United States Air Force Air Logistics Centers:
Lean Enterprise Transformation and Associated Capabilities
by
Jessica Lauren Cohen
B.A., Geology (1999)
Rice University
Sc.M., Planetary Geosciences (2001)
Brown University
Submitted to the Engineering Systems Division
in Partial Fulfillment of the Requirements for the Degree of
Master of Science in Technology and Policy
at the
Massachusetts Institute of Technology
September 2005
C 2005 Massachusetts Institute of TedI
All rights reserved / /
Signature of Author.
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Technology and Policy Program, Engineering Systems Division
st 12, 2005
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Dr. George Roth
Principal Research Associate, Lean Aerospace Initiative
Sloan School of Management
. bThesis Supervisor
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C ertified by .............................................................
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Prof.
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Co-Director, Lean Aerospace Initiative
Professor of Aeronautics and Astronautics and Engineering Systems
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Thesis Reader
Accepted by ........................
MASSACHUSETTS INSTITUTE
OF TECHNOLOGY
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lof. Dava J.Newman
Director, Teo nology and Policy Program
Professor of Aeronautics and Astronautics and Engineering Systems
JUL 3 1 2007
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United States Air Force Air Logistics Centers:
Lean Enterprise Transformation and Associated Capabilities
by
Jessica Lauren Cohen
Submitted to the Engineering Systems Division on 12 August 2005
in Partial Fulfillment of the Requirements for the Degree of
Master of Science in Technology and Policy
Abstract
Lean enterprise transformation entails a complementary set of initiatives and efforts
executed over a substantial period of time, in a consistent and coordinated manner, at all
levels of the enterprise. It builds upon ordinary organizational change in that a broader
set of people and functions will be affected, and non-traditional approaches and mental
models will continue to be exercised. I have developed and proposed a set of capabilities
that must be possessed by any enterprise in order for that enterprise to successfully
transform and sustain a new way of doing business. These capabilities have been drawn
and compiled from a combination of organizational change literature and models, as well
as personal experience and observations.
Between 2003 and the present, three US Air Force Air Logistics Centers (ALCs) initiated
lean enterprise transformation efforts. This notion was beyond the activities these sites
pursued in the past, as the ALCs were challenged to see their enterprises as a system that
needed to be optimized. I have used the capabilities developed to assess each ALC and
make suggestions regarding their future needs in executing lean enterprise changes. In
particular, I have focused on two of the twelve capabilities (a leadership team with a
shared mental model and a balanced and cascading system of metrics), and compared
each ALC to an ideal state and utilization of these capabilities. Further, I have examined
the Warner Robins ALC with respect to all twelve capabilities, in light of past work
conducted at the site.
The results of this research are two-fold. First, I have learned that there are certain
conditions that must be met before lean enterprise transformation can be attempted and
sustained. The readiness necessary can be assessed within a combination of the
qualitative results derived from a comparison with the ideal capabilities I have defined,
along with the quantitative results reported with the LAI Lean Enterprise Self Assessment
Tool. Second, I have determined that there are special practices and cultural aspects of
government enterprises that makes lean enterprise transformation particularly difficult for
them. This is the result of policies in place, and a tradition of strategic direction being
handed down from above.
Thesis Supervisor: Dr. George Roth
Thesis Reader: Prof. Deborah Nightingale
Principal Research Associate
Professor of the Practice
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Acknowledgments
I am greatly indebted to a number of people for their assistance, guidance, and support as
I completed my thesis. The Lean Aerospace Initiative has been my home away from
home for two years, and this work would not have been possible without my colleagues
and advisors. Dr. George Roth and Prof. Deborah Nightingale offered guidance when I
needed it, assistance when necessary, and pushed me to finish when I needed that more.
The LAI support staff and students also helped me keep everything (work related and
not) together.
Sydney Miller of the Technology and Policy Program also proved to be an invaluable
resource for me, in good times and bad. She assured me I would finish, no matter how
long it took me to get there, and worked the system on my behalf. My friends and fellow
students at TPP, and their emotional and social support, are also much appreciated.
And for my husband, Patrick, there are no words to convey the sense of gratitude and
devotion I feel. Without him, there is no way I could have completed this work. Thank
you, my love, for allowing me to drive you crazy for the past six months.
