Gaining Executive Buy-In for Lean

By Bob Emiliani

This article is from the Superfactory Archives, an archive of content from the Superfactory website that existed from 1997 to 2012.

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Gaining executive buy-in for process improvement activities has been a major challenge for over 100 years. Taking a trip back in time to see how an experienced improvement engineer handled this problem can provide useful insights for today’s challenges.

In 1914, Charles E. Knoeppel wrote a series of articles in The Engineer Magazine that focused on the actual practice of putting efficiency methods into place in a typical manufacturing business. The series of articles was very popular, and three years later they were expanded and published as a book titled Installing Efficiency Methods [1]. The book set out to answer two questions (p. i):

• “What is the first thing an efficiency engineer does when he comes into a plant on the first morning of his engagement – and what is the next thing, and the next, and the next?

• How does he find out where to begin the work of betterment, and what does he do when he has found it?”

Knoeppel explains how to do this step-by-step in each of the 29 chapters of the book. He was able to write this book because he had years of experience as a shop laborer and drafter, and later as a self-taught management consultant specializing in efficiency engineering. He was part of the community of practice-oriented process improvement engineers led by Frederick Winslow Taylor, who wrote the book Principles of Scientific Management [2].

Knoeppel’s interest was to help labor and management work together to improve the efficiency of both shop and office work. He felt that management practitioners needed additional resources to better understand and apply efficiency methods. Part of the motivation for writing such a book was no doubt related to the great difficulty people like Knoeppel had experienced in gaining top management buy-in. In 1912, Frederick Taylor said in testimony to Congress [3]:

• “…nine-tenths of our trouble has been to ‘bring’ those on the management’s side to do their fair share of the work and only one-tenth of our trouble has come on the workman’s side.”

Thus, a countermeasure for overcoming management resistance was to write a detailed “how-to” book. Knoeppel begins the Preface of the book by reflecting upon when he first became a consultant (p. iii):

• “It seemed strange to me that almost invariably a manufacturer had to be coaxed into accepting better methods.”

Strange indeed. He went on to say:

• “Instead of deciding a case on its merits, instead of doing a thing because it was good business to do it, the campaign was one of doing what was expedient, often unnecessary, and many times wrong. It was necessary to worship the god ‘diplomacy,’ and if a man possessed tact, ability became a secondary consideration. What was done was with the consent of the organization. Opposition, sometimes passive, sometimes active, was often encountered. Heart failure would have resulted if a manager had said: ‘Here is the factory; you have been found competent to introduce efficient methods; go ahead’.”

One can understand Knoeppel’s consternation regarding the placement of qualifications and ability as secondary. Managers often talk a good line about hiring based on merit, but experience suggests that other, less meaningful decision-making criteria are actually more prominent. Knoeppel continues:

• “The word ‘efficiency’ has been juggled until it has lost its real meaning simply because it stands for anything that a person wants it to mean. Because of the mystery with which the methods have been enveloped it is viewed with suspicion and distrust. Failures have been many. In some cases the engineers have been responsible, but case after case could be cited that would convict the client of ‘contributory negligence’.”

It seems that not much has changed in nearly 100 years. Today, there is much confusion over the meaning of Lean, and Lean is widely viewed with suspicion and distrust.

• “The profession [efficiency engineering consulting] has not been altogether professional… Men with a copy of Emerson’s Twelve Principles of Efficiency and Taylor’s Shop Management , plus a prayer, have been able to convince unsuspecting clients that they knew exactly what these clients wanted and were prepared to give it to them.”

Knoeppel bemoans the lack of professionalism, knowledge, and capability among efficiency consultants. He goes on to say:

• “Why this condition? My whole experience has taught me that one thing stands out above all else as the real reason: Lack of a thorough understanding of the proposition both as regards to the work itself and the methods followed by the men identified with the[scientific management]movement. ”

So the challenge was to inform executives of the process for installing efficiency methods and the type of person who was competent to do this work.

