Can the HR Department Lead a Lean Transformation? - An opinion.
Many companies today are embarking on programs to instill a sustainable, continuously improving culture into their operations. These initiatives are presented with many different names – Operational Excellence, Worker Engagement, Lean Six Sigma, World Class Business, High Performing Work Teams, to name but a few. Kotter’s Change Management model includes, as a critical step, the establishment of a “Guiding Coalition” to steer the process. So who should participate in this team and who should lead it if we wish to maximize our chances of success? I have worked in this industry for over a quarter century, both from within business and as a consultant, and I am astonished how many companies nominate the Human Resources team to lead the transformation.
In this short discussion I would like to share a few of my thoughts on the topic.
Can it work well? Absolutely! One of my favourite clients was a global resources company operating in a very poor third world country. Skilled local personnel were all but unavailable and infrastructure and services certainly did not match the requirements of a company striving to be the best in the world. The Guiding Coalition had to manage the excellence initiative whilst developing the available resources to deliver top service. The job was given to HR. They were also given all necessary support in terms of time, manpower and finance and were actively supported by the Chief Executive. Within three years they were recognized as the world leader in their field in critical KPIs such as Quality and Safety.
Unfortunately this is the exception rather than the rule. Nevertheless, potential clients continue to recommend that HR oversee the process. The reasons are not too difficult to find, yet I believe this decision is counterproductive and should be reconsidered. Why do companies push this viewpoint?
- Liker introduced us to the Four Ps in The Toyota Way. The importance of emphasizing both commitment / engagement of the People and the appropriate Lean tools is widely recognized. Indeed, several authors have concluded that success is 20% based on Tools and 80% based on Attitude. The high focus on People suggests an important role for HR.
- HR is the dumping ground for numerous initiatives that do not seem to belong in any other specific department. I have seen HR departments managing training, employee relations, trade union interface, canteen, security, clinic, community development, newsletters and much more. It is easy to simply add another element to the list.
The HR department is rarely seen as a critical component of the value stream, whereas Sales, Finance, Production, Distribution, etc. can have a direct impact on the bottom line. HR is therefore “neutral” and should be able to take a balanced view when prioritizing activities.
I have never seen an improvement initiative, which decided to focus on improving HR as first priority. The client sometimes argues that, as a result of operational problems, the value stream departments will be too busy to oversee the program.
Many successful change programs are led by a newly constituted Continuous Improvement team. Even so, HR has a most important role to play in the transition. I believe that they must be represented in the Guiding Coalition, but they must not lead it. They have other important work to do. A Latin American HR Manager at one of my clients hit the nail on the head, when he decided that his HR team Mission was to “Help all teams on site achieve the site objectives, with happy, fully-developed employees.” His team members attended meetings of all teams on site to determine their People needs, set themselves goals to deliver against these customer requirements, and enabled the site to be ranked No.1 in a global assessment of performance. However, they did not lead the change program!
HR has many important support functions to attend to. Topics include recruitment, induction, facilitating job designs and career development, interaction with trade unions, recognition systems, assessing company culture and frustrations, assisting to monitor people goals such as personnel development and much more. The Continuous Improvement Manager will assist them to apply continuous improvement principles within their own department. They will realize that monitoring average time to fill a vacancy is nothing but processing waste, but questioning why laboratory technicians can be sourced in a week and it takes ten months to find a financial manager provides real triggers for problem-solving. Counting training days is waste; assessing effectiveness can add value. Continuous improvement must be applied everywhere. It must be in our DNA.
When I embark on a long road trip, the sound system in my car is a necessary support function to keep me informed of road conditions, to entertain me and to prevent me from dozing off. However it does not take me to my destination. HR is the sound system.
The program must be led by an expert in the field. The sooner the value chain takes ownership, the better. The more senior the program Sponsor the better, too. When HR assumes the driving role, our experience is that they frequently do not command the attention the program deserves and all suffer as a consequence.
In a follow-up to these thoughts I will endeavor to review the critical role HR MUST play and who I believe could lead the program most effectively.
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