Call it Lean, Kaizen, ISO, TQM, Continuous Improvement… after 25+ years of significant effort and umpteen variations, companies are still not benefiting from these operating principles as much as they could be. And they certainly don’t seem to be applied much outside of operations, especially not in HR. Why has this commonsense approach not taken root in recruitment and hiring?
Lean is a completely different way of looking at your business. The focus in a Lean environment is on building consistency and efficiency into every step, installing feedback loops to measure quality at each step, and being obsessive about reducing waste – thereby getting a better product to the customer faster, and improving cash flow. The focus is on raising the quality of the product or service and boosting workplace productivity through employee involvement in reducing waste.
By applying the lean principles, you can impact most of the key metrics for your organization.
First, let’s agree to refer to the philosophy generically as “Continuous Improvement”. Too many people associate “Lean” with job cuts, and in these economic times that just creates more fear and less participation. Remember, the original intent of Continuous Improvement was to
- create additional capacity without additional inputs, and
- reduce waste through working smarter while maintaining the same number of team members.
All this should lead to a healthier bottom line and an engaged workforce.
One reason CI fails is short term thinking. Strategic planning is supposed to look long term but organizational behaviour tends to be driven by the profit number for the next quarter. Management will want the CI program to start generating savings within 3-6 months. Usually this is accomplished with a few key people driving the initiative but as soon as those people move on or return to their ‘real’ job, the program usually falters since the key drivers aren’t there to sustain it. We need to develop a way of running the company that balances long term success with continued short term benefits to keep everyone motivated and maintain the sponsorship.
The core principles of CI are simple and applicable to all areas of business. What is unique is how your team applies it to your company. So before we jump into CI implementation or planning, let’s take a step back and look at the people within the company. Do your people fit within the new culture that you want to create? Before you start, take the time to assess the team and get your people engaged!
CI needs to a core, shared philosophy, to avoid the “program of the month” syndrome. The easiest way to achieve that is to fully integrate it into the business model as a “way of doing business” with everyone participating. If it is viewed as a program then the true potential will probably not be reached.
Therefore, if it is going to be a core, shared philosophy, we also need to be serious about spreading the philosophy beyond the shop floor and into the rest of the organization, so that everyone is using the shared language of “growing capacity while reducing waste”.
The HR function, in particular, plays a pivotal role here in not just “doing CI unto others”, but in integrating the philosophy and modelling the right behaviours. That means HR needs to measure and hold themselves accountable for quality, productivity and ROI, and be on the lookout for systems that give them the tools to raise the performance of the organization over time. Your recruiting and staffing processes should be helping the organization measure quality of fit, identifying top performers who are more productive and stay longer, and ensuring that every member of the team is positioned for maximum benefit.
“We now see many HR Departments doing some type of performance measurement. The problem is that most of them have not moved past [measuring] cost and quantity. Typical metrics are cost of hire, numbers hired and trained, ratios of HR staff to employees and HR budget benchmarks. All of these can be useful as after the fact data for the HR staff. However, they do not excite management because they focus on costly activities and not on the value-adding results.” – Dr. Jac Fitz-enz. How to Optimize Human Capital
A Lean HR system…
- Focuses on leading indicators (the four critical aspects of fit) that directly impact business outcomes
- Measures Quality every step of the way (as opposed to non-value-adding results)
- Directs the data gathered throughout the process into a feedback loop that tightens up and improves the process over time
- Removes wasted time by downloading work to the candidate and focusing hiring managers on value-added activities
- Reduces lead-time by providing a steady stream of candidates
…HR departments can now become full partners with other functions in the organization that operate in the Lean methodology.
So in summary, “average” performance and unexpected turnover are both serious forms of waste that have a heavy impact on the bottom line. People, culture, fit and leadership are all important parts of the CI puzzle.
This article was written by Jan van der Hoop, President, Fit First Technologies. Jan can be reached via e-mail at [email protected]