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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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In lean, there is a tool or part of the philosophy called Kaizen, which means continuous improvement. This way of thinking should be applied in all levels of the organization. For example, like traditional organizations tend to wait with changes CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 until some expert tell them to, lean organizations analyze their own strengths and weaknesses against their suppliers and competitors. They study their customers and their needs, and continuously evaluating their environment for opportunities and threats. This strategy of constant change together with involvement and learning at all levels will require constant assessment and constant awareness. These transformations do not happen overnight, they require patience and long-term perspective (Jackson and Jones, 1996).

2.2.4 Communication Towe (2010, p. 51) is on the same track as Liker. She thinks that the key with any organizational change is communication. Using communication in order to translate and teach the principles of lean for the employees, is critical. Reasons for the change, expectations during and after the change needs to be spelled out in common terms. If the employees are left without proper information about changes in their daily work, concepts will get incorrectly and rumours will start to fly.

Communication is also important to get support from the employees about the change.

Resistance will develop if the employees feel unconfident about the change and for instance believe that the lean transformation will make them lose their jobs. That is why it is necessary to point out that no one will lose their job because of the lean transformation, only that it may change people's responsibilities and give them more challenges and opportunities (Towe 2010, p. 52).

2.2.5 Organization Henry Ford believed in philosophy of expanding labour productivity by investing in specialized equipment, increase the degree of specialization of task and by separating the planning and management functions from the actual production efforts. This organizational structure of mass-production firms has its foundation from Taylor. This type of organization created an antagonistic relationship between workers and management in the US.

Toyota on the other hand, use team production and TPS. This comes from the Japanese culture, where emphasis on consensus and co-operation is natural.

Management of Toyota invested in well educated and trained workers, which gave them more flexibility, compared to Ford. Toyota has the managerial philosophy where CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 28 empowerment begins at the shop floor, this is the opposite to what many are used to, the top-down management system (Fane et al. 2003).

Table 1 underneath shows the distribution of different skills needed within the different organizational levels. When it comes to technical-functional skills such as engineering, the majority of the skills are found at the shop floor, with the first-line supervision. This is in line with the philosophy of TPS and having the down-up empowerment. Administrative-Operational Planning and strategic-conceptual entrepreneurial skills are allocated for middle and senior managers (Fane et al. 2003).

This allocation of responsibilities shows how everyone is involved and takes decisions together.

Table 2.4 Leadership levels in lean-system oriented organizations Carroll (2001, p.

81) talks about the term empowering leader which is a leader, that actually does not lead, but supports and helps teams and people to learn and lead themselves. The traditional manager is known to be the leader who gives clear lines of authority, well-defined tasks and seemingly tight control from top to bottom. He or she must be in control at all times and know exactly what everyone is doing. The empowering leader does not have the control, instead the leader is a developer of people, teams and the organizational structures that support them.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 In an organization where very few things change or when the tasks are very simple (as in many traditional organizations) it is possible for the workers to do their work as they are trained to do and as the rules and instructions say. The supervisors perform their tasks as defined by the organizational structure and the instructions from their managers and their managers do the same. But in a world where change is so important to survive, creativity is necessary. This can only be done in an organization where information and decision making are driven down to the people accomplishing the task and where the employees are empowered to make decisions without seeking management approval. These lean organizations are more matrix formed and not as the traditional heretical organizations (Carroll, 2001, p. 82).

2.2.6 Methods and actions "People are our most valuable resource" (Liker and Meirer, 2007, p. 7). What Toyota has succeeded with compared with other bigger auto companies is the superior in quality, which has been excused by others of the superiority of the Japanese worker.

But Toyota has successfully proved that they can succeed to run their business and produce cars in other part of the world, which mean that they do not need Japanese workers in order to succeed. Toyota is primarily interested in people with high work ethic, who are familiar with hard work and have the motivation to lean and perform (Liker and Meirer, 2007, p. 12). Liker (2004, p. 300) describes Toyota's process with new operations in e.g. North America, as all U.S. senior manager were assigned Japanese coordinators. The Japanese coordinators' job was to coordinate with Japan and to continuously teach U.S. employees about the Toyota Way thorugh daily mentorship.

Toyotas leaders believes that the company's only source of competitive differentiation is the exceptional people they develop, that has been their top priority. In fact, Toyota in Japan hires almor all of its new employees directly from school. In some cases from a Toyota City technical high school, where students already have been taught The Toyota Way. Toyota is their first job, and typically their last. This facilitates the process of not having previous experience from other companies with conflicting approaches (Liker, 2004, p. 299).

As experienced from the literature, involvement from the employees is essential in an developing organization. Dennis (2002, p. 104) describes a method, the Kaizen Circle Activity (KCA), which consists of six to eight members. The KCA is formed by a CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 30 manager who needs help with a problem. The circle concludes with a presentation with the results and future activity.

Benefits from the KCA are among others;

1. "Strengthens team members' ability to:"  "Work as part of a team."

 "Lean a team."

 "Think clearly and logically."

 "Solve problems."

2. "Build tem-member confidence. Team members fell good knowing they have contributed to the company's success. They are ready for the next challenge."

3. "Attacks critical problems with "hundreds of hands"."

