Attracting talented Lean managers and executives is a challenge which will only grow more significant as we begin our economic recovery in North America. So make sure you apply a Lean-focused results and value approach to hiring, developing and retaining the best possible leadership for your organization.

•   Make some ONE accountable – because if it’s not in anyone’s job description or performance review, don’t expect to see anyone doing much about searching out, developing and looking after the best of the best.
•   Define those jobs which are strategic to your organization in terms of leadership development and retention – because a talent-management strategy without this focus is no strategy at all and will fail you.
•   Think about and strive and reward to implement these key leadership practices for maximum results within your organization:

Build trust and candor. Great people are inspired by great leaders, and great leaders are honest and trustworthy. Know the potential successors to all direct-reports and make positive connections as frequently as possible. Too often leaders kill trust and candor by being judg¬mental, or more concerned with looking good than acknowledging others. Being a control freak or, on the flip side, avoiding control and blaming others, is a sure way to turn off your talented employees. Yes, it’s the Toyota Way, and it works.

Be accountable for talent. Every individual on your management team must consider identifying and retaining your best employees as “Job One” (with apologies to Ford). All of your HR strategies should be integrated throughout the organization. As with continuous improvement initiatives, you get what you measure. Hold people accountable for hiring well, and for suc¬cession plan execution. Integrate your plan with your corporate strategy and evaluate quarterly. All the top organizations with whom we’ve worked have a talent “war room.” Do you?

Actively protect and promote future potential. You’ve got high-potential players. Why should senior leadership keep “the list” of key employees a secret? After all, we’re not talking Skull & Bones here. Particularly if you’re trying to build a culture of trust and respect for people. Make sure that your top talent knows who they are and then help them to develop. Invest more heavily in the growth of already-excellent talent and extraordinary leadership; almost no amount of spending on “C” players will ever get you a solid ROI.

CEO is the Chief Talent Acquisition Officer. CEOs must take a leadership role in attracting top talent from other organizations. Be a visible evangelist; develop a personal brand beyond your role in the company. Be the kind of leader for whom people want to work. As a leader, be personally accountable for attracting a few key people regularly and serve as a sensei to some of them. Expect the same of other top executives.

Demand only the best. Create tough standards for new talent, and cut your losses when they don’t measure up. When people are performing in an outstanding manner, continue to increase expectations of per¬formance. Strong performers thrive on recognition and ever-increasing challenge, and the opportunity to show what they’re made of. Don’t disappoint them.

Thomas Alva Edison

Turbulent times provide ample opportunities for success, if we approach things with the right frame of mind.

by Adam Zak 

In my role as an executive recruiter specializing in helping companies with Lean transformation, I’ve been spending a lot of my time lately speaking with people all over the world who are wrestling with complex decisions. I thought I’d share some of my observations with you, and in turn, hope that you will share your thoughts with me. 

Everywhere we turn, there’s advice heralding “How to manage in a crisis,” or “New rules for surviving the crunch.” Just the other day I heard a discussion on PBS involving business writers trying to agree on a title for what the economy is going through. And there was no consensus (imagine that, from business writers). 

Crisis Breeds Opportunity 

Craig Barrett, recently retired CEO of Intel told Newsweek readers, “There is a general rule in business life: market share is won or lost during transitions. You cannot save your way out of a recession, you can only invest your way out.” No one is denying that cutting costs is essential to surviving 2009, but we Lean disciples have always practiced a different philosophical approach. As we look for ways to eliminate waste and improve productivity, we are always focused on getting better. In early February Muhtar Kent, Coca-Cola’s CEO told the Wall Street Journal “I’ve been through this movie in smaller versions a number of times in the past…times like these are not an excuse to sit back and ride out the storm.” And this week, at a global sustainability conference in Chicago, I spoke with Rick Frazier, Coke’s VP Supply Chain, who told me they were leveraging their Lean & Green efforts even more dramatically during this time of uncertainty. 

