Lean working generates risk of egg-shell organizations

Citation

(1999), "Lean working generates risk of egg-shell organizations", Journal of European Industrial Training, Vol. 23 No. 1. https://doi.org/10.1108/jeit.1999.00323aab.014

Lean working generates risk of egg-shell organizations

Lean working generates risk of egg-shell organizations

Keywords Employee attitudes, Flexibility, Performance, Productivity, Research

Lean models of work organization are more productive and generate employee enthusiasm, yet carry profound risks of fragility for employers because of heavy pressure on staff and the effect of relentless change on organizations. This is the conclusion of recent in-depth research by the Institute of Personnel and Development (IPD).

The research, commissioned from research teams based at the Universities of Bath and Warwick and detailed in the IPD report, Getting Fit, Staying Fit: Developing Lean and Responsive Organisations, is based on detailed case study work supplemented by focus group discussions.

The report found a mixed experience of shifting to leaner ways of working. Done well, lean working has the potential to deliver much more than previous management systems in terms of responsiveness, agility and business performance. However, those organizations that fail to consider the people management implications of leanness expose themselves to relentless turmoil, with staff troubles, insecurity, retention crises and motivation difficulties. All these conspire to place the organization in peril and the multi-skilled, "can-do" culture ­ the goal of leanness ­ becomes a chaotic, overloaded, "make-do" one.

"What is happening", says Nicholas Kinnie, lecturer in the School of Management at the University of Bath, one of the report's authors, "is that customers and suppliers are forcing organizations to cut lead times, build in quality and deliver consistently.

"The new ways of working demand that employees can respond efficiently to what customers need by developing new skills and knowledge and by having discretion. But there were often tensions in the case study companies between what was demanded and the style of management which often remained hierarchical, controlled, standardised and supervisory."

To many people, leanness is synonymous with downsizing and indeed this may be a feature of the route to leanness. But, as the research points out, leanness has to be understood as a collection of techniques and a process of change rather than any one specific model of management. It defines leanness as involving combinations of the following factors: team-based work organization; shop-floor empowerment and problem-solving practices; quality built in, not inspected in; emphasis on horizontal business processes over functional structures; partnership relations with suppliers; cross-functional management and development teams; responsiveness to customer demand; and human resource policies aimed at high motivation and commitment.

Companies found that lean working techniques contributed substantially to better performance, according to the report. Cuts in lead time, customer satisfaction, productivity and a sense of optimism and enthusiasm among employees were commonly cited as benefits. Teamworking emerged as the most distinctive feature of the new work patterns.

As part of an initiative to reform its call centres, the RAC embarked on a programme which included delayering the organization, developing a new reward structure with emphasis on qualitative and quantitative outputs, new terms and conditions, and a recognition system that integrated performance, continuous development and reward. It wanted to offer more satisfying jobs, while eradicating duplication of work and ensuring a better standard of performance and customer service.

The outcome of the programme has been extremely positive. Customer-facing staff now combine both the service and sales functions that once existed separately. Central to the new organization structure is a new role of team manager, which has completely transformed the old supervisory role. In addition a culture of "getting it right first time" and not passing customer calls around has improved both performance levels and service delivery.

The report identified profound implications for the people side of businesses from lean working. In businesses without an in-house HR capability there was a tendency to treat all people matters connected with lean working practices as short-term and problem- driven. In organizations such as the RAC, where the HR team was heavily involved in designing and implementing the changes to working patterns, there was a strategic approach to change that attempted to anticipate the future.

In cases where there was no HR input, tensions inherent in the concept of leanness were rarely thought through. For example, the permanent pressure to reduce costs had to be weighed against the desperate need for training. The need to maintain job security to motivate employees had to be weighed against the need for employee flexibility. Pay systems, such as individual output-based rewards, existed that were incompatible with team working.

"In several cases ... line management tended to press on with an increasingly intensive work regime, regretting the resulting problems of absenteeism, sickness and staff turnover, but apparently unable to do anything to solve them", the authors write.

The report also found that in many businesses a desire to adopt leanness meant that change would thereafter be continuous and relentless. But being able to sustain the demands made on people by the new way of working was hampered by a lack of personnel expertise.

According to the report, leanness required the personnel function to play a variety of different roles, such as: a supporter of new working methods; an interpreter of leanness to specific work systems; a champion of employee behaviour within the change process; a monitor of work patterns; a resourcer; and an anticipator of change in the wider environment.

Angela Baron, policy adviser with the IPD says: "Lean working undoubtedly has much to offer but is an inherently fragile model of work organization. What it needs to function properly is a high degree of trust between employee and employer underpinned by progressive personnel policies and professional management expertise."

The IPD report, Getting Fit, Staying Fit, Developing Lean and Responsive Organisations, price £35.00 (£31.50 IPD members) can be obtained from Plymbridge Distributors. Tel: 01752 202301.