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«Change Management with Lean approach How the benefits from Lean can be applied in Change Management Master of Science Thesis in the Master’s ...»

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Change Management with Lean approach How the benefits from Lean can be applied

in Change Management

Master of Science Thesis in the Master’s Programme International Project

Management

RICKY VAINALIS

Department of Civil and Environmental Engineering

Division of Construction Management

CHALMERS UNIVERSITY OF TECHNOLOGY

Göteborg, Sweden 2012

Master’s Thesis 2012:35

MASTER’S THESIS 2012:35

Change Management with Lean approach How the benefits from Lean can be applied in Change Management Master of Science Thesis in the Master’s Programme International Project Management

RICKY VAINALIS

Department of Civil and Environmental Engineering Division of Construction Management

CHALMERS UNIVERSITY OF TECHNOLOGY

Göteborg, Sweden 2012 Change Management with Lean approach - How the benefits from Lean can be applied in Change Management Master of Science Thesis in the Master’s Programme International Project Management

RICKY VAINALIS

© RICKY VAINALIS, 2012 Examensarbete / Institutionen för bygg- och miljöteknik, Chalmers tekniska högskola 2012:35 Department of Civil and Environmental Engineering Division of Construction Management Chalmers University of Technology SE-412 96 Göteborg Sweden Telephone: + 46 (0)31-772 1000 Chalmers / Department of Civil and Environmental Engineering Göteborg, Sweden Change Management with Lean approach - How the benefits from Lean can be applied in Change Management Master of Science Thesis in the Master’s Programme International Project Management

RICKY VAINALIS

Department of Civil and Environmental Engineering Division of Construction Management Chalmers University of Technology ABSTRACT There is an increasing need of improving and updating the Change Management (CM) methods and procedures that exists today. These are the consequences of an more changing world, where the organizations needs to follow the flow, adapt and listen to what is required from customers and other stakeholder, in order to survive. Lean have been showed to be very advantageous for many organization, which is why this research is looking closer on how CM can be improved with the help of lean.

A literature review was first carried out in order to gain more knowledge about the theory in CM and lean. From each area in the literature review, the researcher has summarized the most essential factors to facilitate the understanding and the continuous work in this research including discussion, analyze and conclusion.

In order to create an understanding of the principles and methods that are used in organizations today and compare whether these habits were corresponding to the theory, there are four interviews with five people included. The results of these interviews are presented in chapter 5, Interview Results.

The data collected have been discussed, analyzed and compared in order to find potential patterns, connections, possibilities, etc. which would finally result in the conclusions that the research aimed to find.

Findings from the research are that many organizations already are trying to or have the ambition to become lean, but makes the mistake to implement some tools and techniques and believes that it is enough. Many patterns in upcoming problems and reasons of failure are found to be consistent with the answers from the organizations.

These reasons are many such as lack of communication, lack of engagement, bad leadership and resistance. What lean can contribute with, is to learn the philosophy of lean and follow the mindset that lean advocates. Showing respect to the employees, educating, training, involving and communicating are some of the factors and methods. This task is not easy and it is not done overnight, in fact it can, and it will take decades to become lean. But at least now that it is known, the journey can begin!

Key Words: Change Management, Lean, Leadership, Communication, People, Culture, Philosophy, Continuous Learning and Education.

–  –  –

SAMMANFATTNING

Det har bevisats att förbättringar och uppdateringar av dagens förändringsarbeten (Change Management) måste genomföras. Detta är resultaten av den allt mer föränderliga värld vi lever i som företag och organisationer måste lyssna och anpassa sig till för att skapa sig möjligheter till att överleva. Lean har visat sig vara fördelaktigt för många organisationer vilket motiverat författaren till denna uppsats att dyka djupare in i området och se hur förändringsarbeten kan förbättras med hjälp av Lean.

Arbetet är uppdelat i en teoridel där författaren beskriver olika teorier och metoder från dagens förändringsarbeten samt för Lean. Kritiska faktorer för de olika områdena förklaras och även bristerna som existerar och hur de kan motverkas och motarbetas.

Efter teoridelen följer ett kapitel (Interview Results) med en sammanfattning av de genomförda intervjuerna. Intervjuerna analyseras och diskuteras i kapitlet efter (Discussion and Analysis). Arbetet avslutas med slutsatser (Conclution) och fortsatt forskning (Furthur research) Trots att otaliga organisationer har försökt att införa fördelarna med Lean så misslyckas majoriteten p.g.a att de endast applicerar verktyg och tekniker från Lean.





Detta är inte tillräckligt för att lyckas, utan vad som verkligen behövs är att implementera Lean med dess filosofi och tankesätt. Att respektera sina anställda, utbilda, träna, involvera och kommunicera är några av de faktorer som måste prioriteras. Detta är en stor utmaning för alla involverade och det tar många år innan man kan dra nytta av förändringarna fullt ut. Men nu när det är känt så kan arbetet börja.

Nyckelord: Förändringsarbete, Lean, Ledarskap, kommunikation, Människor, Kultur, Filosofi, Kontinuerligt Lärande och Utbildning

–  –  –

IV Preface During my years of studies, the thought of writing a dissertation and in what area has crossed me many times. But it was not until the last weeks of studies in Newcastle last year, that I decided to write about Change Management combined with Lean. Lean was introduced to me approximately one year ago when I participated in a course about lean. I got interested immediately of its foundation, philosophy, development, techniques and tools and I knew that this was something that I wanted to investigate further.

