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Case Study: Is Sustainable Change an oxymoron?

“Is Sustainable Change an oxymoron? Would it be change if it was ‘sustained’ and didn’t change?” Obviously change is a disciple. Change is a culture. And when we talk about being sustainable we are describing a mental attitude; we are describing a discipline and not a point in time. Sustainable change is an environment where we are mentally and culturally focused on searching for and identifying opportunities for improvement.

As a disclaimer, a modern use of the term “sustainable” focuses on environmentally focused activities. That’s not how we are using the term in this article. For us sustainable refers to maintaining a change focused perspective and a change culture.

A few years back I was involved in the major organizational transformation of a military base which involved a restructuring of their maintenance facility. The primary change tool was Lean / Six Sigma. The impact of the changes were dramatic including a 80+ % reduction in some of the cycle times, a 50+ % reduction in inventory, a reduction in paperwork, travel time, inspections, etc. The over-all impact was that the throughput of the maintenance organization was nearly tripled.

Two years after the transformation a new general was given command of the base. This new general thought Lean was a lot of “smoke and mirrors.” He had never experienced the Lean change process and had no faith in it. He trusted tradition and changed everything back to the way it was before the transformation. He re-instituted the paperwork trail and the inspections that existed prior to the transformation, and the throughput improvements were quickly eliminated.

What happened? Why, in spite of the obvious improvements, were the successful changes eliminated? In order to take a look at this failure we need to begin by defining some of the terminology. What is sustainability? What is change?

Change Models

There are numerous models for change, each claiming to be the answer to all your pains. Here are a few of the more popular examples:

TPS (Toyota Production System) – Within TPS we find the roots of many of our current change management models. For example TQM (Total Quality Management), Lean, Six Sigma, Quality Functional Deployment (QFD), Hoshin, etc. are all change methodologies founded on TPS. We Westerners have the habit of searching for one piece of TPS which is the golden coin that we hope will define TPS success. Over time we have migrated from the simplistic to the more complete version of TPS. Today the favorite TPS change model is called Lean.

Process Re-engineering (PR) – PR is an American grown change management model that focuses on rapid and radical change. The speed of the change is key, as opposed to TPS which spends more time on the front-end analysis before executing the change.

Concept Management (CM) – CM is an integration of the best of TPS and PR and brings in the concept of Breakthrough Thinking which is defined in a book by Hibino with the same title.

Change Curve – The change curve, as diagramed in Figure 1 below, teaches us a lot about the change process (diagram taken from eManager page 122). In Stage A we are operating at a steady state and stable level of operation. Stage B occurs when change is implemented. The level of efficiency drops and a new learning curve kicks in which is signified by Stage C and D. Stage C is the most critical stage because this is the time when many changes are dropped. If Stage C takes too long (point X to point Y) the loss of productivity may cause the change to be dropped. This is what occurred with Florida Power and Light and has happened in many TPS, CM, or PR implementations. Unfortunately, when a change process is dropped during Stage C, what we see in Figure 2 occurs. Most United States companies prefer the rapid and radical change and don’t want Stage C to take more than a few months. With larger changes this short time span is impossible. Stage D is where we start to see a benefit from the change process. The final phase of the learning curve is now kicking in. Finally, Stage E is where we have once again achieved stability, hopefully at a higher level of output.

At Florida Power and Light (FP&L) the CEO had difficulty convincing his board that “the benefits of the change are just around the corner.” They had implemented a major organizational transformation program focused on TPS and continuous change. The program was called the Quality Improvement Program (QIP). The benefits from the improvements were so dramatic that FP&L was the first non-Japanese company to win the Deming Award, which is Japan’s most prestigious national quality award. However, the implementation of this improvement program had extensive front end costs and the result was, that after about three years of losses, the Board became impatient and untrusting of the CEO. The Board threw out the CEO along with his TPS based management style and all his continuous improvement ideas, and installed an authoritarian CEO that keeps everything secret. Suddenly, employees who were involved in the organization and it’s changes now had no idea from one day to the next what’s going on within the organization. Short term financial measures ruled the day at Florida Power and Light, as they do in many United States organizations.

How do we Sustain Change?

The question that we still need to focus on is; “How do we sustain change?” In this article we will share our experiences toward the key drivers to successfully sustain change. These are:

1) Action
2) Structure
3) Support

Action – Faith is attained in the doing. Fear from change causes resistance. Tradition has a strong hold on behavior. For example, most people who are inexperienced with Lean tend to look at it as the latest management fad and expect it to blow over in a couple years. However, these same individuals, having experienced a lean process improvement exercise, tend to become converted believers. They tend to be ruined for life in that they can no longer walk into a McDonalds without looking for process improvement opportunities.

Sustaining change requires people to be comfortable with the way change occurs. And that requires them to have experienced the types of changes we are talking about. If we are talking about a Lean change process, then they need to have been involved in a lean transformation and have seen the improvements that have been generated. The result is that fear is eliminated and they are now looking forward to the change rather than resisting it.

Structure – Sustaining change requires a structure that supports the change process. This usually takes the form of a training and certification program. It also requires a change management organization. For example, if we are focused on Lean, then we need a hierarchy of Lean change management experts. The group of experts usually takes the form of a lead Master Black Belt and is supported by as many Black Belts as are needed. This team of individuals would work with management to identify opportunities for change and then organize and execute the change process. The Lean experts would also administer classes and offer certification training.

Support – Top management support is critical. As we saw with the FP&L example top management can go even higher than the CEO. Also, in the military example we saw how a change in leadership can quickly squash a successful change culture. Without top level support, the change management process will die a quick death.

The end result of implementing these key sustainment drivers is ownership. Ownership is experienced by all levels of management and with all the employees. With a spread of ownership throughout the organization we quickly find the right hand and the left hand pushing each other toward improvements.

Summary
Why change? Because if we don’t manage change than change will manage us, and it will tend to move us in directions we would prefer not to go. And why sustain change? Because a change culture takes a lot of work and once you have it you don’t want to lose it. Maintaining the change management momentum is what makes successful companies great. With the key drives to successful and sustained change management that are outlined in this article organizations can find themselves at the top of their game.

Book References:

Plenert, Gerhard, The eManager: Value Chain Management in an eCommerce World, Blackhall Publishing, Dublin, Ireland, 2001.

Posted in Aerospace and Defense, Automotive, Banking & Capital Markets, Business Transformation, Case Study, Consumer Products, Culture Change, Healthcare, Industrial Manufacturing, Lean, Lean Manufacturing, Lean Six Sigma, Manufacturing, Manufacturing Strategy Consulting, Media and Entertainment, Oil Gas and Chemicals, Organizational Change Management, Pharmaceuticals and Medical Products and tagged , , .

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