New Digital Leadership or Lean Common Sense?

New digital leadership or lean common sense? Successful Change Management requires top-down support from leadership. But what does that look like and how do we build such a fertile organizational environment where technology, processes, organizational changes and humans are collaborating in harmony?

Alexander Demmer has spent more than 25 years in operational excellence and business improvement, strategy and implementation, and is one of the pioneers in the integration of lean management, IT practices & corporate culture.

More videos on this series

EPISODE 1 – Are We Disrupting Manufacturing or Reinventing the Wheel?

Do Lean Six Sigma companies better perform on their digital transformation journey? Are we disrupting manufacturing or reinventing the wheel? Alexander Demmer shares his thoughts on GBR Insights.

EPISODE 2 – The Human-Factor Company Type A (Digital) & Type B (Lean-Digital)

Technology alone does not guarantee success; if the people aren’t in support of the transformation. Here’s an example of this argument in a “Digital” vs “Lean-Digital” Enterprise.

EPISODE 3 – Change Management As a Key Success Factor of Digital Transformation

One common denominator of digital and lean is the consensus around the importance of change management. So what role does change management play as a key success factor?​

HANA: Welcome back to Part 4 of GBR Insights, where Alexander and I have been discussing topics around Digital Transformation and Lean.
Today we’re going to talk about how we believe that Successful Change Management requires top-down support from leadership. You know we, often see expressions like “Digital Leadership”, “Resilient Leaders”… “Agile Organization”; but are we talking of new principles and values here? Meanwhile, on the human side, the area of leadership is probably showing the most convincing arguments for the successful transformation of lean enterprises. Can you give us an example of this? 

ALEXANDER: Absolutely Hana. Let’s start with an anecdote. Two years ago, I had the opportunity to participate in a Digital Transformation survey as part of a larger company audit, together with a well-known, seasoned consultant, author of many articles and books around the integrated digitalization in the German speaking countries. We were interviewing 3 leaders of a manufacturing company: the general manager (CEO), the VP of R&D and the VP of manufacturing. The first statement after the introduction we got to hear from the Manufacturing VP was: “Alexander, Klaus you are preaching the seamless process integration along the digital value chain across all departments, however this is not practical in our organization as the R&D people don’t talk to us.” Meanwhile the CEO, general manager, was busy looking on his smart phone. The reaction of my seasoned colleague came very prompt and blunt: “Mr. GM (he addressed him just by his role not by his name) are you listening to your direct reports? They’re complaining about the lack of communication between R&D and Manufacturing…and you are playing on your phone? Why are you on the payroll of this company?”

HANA: Wow, that is very direct indeed! 

ALEXANDER: Yes, in fact, …unfortunately this is not an anecdote but the unfortunate reality in more than one company as we discovered during our audits and research work. (education, advisory)

One of the basics of Lean management is the “GEMBA” (Gemba Walk, Management by Walking Around (MBWA) principle. In the spirit of Gemba a manager’s task is to gain new insights and perspectives from the employees’ (or the clientele’s) point of view. A supervisor should gain an overview by asking specific questions and giving specific feedback guiding employees in such a way that they are able to recognize causes and correlations and better respond to challenges in an independent and sustainable manner. This is a relevant component of lean management aiming to support continuous improvement (kaizen).

HANA: In addition, there is a social component through the upgrading of each individual which in turn has a motivating effect on the staff…and it makes sense: as we have seen in the previous video (where we discuss about Change Management) employees are encouraged by the Gemba Walk to actively contribute to optimize processes -by making suggestions.

ALEXANDER: Correct, Lean leadership is based on a simple principle: develop and improve the problem-solving competence of your associates, of your team. Supervisors (Sensei, Mentors) are coaching their team members to practice improvements at the lowest organizational level.

This is exactly what happened in company B (Lean Digital) where the QM team, supported by their managers, have design and implemented a new service center. 

Many failed projects in the digital world are due to the fact that supervisors don’t trust their employees. Though meanwhile smart algorithms are delivering the right information to take the right decision on tidy and fancy dashboards more than one “old school” supervisor is refusing to transfer accountability to his shift operators. 

HANA: Considering this from this angle it’s not surprising that in organizations that fails to offer a clear perspective (in other words “What’s in it for them?”) you simply cannot empower people as long as managers refuse to share knowledge. (and are afraid to lose authority)

ALEXANDER: The huge advance of “Lean” leaders is that they understand how to delegate work, responsibility and empowerment in a healthy mix of challenging and encouraging their collaborators, however without overtaxing them. Acting this way, they can dedicate more time for strategic activities and at the same time their team members are progressing into more demanding jobs and promoting their professional career. 

HANA: As a result, this behavior automatically creates an atmosphere of trust, respect and self-motivation. On the other hand, it is of little use when so-called “resilient, charismatic leaders” preach the “agile organization” without delegating responsibility for work and associated decision-making authority to their employees.

ALEXANDER: That’s true. On top of this, we also have to consider or to be aware that, building such a fertile organizational environment where technology, processes, organizational changes and humans are collaborating in harmony takes years of persistence work, rather than months or weeks.

HANA: That’s some sobering analysis Alexander. Confirming the results of how Lean leadership influences the change management process and ultimately builds a culture of trust and mutual respect. I mean, trust and respect are crucial when it comes to the success of an organization.

Well, thank you once again for joining us today, thank you to everyone who watched our discussion, let us go now and put our knowledge into practice. Join us next time.

ALEXANDER: Thank you Hana, see you next time.

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