Beware The Risk of Venturing Too Close to the Value Stream

There is a fine post on the Lean Blog exhorting senior managers to work closely with the middle management folks to assure that they are effectively communicating with and bringing out the best in the production people.  It all reads well enough, but it is based on a a faulty premise.  The title, "Weak Link: Management’s Relationship with People", assumes that there are two groups – management (who apparently by dint of superior breeding and knowledge have risen above the category of ‘people’, and are commonly referred to by their career classification) and the unwashed masses we enlightened lean thought leaders refer to as people, and the unenlightened execs know as headcount. 

There was a day in American business when entering the ranks of management meant more than switching from an hourly pay scale to a salary.  It meant that one was on the track – fast or slow- that could eventually lead to upper management and a good deal of money.  Most important, it meant that one was in the protected inner circle of decision makers – albeit small decisions at first – that was exempt from financial insecurity.  A member of ‘management’ had too much value to be subject to layoffs and, so long as the manager didn’t do anything really stupid, he was set for life.

In his Adventures of a White Collar Man, Alfred Sloan wrote of the production worker, that he "accepts the hazards of bad times – the business cycle."  Their lesser status was confirmed when he explained that, "attempts to improve the economic status of our people, especially those who have so little, through hourly wage laws, shorter hours and all the other panaceas that have been imposed on the economy" were just so much "wishful thinking."  He went on to confirm that the heart of the company was not the 220,000 hourly production workers at GM, but the 10,000 people in management.

Under that scheme, the Lean Blog post would be right.  The 10,000 would very much need to work together to figure out a way to keep the 220,000 happy and energetic.  But those were the days when the job security of the 10,000 was pretty much assured and that of the 220,000 was, as Sloan wrote, subject only to "the hazards of bad times – the business cycle."  A lot of water has gone over the dam since Sloan created the pillars of American management and penned those words in 1941.

Millions of American manufacturing jobs have disappeared over the last decade – some due to productivity, but most due to offshore outsourcing – and the last decade has not been characterized by "bad times" or a downturn in "the business cycle".  The economy has generally been pretty strong. They have been lost due to mismanagement of some companies, and strategic decisions to replace American workers with cheaper labor in others.  Strategic reductions in the hourly workforce, or workforce reductions to adjust capacity as the only possible solution to losing big chunks of market share, are an entirely different animal than the situation Sloan described.  It changes the dynamic between the salaried people once termed the heart of the company and the expendable hourly people.  The distinction becomes blurred, or disappears all together.

When Furniture Brands boasts that they have closed 31 of 57 plants, or when Delphi submits plans to close 14 plants, or Ford and General Motors opt to close plants employing 30,000 people each, a whole new ball game has begun.  That means 31 fewer plant managers at Furniture Brands and 14 fewer at Delphi.  That means hundreds, even thousands, of production managers, schedulers and process engineers, as well as first line supervisors, quality managers and technicians and materials managers are out of work.  The old line of demarcation between those at the heart – in the inner circle -and those on the outside whose careers and financial security are subject to the whims of people and events far beyond their control, is no longer dictated by whether someone gets paid by the hour or by the month.  It is dictated by whether someone is close to the value stream or high above it.

The Lean Blog post states, "Pollster Gallup has found that 40 percent of American workers feel disconnected from their employers, with 19 percent being ‘actively disengaged’ from their workplaces."  Pollster Gallup should have a chat with manufacturing’s front line  – plant level management.  He will come up with similar results, if not worse.

In many plants, there are middle and lower level management people who have long beaten their heads against the wall attempting to gain upper management support for lean manufacturing efforts that will raise the plant performance level to the point that closing it would not be necessary.  There are engineers who have long pushed investments in flexible machines that can produce higher quality products in shorter cycle times, only to be rejected time and again due to insufficient labor savings.  These people are swept into the unemployment lines along with the production people and everyone else connected to the plant.  They are hardly treated as the ‘heart’ of the business.  They are increasingly seen as high dollar headcount, and little more.

The front line managers in many companies are the intrepid, remaining few.  The managers at the remaining Delphi, Furniture Brands, Ford and GM plants are trying to do their jobs, while keeping one eye on the horizon looking for the axe that will inevitably be swung their way in light of senior management’s lack of commitment or ability to lead manufacturing.

So take the Lean Blog post to heart.  It is chock full of good stuff, but you have to recalibrate it first.  It is a waste of time in most of the publicly held manufacturers remaining in America to provide coaching to lower and middle level manufacturing managers on how to better inspire the production workers. It is the senior managers who need to read and heed the Lean Blog post.  The starting point is for them to communicate with middle management – and give the middle managers a good reason to be confident in and suportive of the company and its vision.