HR’s Role in the Lean

Organizational Journey

rganizations ranging from hospitals to manufacturing struggle

Monica W. Tracey, Ph.D.

Oakland University
O to find sustainable continuous improvement methods. The
complexities and interrelationships of such organizations require
that continuous improvement efforts be broad and self-reinforcing. This
need has generated dozens of initiatives from business and academia
including the implementation of balanced scorecards, re-engineering,
360-degree performance reviews and Total Quality Management, to name
a few. Most may provide partial solutions to the organizational need for
continuous improvement. With trade barriers, information barriers and
Jamie Flinchbaugh
Lean Learning Center cost-of-business barriers dropping, competitiveness is increasing.
Organizations need good products, good brands, good strategies, good
partnerships, good people and good financial resources to succeed. In
addition, however, an organization cannot succeed perpetually without
continuous improvement—a fact across the board, from manufacturing
plants to banks to hospitals to nonprofits. How should an organization
embark on this all-important task? One solution is to transform an
organization using “lean.”
Lean is not a new concept. According to James Womack and Daniel Jones,
(1991) authors of Lean Solutions, Lean Thinking and The Machine That
Changed the World, the concepts of lean started more than 90 years ago.

WorldatWork Journal fourth quarter 2006 49

Organizations implementing lean experienced a 63-
percent reduction in customer lead-time, a 61-percent From this study,
increase in market share, a 24-percent increase in
product diversity and a 39-percent time reduction to surveying more than 220
launch new products (Standard and Davis 1999).
But what leadership and organizational conditions managers and employees,
must exist to institute a lean transformation? Can the
human infrastructure and HR department contribute five significant predictors
to this success, and if so, how? These questions led
to the authors’ study, focusing on organizations that of successful lean
have implemented lean and the leadership and
organizational conditions that either assisted or implementation were
impeded this lean transformation. The study’s goal
was to recognize and document a standard process identified.
of leadership and organizational conditions ultimately
supporting organizations in their attempts in a Machine that Changed the World, Womack and Jones
lean transformation. (1991) defined lean as a way to do more with less—
From this study, surveying more than 220 managers less human effort, less equipment, less time and less
and employees, five significant predictors of successful space—while coming closer to providing customers
lean implementation were identified: with exactly what they want. Since that time, a wide
1. The development of teams as a supporting range of books has become available, and many
structure of lean industries beyond manufacturing have joined the lean
2. The calculation and communication of metrics journey (Liker 2003, Dennis 2002, Flinchbaugh and
3. Communication among organization members, Carlino 2006).
particularly across organizational barriers Today, although many definitions exist, all definitions
4. Managers explaining to the employees their role agree that lean stresses the elimination of waste,
in lean implementation known as any resources beyond the absolute minimum
5. The acknowledgement and celebration of required to add value to a product or a service (Ohno
successes toward lean implementation. 1988, Suzaki and Womack 1991, Womack 1996,
In addition, the authors discovered conditions to assist Standard and Davis 1999).
HR to support the organizational journey toward lean. Lean, however, goes beyond just waste elimination.
It aligns how an organization thinks and works
Lean 101 (Flinchbaugh and Carlino 2006). In its simplest form,
In 1987, a research team from MIT’s International the concept of lean production includes principles such
Motor Vehicle Program studying the Toyota Production as communication, teamwork, efficient use of resources,
System coined the term “lean” to describe the system elimination of waste and continuous improvement
as one that “needs less of everything to design and (Womack, Jones and Roos 1991). Womack (2002)
produce products economically at lower volume with maintains that institutionalizing lean principles requires
fewer errors” (Womack 2002). Later, in their book The a transformation in corporate culture, practices,