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TABLE OF CONTENTS
I
INTRODUCTION ......................................
2
LITERATURE REVIEW AND METHODOLOGY ........................
3
LEAN ENTERPRISE CHANGE CAPABILITIES ...................
4
UNITED STATES AIR FORCE AIR LOGISTICS CENTERS: A PRIMER .. 82
5
AN IN DEPTH EXPLORATION OF TWO LEAN ENTERPRISE
CHANGE CAPABILITIES ..................................... .....
10
.
22
44
............. 92
6
AN IN-DEPTH DISCUSSION OF WARNER ROBINS ALC ................... 122
7
POLICY BARRIERS TO CHANGE AND CONCLUSIONS .................... 168
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1 INTRODUCTION
10
1.1
What is lean?
10
1.2
What is a lean enterprise?
12
1.3
What is lean enterprise transformation?
13
1.4
What is a lean enterprise transformation capability?
14
1.5
Can lean enterprise transformation be successful in a government context?
16
1.6
Unique Opportunities for this Research
18
1.7
Larger Theory of Enterprise Change
19
1
Introduction
1.1
What is lean?
Lean, as a concept, has two driving forces: to continuously eliminate waste, and to
continuously add value (Womack & Jones, 1996). Practitioners of lean should be
constantly asking themselves, "Am I doing the right job at the right time?" But lean is
more than a set of tools and techniques. Advocates of this way of thinking suggest that
lean must become an ingrained mindset that allows people to see their world differently,
as they continually strive to improve all aspects of production and value delivery to all
stakeholders using data collected locally. Any group of workers looking to employ lean
techniques must become a "community of scientists" constantly applying the scientific
method, over and over again, to recognize areas of concern, identify and test possible
solutions, and then implement new standard operating procedures (Spear & Bowen,
1999).
In its most common form, lean is a synonym for the Toyota Production System and has
roots in traditional manufacturing arenas. In "The Machine That Changed the World",
Womack, Jones, and Roos outline the differences between Toyota and other automobile
manufacturers, and highlight the techniques and practices that allow Toyota to be so
much more effective and efficient at their stated tasks. These techniques include just-in-
time inventory and production, kaizen or methods of continuous improvement, and the
community of scientists described above, among others (Womack et al., 1991).
In the 1996 publication "Lean Thinking", Womack and Jones propose a series of five
steps that will allow any manufacturer to become lean, at least in the most general sense.
These steps include:
Step 1 - Specify customer value by product;
Step 2 - Identify the value stream for each product;
Step 3 - Make the value flow without interruption;
Step 4 - Let the customer pull the value from the producer; and
Step 5 - Pursue perfection.
The first four steps are designed to progress sequentially in order to transition to a lean
manufacturer. The final step is intended as a reminder that the process of transitioning to
lean should never end, and that the steps can be repeated to gain further improvements,
with perfection as the ultimate (albeit unattainable) goal (Womack & Jones, 1996).
In its current form, however, lean has not been restricted to only manufacturing
environments. Lean was originally a term used to illustrate the series of practices at
Toyota, the best example, among others, of Japanese production methods. In the US, lean
application began in the manufacturing areas, but corporations quickly realized that it
could be applied throughout the enterprise. Many examples exist throughout the
aerospace community of lean deployment in non-manufacturing areas. These areas
include personnel and hiring, purchasing and supply chain management, financial
management, leadership processes, and other parts of large organizations. Furthermore,
once lean thinking is applied beyond the boundaries of one organization, be that
functional or physical, you are approaching the realm of the lean enterprise.
1.2 What is a lean enterprise?
A lean enterprise is an integratedentity that efficiently creates valuefor
its multiple stakeholders by employing lean principles andpractices.
(Murman et al., 2002)
By definition, an enterprise is larger than an individual organization. An enterprise will
be comprised of multiple organizations with a myriad of functional responsibilities.
Efficient management of the enterprise will require identification of cross-boundary
dependencies and interactions. Furthermore, leaders must actively pursue a systems
perspective of the enterprise in order to avoid sub-optimization at the organizational or
functional level. In order to accomplish this, mental models of leadership must be shifted
away from functional organization or silo-ed requirements. Everyone must work
together, understand their place in the enterprise, and embrace a lean culture.
