Phooey on the need for Management Support in a Lean Transformation

Do you really expect a CEO to lead a Lean Transformation? Why should you even expect upper management to sign off on the transformation before you prove the value of it? Time and time again, I have always heard the failure of any transformation, Lean, Six Sigma or practically any methodology to be the fault of lack of upper management support. Here is why you don’t need them or want them around.

When inducing change in an organization the transformation needs to start along the edges. The core where your upper management exists has a tendency to reward proven solutions; they are not the risk takers. They buy patents, give rewards for innovation and even buy companies. Most core participants tend to focus on knowledge flows within the core rather than making a concentrated effort to identify and participate in relevant knowledge flows on the edge.

In the book The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion, the authors’ state:

Knowledge flows naturally flourishes on the edge. Why? Because by definition, participants on these edges are wrestling with how to match unmet needs with unexploited capabilities and all the uncertainty that implies. Edge participants therefore focus on ways to innovate and create value by connecting unmet needs with unexploited capabilities and then scaling these opportunities as rapidly as possible. In the process, they create significant new knowledge.

Since much of the most relevant knowledge on the edge is tacit knowledge, edge participants naturally place a heavy emphasis on building diverse networks of relationships that will help them to collaborate more effectively with others in the creation of new knowledge. For this reason, gatherings where participants can share stories and experiences, learn from each other, and identify potential collaborators become particularly prominent on the edges.

Edge participants often reach out to participants in the core in an effort to build relationships and enhance knowledge flows. But those efforts are often frustrated or at best to marginalize because where participants are too busy concentrating on defensive strategies within the core, trying to protect their profits and position, to understand the true growth opportunities represented by relevant edges. Or participants tend to focus on transactions rather than investing in a long-term effort to build sustainable, trust-based relationships on the edge.

For this reason, especially, the few core participants to understand the full potential of the edge and are able to reach out and connect into rich knowledgeable flows occurring on the edge will be in the best position to create economic value. They will be able to respond to increasing margin pressure in the core by helping to scale innovation on the edge and in participating rich new sources of profitable growth arising there. Unfortunately most core participants to the extent that they recognize increasing importance of knowledge flows at all, tend to focus and knowledge flows within the core rather than making a concentrated effort to identify and participate in relevant knowledge flows on the edge.

Why do these edge people or these risk takers even care about the core people? Edges and cores need each other. Unless they become part of the core, edge players never gain access to the stature, money or connections that exist in the core. The core needs innovation from the edge to continue refreshing and regenerating itself. In business terms, edge companies need resources to scale growth and core companies need new growth platforms to compensate for increasing competitive pressures.

In tomorrow’s podcast, Terry Barnhart and I discussed how Boyd’s OODA Loop could be used to implement Lean without the efforts of top management or a mandate driven down the chain. It could be driven by performance from the edge. The idea came up during the discussion on isolation and how Boyd saw isolation as a critical strategic device. In effect, the opposite of the information-rich environment that you picture in developing Lean, isolation could be a key factor in a Lean Transformation.

Isolating your enemy, Boyd saw, as a powerful tool in making his OODA loop inoperable, cutting off the flow of information both in and out of the organization. In his 14-hour briefing, "A Discourse on Winning and Losing," Boyd described three strategies for isolation.

"Physically we can isolate our adversaries by severing their communications with [the] outside world as well as by severing their internal communications to one another. We can accomplish [the former] … via diplomatic, psychological, and other efforts. To cut them off from one another, we should penetrate their system by being unpredictable.

"Mentally we can isolate our adversaries by presenting them with ambiguous, deceptive, or novel situations, as well as by operating at a tempo or rhythm they can neither make out nor keep up with. Operating inside their OODA loops will accomplish just this by disorienting or twisting their mental images so that they can neither appreciate nor cope with what’s really going on.

"Morally our adversaries isolate themselves when they visibly improve their well-being to the detriment of others … by violating codes of conduct or behavior patterns that they profess to uphold or others expect them to uphold."

Building a collaborative team effort will be much easy out on the edge. You will be able to develop and modify your lean practices with ready participants that are looking for similar solutions. Look for early success on the edge, they are much more forgiving and helpful building your team there. As you start moving to the core expect to encounter resistance. Sidestep the resistance, why waste your time? As you build constituency, integrate your culture downstream and the non-believers will isolate themselves from the team.

This sounded at first a pretty cold-hearted method but the truth of the matter is that building a winning team normally includes leaving a few naysayers behind. Many of them will join the team after it has become successful others may never join. This may be a slightly worn out video as it has appeared on my blog before but it is very fitting!