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Creating a Culture of Continuous Improvement

The concern about creating a kaizen culture is always the same: “I don’t think my people will tolerate this level of change.” But failed change usually results from failed management, not people’s unwillingness to change. Create a culture they can thrive in, and you’ll soon be on the path of continuous improvement.

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Contributing editor John Sweigart is a principal partner in The Body Shop @ (www.thebodyshop-at.com). Along with his business partner, Brad Sullivan, they own and operate collision repair shops inside new car dealerships, as well as consult to the industry. Sweigart has spent 21 years in the collision repair industry and has done everything from being an independent shop owner to a dealership shop manager to a store, regional and, ultimately, national director of operations for Sterling Collision Centers. Both Sweigart and Sullivan have worked closely with former manufacturing executives from Federal-Mogul, Morton Thiokol and Pratt & Whitney in understanding and implementing the principles of the Toyota Production System.

Kaizen: Japanese for continuous and incremental improvement, a business philosophy about working practices and efficiency; improvement in productivity or performance.

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I’ve helped a lot of businesses both inside and outside of collision repair create a “kaizen model,” and in all cases, the initial concern is the same: “I don’t think my people will tolerate this level of change.” I remember my first experience with a sensei who explained the basics about what we were about to attempt, and I thought, “I know my technicians, and there’s no way these guys will ever participate in a business that works like this!” How wrong I was.

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Change and Failure

So what’s at the root of this concern? Look at successful and unsuccessful change anywhere, in anything. What makes change stick? How common is change? How often do people change and why do they do it? The most common personal experience around change usually has to do with some habit or behavior, like trying to quit smoking or altering your diet. Why do both come with an incredibly high failure rate?

Look at changes in your business, specifically a failed attempt to implement a different way of working. In response, managers say, “We used to do it that way, but we just don’t anymore,” or “We had a good start and some excitement, but it faded after a few weeks.”

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If you examine all these personal and business failures closely, the common element you’ll find is that both the scale of these projects and their timeframes were unreasonable or inappropriate. They were changes we were just not used to or prepared for. For example, successful diets require a lifelong change in eating. Who really thinks that through before starting and is prepared to stick to it forever? It just sounds completely unreasonable. Might there be a more sustainable approach?

What about changes that do stick? Are there factors here that might create understanding? How about a change in your leisure activity? Think about a vacation you took to a new place you never thought you would enjoy, but now you’ve been back there several times. Or how about a new hobby or sport you were accidentally exposed to and wound up loving? These sometimes lead to major lifestyle changes (and usually major investments as well), but they’re very enjoyable changes that we fall into with pleasantly surprising outcomes.

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But we’re talking about work here, which often requires more difficult changes. What drives success here? It’s a difficult question to answer. But ultimately, when people understand the value in a change, they accept it, so perhaps the more appropriate question is, “What teaches the value of a new way?” If you approached change from that standpoint, maybe you would have a better chance of making change work.

The fact is that the value of doing work in a new way, or doing anything in a new way, can only be realized when it’s experienced. While learning about “what the change can do” has merit, like jumping out of an airplane, you’ll only begin to “know what that means” after you’ve been there. Therefore, the key to successful change lies in “learning its value by doing it.”

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The Manager Killed It

Successful change always requires a period of “doing” in the new way, so that the value can be exposed and support the purpose of the change. The lesson learned, the reflection after the doing, becomes the thing that increase sthe odds of the new way “sticking.” It’s do-learn-do-learn.

With that knowledge, what is it then that causes people to stop “doing” after awhile? Is it from not exposing the value of the new way while people are doing it? Is it from not reflecting on what was learned after we’ve done it for a while? If you have good employees who no longer do work the way you asked them to, is it really because they just stopped on their own? Or is it because their employer failed to expose them to the value? From my experience, in every case, failed change is a result of failed management, not people’s desire, aptitude or ability to change. It’s the manager who killed it. Why is this the case?

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Start with the project of creating a kaizen body shop. A kaizen shop is one that’s in constant motion, making constant, daily change of process for the sake of improvement. How do you manage that on a day-by-day basis?

First, it’s a completely different model with the specific function of improving constantly. It recognizes that only process (whether you know you have one or not… you do, it just may not be a very good or sustainable one) delivers results. It uses a process for the purpose of identifying problems, which appear as defects or “out of standard conditions.” To see these defects, you need to pay extreme attention to consistency. You need to do it exactly the same way every time so that how “the way” delivers outcomes can be examined and modified, thereby improving the outcomes. Put another way, you need to watch the engine run closely so that you can see the problems with the engine.