The types of stakeholders involved in enterprise activity will overlap with those
concerned with individual organization progress, but it is possible that there will be a
greater number of stakeholders to satisfy in the enterprise environment. Enterprise
stakeholders will include all employees (including any union affiliations if they are
present), customers, suppliers, leadership and management, and the local community, as
well as others. Just as a customer pulls value from a lean producer, the ideal lean
enterprise will allow all stakeholders to pull value. In the enterprise situation, the needs
of each stakeholder must be balanced against the needs of other stakeholders and the
enterprise itself. In this manner, all concerns can be addressed and encompassed early in
the value delivery process.
The lean enterprise, as I have defined it will adapt lean principles and practices to be used
throughout its operations, and not just limit them to the manufacturing arena. Truly
successful lean enterprises will use lean thinking as they manage operation and support
functions and financial budgeting questions, as well as the overall strategic direction for
the future. A lean enterprise will use lean techniques and tools at the local level and the
enterprise level, and at every level in between. I believe that the challenge of going from
lean at a local level to lean at the enterprise level, and developing and cultivating a truly
lean culture, is embodied in the concept of lean enterprise transformation.
1.3
What is lean enterprise transformation?
Lean enterprise transformation is the journey that employs lean concepts, tools, and
techniques towards the end goal of a lean enterprise. This journey will bring the whole
enterprise, and all personnel, onto the same page when it comes to the core mission and
vision of the enterprise goal. Lean enterprise transformation should be designed to
eliminate the undue and burdensome influence of organizational and functional silos, if it
exists, with a focus on greater communication and less isolation. The wave of
transformational efforts should eventually extend to all suppliers and customers, but
initially and at the very least, should seek out and incorporate their requests and
recommendations.
Lean enterprise transformation entails a set of complimentary initiatives and efforts
executed over a substantial period of time. This must be done in a consistent and
coordinated manner at all levels of the enterprise. Lean enterprise transformation builds
upon more traditional organizational change and lean improvements in that a broader set
of people and functions will be affected. Also, I think non-traditional approaches and
mental models will likely be exercised.
1.4 What is a lean enterprise transformation capability?
A lean enterprise transformation capability is the capability to execute or support a
certain task that is necessary, but not sufficient, for lean enterprise transformation. This
is a capability that must be possessed by any large complex enterprise and deployed in
order for that enterprise to initiate a successful transformation process, and then sustain a
new way of doing business. Once the capability is developed, the whole enterprise
should have access to it and utilize it fully.
In order to accomplish the lofty goals that proponents of lean advocate, I have proposed a
set of twelve lean enterprise change capabilities that I believe are necessary for initiation
and sustainment of lean enterprise transformation. The capabilities have been drawn and
compiled from a combination of organizational change literature and models, and
personal experience and observations. The set of capabilities include:
1. A leadership team with a shared mental model;
2. Planning and implementation process;
3. Balanced and cascading system of metrics;
4. Standardized processes and a team to track them;
5. Compensation and reward system;
6. Developing and deploying vision and mission;
7. Communication and public relations abilities;
8. Change management;
9. Cadre of change agents;
10. Context for local experimentation;
11. Continued learning and self-renewal; and
12. Training and education.
No one of these capabilities, which are explained in Section 4, is more important than the
others. They should be viewed as a set of capabilities, rather than individual abilities that
can be cultivated independently. The systematic nature of this set should reflect the
systems approach that will enhance any lean enterprise transformation.
1.5 Can lean enterprise transformation be successfulin a government
context?
In the vast majority of US Government affiliated enterprises, there is no profit motive or
measure associated with value production. The customers and oversight bodies are
complex and made up of multiple entities with particularly points of view and priorities
as to what is valued. This fact enhances the likelihood of greater resistance to lean
enterprise transformation from some workers, as the bottom line reasons for
improvements will be harder to decipher and quantify. Even though this is not
intentional, it is possible that these policies have the affect of dampening the influence of
the lean enterprise change capabilities outlined above.
Within the Air Force enterprises that I have observed, it is hard for leaders and employees
to agree on goals with clarity, and thus they cannot agree on what is waste and what is
value. They often do not take time to figure this out before undertaking initiatives,
because it is not in their culture to do so. They want to act immediately, often before
taking the time to collect and analyze data. Historically, successful leaders have
embraced this "act immediately" mentality, and have been rewarded for this behavior. I
believe these policies and cultural attributes will likely hamper lean enterprise
transformation if left unchecked.
