We’re heading into the big season for major lean conferences, the biggest being the annual Lean Accounting Smmiut in Savannah in October and the AME Conference in Jacksonville in November. It will probably cost three grand to send someone to the Summit; four to send someone to AME. As the events loom everyyear I seem to always be drawn into the same conversations. I urge senior folks to take a broad view in deciding who should be toddled off to the events; the senior folks push back on the cost and can’t see why anyone not directly involved should go … ‘Why should anyone other than the CFO and the Controller go to the Lean Accounting Summit?’ … ‘Why send anyone other than the lean coordinator and the operations folks to AME?’
The short answer is that we need to send just about everyone to these events and others because we have to quit breeding functional geniuses who are business idiots.
At its entry level lean revolves around value stream maps and kaizen events aimed at improving those core processes defined by the map. One has only to sit in such a session in which people from up and down the cross-functional activities linked by the map try to work things out. It is always patently obvious that few people, if any, have the vaguest clue as to what goes on outside of their silo and why.
At a higher level, when companies are ready to contemplate a formal structural reorganization, breaking up the functional silos and putting everyone into value streams, the most common limiter of what they can do is a dearth of people qualified to be value stream managers – nobody remotely qualified to lead a cross-functional team.
We hire people into entry level jobs, then as their superior talents, attitude and values become apparent we move them up the silo. The production foreman becomes the production manager, then the production director and ultimately the production VP. The CFO takes pride in the fact that she started out as a payroll clerk and worked her way up. The VP of sales and marketing tells tales of his early days as a road warrior, knocking on potential customers’ doors and living out of a suitcase.
The common thread is mastery of their functional skill and complete oblivion regarding what the rest of the business is doing while they are working their way to the top.
We have production and sales people in positions of leadership whose knowledge of the financial side of the business is limited to incredible skill at sandbagging budgets and gaming the overhead allocations to standard costs. We have senior folks in sales, accounting and HR who can’t find the CNC lathe in the factory, let alone tell you what it really does or how it works.
We spend a lot of time decrying dysfunctional company cultures characterized by crappy attitudes toward people – knee jerk layoffs, top down insulting management, management by policy manuals and so forth. Such abusive cultures exist to be sure, but the most prevalent cultural hindrance to lean is the adversarial relationship between the silos. Well intentioned folks to be sure, but an ongoing battle between sales and production over forecasting, costs and lead times; and between accounting and everybody over everything.
Each silo is tunnel visioned on its own strategy … production folks convinced that if everyone else would just line up behind their scheme for scheduling and batching – get the sales folks to compel the customers to buy in batches of 50 with three week lead times … sales folks convinced that if only production would carry more inventory … accounting people quite sure that no one is concerned about spending and costs but them … IT pushing its vision for electronification of everything that moves and much of what doesn’t … Everyone honestly believing their job is important and challenging while the other guys jobs are easy and less significant.
Our definition of a ‘good culture’ is often one in which the running inter-silo struggles are conducted in a friendly manner, while a ‘bad culture’ is one in which the functions are openly insulting to each other. The boss’s job is typically that of referee and ongoing arbitrator of the silo wars.
No functional strategy will work because they are all born of ignorance. They are born of functional wizardry and often absurd naivety when it comes to the rest of the business; and few folks if any who could explain from end to end how the company actually makes any money.
This is why a lot of folks have to attend these events. Sending the production and sales managers to the Lean Accounting Summit, or sending the Controller and HR lead to AME won’t solve the problem all by itself but you gotta start somewhere and education would be an excellent first step.