Any good lean initiative has a friend in high places.
By now we all know that struggling to sustain a lean culture is a perennial pain point in manufacturing circles, and that those efforts that do succeed almost invariably have someone in management to thank for that success, at least in part.
It’s an odd dynamic, if you really think about it. In practice, lean has all the hallmarks of guerrilla warfare, including a distributed power structure that enfranchises the “lowliest” of workers to contribute their suggestions to improving processes and spotting and stopping inefficiencies during production activities. It is not a top-down bureaucracy, reliant on endless meetings and PowerPoint decks to function. It’s power to the people, but with one catch — it needs a bigwig to keep it going. Not the many people pulling the levers of change at the operational level, but the one who believes deeply in lean and trumpets its value to his or her fellow executives.
Management is important to lean. As such, a new survey out of Australia should provoke more than a passing interest in lean-minded companies. The “Management Matters in Australia” study benchmarks the management performance of the country’s manufacturers against that of their international counterparts, based on an earlier study of 15 other countries by the London School of Economics, Stanford University, and McKinsey & Co. The research team responsible for the Australian study hailed from the University of Technology Sydney, Macquarie Graduate School of Management, and the Society of Knowledge Economics
The survey rates management based on what its authors call three core components: operations, performance and targets, and people.
Findings ranged from the mundane — There is a strong positive relationship between good management practices and [company] productivity — to the profound — There is a highly significant positive relationship between the management score and the overall degree of plant manager autonomy.
The latter is an example of the C-suite–factory harmony that often exists in lean success stories. Management backs the continuous improvement effort even as it backs off from day-to-day activities, letting operational workers identify and execute areas of improvement.
And despite the belief that the larger the company, the greater the inhibiting bureaucracy, the authors found that large companies boasted better management scores than their smaller counterparts, with multinationals second to none. The worst management structure can be found in government-owned firms (no surprise) and family-owned businesses, which did surprise me a bit. We’ve recognized a number of family-owned businesses each year in our Progressive Manufacturing Awards, for instance.
According to the study, the low management scores among family-owned shops may owe to their lack of hierarchy, since the researchers found that “organizational hierarchy is also positively correlated to the management scores, a finding possibly indicating limitations in flatter structures.”
As for remedies for manufacturers with low management scores, they may want to consider investing in management practices, which the authors said “is usually a much more cost-effective way for firms to boost productivity, relative to hiring additional employees or direct investment in fixed capital.”
With respect to lean efforts, the best advice for management may be: empower and sustain.
If you’d like to receive the Lean Matters newsletter, sign up here.
Empower and Sustain: Good Management for Lean Manufacturing
Any good lean initiative has a friend in high places.
By now we all know that struggling to sustain a lean culture is a perennial pain point in manufacturing circles, and that those efforts that do succeed almost invariably have someone in management to thank for that success, at least in part.
It’s an odd dynamic, if you really think about it. In practice, lean has all the hallmarks of guerrilla warfare, including a distributed power structure that enfranchises the “lowliest” of workers to contribute their suggestions to improving processes and spotting and stopping inefficiencies during production activities. It is not a top-down bureaucracy, reliant on endless meetings and PowerPoint decks to function. It’s power to the people, but with one catch — it needs a bigwig to keep it going. Not the many people pulling the levers of change at the operational level, but the one who believes deeply in lean and trumpets its value to his or her fellow executives.
Management is important to lean. As such, a new survey out of Australia should provoke more than a passing interest in lean-minded companies. The “Management Matters in Australia” study benchmarks the management performance of the country’s manufacturers against that of their international counterparts, based on an earlier study of 15 other countries by the London School of Economics, Stanford University, and McKinsey & Co. The research team responsible for the Australian study hailed from the University of Technology Sydney, Macquarie Graduate School of Management, and the Society of Knowledge Economics
The survey rates management based on what its authors call three core components: operations, performance and targets, and people.
Findings ranged from the mundane — There is a strong positive relationship between good management practices and [company] productivity — to the profound — There is a highly significant positive relationship between the management score and the overall degree of plant manager autonomy.
The latter is an example of the C-suite–factory harmony that often exists in lean success stories. Management backs the continuous improvement effort even as it backs off from day-to-day activities, letting operational workers identify and execute areas of improvement.
And despite the belief that the larger the company, the greater the inhibiting bureaucracy, the authors found that large companies boasted better management scores than their smaller counterparts, with multinationals second to none. The worst management structure can be found in government-owned firms (no surprise) and family-owned businesses, which did surprise me a bit. We’ve recognized a number of family-owned businesses each year in our Progressive Manufacturing Awards, for instance.
According to the study, the low management scores among family-owned shops may owe to their lack of hierarchy, since the researchers found that “organizational hierarchy is also positively correlated to the management scores, a finding possibly indicating limitations in flatter structures.”
As for remedies for manufacturers with low management scores, they may want to consider investing in management practices, which the authors said “is usually a much more cost-effective way for firms to boost productivity, relative to hiring additional employees or direct investment in fixed capital.”
With respect to lean efforts, the best advice for management may be: empower and sustain.
If you’d like to receive the Lean Matters newsletter, sign up here.