50 WorldatWork Journal fourth quarter 2006

processes and management. Many other corporate
internal functions have been adopting lean principles While lean is most often
beyond the core of manufacturing, including product
development and supply chain management and, more communicated as a set
recently, accounting. But in many companies, HR
remains untouched and unchanged by their company’s of tools, it is most
commitment to lean. And for those who have engaged
HR, it often does not contribute as deeply as its potential effectively practiced as a
(Tracey and Flinchbaugh 2006). HR is strategically placed
to lead in these areas. comprehensive operating
Lean at Work system including
Lean manufacturing has gained significant exposure
and commitment in the past 20 years. Jusko (1999) principles or culture,
reports that in one study, nearly 55 percent of corporate
executives identified lean manufacturing as “extremely systems and processes,
critical” to their ability to achieve world-class status,
and 40 percent identified it as “somewhat critical” tools and skills, and even
(Jusko 1999). Supporters of lean operating systems
maintain that the implementation of lean evaluation and metrics.
is more efficient based upon the commitment of people
to continuously improve productivity and quality is deployed, rather than its applicability, given the
(Carroll 2001). While lean is most often communicated breadth and depth of success stories. What is a
as a set of tools, it is most effectively practiced as “must-have” and what is solely positive or supporting?
a comprehensive operating system including principles Because every organization is different, no universal
or culture, systems and processes, tools and skills, and road map for lean success can exist (Flinchbaugh and
even evaluation and metrics (Flinchbaugh and Carlino Carlino 2006). In addition it appears that the role HR
2006). Corporations practicing lean report improvements has taken in lean transformation is far from active
in safety, quality, delivery, cost and even morale. This (Tracey and Flinchbaugh 2006). It is in the pursuit
in turn often leads to overall improvement in financial of leadership and organizational conditions, and HR’s
performance. The authors’ observations, however, role in lean transformations, that guided this research.
indicate that while most companies are achieving HR departments and professionals alike can be left
performance gains, few would consider their lean efforts behind or help lead the organization to success with
extremely successful (Flinchbaugh and Carlino 2006). a road map for lean success.
But why do some organizations achieve greater results
than others? Given the extensive materials on technical Walking Through the Study
details of lean, the problem may not be a lack of As previously stated, this study’s goal was to recognize
knowledge and understanding of lean (The Lean Library and begin the documentation of a standard process and
2006). The problem is more likely related to how lean the enabling leadership and organizational conditions

WorldatWork Journal fourth quarter 2006 51

that ultimately support corporations in their attempts Each survey asked similar general questions, but
at a lean transformation. The study began with an different role-specific questions related to the
extensive review of existing research on lean, with implementation of lean. From 72 different sites
particular attention paid to the writings on culture, or organizations, 154 workers completed the
leadership and corporate environmental factors that employee survey, and 72 managers completed
support lean initiatives. the management survey.
Variables and factors relating to instituting a lean
transformation were identified and sorted into six areas: Employees and Managers Respond
0 Demographics (age, sex, ethnicity, etc.) Employee survey responses were categorized. The
0 Work environment categorization was based on how responses related to
0 Innovation, tools and technology lean implementation. The strongest predictors, in order
0 Lean implementation of significance for employees, were:
0 Communication 0 Teams were or will be developed to implement lean.
0 Rewards/benefits of lean implementation. 0 Success related to the implementation of lean has been
Two separate surveys were designed. One addressed or will be celebrated by the organization.
employees working under direct supervision; the other 0 Departments within the employees’ organization stay
addressed supervisors and managers charged with in constant communication about the implementation
ensuring lean practices within their department(s). and outcomes of lean.
0 Metrics are calculated to determine lean

The development implementation success.

0 Throughout the implementation of lean, managers

of teams to implement talked to the employee about the employee’s role

in implementing lean.

lean, using metrics to These results suggest that the development of teams to
implement lean, using metrics to measure success, the

measure success and celebration of that success, as well as communication

between departments and to employees regarding their

the celebration of that roles, significantly accounted for employees’ perception

of a successful lean implementation.

success significantly... The significant predictors of successful lean

implementation for managers were:

accounted for 0 Success related to the implementation of lean has

been or will be celebrated by the organization.

employees’ perception 0 Metrics are shared with employees.

These results suggest that the communication of the

of a successful lean measurement to employees and success of lean

implementation significantly accounted for managers’

implementation. perception of a successful lean implementation.

(See Figure 1 and Figure 2 on page 53.)

52 WorldatWork Journal fourth quarter 2006

FIGURE 1 Employee’s Perception of Successful Lean Implementation

.35

.30

.25
Co-efficient

.20

.15

.10

.05

0
Teams Developed Celebration of Metrics Calculated Departments in Manager
Success Constant Discussed Role
Communication
Independent Variable

The Bottom Line Teams in a lean environment need the following.