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Traditional Versus Kaizen

But how do most managers manage body shops today, and can these same people manage this kaizen business? Let’s start by looking at how we manage people. Today, many shops manage their people with income, or lack of, through consequences associated with either how much work they produce (flat rate) or, in the office, how much gross profit they keep (bonus pay). When your pay is driven by “make lots of work” or “make lots of gross,” it’s very difficult to maintain extreme consistency.

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Next, traditional body shop management focuses on removing problems (defects) from the system through expediting around trouble (firefighting). It has both incentivized people to “go like hell” and also focus their activities on supporting clearing the path for maximum production. Good managers in this system spend lots of time making sure problems don’t happen or at least don’t affect production. But the kaizen business intentionally puts these problems directly in people’s paths so they can recognize where the problems came from and how they can be eliminated forever through a process change. These problems are seen as precursors to improvement and are celebrated, not managed around.

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In a kaizen shop, the daily “beating your head against the wall” to “make work” ends. Call it a surrender, but it understands that this traditional way of working is 1) too dependent on needing specific people talents to be successful, 2) only profitable when many factors come together correctly and 3) just not worth doing any more. It knows that the head must no longer be used as a hammer but rather to think through the problem with accuracy. It knows that there’s always a better way to do everything and that those who discover it always win.

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A kaizen shop manager needs 1) a consistently executed process so that its defects appear and can be understood, 2) people whose incentives are aligned with being consistent and 3) problems that are allowed to surface at their source, stop in their tracks and get highlighted for all to understand their cause.

It’s management that sets the stage for successful change, and that starts with understanding what “management” means in a kaizen business. Clearly it’s very different. What we know is that people will do what you ask them, and continue to do it when they see the value. It’s not them that blow it…it’s their leadership. Leading successful change in the kaizen shop begins with asking them to do the right things. Employees in a kaizen business will have little or no problem making the changes you ask…as long as they’re safe. It’s the leader who’s typically unwilling. Funny, it sounds like cannibalism, but it’s the truth.

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So what’s the right thing to ask for? It’s simple, really. You’re in the improvement business now, so you need to ask your employees to do their part in improving by executing a consistent standard way of working. They need to act as “testers” of the way (the process) so the results of the test can be used to change it. The value will be seen when the business results begin to improve. This is where you begin to gain traction. It further improves when your people realize that they’ve become the creators of these new ways. At that point, they not only see the value but they find the work to be rewarding and fun. (continues on next page)

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Adopting the Culture

This culture that kaizen creates is clearly very different than the culture that exists in most organizations today. It says, “We exist to improve,” and “Learning is our primary function.” It’s leadership’s job to create this new culture. At the end of the day, the culture, not some campaign, will get the job of change done. But talking about making change in a business is hard enough, let alone going to the “C” word.

But culture change is really what we’re talking about here anyway. Any real change happens because it’s what everyone believes in. That’s also called your “values,” which are an outward representation of your culture. But “changing people” is the same thing.

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So how are cultures adopted? In a family, it’s a four-step process that starts with learning the survival skills. These are taught by the leaders (parents) through specific and simple instructions: “no,” “yes,” “good,” “bad,” etc.

The second phase is learning how to be a good citizen, i.e. we don’t do that here, we do this, these are the rules we live by, this is how we behave. The third phase is personally excelling in the group, leading and achieving success. And finally, the last cultural phase is giving back, teaching others, leaving your mark.

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So to prepare your people, you need to first set these basic survival skills for your people. Next, you can work on the rules for being a good citizen, but there’s no need to do this until the people know how to survive. As I said earlier, changes fails primarily when you ask for too much too fast. You have to be realistic in your expectations and go one step at a time if you want to make this work.


 Lean Is Not the Toyota Production System
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Many people in our industry think that “lean” is the Toyota Production System but it is not. Lean is a word that was created to describe some of the tools Toyota uses to improve its processes. Lean should be defined as “a way to eliminate waste.” While defining things, we might as well define the other terms associated with lean. “Six sigma” is a tool used to identify and eliminate variation. “Theory of Constraints” is a tool used to bust constraints or better flow production. Kaizen is continuous improvement.  

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A kaizen model uses all of the aforementioned tools. It uses lean to remove real waste. It uses Six sigma thinking in that variation hides defects, and reducing variation brings purer problems (that we can solve). It uses Theory of Constraints thinking about creating flow for the explicit purpose of identifying where flow fails so these problems, when fixed, improve the entire value stream (because there is one).