“A recession creates winners and losers just like a boom,” observed Mauro F. Guillen, a professor of international management at the University of Pennsylvania’s Wharton School in BusinessWeek. Let’s chose to be among the winners. 

The Need for Leadership with a Wartime Mentality 

I think any Lean practitioner will agree with me that in many companies upper management has spent too much time focusing on quarterly financial statements and not enough time on long-term thinking. Executives have to lead “their people out of a psychological funk and at the same time tailor their business to focus on a new reality,” says management consultant Ram Charan in BusinessWeek. 

Cut If You Must, But Keep All You Can 

In discussing both strategy and tactics with my contacts, I hear  that many are focused on avoiding or limiting layoffs by instating four-day work weeks, unpaid vacations and voluntary or enforced furloughs. Others are implementing flexible work schedules, wage freezes, or cuts to 401(k) and pension contributions. By keeping controls on people costs, they’re keeping the people. 

For a strategy that pays returns twice, consider this: a number of Lean companies are bringing back previously outsourced work, thus both retaining skilled team members and removing non-value added transportation and outsourcing administrative costs. 

Certainly some Lean companies out there are indeed using these times to reduce staff and make their organizations “leaner” (obviously a total misunderstanding of the Lean concept – so were they really “going Lean” in the fist place?). But most of my clients seem to “get it” and are letting go and hiring too, with an eye to building a better Lean operation and mustering forces to take advantage of opportunities that will most certainly arise, as well as those they can create. That’s continuous improvement with a long-term view. 

As Diane Swonk, chief economist at Mesirow Financial said in Newsweek, “So many CEOs are so focused on defense that they may be missing real opportunities. If you only play defense, you will not be on the right side as the economy bottoms, let alone turns. For us, for instance, there was an opportunity to attract talent and clients as our Wall Street counterparts imploded. The new blood is helping to buoy profits today and will put us in a whole new position on the other side of the crisis.” 

A blog article from HarvardBusiness.org recently cited three rules that leading companies use to maximize service while eliminating wasteful activities: reduce, redesign and restructure. 

Reduce Wisely and Emphasize Talent

Before making painfully aggressive reductions, it pays to keep in mind some potentially serious repercussions:  You risk losing valuable contributors inadvertently, damaging internal morale or your external reputation as an employer-of-choice. You may also lose sight of the important training and staff-development programs which are helping keep your key people engaged with your execution strategy.  Recently, The McKinsey Quarterly advised “By emphasizing talent in cost-cutting efforts, employers can intelligently strengthen the value proposition they offer current and potential employees and position themselves strongly for growth when economic conditions improve.”  Makes sense to me.

Redesign Jobs and Make Them More Engaging

If you want to maximize morale and involvement, Lean practices prove again and again the importance of engaging people. Now is a great opportunity to redesign jobs, and perhaps even career paths, to totally engage the people undertaking them. Adding more responsibility, a greater measure of autonomy, and improved sense of control all weigh heavily on promoting employee satisfaction.

In addition to redesigning roles, companies cutting jobs should carefully protect training and development programs. Again, not only are these  essential to maintaining workplace morale and increasing long-term productivity, but they also provide your  people with the skills necessary to perform their redesigned jobs.

Restructure the Lean Way

Lean can excel in times of crisis. Focused on basic process improvement, Lean solutions often require no capital expenditures. Frequently, companies turn to Lean after buying new equipment or technology that failed to generate expected improvements. Lean is also scalable — management can tailor the people component to meet specific requirements. 

Looking beyond crisis mode, Lean can accelerate the impact of changes by:

1. Using existing Lean experience and leadership in an organization to jump-start the turnaround.
2. Achieving measurable cost reduction and enhanced value to customers.
3. Establishing a framework for improvement that delivers returns to the organization as good times return.

The key is to remember that you’re managing a crisis. The Lean effort can’t become the turnaround; it must work in parallel with efforts to manage cash and reduce costs.