In a broader sense, government enterprises have long relied on someone else for strategic
direction. This usually comes from high in the military chain of command, including
Congress, the Pentagon, and ultimately, Department of Defense directives and mandates.
This results in a culture in which Air Force enterprises are expected to implement and
refine someone else's strategic plan, and not necessarily devise their own. Now, this is
changing. Throughout the military complex, smaller enterprises are being asked to
complete their own strategic planning process, and undergo transformations designed to
enhance autonomy, while still maintaining structural ties and resources dependencies.
These ideas are an essential part of lean concepts and lean enterprise thinking. These
enterprises are left with a competency gap: they must learn how to plan and implement
their own strategic directives, while still maintaining alignment and consistency with the
wider environment.
I have observed this situation at the three US Air Force Air Logistics Centers (ALCs)
studied for this work:
* Ogden ALC at Hill Air Force Base in Utah (OO-ALC);
* Oklahoma City ALC at Tinker Air Force Base in Oklahoma (OC-ALC); and
* Warner Robins ALC at Robins Air Force Base in Georgia (WR-ALC).
The ALCs are independent enterprises, but they are also part of the larger US Air Force
complex. Their extended enterprise includes each other, and extends upwards through
the Air Force chain of command, through the Pentagon and the Department of Defense,
and all the way to Congress and the President of the United States. For the purposes of
this thesis, I will define three separate systems, even though these ALCs are actually subsystems in the larger Air Force Materiel Command (AFMC) enterprise. This definition
will help me focus on steps that can be taken by each ALC to further their goal of lean
enterprise transformation.
This thesis will address the lean enterprise transformation attempts of the three ALCs in
light of this restrictive government environment. To assume they are capable of
everything a commercial enterprise is capable of is a mistake, in terms of lean enterprise
change capabilities, understanding of their customer, and business motivations for change
(such as savings reinvestment or recognition of lean activity in performance reviews).
This does not mean that lean enterprise transformation will be impossible, but it does
mean that it will be more difficult, and may take longer. I believe the leadership teams at
all three ALCs are capable of rising to this challenge.
1.6 Unique Opportunitiesfor this Research
Research access to each ALC was provided due to on going involvement between the
ALC leadership teams and the Lean Aerospace Initiative (LAI), my research group at
MIT. I was originally introduced to life and work at the ALCs through my work with
four case studies completed at WR-ALC in January 2004. These case studies examined
the lean history of WR-ALC, and the lean efforts within the C-130, C-5, and Purchase
Request areas. In 2004 and 2005, LAI engaged with each ALC in order to facilitate an
enterprise assessment process called Enterprise Value Stream Mapping and Analysis
(EVSMA). An alpha-test of EVSMA was conducted at OO-ALC, followed by a betatest of EVSMA at OC-ALC, a gamma-test of a modified EVSMA process at WR-ALC.
This research is an inductive study. I was brought into each engagement in order to
observe activities and document progress. Through these observations, and my reading
of academic change literature, I devised and developed the set of twelve lean enterprise
change capabilities.
1.7 Larger Theory of Enterprise Change
This research is part of a larger attempt at LAI to identify a broad theory of enterprise
change. My piece examines enterprise transformation in the context of the three ALCs.
This work will be combined with research done at other sites, both military and
commercial. The theory developed will later be tested at a variety of enterprises and
institutions. However, recommendations and suggestions can be made to the sites in
question based on the preliminary analysis provided and a comparison with
organizational behavior literature.
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2
LITERATURE REVIEW AND METHODOLOGY
2.1
From Commercial Organizational Change to Governmental Lean Enterprise
Transformation: An Overview
22
22
2.2.1
2.2.2
2.2.3
2.2.4
General Models of Change
Theorizing Change
Breaking the Code of Change
Leading Change
The Dance of Change
23
24
25
26
27
2.3.1
2.3.2
2.3.3
2.3.4
2.3.5
2.3.6
2.3.7
Barriers to Change
Identifying Resistance
Structural Inertia
Roles of Outside Influences
Organizational Identity and Image
General Cynicism
Perception of Fads and Fashions
The Role of Managers: Showing Emotional Commitment
28
29
30
32
32
33
34
35
2.4
Policy Literature Discussion
36
2.5
Methodology
40
2.2
2.3
2
Literature Review and Methodology
2.1 From Commercial Organizational Change to Governmental Lean
Enterprise Transformation:An Overview
Organizational change has been studied for quite some time now (Beer & Nohria, 2000).