The research demonstrated that success with lean First, they need a common language, common principles
depends upon how HR changes and adapts its and common tools. Second, they need a common
approaches along with the rest of the organization. drive provided by vision, metrics and goals. Third, they
HR can play a guiding role in lean or be an excuse need to design the work around them visually so that
factor for those pushing the change along. Five key there is high agreement about what work must be done
predictors can support an organization’s attempt to and how it should be done. Problems need to be
improve business through lean. They are: exposed immediately so that they may be resolved.
1. Development of teams as a supporting structure
2. Calculation and communication of metrics
3. Communication across boundaries
FIGURE 2 Manager’s Perception of
4. Communication to employees regarding their role Successful Lean Implementation

5. Acknowledgement and celebrations of successes.

.44

Development of Teams as a Supporting Structure .43

Teams are an important element of a lean organization. .42

Co-efficient

The research supports that the development of effective .41

teams extends deep inside and outside of lean .40
transformations. Within lean, teams are important
.39
because the whole process must work together to
.38
build value for the customer, and if teams cannot
.37
work together then the process cannot work for the Celebration of Metric Shared with
Success Employees
customer. How teams work is more important than
Independent Variable
their mere existence.

WorldatWork Journal fourth quarter 2006 53

 No surprise so far, but fourth, and perhaps most metrics must be as predictive as possible, with only a
important, teams need the capability and the skills small fraction of the metrics looking backward. Because
to manage themselves. these metrics should support daily decision-making,
In a lean environment, teams need a great deal predictive metrics offer much more useful decision
of autonomy to manage and improve their process, support than those that are rearward facing. Third,
but this is not done in a vacuum. Teams are still part management must support the metrics, deciding who
of the larger organization around them. Providing will review the metrics, when they will do so, what they
more autonomy than necessary or prudent can be will look for, and how will they respond to the metrics
a big mistake, for with this new authority comes new with action. Fourth, and perhaps most importantly,
responsibility—the responsibility to function as the metrics must point in a steady and consistent
a productive team together, and with other teams. direction toward the ideal state.
Focusing on the expected behaviors of working with It is important to understand that any time metrics
a team can be an effective target of incentives. It has connects to pay, behavior is influenced. Most often,
been suggested that “a most significant development the outcome is negative, although this does not make
in commitment theory has been the recognition that the practice a negative one. Metrics tied to pay are often
commitment can be directed to targets other than an outcome metrics, whereas metrics for daily decision-
organization” (Giancola 2006), where in this case, the making are often predictive measures, not outcome-based.
team function is the target. With this in mind, the predictive measures used for
The way an organization pays employees can be empowered decision-making must be linked to those
the first dagger in the cooperation expected in a lean used for incentives. This is a metric design issue and an
environment. Regardless of the magnitude of the education of teams issue.
incentives, if they focus on individual behavior or
performance, the resulting behaviors will not support Communication Across Boundaries
a unified team approach. As a simple manufacturing Organizations that are successful in lean also
example, if an operator is measured on how many units successfully improve their communications, particularly
it produces or keeping a machine utilized, it will across boundaries such as departments and functions.
overproduce to its customers’ needs, resulting in In a lean environment, process focus takes priority over
waste. Pay must be aligned to the expected team-based functional focus. Successful lean processes have material
behaviors of lean. or information flowing across functional boundaries, so
naturally organizations that are successful in lean will
Calculation and Communication of Metrics also improve communications across functional
Metrics “keep score” and determine if progress is boundaries in the manner most efficient
being made. In a lean environment, several criteria and effective for the customer.
should be considered when developing metric systems The research found that communication in a lean
or scoreboards. First, a scoreboard and its relevant environment must be vertical, horizontal and
metrics must be “owned” by those who own the two-way. It is not enough for a lean leader to be
process, whether it’s a cell team on the floor, or an excellent communicating the vision and direction
office team such as customer service. Therefore, metrics to the masses of the organization. The lean leader
must be easy to update by these process owners. Second, also must convey information about the changes

54 WorldatWork Journal fourth quarter 2006

 and a lack of alignment. The second issue is in regard
Mistrust and to differences of incentives across the organizational
boundaries and how it affects ambiguity. Mistrust and
misunderstanding misunderstanding of the incentives and motivations
of groups who require cross-boundary collaboration
of the incentives and run rampant in many organizations. When a lean
transformation begins to take root, cross-boundary
motivations of groups collaboration and communication are an absolute
must. The authors’ experience has indicated that
who require cross- when groups cannot align on the best way to
collaborate regarding systemwide waste elimination,
boundary collaboration the incentives that drive misaligned directions often

run rampant in many is the first culprit.

