Transforming from the Top Down

Operational excellence begins — or ends — with effective leadership

Highly effective operations rely on every individual. Frontline associates are tasked with complete control of their work areas. They’re well-trained and responsible for product or service quality — and for improving how they perform their work.

That’s not the case at companies struggling to make and sustain improvements. We often see one of two problems, both of which occur above the frontline: leaders stuck in legacy command-and-control management cultures, or managers lost in endless searches for a magic method or technique that will solve everything — at least until they chase the next magic answer. Both groups share a common fault: they’re so operations- and machine-focused that they completely forget the human capabilities all around them.

Firms that are able to continuously improve their operations behave quite differently. At Toyota, for example, leaders achieve performance goals by coaching and developing staff to improve their work — and operational outcomes. In fact, managers are expected to train workers so well that managers can be replaced by their workers. Failure to do so means a manager can’t be promoted (because there’s no one ready to replace him or her).

Performance Solutions by Milliken and components of the Milliken Performance Systems (MPS) help to develop effective leaders and managers in companies — by teaching them how to model behaviors necessary for a successful transformation, including:

  • Respect for people: Leaders should value the work of everyone in the company — both for their technical skills and for their ideas on improvement. The foundation of MPS is safety, and a Performance Solutions client often begins a transformation by engaging frontline teams to assume ownership of workplace safety. This improves safety and develops mutual respect among frontline workers and managers. As this joint confidence grows, associate teams begin to own and improve other operations — 5S/workplace organization, quality, daily equipment maintenance, etc.
  • Strategic clarity: C-suites and plant break rooms are filled with dusty, unread, annual vision and planning documents. Yet true strategy deployment (hoshin kanri) requires development of a longer-term strategy (three to five years) that spurs organization-wide alignment. This longer-term hoshin is complemented by annual goals to support the transformation, with execution facilitated by regular employee, manager, and senior leader meetings up and down the company to identify and solve problems.
  • Continuous skills development (CSD): A standardized training process ensures that associates do the right things, the right way, every time. CSD also includes the roles of leaders, managers, and supervisors, establishing systems to enhance their development. Unfortunately, CSD is ignored at many companies: Just 56 percent of manufacturing plants have a formal employee training program, and only 44% have a leadership/supervisor development program.(1)
  • Kaikaku (radical change): Even the best organizations sometimes fall into complacency after initial targets are achieved. Market forces may inspire a new sense of urgency, but leaders must take responsibility for refocusing the organization on the next level of innovation. Kaikaku is a big objective that aligns and forces kaizen (rapid improvement events) to take place in an organization. At Toyota, Eiji Toyoda put forth the vision of Toyota’s leadership in environmentally-friendly vehicles, long before the company had any technical capabilities or capacity in the field. What followed were thousands of kaizen activities to get the first-generation Prius to market.(2)

These leadership strategies and behaviors are critical to operational excellence and continuous improvement, yet remain untaught at many business schools. Manufacturers have to learn these themselves — or with help from Performance Solutions by Milliken.

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[1] MPI Manufacturing Study, The MPI Group, March 2018.
[2] Jeffrey Liker, “Why Big Changes Require Many Small Changes: Kaizen and Kaikaku,” IndustryWeek, Nov. 14, 2013.

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