In the past 60 years, scholars have often chosen to focus at the organizational level, while
including details about change effects on individuals and teams. Many aspects of change
efforts and programs, models and attempts, have been studied in both qualitative and
quantitative manners (Kotter, 1996).
I believe expansion from the organizational level to the enterprise level is a logical jump,
and is a reasonable progression of scholarly work in this field. However, this leap of
faith does present some complications. As you cross organizational and functional
boundaries, responsibilities and expectations are more likely to change (Murman et al.,
2002). Also, repercussions can become more numerous and potentially more
complicated. Both of my assertions would lead to an environment less conducive to
change or transformation.
There is a difference between change and transformation. Some leadership team
members that I spoke with indicated that transformation, for them, implies a radical, and
perhaps revolutionary, leap away from business, and thought, as usual. Transformation is
the sum of multiple change efforts conducted in a coordinated manner over a significant
period of time. The net result of this coordinated move is a dramatic change in state, or a
"transformation." I believe enterprise transformation can be thought of and accomplished
as the aggregate of smaller organizational change projects and initiatives.
We are entering new and uncharted academic waters with this expansion from
organizational change to enterprise transformation. The current literature available deals
primarily with organizational change. In the following discussions, I will make all
attempts to justify the expansion, and address any discrepancies where needed.
Furthermore, my reading of the current literature has led me to the conclusion that it deals
primarily with commercial organizations. Few studies have been conducted examining
change in government settings. This thesis is concerned principally with governmental
entities and Air Force Bases in particular. Again, parallels will be observable, and
differences will be noted as appropriate.
2.2 General Models of Change
In order to better assess the change processes currently in progress at the ALCs, we must
first be comfortable with an ideal change process. I have selected four change models
which, when viewed as a set, quite adequately describe a strategy of change management.
They complement each other, and fill gaps were necessary. They present a balance of
bottom-up and top-down change methods. If used sequentially, along with feedback and
re-work when necessary, I believe a leadership team would be well served by these
models. This opinion is based on my observations of leadership teams and my notion of
what I believe is missing in their current efforts.
2.2.1 Theorizing Change
Theorization is one piece of a broader model of institutional change. This step, described
by Greenwood, Suddaby, and Hinings, supports the notion that before an organization
can undergo change, they must conceptualize the change they are seeking, and truly
understand the implications of the initiative they are attempting to begin. Theorization
involves two specific tasks: 1) specification of a "general organizational" failing for
which a local innovation is a "solution or treatment;" and 2)justification of the
innovation (Greenwood, Suddaby, & Hinings, 2002).
Figure 2.1 Model of Institutional Change (Greenwood).
Theorization of change is important because it connects to one of the central concerns of
institutional thinking: the conferring of legitimacy. By conferring legitimacy, people at
all levels of the organization can buy into the change process, and more readily accept the
new procedures being foisted upon them. Theorization is integral to institutional change,
and it allows the rendering of ideas into understandable and compelling formats
(Greenwood et al., 2002).
2.2.2 Breaking the Code of Change
Once change has been theorized, senior leaders must decide on the change management
techniques they are going to use to justify, initiate, and sustain that course of action. In
"Breaking the Code of Change," Beer and Nohria (editors) present the findings of a
Harvard Business School conference at which possible methods were debated.
Underlying much of the debate is the difference between Theory E and Theory O (Beer
& Nohria, 2000).
Theory E and Theory O are two strategies available for change management
professionals and leaders. Both strategies have benefits and costs, and both are valuable
in different situations. Beer and Nohria define the theories as follows:
Theory E has as its purpose the creation of economic value, often
expressed as shareholdervalue. Itsfocus is onformal structure and
systems. It is driven from the top with extensive helpfrom consultants
andfinancial incentives. Change is planned andprogrammatic.