 High Commitment, High Performance 

A February 9, 2009 article in the Harvard Business School’s Working Knowledge series caught my eye. Uncompromising Leadership in Tough Times featured Q&A with author and Harvard professor Michael Beer who has studied the successes of high commitment, high performance (HCHP) leaders in tough times. What he found was that “they shared the view that a firm has a larger purpose than simply profit and increasing stock price, though they were all laser- focused on profitability and saw it as essential to achieving their larger purpose for the firm. They had a multi-stakeholder view of the firm as opposed as a shareholder view. The purpose was to add value to employees, customers, community, and society-not just shareholders.”  

Let’s all of us heed Edison’s advice and find a better way. It will require everyone from the C-suite to the shop floor to think and work differently. But isn’t that what Lean is all about? There has never been a more important time than now.

“Respect for people: Very few businesses start up only on the backs of the sole founder. It takes a team.”  Jamie Flinchbaugh 

Just a few days ago Jamie blogged over at LeanBlog about the Lean Entrepreneur. With layoffs mounting at even the Leanest Thinking companies, he argued that this might be just the time for “lean-minded” individuals to strike out on their own and start new businesses. In fact, some quick research I did indicates that 16 of the 30 DJIA (Dow Jones index) corporations were launched during past recessions, among them Microsoft, Hewlett-Packard, and Walt Disney, for example. Jamie makes a persuasive point. 

And he’s also on target writing that Lean Thinkers’ clear focus on “customer obsession,” “direct observation” and “respect for people” can add tremendous value to the new venture.  But I might have changed the order a bit and put “respect for people” first. So here’s some additional perspective on the importance of the team – people – to the success of your new business undertaking.

In my earlier days I spent some time in Silicon Valley helping start two companies, one which turned out moderately successful and was sold to a strategic buyer, and one which burned to a crisp and was eventually abandoned.  These two experiences qualified me for a very small seat at the venture capital table, and I found myself assessing the viability of entrepreneurial ventures as they were brought to our attention. 

I learned that, without question, the start-up team is absolutely the most critical element in the success or failure of a new company.  Analyze carefully your own strengths and weaknesses and recruit others who can balance and complement these.  Sure, it may be your brilliant idea for a phenomenal product or service, and you may be hesitant to share decision control, execution responsibility and eventual profits with others.  But unless your business is high-powered consulting (think Deming, Drucker, Ram Charan, or James O. McKinsey – well, you get the picture) you are not likely to make the big time on your own. 

It is very likely that you’ll need 3-4 key team members, your co-founders, to help you get this thing off the ground.  Each will bring his or her specialty to the venture: a boss (CEO); an idea guy (R&D, technology); a bean-counter/administrator (CFO or controller); and a chief sales rep (VP/Director Sales/Marketing).  If you get the right people in place things like “who is our customer, what are we going to sell them, and how will we make it” have a way of getting figured out. That’s what talented people do. 

I know. You’re thinking “Whoa, no way I can do this in the early stages of my new company.” Well, you may be right and you probably won’t be able to recruit all the critical talent at once or at the start of your venture.  But at some point you will need funding to build and grow your business, and the source (banks, angel investors, VCs, and the like), quality and cost of that funding will greatly depend on the excellent qualifications and credibility of the management team you’ve pulled together.  Think and plan carefully. 

Finally, a word about Boards. You may not need a board of directors right away but it wouldn’t hurt to connect early on with some individuals who can help mentor you and your new venture in the right direction.  Do you have family or professional colleagues who can provide a sounding board for your ideas? Perhaps non-competing industry professionals with strong leadership and management track records?  Executives you’ve met through professional networking (LEI, SME, AME…) who can make solid introductions to functional managers within their own companies?  Take advantage of these resources to build an informal “advisory board” or roundtable so you can benefit from their collective experience.

And then get on with it.  As Jamie Flinchbaugh concluded,

“…if you find yourself in the unfortunate position of not having a job, maybe this is a time to take those lean skills in a new direction.” 

I certainly think that might be the case.    Adam Zak