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John Hunter

Lean

How to Create a Culture of Continuous Improvement

CEOs are the last to know, but they shouldn’t be

Published: Tuesday, November 24, 2015 - 01:00

I have discussed steps to take to build a culture of continuous improvement in numerous posts on my Curious Cat Management Improvement blog. What it boils down to is building a system that supports that culture. Your culture is the result, not your aim.

David Heinemeier Hansson put it well recently in his essay, “CEO’s Are the Last to Know”: “But the bottom line is that culture is what culture does. Culture isn’t what you intend it to be. It’s not what you hope or aspire for it to be. It’s what you do.”

To create a culture that enhances your effort to continuously improve, you must create systems that move things in that direction. Part of that system will be the continuous assessment of how your organization is falling short of your desired culture. This requires honest assessment of the current state, and it requires those in leadership to design systems to get a clear picture on what is really happening in their organizations.

As I said on Twitter in relation to that article, “leaders need to understand danger of losing touch” and take steps to counter that risk. Often the explanation for why something happened (e.g., a process producing a failure, or a leader not being aware of the real culture) is an explanation of what the system must be designed to address.

In many organization CEOs are not aware of what is going on. This is a weakness that must be addressed systemically. Many of the better management methods proposed by W. Edwards Deming address this issue. CEOs are given a false picture when they focus on results instead of the management system. CEOs are given a false picture when they create a climate of fear. CEOs are given a false picture in organizations focused on achieving bonuses instead of continuous improvement.

These weaknesses in CEOs’ effectiveness cascade down the organization with each level experiencing its own versions of these weaknesses. Creating the right culture requires a management system built to support the organization as it grows into such a culture. It is a dynamic process that feeds back upon itself (in very classic systems-thinking ways).

What not to do:
• Hold annual performance appraisals, especially tied to pay
• Give individual bonuses for good numbers
• Pit employees or teams against each other
Blame people instead of seeking to improve systems
• Encourage hero worship (in the form of massive executive pay)
• Reward those who win the variation lottery (or are good at fooling people by using data)

What to do:
• Build enterprise capability
• Promote the acceptance of management improvement ideas
• Grow the talents and skills of your people
• Promote those who improve everyone around them (not those who seek hero status)
• Train supervisors (and managers and executives) to coach and expect them to make those working in their organization more effective
• Get everyone to the gemba
• Teach everyone enough about data to make sensible evidence-based decisions and to avoid foolish decisions because they don’t understand variation
• Focus continually on how to delight the customer
• Delight employees through intrinsic motivation (let them have joy in work)
Make problems visible and encourage bringing problems to light (also encourage solving those problems)
• Develop systemic processes that use experimental data with quick iterations to make decisions on improvements, in the mode of the plan-do-study-act (PDSA) cycle
• Continually improve the management system itself

Doing what you should and avoiding what you shouldn’t is much more difficult to implement than to read. Sadly, the difference between giving lip service to ideas and actually doing what’s required is so vast that few organizations do a decent job of creating customer-focused cultures of continuous improvement.

Many items included in the to-do list may not seem related to culture. In my opinion, things aimed directly at culture are often pointless. What matters is creating a management system that encourages proper actions and processes. Actually applying the PDSA cycle well and repeatedly will do much more to change the culture than countless CEO statements about what the company values. With the proper management system in place, the direction provided by CEOs and others can make a big difference. Without it, the culture is unlikely to change significantly, no matter what claims are made about values.

A few other tips to consider: You must pay attention to what you learn from your iterations of changes to your management system. Maybe your vision for the culture you wish to create is not sensible for your organization. Seeking to create a culture that conflicts with the reality of your organization will not work.

Focus on iterating toward a vision. Massive changes may sound impressive during an annual review or a conference presentation, but they usually fail.

Very few organizations take the time required to train and educate employees. If you want to create a culture of continuous learning and improvement, you almost certainly need to focus much more on education and learning than you are. Education can be formal, but focusing on learning as you apply quality tools is also extremely useful and too often overlooked. Coaching is a big part of doing this well, but it’s another tool that is massively underappreciated. Most supervisors and managers should be spending more time coaching than they are.

First published Sept. 8, 2015, on the Curious Cat management improvement blog.

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About The Author

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John Hunter

John Hunter, CEO of CuriousCat.com, authored Management Matters: Building Enterprise Capability (Leanpub, 2012). He authors two management blogs (Curious Cat Management Improvement blog, The W. Edwards Deming Institute blog) and other blogs on topics including investing, technology, and travel. Hunter’s career has been spent helping organizations increase customer delight using continual management improvement strategies. Since 1995 he has used the Internet to improve the results of management improvement efforts in various roles including as a software development program manager. Through Curious Cat Hunter manages more than 30 websites.