The deep secret of Lean-transformation: the People Review

Published on
March 26, 2024
Roberto Priolo
Roberto Priolo
Roberto Priolo is editor at the Lean Global Network and Planet Lean
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Developing a Lean-culture means developing every Lean-thinker and helping them reach their full potential. This is how the Aramis Group does it.

What is your next role? Who do you see in your current role? What would you do if your next role didn't work? How often do you ask yourself these questions? Or does your company ask them of you? We always say Lean-performance is built on people development, but first we must consider what people development really means. Undoubtedly, in any organization, a few people will want to stay in an expert role and perfect their skills ad infinitum-what Toyota calls Takumi, expert practitioners-but most will want to evolve and take on new and different roles, as well as continue their careers, gain more responsibility and achieve greater success.

Traditional Companies

A traditional business is a system of Darwinian selection for the most ambitious and the most aggressive, rarely the smartest. People get into their next job because they ask for it, lobby for it and do whatever it takes to get it. Occasionally they are tapped on the shoulder for a promotion thanks to their results, often when a manager moves on. However, we have to accept that senior management is very bad at distinguishing brash self-assurance from competence. In our company, for example, we find that senior management is still biased toward middle managers with a "prove" mentality (demonstrating the results they got out of their teams) rather than "improve" (looking for ways to do the job better, even if it is uncomfortable, and developing team members). "Prove" managers constantly prove, which often works, while "improve" managers constantly consider and experiment, which makes them seem much less confident.

The Result

As a result, a senior leadership team often consists of 4D (Define-Decide-Drive-Deal) managers with too few 4F (Find-Face-Frame-Form) leaders. As a result, the entire company gravitates toward functional decisions, short-term optimization and radical financial perspectives. A brief explanation of 4D and 4F leadership:

4D: the leader defines the situation in their mind based on reports and their understanding, decides on the best option, drives the decision through the ranks, asks middle managers to implement regardless of opposition (what they call "resistance to change"), and then deals with the inevitable unexpected consequences and adverse effects. This way of thinking is based on the illusion of knowledge ("I understand it all") and the application of power ("I have the authority to push this through") and is typical of people who generally prefer to be right rather than successful. When they fail, even visibly, you can still hear them claim that they were right and that unforeseen circumstances - those pesky unknowable unknowns - derailed the brilliant strategy.

4F: the leader goes to gemba to find the problems that people are facing and to confirm their understanding by looking, seeing and talking to the teams in the workplace. They then face the part of the problem that no one wants to look at because no one currently knows how to address it, and start learning what they need to learn to succeed. The leader and their team then frame the problem in a way that everyone can understand, "this is the challenge we have and here is the kind of solution we are looking for." For example, when Toyota had to close its Australian plant because all the other automakers had left, they framed the challenge as "last car, best car." And when they had to deal with the terrible flood in Durban, South Africa, with the entire plant covered with a meter and a half of muddy water, they framed the recovery project as "better than before." This enables the leadership team to form collective solutions from everyone's contribution to a common project, creating collective intelligence from individual learning and collaboration - respect and teamwork.

Our Experience

In our experience, leadership teams composed of functional heads who master 4F thinking radically outperform others, as we described in Raise the Bar. The question remains: how are these leaders developed and selected? A recurring problem we have encountered is that external hires -often highly successful career managers in their own right- are so deeply entrenched in the "proof" mentality and 4D thinking of having ideas and imposing them on others that they struggle to adopt the "improve" mentality of 4F thinking and building collective continuous improvement solutions.

In a nutshell

In a nutshell, a Lean-transformation can be seen as four main steps:

  1. Recognize the waste in our current way of working and visualize the problems that generate this waste;
  2. Understand and reveal the misconceptions underlying these problems;
  3. And the people who have these wrong views and push them on the organization;
  4. Change them (make them change their minds) or change them (agree with them that they are on a different path than our Lean-path and are better off in a more traditional company)

At Aramis Group, for example, we buy used cars that we refurbish and resell with a guarantee of quality to customers. It is easy to think that the larger our stock of cars on display, the easier it will be for a customer to find the car they want ende deal they are happy with. Thinking this way, we should buy as many cars as possible, refurbish them and then display them on our website (and infinite store shelf) for people to buy. This turns out to be completely wrong. Customers are actually quite specific in what they are looking for and, not surprisingly, are generally all looking for the same kind of deal. As a result, a car loses market value every day it sits in inventory. Our company's trick is to recognize the cars that people will buy and stock as low as possible to turn them around quickly. If the car is not sold in the first two weeks, it will probably sit forever and have to be discounted so deeply that we lose our shirt on the deal.