Theory 0 has as its purpose the development of the organization's human
capabilityto implement strategy and learnfrom actions taken about the
effectiveness of changes made. Itsfocus is on the development of a highcommitment culture. Its means consist of high involvement, and
consultants and incentives are relied onfar less to drive change. Change
is emergent, less planned andprogrammatic. (Beer & Nohria, 2000, p.3)
Change management is essential to any type of planned change effort. The truly
important conclusion to be drawn from this work is that every organization can, and
should, customize the best balance for their predicament. This balance is known as
Theory OE. Every situation calls for a different equilibrium. The challenge for leaders is
to recognize the differences between the two strategies, assess their strengths and
weaknesses, and achieve the correct alignment.
Theory E
Theory O
Theory OE
Goals
Maximize Value
Develop capabilities
Leadership
Top down
Bottom up
Embrace paradox
between value and
organizational capability
Set direction from top
and engage people from
Dimensions
of Change
below
Focus
Structure and systems
Corporate culture
Focus simultaneously on
hard and soft
Process
Reward
System
Use of
Consultants
Programmatic
Financial incentives
lead
Expert consultants
analyze problems and
Emergent
Commitment leads
and incentives lag
Consultants support
process to shape
Plan for spontaneity
Incentives reinforce but
do not drive change
Consultants are expert
resources who empower
shape solutions
own solutions
employees
Table 2.1 Descriptions of Theory E, Theory 0, and Theory OE (Beer & Nohria, 2000).
2.2.3 Leading Change
Subsequent to selecting a change management strategy, leaders must initiate and sustain
the change planned. In his 1996 book "Leading Change," Kotter outlines an eight-stage
program designed to highlight errors to avoid and opportunities for success during all
periods. He acknowledges that change is hard and that most efforts will fail, but stresses
that organizations who follow his steps are more likely to be victorious. The eight-stages
are: 1) establishing a sense of urgency; 2) creating the guiding coalition; 3) developing a
vision and strategy; 4) communicating the change vision; 5) empowering employees for
broad-based action; 6) generating short term wins; 7) consolidating gains and producing
more change; and 8) anchoring new approaches in the culture (Kotter, 1996).
One lesson from this work is that change involves numerous phases that, taken together,
usually take a long time. And sometimes, that amount of time is longer than some CEOs
are willing to wait. However, he cautions that skipping steps creates only an illusion of
speed and never produces a satisfying result (Kotter, 1995). A second important lesson is
that critical mistakes in any of the phases can have a devastating impact, slowing
momentum and negating previous gains (Kotter, 1996). The model proposed by Kotter is
an example of a Theory E driven change process.
2.2.4 The Dance of Change
As any change initiative progresses, stakeholders will display resistance; this is just a fact
of life and an especially salient fact of change. Instead of addressing change initiatives
and management techniques directly, "The Dance of Change," by Senge, Kleiner,
Roberts, Ross, Roth, and Smith, book attempts to direct change through mitigation of
barriers, such as those discussed later, as well as others. In particular, they advocate the
creation of a learning organization, and a culture that can mitigate resistance effectively
on its own.
All organizationsthat innovate or learn come up againstinnate challenges
that blockprogress. The harderyou push against these challenges, the
more they seem to resist.But ifyou can anticipate them, and buildyour
capabilitiesfor dealingwith them, they become opportunitiesfor growth.
(Senge et al., 1999)
This can be a very effective method of change and transformation effort enhancement if
followed well, and an example of a Theory O driven change process. However, in order
for this strategy to be successful, senior leaders and change agents must be able to
identify barriers to change. Those most commonly associated with large-scale enterprise
transformation are discussed below.
2.3 Barriers to Change
As discussed earlier and in the "Dance of Change", resistance is something to be
expected, understood, dealt with, and conquered, as opposed to feared and forgotten until
it is too late. The capability to develop these answers, and train people to have them on
hand, is a necessary condition for successful change. The first step is to identify the
different barriers to change, and then address each one (or at least the primary drivers)
before they overwhelm the change effort. The following sections address some of the
most commonly observed types of barriers to change:
* Identifying Resistance
* Structural Inertia
* Roles of Outside Influences
* Organizational Identity and Image
* General Cynicism
* Perception of Fads and Fashions
* The Role of Managers: Showing Emotional Commitment
I have chosen these because I believe they best describe the types of resistance I
witnessed at the three Air Logistics Centers.