As a part of the culture at Toyota is to have same goals and acting the best for the organization. At Toyota the employment security is an implicit guarantee for the effect that only in the most sever circumstances and as a last resort would result in termination. There are no special treatment for executives with offices or dining rooms. And the Genchi genbutsu, is the principle or spirit at Toyota, which ensures that managers and senior managers are in constant contact with shop floor environment and its members (Dennis, 2002, p. 141).

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 2.2.7 Essential Factors of Lean Following are some factors that from the literature are considered to be critical in Lean.

1. Customer value - As one of the founders of the TPS, Taiichi Ohno (Liker, 2004, p. 7), formulated to add value to the customer and reduce waste. One of lean's main pillars is to create an operation where the work adds value for the customer and reduce the work that doesn't.

2. Great people - Several sources e.g. Liker and Meier (2007), Sun (2008) and Towe (2010) explain that Toyota believes that their competitive differentiation comes from the great people they develop. Talented people that are taught the TPS from the beginning.

3. Think long-term and substantial - The philosophy, goals, expectations, openness and outcomes must be long-term and understood by everyone (Liker, 2004), (Sun, 2008), (Dennis, 2002).

4. Change with small improvements - According to Liker and Meirer (2007), Sun (2008) and Jackson and Jones (1996) lean is about making small, but continuous improvements. Change is essential in order to survive in today's developing world.

5. Understand and commit - Also must the entire organization understand and be committed to the philosophy of lean in order to improve it. For example when managers use the principle Genchi genbutsu (Dennis, 2002).

6. Involve shop floor workers - In order to make change sustainable and successful it is essential to involve workers in the decision making process.

Adapting the principle of involving from the bottom and up (Sun, 2008), (Jackson and Jones, 1996). Fane et al.(2003) emphasizes the knowledge that the shop-floor workers have and the importance of them sharing it.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 32

7. Standardized work - According to Liker and Meirer, (2007) standardized work facilitates the process of improvements. This also facilitates the possibilities of several people to learn the same work.

8. Leaders must teach - Toyota believes that the leader's most important job is to teach others. The organization must develop a learning culture, which should never stop. Towe (2010), Liker and Meirer, (2007)

9. Communication - Once again, communication is brought up in order to succeed in an organization. According to several sources (e.g. Towe (2010), Liker and Meirer (2007) and Liker (2004)) communication is important in order to learn, support, listen and much more which is essential in an developing organization.

10. Job Security - Dennis (2002) and Towe (2010) states that Toyota is clear with the message to its employees, that no changes will ever risk their job security.

The only thing that may happen is other tasks and responsibilities.

11. Lean everywhere - In order to implement Lean and gain its benefits, it must exist in the entire organization (Teresko, 2006).

Educate and train - As mentioned, the people are the most valuable resource which if they are continuously trained and educated, will result in a great long-term investment. (Fane et al. 2003) (Liker and Meirer, 2007).

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 3 Method

3.1 Introduction The aim with this research is to find how the benefits of lean are applicable into the processes of Change Management. This chapter will explain the procedure of the research and evaluate different methodological approaches and data collections.

3.2 Research approach The structure or method used for this research is the most common in business and management research. Remenyi et al. (1998, p. 73) calls it Passive Observation and this is applied when the researcher is unable to conduct an experiment and has to rely only on evidence that already exists. In this case the researcher has collected information from interviews, articles, books written reports etc. In order to gather information from different sources and with a big variety. The researcher searched at both British and Swedish databases as well as at the library and on the web. One reason to prefer information from scholarly, refereed journals and books is according to Treadwell (2011, p. 61) that they give you access to primary research. Other popular articles may be a summary of other authors and does not provide you with citations to tell you what the real source wrote.

The literature review was a prerequisite for the researcher, in order to establish the existing facts about the theory and models that already existed. It is important to examine the existing literature critically since it is a maxim that researchers should trust only certain information and always be suspicious (Remenyi et. al, 1998, p. 75).

The literature review contains different methods and theories about Change Management and Lean, in order to as described above, establish a sufficient foundation of knowledge within the two areas. Essential factors about each area were then produced from the facts that were gathered.

3.3 3.3 Interviews Interviews includes identifying and selecting individuals for a study, getting their permission to interview them and then gather information by asking them questions or observing them (Creswell, 2012, p. 10) This was how the researcher proceed with the interviews.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 34 For this research, there are four interviews conducted with a total of five respondents.

This means that in one interview, there are two respondents attending at the same time. The author choose to solve this by presenting the answers with four letters which means that letter B, represents the answers of two participants. The interviews were made in order to gather qualitative information about the subject and to see and compare whether the interviewees' answers about CM and lean would match with the literature or if there existed any major differences. The structure of the interviews were not decided until after the literature review were done. The researcher created the questions for the interviews based on the essential factors that were found.

However, the structure of the interviews were most Semistructured interviews. These interviews are based on broad questions where the researcher formulates the question as "Tell me about..." or "What is your view on...". Some additional questions were also dropped to allow the respondent to make more detailed answers (Treadwell, 2011, p. 165). According to Creswell (2012, p. 16) collecting data from a small number of participants, stating the questions in a general and broad way and writing the report using flexible, emerging structures are some of the characteristics for a qualitative research. All of these characteristics are covered in this research.

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