Keeping stock is an obvious waste in our business, but fortunately many of our competitors don't recognize this and actually take pride in the size of their inventory. However, bringing out the misconceptions that lead to creating large inventories is much more difficult, especially since it all comes down to some purchasing decisions. Within the company, we have people with differing opinions: "this deal is so good, what does it matter if it creates inventory?" versus "this deal must be incredibly good, given the stock it's likely to create." These two similar but very different views have a huge impact on the overall success of the company, which means that these mental models need to be brought to the surface and discussed one by one with middle managers.

This is just one example, and we have many more: quality first, treating people well, not micro-managing - there are many misconceptions that we know create waste but that people can cling to frantically. In fact, we formulated the "change your mind" cycle as follows:

Our experience has taught us that this cycle can take up to four years. It's not that people don't change their minds and learn; it just takes a long time - and we're fine with that.

Nevertheless, in Jim Collins' terms, it really matters who is on the bus. If we look at the whole business, we can see that areas where people have the right way of thinking do well, while others do not. We can also see that understanding depends on context, and is transferred very slowly. Someone who has understood something in one department may not recognize the exact same problem elsewhere. People development is therefore fundamentally linked to the experiences people have.

Our goal is to have management teams with an "improve" mentality and managers who have experienced enough aspects of the business that they can see results beyond outputs and build collaborative answers to our challenges. Our goal is also to let people develop their careers according to their desires and preferences and never impose a challenge on someone who does not want it (what are the chances of success of that approach, anyway?). This creates a seemingly insoluble equation, especially if we keep nominating or hiring people for jobs at the last minute when someone leaves their role for one reason or another (which happens when a company is growing as fast as we are).

That's why we created a central institution of "people review"-a chance to step back and look at each person's career in the company and their future possible career paths.

These people review is an important tool of our Lean-transformation. In fact, it is where we see the transformation happening, and the potential to move forward. Clearly teamwork is important for a winning team, but we also need better players who understand the game and can make passes, not simply run with the ball to score, ignoring their other teammates - or the opposing team. This people review doesn't place people in jobs or judge their performance. It looks at their potential:

  • What do they understand?
  • What don't they understand?
  • What are they struggling with?
  • What unsought initiatives have they taken?
  • What do they like?

And, starting from that point, it helps us determine what their next role in the organization might be, or how a role might be created for them:

The question of what they like may seem obvious, but it is often overlooked. Traditional management focuses on the organizational structure and how to place people within it. Our approach, however, prioritizes understanding individuals, with the goal of aligning their next role with both their personal expectations and the needs of the company.

However, such assessments are prone to significant blind spots - particularly biases. Having these discussions collectively, in a room, harnesses the power of collective intelligence, providing varied perspectives that help us tune into what comes next for our team members. Still, these remain subjective opinions. That's why we go to the gemba - to confront our assumptions with reality. This helps us measure the actual efforts of each individual in kaizen and leadership.


Shaping the future of our company

A forward-thinking approach is crucial to shaping the future of our company. This includes recognizing potential at every level of our organization. Therefore, in these reviews we discuss individuals ranging from executives to team leaders, and recognize the potential that exists within the company. One thing we have learned is the disproportionate impact of team leaders on company culture and how valuable our ex-team leaders are when promoted through the hierarchy. In this way, we are ready to offer the sales leader the position of plant manager for a while, with the goal that they will assume the role of head of country when the current officer moves on to business. We have several cases of people who started at the team leader level and now have factory or department director jobs. This is basically how our Lean culture progresses: one promotion at a time.

Development in a broader sense

If our goal is to satisfy customers and make profits by developing ever better service by developing people, we need to see development in a broader sense. Not just honing their analytical skills through thorough problem solving and their leadership skills by encouraging and supporting improvement initiatives, but giving them career opportunities in which they grow from team leader to area manager to functional director - and beyond, to corporate roles. Who you have on the bus depends on who you invite on the bus and how well you show them the opportunities to jump on board and whether you give them the tools to do so. A culture is the sum of its people - a Lean-culture is a sum of Lean-thinkers. There is no shortcut to developing a Lean-culture, other than developing Lean-thinkers one at a time and having an attitude that helps them steer and grow in the organization - the people review.


Michael Ballé is lean author, executive coach and co-founder of Institut Lean France.

Cyril Gras is Group Head of Kaizen Office at Aramis Group

Pauline Marion is Group Head of Talent at Aramis Group

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