-based and service level competitiveness.

However, there are often significant barriers which must be overcome in order to affect lasting change.

Lean And Six Sigma

Leaders must role model change – the Lean Leadership maturity model
Leaders need to be open to learning and change themselves, and creating a learning environment for those around them. This is why Lean and Six Sigma methods and tools, when used in isolation, are not enough to deliver lasting operational transformation. Instead, they should be used as part of a broader approach to driving continuous improvement. The Lean Leadership maturity model articulates the evolution of Lean deployment in most organisations.

Deploying rigorous standards, tools and audits initially deliver strong results, but over time improvements slow and results plateau. Getting over the ‘wall’ needs a different approach to leadership. Leadership must focus on reinforcing Lean behaviours through situational coaching (on-the-job).  Time spent at Genba (time spent observing from the ‘shop floor’) coaching teams and supporting continuous improvement must be the first priority, and if demonstrated consistently is truly transformational.

“What are the new skills required in a change organisation?”
Learning change management, Lean leadership behaviour and coaching skills in a classroom is a world away from doing it in reality. When developing leaders at all levels, situational coaching provides the fastest and most effective approach.

Hitachi Consulting - Lean

To support this internal change, teams need to understand the working context of the people they are supporting - so they can relate change activities to the daily lives of employees and the performance of their business. In this way, change teams are perceived as jointly responsible, demonstrating a higher level of commitment to results defined and delivered together.

Yet the biggest problem for many leaders and managers today is time. Leaders can have fantastic people skills but if their calendars are too full, they simply have no time to demonstrate it. Supporting others to improve their personal effectiveness and create time is an often forgotten but core competence of internal change teams – to support leaders to rise to the challenge.

“How do we break down organisation silos?”
Finding a tangible shared objective can appear difficult, particularly when senior leadership teams are perceived as distinct to the rest of employees. But in fact, it is business transformation itself that should be the common goal. The goal: drive performance improvements across the end-to-end value stream and create a rewarding place for people to work. This will result in a high-performing organisation and create an environment for true continuous improvement. 

Jonathan Gray - Hitachi Consulting

Which organisations deliver change best?
Those that deliver change well tend to have strong values and are consistent in their approach to driving performance and implementing change, with a focus on long-term impacts. “The worst behaviour you demonstrate is the best behaviour you can expect of others” is a powerful statement, because it is simple and true. An organisation cannot have multiple standards of leadership behaviour if it hopes to create a consistent way of working and a high performing culture delivering breakthrough performance.

An article from Jonathan Gray, Vice President at Hitachi Consulting – the global management consulting and IT services business of Hitachi – responsible for the delivery capability of the EMEA industrials practice. Gray has over 15 years of management consulting experience complemented with time spent in industry and finance, and specialises in Operations Strategy, Leadership and Performance Management across the value chain.