• “It therefore seemed to me that what the industrial world needed most was a work of such a practical nature as not only to induce managers to investigate it and try it out in small ways in their own business, but to serve in an indirect way to furnish the measure of the men competent to handle the details. Knowing more about the the proposition themselves, they [managers] would be in a better position to gauge the ability and success of the [efficiency] engineer.”

Thus, Knoeppel’s primary audience for the book is company executives, whereas the articles he had written previously in The Engineer Magazine were intended for working-level engineers. The idea of writing a detailed “how-to” book for executives is as appealing today as it was in 1917. In the context of Lean management, there are many new authors, myself included [4,5] whose target audience is senior managers. While it remains worthwhile to write such books, experience reveals that it is not sufficient for overcoming resistance to Lean management among top managers, in part because most senior managers do not read books.

Knoeppel concludes the Preface by saying:

• “… it is hoped that in some measure this book will open the eyes of executives to the value of the work – so necessary to our industrial progress.”

There is probably no doubt that Knoeppel’s book favorably impacted some top managers and the companies they owned or worked for. And one can easily say that industrial progress has been made along many dimensions since 1917. However, it can also be said that progress along the dimension of fundamental process improvement – the elimination of waste, unevenness, and unreasonableness – has been isolated at best, and understood broadly by manufacturing managers only in times of national emergency such as World War I [6] and World War II [7].

More importantly, what knowledge of processes improvement people did possess has not carried over from one generation of managers to the next. Avoiding this outcome is one of the most amazing aspects of what Toyota has done. So overall, since the dawn of Scientific Management in 1882 [3], it is safe to say that managers have not paid much attention to process improvement. Instead, the focus has been on results, with little or no interest in process. The contraction of the American manufacturing base over the last 30 years, in large part due to executives searching for lower cost labor, is testament to this.

Unfortunately, what we have been engaged in is the constant re-introduction of process improvement principles and practices to each new generation of managers. Knoeppel and others from his day would marvel at the inefficiency. And they’d probably be shocked to learn how their work has been misunderstood or ignored by educators.

Nevertheless, training each new generation of managers is work that has to be done – non-value added but necessary – if we hope to improve the performance of manufacturing (and service) businesses that remain in the U.S., as well as prepare for the days when some manufacturing may return to the U.S. The question is: Is there a better way? And then a better way after that? Let’s look at what Knoeppel wrote in more detail.

In the first 5 chapters, Knoeppel presents a realistic and detailed narrative describing a company with declining profits that is headed for sale or bankruptcy. Top company officers fret about the problems that lie before them when the general manager suggests hiring a “consulting engineer on management and organization.” The president of the company quickly rejects this idea, and says: “…a stranger who knows less than we do about it [our business] would only manage things in a way that would invite even greater disaster.” A company director agrees with the president and cites three firms who had this type of work done and were very dissatisfied with the results. The general manager, however, skillfully points out flaws in each of the president’s and director’s arguments and convinces them to meet with a consultant.

The consultant, Mr. Brown, performs a diagnosis of the company through a series of questions to top company managers. Mr. Brown, in turn, gives detailed answers to the president’s questions. The president is initially impressed, but asks Mr. Brown to provide additional examples from companies he has previously worked with. These detailed examples impress the president even more, as does the fact that Mr. Brown honestly responds to questions about the failures that he experienced in past assignments. Mr. Brown gets the job.

The remaining 21 chapters describe various plans of investigation and activity that a competent efficiency engineering consultant would carry out. The methodology is similar to how physicians diagnose and treat patients, with Mr. Brown acting as a “business doctor.” Careful consideration is given to leadership and behavioral aspects of work and organization – what we today refer to as “organizational behavior” or “culture.”

