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Lean Myths & Realities – People

LEAN Misconceptions – Part 2

In Part 1 we debunked the myth that Lean is all about cost reduction. In this article we explore the myth that to be Lean a business has to cut staff.

Misconception # 2: Lean is a process to reduce the number of employees

As discussed in “Misconceptions # 1”, reducing the non-value added components or waste, capacity is increased (diagram 1), and increasing capacity is the REAL purpose of Lean.

Lean Misc Image #2

Diagram 1

By creating this additional capacity, the organisation now has the opportunity to either:

a) Reduce the number of employees.
Using this approach will invariably result in the following:

  • The process of continual improvement which is fundamental to Lean, coming to an instant halt. After all, which employee wants to reduce waste and make improvements to the organisation if it means that either he or his peers will then be without a job?
  • A huge decrease in employee morale.
  • Stagnant/declining productivity with the possibility of implementing any future improvement program/s being slim.
  • Stagnant growth and process improvement, thereby allowing the competition to catch-up and finally overtake the organisation.
  • Distrust between management and the employees, perpetuating the “us vs them” culture.

b) Utilise the employees to increase output and/or add greater customer value.
Using this approach will have the exact opposite effect to that of (a) above.

Companies often talk about people being their greatest asset and that people make the company. As previously mentioned, Lean is about reducing waste, and perhaps one ‘waste’ that is not often regarded as such particularly by management, is the waste of ‘untapped human potential’. Ohno, the father of Lean thinking at Toyota, said that the real objective of the Toyota Production System was to create thinking people. Lean is about total employee involvement and using employees to continually improve processes. In the 1980’s, many companies like GM experimented with total factory automation, and they learnt the hard (and expensive) way, that any automated factory that does not benefit from continual improvement, will fall behind in the productivity race.

Using the untapped human potential that is unfortunately often dormant in many organisations, requires commitment and management support, plus a culture of trust and mutual respect. Much like continual process improvement, basic and continual employee training is essential in a Lean organisation. You cannot expect employees to make process improvements or identify and add greater customer value, if you don’t educate them. Teach them to identify waste, give them the necessary tools, and allow them to make improvements. The old adage of “what happens if I train them and they leave?” is replaced by “what happens if I don’t train them and they stay!”

There are countless examples of work teams or quality circles that have made dramatic improvements not only in terms of productivity and quality, but also in adding customer value. The engagement of people on a Lean journey is essential as it will predict their behaviour and your success (Hines, Found, Griffiths & Harrison, 2008). In the highly competitive environment in which we live, using Lean as a means to simply reduce headcount, is a road to disaster.

Mike Karle