During my studies in Newcastle I had yet not decided exactly what to write about but when I read about Change Management, I made some further research about it and found in an article that it lacked in many aspects and that lean could contribute in improving the theories and methods of it. And this his was how the idea of combining Change Management and Lean finally became reality.

Göteborg, April 2012Ricky Vainalis

V VI 1 Introduction

1.1 Background Markets, people and organizations are developing rapidly in an unpredictable way with new technologies and innovations, which increases the uncertainty and complexity for today’s project management procedures. Traditional project management methods lose their efficiency to master these challenges which is why, according to Saynisch (2000) there is a need for updating these traditional methods (Saynisch, 2000). To overcome these complexities it is important to manage the communication with the customer to understand these continuous developing needs, which is why lean is aimed to be used as a compliment for today’s change management methods. The information flow must be tailored to ensure that the customer becomes and remains satisfied. Lean can bring significant improvements to this (Revelle, 2010).

Today, there are already many companies that try to implement the philosophies of lean in their organizations. But lean is much more than just techniques, it is a way of thinking which involves everyone in a culture of continuous improvement. It is a human system, customer focused and customer driven approach, where the employee are the customers of their upstream colleagues (Liker, 2004, p.xi).

There are examples that show why companies fail to implement lean due to executive managers who hear about lean, but rarely understand the philosophy and process of it, they have only acknowledged the results. This leads to a delegated assignment down, to a less enthusiastic manager, to check it out (Liker, 2004, p.270).

The Toyota Way can be summarized through two pillars: “Continuous improvement” and “Respect for People”. The true value of continuous improvement comes from an atmosphere of continuous learning, where there it is not only accepted but embraced with changes (Liker, 2004, p.xi). This is why there is a need for making a research of how to include the benefits of lean to the change management in projects.

1.2 Purpose Even though companies think they have accomplished to implement lean, they are according to Liker (2004, p.16), not even close. He says that for Toyota it took decades to create a lean culture and when it comes to companies outside of Toyota CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 and their closest suppliers, he would say that not even 1% get an A or B+ in lean. This shows that there is a quest from many companies to become lean, but still there is much to learn.

As mentioned above, Liker (2004) states that one of the major factors of success for Toyota is that they have the respect for their employees. That is why this study will look closer on how change management, can be improved and become more effective with the help of the philosophy and mindset of lean.

1.3 Research Questions

The following questions will be answered in the research:

 What is change management and how is it important in organizations?

 What is lean management?

 How can the benefits of lean be applicable to change management?

1.4 Objectives  Essential factors of Change Management will be investigated in order to find where and how to improve it.

 Essential factors of Lean will be investigated in order to see how it can contribute the most and to find its most important aspects.

 The findings from the literature will be the foundation of for the discussion, analysis and conclusions compared with the results from the interviews.

1.5 Research outline Chapter 1Introduction.

Introduces the research including Background, Purpose and Research Questions.

Chapter 2 Literature review The research starts with a literature review about the two areas Change Management and Lean. These are needed in order to gain a sufficient knowledge and view about the theories and methods that exists today. The research has also produced essential factors for both CM and lean as a result from the literature review. These factors are aimed to facilitate the understanding of each area and also to facilitate the continuous work of the research.

Chapter 3 Method CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 2 A description of the approach and procedure with different thoughts and ideas about the research. Limitations and deviations are also discussed.

Chapter 4 Interview Results The results from the interviews are presented here. No analyzes or discussion are taking place here, just concrete results.

Chapter 5 Discussion and Analysis This chapter discusses the findings from the literature and the interviews. These are analyzed and finally a conclusion is made.

Chapter 6 Conclusion This chapter gives a conclusion considering all aspects of this research. Including results from secondary and primary data and also from the previous chapter, Discussion and Analysis.

Chapter 7 Further Research Ideas and recommendations for further research are included in this chapter.

Chapter 8 References CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 2 Literature Review This chapter is about the theories regarding change management and lean. There are four different methods presented in the change management section and a section that presents why change management fails. Later follows a chapter about resistance and how to deal with it and finally some of the most essential factors of change management. After change management the lean section follows, which presents and explains the theories and philosophies of lean and finally ends with the essential factors of lean.

2.1 Change Management In the past, models of change tended to be incremental which had negative implications for change management practice. These planned changes led to efforts to be continuous improvement (what the Japanese calls Kaizen) practises and the major focus were put on changing sub-systems or parts of the organization, instead of focusing on changing the whole organizations at once. Today however, there are many assumptions about the incremental nature of change which have been reviewed (Hayes, 2007, p.3). Following models are a mix of different change models which will be analyzed and compiled later.

2.1.1 Lewin's three-step model According to Cameron and Green (2004, p.96) there are many models developed about organizational change. Kurt Lewin developed his idea about organizational change from the perspective of the organism, metaphor. Lewin thought that it was essential to look at the whole process when making changes and that it would consist of three steps. Basically the first step is to unfreeze the current situation, which means to define the current state, surfacing the driving and resisting forces and picturing aimed end-state. The second step is about action, through participation and involvement a new state is aimed to be reached. Then the third and last step is about refreezing and stabilizing the new state of affairs, established by setting policy, new standards and rewarding success.



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