Before I elaborate on Knoeppel’s method for gaining management buy-in, it is worthwhile noting the many aspects of efficiency engineering that are consistent with Lean management. The descriptions of the various plans of investigation and activity clearly show basic awareness or detailed knowledge of the following (though not necessarily in the same language as that used below):

• Waste – defects, transporting, waiting, and movement

• Unevenness

• Unreasonableness

• Variation

• Standardization

• Workflows and layout

• Teamwork

• Observation and “go see”

• Milk runs

• Ask why

• Load balancing

• Preventative maintenance

• Audio and visual controls

• Point-of-use

• Importance of good management-labor relations

Interestingly, there was also an awareness of “push” and “pull” in a discussion of how to plan work (p. 121):

• “The [planning] method outlined also leads to an important principle which all should work to and which will do much to correct the usual policy found in shops. It can be stated as follows: The method to follow in getting the work though a shop is not to apply pressure at A towards B, but to draw at B from A. This means a ‘pull’ type instead of a ‘push’ type, as one man expressed it.”

Knoeppel also outlines how poor wage plans, poor working conditions, and poor human relations cause great inefficiencies. Thus, there was a clear recognition that certain policies and types of management thinking and behavior created waste. Regarding worker complaints, Knoeppel said (p. 232):

• “All bosh, you say, this listening to complaints. Let me cite cases that will show that it is a wise plan to listen to complaints, which after all are suggestions of a reversed nature. ”

Finally, Knoeppel criticized the nearly uniform desire among executives to search for heroic individuals that can produce business results, rather than learn about the methods and related management practices that have been concretely demonstrated to improve efficiency (pp. 234-235):

• “It is hard to convince executives that law and principle can be made to operate successfully. As a manufacturer recently wrote me: ‘What we think we really need more than anything else is a foreman who can produce results, and now we are trying out a man who thinks he can do this.’ In other words, the manufacturer does not know what he needs to secure results… The phrase is the most eloquent summing up of the conditions existing in many of our manufacturing concerns that I have seen.”

Now let’s return to the methods used by Knoeppel to gain executive buy-in for process improvement. At the macro-level the obvious method was to write a practical how-to book for executives. The idea was to inform executives what to expect if they were thinking of hiring an efficiency consultant in order to reduce or remove their fears of the unknown. Along the way, Knoeppel described in detail what a competent and reputable efficiency consultant looked like and what he did.

At the micro-level, the book reveals a more formal strategy. First, Knoeppel presents a common business problem, declining profits, to impel action on the part of management. This is the well-known “crisis” scenario that Lean practitioners have long understood. While this is not new to us today, it may have been new in 1914 when the magazine articles were published. Next, Knoeppel presents Mr. Brown, the consultant, in a very measured and carefully designed way: first to gain management’s trust through sound logic and reasoning, and then gain their buy-in for efficiency improvement activities. To do this, Mr. Brown had to possess the following characteristics:

• Ability to communicate to company officers in very direct and clear terms, orally, without lengthy reports as back-up documentation.

• Thoroughly answer questions from any direction, about any aspect of the business

• Deep, deep, deep knowledge of process improvement, with many practical examples, and the ability to explain how it intersects with human behaviors and needs, day-to-day work activities in various departments, management objectives, and business goals.

In order for executives to recognize these as desirable characteristics they had to be shown the details of what to look for. Knoeppel’s book gave executives key insights and tips to generate buy-in and also knowledge they would need to interview candidate efficiency engineers and make smart purchasing decisions for consulting services.

There are other methods for gaining top management buy-in for Lean management that will, no doubt, continue, such as educating or informing people through books, articles, conference, meetings, degree and certificate programs [8], etc., and also through direct participation in process improvement activities. After all, seeing is believing.

What else could be done? One approach could be to establish a coordinated effort to create pull for Lean among key stakeholders such as employees, suppliers, customers, and investors for a particular company or industry segment. Lean could more aggressively align itself with the public’s growing interest in green products and services and sustainable business practices. Lean management could assert itself more strongly in the growing efforts to improve service productivity, and also exploit the intersections of Lean and information technologies as Toyota Motor Corporation has done.

