The first article of this series discussed how a number of Lean initiatives either fail outright or fail to deliver as planned. Furthermore, the first article went on to attribute these shortcomings to four cultural factors: an organization’s purpose, its leadership, how it treats its people and how the organization views continuous improvement. This article (divided into two parts) will explore the second of these cultural factors, Lean leadership. The first part is simply about leadership; the second will focus on the qualities that distinguish Lean leadership from leadership in general.

Now, back to the failures alluded to earlier. It is more than interesting to note that several of these failures were led by managers with very strong personalities. In addition, all of these managers were chosen because of their prior successes in leading projects, leading production facilities and in two cases, leading entire corporate divisions; and doing so with great business success. In fact, on the surface, it would appear that these culture-changing events failed in spite of this distinguished leadership track record. However, upon scrutiny, we found this not to be true. While each manager was actually quite good at managing, their prior jobs did not prepare them for an active leadership role. In addition, each manager failed to practice at least two of the skills that distinguish leadership from Lean leadership.

Leadership vs. Management

In John Kotter’s book, A Force for Change (Free Press 1990), he describes rather nicely the distinction between management and leadership. He states that both management and leadership, using different techniques, need to:

1. Create an agenda,
2. Develop a human network to accomplish the agenda and
3. Properly execute and complete of the agenda.

But the desired outcome of management is dramatically different from the desired outcome of leadership. Management’s objective is to produce and perpetuate a system that will create predictable and orderly outcomes on issues that are important to the business. Such outcomes include: on-time delivery and good quality, as well as being on budget. Predictability is the key. On the other hand, the role of leadership is to produce change, often large, dramatic change. Good leadership takes the firm into and through many unknown areas that are necessary for the business to survive and prosper.

Because the functions of management and leadership are dramatically different, it is not surprising that the skill set necessary to be successful is also different. The skills are summarized them in the table below.

Comparison of Management and Leadership

In the typical management job, be it CEO, regional director, facility manager, production manager or line leader on the floor, there are aspects of both management skills and leadership skills that are required to execute the job well. Depending upon the nature of the job and the nature of the work, the split between the need for leadership skills versus the need for management skills will vary greatly. However, generally speaking, as you ascend the corporate hierarchy, leadership becomes a larger factor as you strive to make your company a more powerful money-making machine and a more secure work environment. And quite frankly, since most people do not make such a clear distinction between leadership and management, it is easy to lose track of which skill set is important for any given job. Because of these factors, it is common to promote or rotate a person with excellent management skills into a new management job and have them fail.

Excellent management, by its nature, is somewhat conservative, methodically incremental and short-term oriented. As a result, the very best management often cannot produce major change. Only with leadership does one get the boldness, the courage, the vision and the energy needed to create the large and difficult changes – and cultural change certainly tends to be large and difficult.

Avoiding Failure Modes

It is no secret that U.S. manufacturing presence continues to shrink. Many firms are rushing off to the panacea known as China. Ultimately, businesses must supply the needs of their customers and supply good product, on time, for a fair price – this work is the province of management. Yet, at the same time, businesses also must recognize the changes in both their external and internal environments and then they must change accordingly. Effecting this change is the province of leadership.

In my analysis of the 17 firms alluded to earlier, I found that those firms that under-performed or failed had one trait in common: they were all over-managed but under-led. For example, they had on-time performance, good quality and a clear understanding of what was happening with the finances. The management was viewed as being very solid. Solid, but – unbeknownst to them – surprisingly blind to changes in both the external and internal environments of the firm. What they could not do was change with any ease or with any speed. They lacked the leadership necessary to pass through the minefields of change.

For example, these firms could not get new products or product changes to market quickly. Their manufacturing launches were understaffed, poorly planned and chaotic, normally late and extremely expensive. Not surprisingly, customers were routinely upset and frequently these firms were on quality containment at day one. They had extremely long lead times for even simple engineering changes. When they had quality problems, they were not able to quickly diagnose the problem, not able to quickly correct the situation and not able to firmly change their production systems to sustain the gains. In addition, they all complained about how their customers expected too much of them. The managers at these firms routinely viewed the customer as an adversary, not an ally; their customer focus was extremely antagonistic, not at all synergistic.

In addition to the leadership deficiencies mentioned above, the businesses typically had the following undesirable traits, normally ascribed to management. These traits include:

• Being very bureaucratic. The simplest of tasks often required several forms filled out and multiple levels of review and multiple approvals. Controls abounded and even though it appeared that there were many folks responsible to get things done, no one was really responsible. When things didn’t get done, excuses were readily found and all too often these excuses were seriously listened to.
• Obvious inconsistencies in where management spent their time. At times, management would spend excruciatingly large amounts of time on seemingly trivial details, yet other times gloss over major issues. Their subordinates were frequently confused as to what was really important.
• Turning any problem or symptom into a goal so it could be managed. Hence, they then had dozens of goals to manage (their strength) and at the expenses of managing these goals the focus would get lost.
• Not being “system oriented.” When problems would arise, all too often the problem was viewed to be in the people, rather than in the system or process.
• Failure to analyze failures. Victories were celebrated but failures were simply not talked about – likely because too many previous messengers of bad news had already been beheaded. Consequently, scarce little was learned from these failures and they were frequently repeated.
• Being very insular. Leaders at these firms would seldom look outside their company for new ideas. Quite frankly, new ideas often were viewed as “just a little screwball” or met with the catchall “that just won’t work here.” Or, the procrastinator I really like to hear, “We’ll put that into the budget hopper and review it then.”

So do we replace management with leadership? No. Although many firms are much weaker in leadership skills than in management skills, good management is a key factor in business success. Likewise, as internal and external environments change, businesses need a good dose of leadership as well. Clearly, both skill sets are needed. In addition, businesses need to recognize the over-managed but under-led phenomenon and begin to dismantle it. To do that, firms must celebrate their management prowess, augment their critical leadership skills and grow into a healthier balance.