organizations. Communication to Employees Regarding Their Role

Part of management’s communication for lean
going on at the top. Lean changes the work and implementation includes clarity of each employee’s
the way people think, so employees need to see roles and responsibilities. This communication,
that the organization’s top-ranking individuals are however, is a two-person process. Lack of employee
changing the way they think before the remainder commitment was one of the top barriers to
of the employees will do the same. implementing continuous improvement. This
Bottom-up communication is equally important. study traced the roots of employees’ negative
It provides valuable, timely information about changes attitudes to the management team inconsistently
that are going on, and about new barriers that arise communicating with them. In addition, it was
as progress is made. Horizontal communication must discovered that employees needed to be trained
occur directly from the source of the information to in communication and discussion techniques;
the need. The ability to communicate, and for that otherwise they do not understand how to ask
communication to be received and used, is important questions and how to elicit feedback.
to assure process experimentation where the work is When many organizations begin their lean journeys,
done. Increased experimentation can result either in they train everyone in lean. The organization then gives
increased chaos or in organizationwide improvement. everyone the same role: Go out and apply lean. However,
The key variable differentiating between these two as with any other aspect of an organization, success
states is how well an organization communicates depends upon role clarity. Roles must change as an
directly from person to person. organization goes toward lean maturity, so the rate
When it comes to the link between communication at which an organization reaches maturity partly
and pay structures, two important variables must be depends on lean role clarity and integration through-
considered. The first is clarity in communication about out the journey. Maintaining role clarity as these
the impact and expectations regarding incentives and roles dramatically change appears to be an important
pay. Ambiguity in this matter quickly leads to confusion criterion of success.

WorldatWork Journal fourth quarter 2006 55

 what is required of them. The reason for the incentive
If objectives remain clear, is improved results, and the incentive plan serves as
a communications vehicle to accomplish this.”
employees feel a sense Incentives require communication and act as a means
for communication simultaneously.
of accomplishment
Acknowledgement and Celebrations of Successes
and, if appropriate, the Most corporate initiatives have a distinct beginning

accompanying reward. and a clear, objective outcome, but lean is a never-

ending journey. If objectives remain clear, employees
However, because lean feel a sense of accomplishment and, if appropriate,
the accompanying reward. However, because lean is
is an endless journey, an endless journey, employees are unsure when to
celebrate accomplishment. Simultaneously celebrating
employees are unsure and raising awareness of the remaining performance
gap is a tough balancing act. However, this research
when to celebrate demonstrated that organizations finding ways to
celebrate success along the journey are more successful
accomplishment. at lean. They clearly define milestones, communicate
When pay is linked to lean efforts, organizations progress toward the milestones and celebrate successes
often start with a direct expectation of participation along the journey.
in lean activities. The quality of participation is not So how does an organization acknowledge success
considered important, and this drives behaviors toward on a neverending journey? First, the organization must
phony involvement. This must evolve, however, as roles learn to recognize and communicate progress. Then it
evolve. Quality of involvement, behavior change and must decide how to reward such progress, if at all. Do
direct performance improvements must be taken into not overemphasize financial incentives, although those
account with role expectations and incentives. However, that exist must be aligned to lean efforts.
it is important not to overemphasize the size of Recognizing success in lean first requires that it be
contribution, which can lead to frustration, as some understood as a journey. Without implying that
individuals are in a position for a greater contribution ultimate lean has been achieved, leadership must
than others. But at any phase, consistent and clear balance recognition of the success achieved with
communication of expectations is vital. Zingheim maintaining the tension for future progress. If
and Schuster (2005) state: “Championing must be tension is sustained without recognizing progress,
continuous, not just at the start of the incentive plan. organizationwide burnout will follow. Managers should
Incentives are the responsibility of the managers understand that what they choose to recognize as
from top to bottom—helping to set goals, coaching success, and how they choose to recognize it, can either
employees on how to reach the goals, problem solving reinforce human progress or retard it.
with employees, removing barriers to performance, Rewarding progress is a more complicated challenge.
communicating, and helping ensure everyone knows All solutions to the reward problem have downsides.