Another opportunity could be for large institutional investors, who are influential among top executives, to establish and fund a research organization similar in concept and purpose to the Insurance Institute for Highway Safety or Underwriter’s Laboratories Inc. [9]. A necessary supporting action would be to standardize leadership so that generations of top executives understand how to create wealth from waste, unevenness, and unreasonableness. These actions might provide the push needed to gain broad-based buy-in for “REAL Lean” [10] among current and future Fortune 2000 executives.

Knoeppel conclusion to the book contains these sharp words (pp. 236-237):

• “It is hoped that what has been said in this and previous chapters will convince executives that there is, after all, something of real and substantial value in this efficiency work. A writer recently said: ‘As our industries are organized to-day, not one establishment in ten can have scientific management, because not one in ten is willing to live by its law.’ If this is true, then the executives of our industries are to blame. Whether or not the work is to be the success possible; whether or not our industrialism is to be the most efficient on earth – is simply a question of the co-operation of executives and managers. The engineer has been and is doing his share. His work is exceedingly trying, calls for considerable travel, and demands much in the way of personal sacrifice. He is constantly forced to battle with trying situations back of which are skepticism and doubt. Certainly opposition will not make his task any easier. That he will win there is no question, for the history of every movement shows that the things which are now successful were forced to withstand bitter criticism and repeated failures, some having to fight for their very existence… Because we are quitters; because we are skeptical of anything new; because in America there is too much ‘each for himself’ – the progress of the work to date is not all it should be. Industry and the community at large are the real losers – not the engineers and those who advocate what has been described in these pages… it behooves industrial managers to cease condemning on general principles and to make a real and consistent attempt to find the meat that will prove to be the best kind of industrial nourishment. ”

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Notes:
[1] C.E. Knoeppel, Installing Efficiency Methods, The Engineering Magazine Co., New York, NY, 1917. The Engineering Magazine was edited by Charles Buxton Going, who played an important role in establishing the profession of industrial engineering. See https://en.wikipedia.org/wiki/Charles_Buxton_Going
[2] F.W. Taylor, The Principles of Scientific Management, W.W. Norton & Company, New York, NY, 1911.
[3] Taylor’s philosophy of management and the principles and practices of Scientific Management are widely misunderstood. The best expression of his thinking can be found in his testimony to Congress given on 25-30 January 1912. See Scientific Management: Comprising Shop Management, Principles of Scientific Management, Testimony Before the House Committee, F.W. Taylor, with Foreword by Harlow S. Person, Harper & Brothers Publishers, New York, NY, 1947
[4] B. Emiliani, with D. Stec, L. Grasso, and J. Stodder, Better Thinking, Better Results: Using the Power of Lean as a Total Business Solution, The CLBM, LLC, Kensington, Conn., 2003.
[5] B. Emiliani, Real Lean: Understanding the Lean Management System, The CLBM, LLC, Kensington, Conn., 2007.
[6] S. Chase, The Tragedy of Waste, The Macmillan Company, New York, NY, 1925.
[7] W. Vogt, "What You Can Do When You Have To" and "The Production Runs of the Century: A Comparison of Plant II and Willow Run," pp. 6-21, Target, Vol. 15, No. 1, First Quarter 1989
[8] For more on what educators are doing to bring Lean management to the classroom, see teachinglean.org.
[9] This is one way in which insurers guard against losses. Couldn’t institutional investors do the same? It might be a very effective supplement to risk management activities and state and government oversight (e.g. SEC, FTC, Justice Department).
[10] Where “REAL Lean” is embodies the principles “Continuous “Improvement” and “Respect for People,” and Fake Lean is “Continuous Improvement” only. See "The Toyota Way 2001," Toyota Motor Corporation, internal document, Toyota City, Japan, April 2001.