2.3.1 Identifying Resistance
Resistance to change will likely be an obstacle to successful implementation of
reinvention initiatives (Trader-Leigh, 2002). The different types of resistance
encountered will be based on how individuals and organizations perceive their goals are
affected by the change. In other words, if one man feels his job will be affected more
than someone else on the other side of the factory or office, change agents should expect
to see more resistance from him. Trader-Leigh suggests that all change agents should
anticipate resistance and learn to manage it effectively.
This study is particularly interesting because it is one of the few pieces of the literature to
deal with a governmental organization. She identified key forces or resistance at the
State Department during a time of transformation. These forces include self-interest,
psychological impact, and tyranny of custom, redistributive effects, destabilization
effects, culture compatibility, and political forces (Trader-Leigh, 2002). I have spoke
with people at the ALCs who indicated they had observed all of these destabilizing forces
during local lean efforts, and they believed these forces were working against the
transformation process.
2.3.2 Structural Inertia
...for wide classes of organizationsthere are very strong inertial
pressures on structure arisingfrom both internalarrangements(for
example, internal politics) andfrom the environment (forexample, public
legislation or organizationalactivity). To claim otherwise is to ignore the
most obvious feature of organizationallife. (Hannan& Freeman, 1977)
Structural inertia has been defined as the relationship between the speed at which an
organization can transform (and thereby succeed or die - as shown in Figure 1) and the
rate at which the surrounding environmental conditions change (Hannan & Freeman,
1984). If an organization can change rapidly in the face of new circumstances, it is said
to have low inertia. Conversely, if an organization has become so complex that it cannot
react in a flexible manner to new situations, it is said to have high inertia (Kelly &
Amburgey, 1991). Furthermore, because organizations exist in various environments, it
is possible to be considered flexible with low inertia in one context, while being seen as
steadfast with high inertia in another (Hannan & Freeman, 1984).
In their 1977 paper, Hannan and Freeman attempt to extend evolutionary theory into the
realm of organizations, and they feel justified in doing so. They use an analogy of
"inertial forces" as those forces or outside environmental pressures that would cause an
organization to undergo change, or an animal to evolve. They argue that high levels of
inertia (or un-changeability) result from external pressures.
However, they also contend that this is part of organization natural selection, and that, "If
selection favors reliable, accountable organizations, it also favors organizations with high
levels of inertia (Hannan & Freeman, 1984)." They suggest that inertia increases with
age, and therefore older organizations are less likely to change, but also more likely to
survive in the long run. They are unsure of how size plays a role, although they are
leaning towards concluding that smaller organizations can change more easily (Hannan &
Freeman, 1977).
All of the factors leading to high structural inertia, and therefore low changeability, are
resident and descriptive of all three Air Logistics Centers. They are older, large, complex
enterprises stuck in a multi-faceted and uncertain environment. My reading of this
concept leads me to believe that transformation at the ALCs will be extremely difficult,
unless they can develop the capability to plan within this environment, or modify their
situations sufficiently. Hannan and Freeman (1977) suggest that some organizations will
die out if they are unable to change, and that this process is part of the natural course of
organizational evolution.
2.3.3 Roles of Outside Influences
The central thesis of this concept is that outside influences, and especially marked
environmental punctuations, can dramatically reduce pressures and rewards for
organizational inertia. Thereby, outside influences, such as regulatory or policy shifts,
can alter both an organization's propensity for change and their survival chances
following change (Haveman, Russo, & Meyer, 2001).
Essentially, this concept provides a balance for structural inertia, and shows that at times
of outside pressure an organization can react quickly if they try hard enough. The ALCs
are currently concerned with two types of outside influence that could alter the course or
effectiveness of their lean enterprise transformation. First, the on-going war on terror has
driven them to higher rates of production and shorter time scheduled than were necessary
before. Second, the Base Realignment and Closure (BRAC) process can significantly
shift their business and transformation plans if any of these bases is put on the closure list
(see Section 5).
2.3.4 Organizational Identity and Image
In their 1991 paper, Dutton and Dukerich defined the terms organizational identity and
organization image, with a particular nod to the effects of these concepts on
organizational change. Organizational identity is the sum of the distinctive attributes of
one organization, as seen by someone on the inside. Organizational image is what an
insider believes is perceived by an outsider about the organization in question (Dutton &
Dukerich, 1991).