You can use any of these tools to create some improvement in your organization. But a kaizen business simply says that its core value is in continually making changes to continually improve. This is where real industry reshaping comes from, where someone will show all of us what the successful future of this industry really looks like. This is what you need to prepare your people for…if it’s what you choose to be in.

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In reality, you’re asking them to create an easier, more sustainable, more profitable, simpler and more rewarding business. Who wouldn’t sign up for that? The key lies in telling them what they need to do to get there, not the high-level theories and clever tools that excite everyone. It’s the very specific (“Take this one step for me, please…then we’ll deal with the next one”). We all tend to think that people just won’t get this stuff, but that’s nonsense because it’s easy to understand. It’s the “what do I do right now” that they want from you. Remember, you only learn by doing, so please tell them what to do.

 

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Create a Kaizen Business


Know what business you’re getting into and share the vision. Our most important “number” from here forward is related to what our problems are and how much of an impact they have. From here on out, we fix problems not by brute force but by building better processes to address them.
Know what to ask of your people. Create the proper job description that starts with, “Execute the work standard consistently to test its ability to deliver the expected result.”

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Keep the instructions short and simple. People need to be taught the basic survival skills: do this, don’t do that, good, bad, etc.

Prepare everyone for the problems.
Flow will make little problems bigger. Everyone must know that their job is to no longer sweep problems under the carpet but identify what caused them.

Tell them how to win.
From here on out, we celebrate finding systemic problems…systemic fixes to these make them go away forever.

Tell them what to do with the old scores.
Our old numbers (gross profit, sales, etc.) are merely outcomes of our old way of working. We must know that today, we’ll score only our actual process using specific information about how well our steps work together.

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Have a way to create and execute non-disruptive counter measures. You need to be consistent with your process, but sometimes you need to fix a problem outside of it to keep your customer from feeling the impact. Be ready to take these counter measures “offline” to keep the process doing its job, which is to raise problems.

Prepare everyone to deal with insurers/vendors/customers.

Insurers – Very few insurers will ever get what you’re doing  because they just don’t have these kind of cultures in their organizations. Don’t bother trying to explain to them what you’re doing (even though they’ll get a big win from the work). Leave them out of it. Make sure their needs are built into your standards (even though many of these things will detract from improvement).

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Vendors – Remember, you’re the customer, so ask for what you want. But do pull these guys in up front so they can see the value of your process to them. Make these guys your allies.

Customers – Avoid discussing the details of your process; they really don’t care much. Do, however, discuss what they can expect from you. In a process, it will be difficult to interact with customers in an ad hoc way.

Get yourself ready to manage differently. Your motives, goals and daily activities cannot be centered on achieving some daily production target. Your motives, goals and activities must be focused on improvement. You must commit to the fact that most of the work now is in understanding what the problem is, not how to fix it. You must know that real problems are only exposed when your system raises them. You must commit to being consistent with a process so that it can expose these flaws. You must know that this is an “all or nothing” thing and that living in both worlds (traditional production management and continuous improvement) will only make thing worse. It’s the leaders’ commitment to discovering problems that makes it work.

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Know that falling off the horse is part of improvement, as long as getting back on comes next. You’ll struggle in understanding how this really works, but the learning only comes through the doing. You must know that getting back on track with process and problems will teach you something.

Whether you’re a guest in someone’s home, a member of a new club or a visitor in a strange place, there’s a culture that exists in each place. You’ll inherently learn these same rules and behave accordingly, or you’ll opt out. You’ll think the same way I discussed earlier: “What are the basic rules?” and “How do I fit in?”

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Know what this needs to look like for your new organization, and know what it looks like today. Map this out and make these changes right up front. Great thinking in the wrong organization will only create frustration.


John Sweigart has developed the knowledge of the Toyota Production System and its execution over the past 11 years. As director of lean operations and ultimately national director of operations for Sterling Collision Centers, Sweigart helped lead its operations and production model growth up to and through its acquisition by the Allstate Corporation. Sweigart also acts as senior lean coach for Murli & Associates, a Conn.-based lean consulting firm with clients in industries such as transportation, construction and insurance. Today, Sweigart’s primary function as direction leader of The Body Shop @, a Pa.-based collision repair organization, allows him to further develop the discovery and value creation of kaizen in the collision repair industry. Its “Star-Link Certified” collision repair system knowledge is now exclusively offered to the industry through a strategic alliance with DuPont Performance Coatings.

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