“The most powerful force in the universe is compound interest.” – Albert Einstein

More and more organizations are realizing that their future strength lies in developing and cultivating a culture of continuous improvement. Inspiring each and every employee – specifically those closest to the front line – to find ways to make improvements, remove waste and increase efficiency creates the organizational equivalent of compound interest. Over time, the payoffs can be tremendous.

Creating a culture of continuous improvement, or any other proactive culture, starts with clearly understanding what makes a proactive culture unique. The fundamental difference between a reactive culture and a proactive one is that a proactive culture empowers front-line workers to make local decisions, take action and then take ownership of the results – role expectations normally associated with supervisors. For an organization not accustomed to this, this is big-deal change!

In a reactive culture, ownership of behavior is informally assigned to supervisors and/or the appropriate organizational department. Examples include safety, customer service, reliability, etc. In a reactive culture, the answer to who owns safety is “the safety department”, and enforcement is performed by either the safety department or the area supervisor. Customer service belongs to the “customer service department”. Reliability belongs to the reliability group. In this type of culture, the prevailing attitude regarding issues not directly in one’s specific responsibility is “It’s not my job.”

In a proactive culture, the desired behaviors are supported and reinforced by everyone. The answer to who owns safety (or customer service or reliability) is “Everyone”. You don’t get very far without your hard hat (or safety glasses or hearing protection) in a proactive safety environment – everyone is looking out for you and they feel strange NOT correcting violations. In a culture of continuous improvement, the same attitude prevails regarding waste, errors and problem identification. Everyone is involved in the process and, perhaps surprisingly, these organizations focus less on being the best and more on being better. It is in the process of getting better that they become the best – the power of “compound interest”!

For a behind-the-scenes view of how two organizations created a culture of continuous improvement, two publications are readily available. One publication is the Stanford University case study “New United Motors Manufacturing Inc. (NUMMI)” by Charles O’Reilly and the other is the book “It’s Your Ship” by Commander Michael Abrashoff. Although the organizations show little obvious resemblance to each other – one is a Navy ship and the other a unionized auto plant – their transformation process and the subsequent results are surprisingly consistent. In both cases, the leadership focused on creating a proactive culture of continuous improvement and was able to take an existing organization from the lowest levels of performance to the highest in roughly one year.

In both organizations, the leadership focused on three primary goals to create a culture of continuous improvement:

  1. Creating a clear expectation of the desired organizational behavior. This includes the behaviors of the leadership, management, supervisors and workers. Organizational culture is influenced by systems, structures and style of leadership. By knowing what behaviors are expected, the leadership can then align the systems and structures to support and reinforce those behaviors. At NUMMI, it was an unrelenting focus on quality (vs. production volume.) Commander Abrashoff focused on changing the classic military “Command and Control” organizational structure to one of front-line engagement. In both cases, the leadership reoriented the entire organization to clearly and consistently reinforce the desired behavior at each level.
  2. Clearly communicating through action that the front-line worker is the critical factor in success. On his first week as commander of the ship, Commander Abrashoff reversed a longstanding history of officers cutting to the head of the meal line during the weekly ship cookout. By going to the back of the line, Abrashoff sent a clear message that the crew came first. (Perhaps not surprisingly, the next week at the ship cookout, all of the officers took their place at the end of the line. Abrashoff didn’t have to say a word.) At the NUMMI plant, hourly workers were provided significant training on the new processes with specific emphasis on their responsibility to stop the line if they found any problem or error. In a true 180-degree reversal, the workers were now commended for stopping the line to fix a problem – getting it right was more important than getting it done.
  3. Focusing on “why”, not “who”. On his ship, Commander Abrashoff continuously challenged his crew with the question “Is there a better way to do this?” At NUMMI, managers used the five-why’s technique of root cause analysis to identify the source of any problem – and then eliminate the problem at the source. In both situations, the front-line workers became actively engaged in identifying the problem and then developing the solution. This intellectual engagement creates the sense of ownership and commitment that is at the heart of true continuous improvement.

In subsequent interviews regarding his transformation efforts on his ship, Commander Abrashoff made the statement: “True leaders hand out responsibility, not orders. If all you give is orders, all you get is order takers.” Creating a culture of continuous improvement requires that the leaders lead differently and replace a culture of compliance with a culture of commitment. Compound interest only works if you invest early. Continuous improvement is no different. By reinforcing critical behaviors, empowering the workers, and focusing on why, not who, your organization can tap into “the most powerful force in the universe”.

This article first appeared in the May edition of Life Cycle Engineering’s IMPACT newsletter.

About the author:
With more than 20 years experience in organizational design, change management, and a dedicated focus on delivering sustainable improvements, Scott Franklin is a well-respected authority on organizational change, specializing in the leadership responsibilities of change management. Scott brings specific expertise in the areas of creating a combined learning organization in parallel with a strengths-based organization, while simultaneously creating a culture of execution. You can reach Scott at sfranklin@LCE.com.