In this difficult economy, a Lean transformation is an ideal choice for reducing costs, however it can be viewed as a threatening experience for employees. How often in the past four years have large firms laid off workers by the hundreds in the name of “efficiency”? A threatened workforce is going to be resistant to any sort of change, good or bad, which is why it is essential to have a strong commitment from the ground up before beginning your Lean journey.
When Art Byrne was trying to implement Lean at his company, Wiremold, one of his first steps was communicating with the workforce. After an initial round of offering generous incentives for retirement to shrink his workforce, he gathered the remaining employees. He offered a simple guarantee: no one would ever lose their job as a result of the Lean Transformation. His fellow managers were flabbergasted but he realized that without support on the factory floor, this effort could not happen. He spoke about it a few years later.
“I’m certain that 99 percent of American companies wouldn’t do this, but taking away the fear of job loss is at the core of a Lean conversion. Think of it logically from a human perspective rather than as some corporate bureaucrat. If I asked you to help me reduce the number of people needed to make a particular product from five down to two, and after you did, I followed up by laying off three people, one of whom was your cousin and another a good friend, what would you say to me when I asked to help me do the same thing a month later for another product?”
Byrne had hit upon an essential facet of Lean principles. The solutions to eliminating waste are not found in a corporate board room but rather on the factory floor. By offering job guarantees, the workforce was able to fully embrace the principles of efficiency without fear of losing their employment.
When Byrne first showed the unions at his facility this contract guaranteeing their jobs, the employees were very suspicious. Struggles with previous management had left them cautious about such a generous arrangement. Why would Byrne make such a generous offer while only asking for them to be open-minded to the Lean transformation? They pored over all the documents but could find no catch. After some initial discussion, the Union accepted his offer and they went to work eliminating waste.
Naturally, as processes are streamlined and Waste, or Muda, is eliminated (see our article about Muda), jobs that used to require several employees could instead be handled by only a few. When this happened, Byrne promoted the best employees to the Lean transformation team, who would start working on what other improvements could be implemented. It was seen as a promotion and a reward for a job well done.
At Wiremold, the results were dramatic. Over the next five years, they reduced time-to-market by 75 percent, while productivity was increased by 20 percent. Sales per employee soared, more than doubling and thanks to Byrne’s vigorous profit sharing efforts, the workforce shared in the company’s prosperity.
Throughout the process, Byrne continued to keep in close contact with employees at all levels of responsibility within Wiremold. These open lines of communication ensured that the Lean transformation is not a single event but rather a continuous journey toward perfection. Once every worker, from the janitor to the CEO understands and embraces this concept without fear of elimination then your Lean transformation can begin.