I had the opportunity to attend the operations review of a local client last week, and walked away with perspectives from a company that has dramatically improved their standing during the recent slump in the building products market.  From the top down, they continue to challenge the status quo, and drive improvement in every aspect of their business, from the shop floor, to interactions with customers and potential clients.

Any business would be forced to react to a 30% market decline over the past two years, and such a challenge has derailed many of the best of strategies and intentions.  As good luck, or justifiably, good leadership would have it, Exterior Portfolio™ by Crane embarked on a Continuous Improvement journey 3 years ago, an “initiative” that has since become a non-negotiable part of their corporate DNA.  As you will see, the CI mindset has permeated every part of their business and the results are real.  At the review, they credited their “very existence today, to the improvements and agility that this culture has provided”.  Now they are positioned to reap dividends as the market comes back, and are without question, a much more nimble and efficient business.  It goes without saying that their experiences and results have done nothing but solidify their commitment to increase the rate of improvement in their business going forward.

I share few highlights from the day-long session, that could be considered best practices for all of us in both good times and bad.

Invest in the Team

Training is often the first thing to go, when budgets get tight.  Taking quite the opposite approach, the client invested in ongoing development of the team, using both internal and external resources, recognizing that a smaller workforce will require everyone to contribute on a broader and higher-functioning scale.  Lean Certification graduates became internal trainers, supervisors improved their leadership skills, and a robust new-hire curriculum was developed which reduced turnover and minimized the learning curve.

Push Decisions Down

An educated workforce can make the best decisions at the lowest level where the data is the clearest and the variables close at hand.  I was excited to hear about putting daily machine scheduling in the hands of the operators, providing them with the data and visibility to discern critical orders vs. stock replenishment, and empowering the floor make the best decisions to both satisfy the customer and optimize the production sequence.

Involve the Entire Company 

All too often, continuous improvement, lean, or whatever the “focus” may be called, is associated with operations and shop floor improvement.  Expanding the CI focus throughout this business has driven reductions in their cost of running payroll, dramatically reduced the cost of marketing promotions, and provided tools to more creatively respond to customer requests to cite just a few examples.  More importantly, this cross-functional focus has united the entire company behind the drive to be the market leader in their segment.

Partner with Key Suppliers

Key performance improvements were openly credited to “loyal” suppliers who have taken complete ownership of formally challenging aspects of the business.  While the decision and transition was not always easy, these partners have since leveraged their expertise to provide marked improvements in service level.  The relationships are also characterized by a trust and level of service that redefines the typical vendor/customer model.

Embrace the “New Normal”

The tone is set from the top, and the President addressed the group, challenging them to focus on the “new normal”.  The market will never be what it was before, and the company who is quickest to react, offer new and novel solutions, and be willing to shed the stereotype of what the business is and how it acts, will be the winner at the end of the day.  What a fitting strategic umbrella under which to drive a true continuous improvement culture.

All in all, I felt these were some great examples of how leadership, vision, and strategic investment have positioned a company that could have easily been victim of tough economic times  Instead, they have been able to gain critical momentum, and be well positioned to win during the recovery.

How to Achieve Sustainable Operational Performance

A change in leadership can bring fear and uncertainty to an organization, and a new leader must defuse that to begin bringing about sustainable change.  And although new leaders must act quickly, they should not do so until they gain an understanding of the organization and the trust of its employee.

It is a mistake for a new leader to go in with preconceived solutions. Change needs to happen fairly quickly but not before the initial level of trust is built and the new leader gains an understanding of the opportunities the employees see and the obstacles they have faced. A new leader can create a culture of sustainable operational performance.

New Leaders Can Gain the Confidence of Long-Term Employees

When a new leader moves into that position, there are typically expectations of higher performance, so as soon as that leader can communicate those expectations to the organization, the better. It is important to convey that systems, processes and behaviors are going to have to change in order to achieve a higher level of performance. You really need to communicate that overall vision, that a higher standard is important, and then communicate why it is important in terms of your customers’ demands and what is changing in the marketplace.

Creating a Culture of Higher Performance

The CEO has to spend time one-on-one with the organization’s key leaders to understand their pain. Typically, these people want a higher level of performance as well. That really gives you the opportunity to start building trust with the team, as well as understand the landscape of the organization and what obstacles and opportunities exist. Change is scary, and new leadership can be frightening, so it is important to ask people what they are afraid of and address those fears head-on.

Implementing Operational Improvements

The most important thing is to identify the top four or five priorities you are going to work on. Then, you begin to challenge the status quo. Ask, ‘What would it take to create a higher level of performance?’ Then, to discuss solutions to the challenges, create a forum, which should include people across different functions in the organization, from front-line people to C-level positions.

Solutions should be sustainable and should aim to simplify, standardize and automate a process. First, to simplify, you need to eliminate waste in your processes. There is not a single area of an organization that does not deal with processes that have inherent waste and opportunities to eliminate it.

Once you simplify that process, standardize it so that you get a consistent outcome from now on. When an organization does not have standardized processes, it has difficulty moving past the same challenges because they continue to have different outcomes.

Finally, automate the process. Figure out how to take advantage of the technology you have at your disposal and how to leverage the system to automate those processes throughout the organization.

Encouraging Employees to Embrace Changes

You have to celebrate the trying. Even if you tried something and it did not work, it is still a win that you tried something different. If you are willing and open to trying different things, quick wins are going to come, but make sure that you celebrate not only the things you tried that worked really well but also when you tried something that did not work well. This will foster a culture of change at all levels of the organization.

Pitfalls New Leaders Make when Implementing Change

The first is not acting quickly enough. Many organizations are great at identifying their challenges and even at following through to develop solutions, but then they do not take quick, decisive action.

Another pitfall is failing to follow through. Many employees have heard the message in the past about maintaining a culture of continuous improvement, but it has not been followed through on. When improvements are not sustained, that responsibility resides with the leadership.

Finally, many leaders make the mistake of focusing on the draggers in an organization instead of on the performers. Focusing on the draggers and allowing them to maintain the status quo and not get involved in change is demotivating to the employees who are working hard to make improvements in the organization.

Ensuring the Culture of Operational Performance is Sustainable

Reward employees who are willing to drive change and identify solutions. Do not just have them go through the motions of attending a training class, but have them focus on external activities. Have them start to understand more about the external marketplace and really see other businesses and other business models.

They will come back with really great ideas, and one of the best ways to take advantage of training is to ask those employees to share their learning with others. You put them in a position of expertise with others, and that really starts to raise the average level of performance. Those people then become the removers of obstacles and the gatekeepers of resources, so that their leaders can then focus on improving and growing the business.