56 WorldatWork Journal fourth quarter 2006

Some can be catastrophic. If people are rewarded in approach are its broad reach and representation, and
proportion to the size of the ideas they contribute, big its downside is the lack of clear decision-making and
ideas abound, and the development of people not in ownership. Engagement with such a committee is not
the position to make big contributions is minimized. difficult, as its membership is often self-selected and
Another big problem is rewards quickly become working framework rather loose. The authors predict
entitlements, losing the intended effect. Some successful that HR will rarely be rejected if a representative simply
organizations give no significant direct compensation starts showing up (as the group needs “all the help
for ideas contributed or for participation in lean. it can get”). The immediate chance to add value
Unfortunately, the authors know of no thorough is to use HR skills, including recruitment and selection,
empirical data supporting a common-sense lean performance assessment, team building, communication
practice that the most-effective encouragement is to processes and training, to assist the group structure
support the people contributing ideas day-in and day- itself, grow beyond its initial boundaries and ultimately
out by listening to those ideas and acting upon them. succeed at a greater rate. However, the authors have
However, no matter how deep or sophisticated pay found that the committee will rarely be willing to “take
structure aligns to lean expectations, culture changes a break” to restructure, and HR’s presence and input
and performance gains, financial incentives cannot must connect with the group seamlessly.
replace employee engagement and support. Another popular method of leading a lean initiative
is through a formal lean office, often called a Lean
Next Steps for the HR Professional Promotion Office, although promotion is hardly the
For HR executives, managers, professionals or limits of its focus. In a manufacturing environment,
consultants, an organization’s move to and through these groups are often filled with people who
the lean process presents many challenges. How does understand lean, whether they came from the
this professional engage? What levers should HR pull? management ranks, from process engineering or from
As a first step, the HR professional should know the shop floor. In any case (whether in manufacturing
how the decision-making process for a lean initiative or not), they were not selected, in most cases, because
is typically established. There are several options that of change-management skills. They also likely want to
most companies fall into either because of suitability see lean happen in such a way they feel the frustration
or popularity. The first, most often recommended in of “pushing the rope.” Here, HR can provide assistance
books and case studies is the lean steering committee. by providing input on shaping and getting the message
This is particularly popular when a factory is launching out, on team organization and leadership and on using
a lean initiative independently, or when employee existing systems to provide incentives and motivation.
engagement is a predetermined specific outcome desired Committee members are not likely waiting for HR to
by the objective within the organization. These steering volunteer, because they do not understand how they
committees often begin as a coalition of several change can use the skills of HR. So an HR representative must
agents across the organization that are committed make the case.
to lean and have banded together to make the lean Lastly, there is the direct leadership model. This
process a reality. The committee often has a diverse usually involves one person, either the line manager,
representation vertically but is narrowly focused on the CEO or the plant manager. If this person is leading
operations horizontally. The benefits of the committee lean, he or she likely has a clear vision of what lean

WorldatWork Journal fourth quarter 2006 57

means to him or her. That vision is based on how the Resources Plus
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Helping the person assemble a plan to translate Authors
the vision down to tangible actions, helping people Monica W. Tracey, Ph.D., earned a doctorate in instructional technology and is an
assistant professor in the Human Resource Development Department at Oakland
understand what the vision is and how they should University in Rochester, Mich. She is a founding member and the current executive
be fulfilling it, provides immediate value. director of the Pawley Institute, an institute with a mission to research and teach
lean concepts. Tracey has published numerous studies on instructional design,
Once HR has a place in the decision-making performance improvement and lean principles and practices. She can be reached
at tracey@oakland.edu.
process, many of the issues discussed in this paper can
Jamie Flinchbaugh is the co-founder and partner of the Lean Learning Center in
get increasingly serious attention. To secure that seat in Novi, Mich., a premier lean education and consulting firm. He is also the co-author
of The Hitchhiker’s Guide to Lean: Lessons from the Road. Flinchbaugh has 15
the process, first, understand how lean is being led. years’ experience in lean transformation inside and outside corporations, and has
held a wide range of leadership roles. He can be reached at
Then find a way to add immediate value to those Jamie@leanlearningcenter.com.
making lean happen.
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58 WorldatWork Journal fourth quarter 2006