Both of these concepts can influence a senior leader as they are crafting the case of
change, and can either hamper or hasten transformation efforts. Gioia, Schultz, and
Corley discuss the potential benefits of a flexible and fluid organizational identity in their
2000 paper. They introduce the concept of adaptive instability of organizational identity
and image. They argue that this adaptive instability allows for flexibility and change in
the long run, and is a concept that should be further explored in research and in practice
(Gioia, Schultz, & Corley, 2000).
The ALCs have an organizational identity that is firm and unresponsive, but respected on
the outside, leading to a positive organizational image. This lack of flexibility, and the
structure of the Air Force as a whole, could thwart lean enterprise transformation efforts
if not handled and addressed appropriately.
2.3.5 General Cynicism
Cynicism can manifest itself in a myriad of fashions within an organization or enterprise.
Dean, Brandes, and Dharwadkar (1998) define organizational cynicism as, "a negative
attitude toward the organization, comprising certain types of belief, affect, and behavioral
tendencies." This quality or feeling can be resident in any person associated with the
organization, either inside or outside. And these feelings can disrupt the transformation
process, by increasing resistance and general bad feelings towards new processes or
leaders (Dean, Brandes, & Dharwadkar, 1998).
Unfortunately, the authors do not give suggestions for how to manage this occurrence,
but instead outline a future research agenda for further study.
2.3.6 Perception of Fads and Fashions
As organizations change, or choose not to change, over time, they make decisions just as
any rationale person would. Sometimes those decisions are efficient, and result in
innovation seen as beneficial. Other times, organizations chose innovations or
developments that are actually sub-optimal for their predicament. This duplicity is
known as the efficient-choice perspective, and in his 1991 paper, Abrahmson
acknowledges the limitations of this school of thought by describing situations in which
companies do not choose efficient innovations, or they choose inefficient technologies.
In order to extend this model, the Abrahamson describes three additional perspectives
that might allow us to better understand the diffusion of innovations throughout
organizations within a particular industry:
Fads - organizations look to imitate their successful friends because they are
unsure of their goals and are not under a lot of outside pressure;
* Fashions - these trends lead to the adoption of inefficient innovations because
groups are still unsure but this time they are susceptible to outside pressure; and
* Forced-selection - this leads to coercion from more powerful groups over less
powerful groups, and suggests that inefficient innovations will be adopted, or that
efficient ones will be passed.
He suggests that if these perspectives can be applied to decisions already made, there is
no reason for leaders not to take these assumptions and descriptions into consideration
when making new decisions, and avoid the pitfalls of peer pressure. Alternatively, he
also contends that even symbolic adoption of some innovations will help in long run
reputation, even if the specific technology is not important to the business bottom line
(like the wide-spread adoption of quality circles) (Abrahamson, 1991).
2.3.7 The Role of Managers: Showing Emotional Commitment
Managers can be sources of resistance, but, if trained properly, they can also be a positive
force for change and honesty in the transformation process. In his 2002 paper, Huy
discusses the benefits of managers showing emotional commitment to change. He
suggests that managers should be trained in how to show personal emotional commitment
to the change in question, as well as how to balance the emotional needs of employees
and answer their questions and concerns (Huy, 2002). This could be a new role for
middle managers during radical change processes. If this managerial emotional
commitment could be facilitated, fostered, and grown, less resistance may be
encountered.
A conceptual model for how managers should go about showing this emotional
commitment was presented by (Isabella, 1990). In the course of her research, she is able
to use the evolving interpretations of key events in a radical change process by managers
to fully understand the history of a particular organization (Isabella, 1990). Also, she
suggests a four stage cognitive model that describes what managers are trying to do
during each stage of a change process. These stages include: 1) anticipation, 2)
confirmation, 3) culmination, and 4) aftermath (Isabella, 1990). She also highlights the
event triggers that help managers know when to move from one stage to the next. She
recommends keeping everything in terms of the personal - "what is this going to do to
me."
Senior leadership at all three ALCs will need to convince their middle managers to
express this emotional commitment if their lean enterprise transformation efforts are
going to succeed. Middle managers are the link between top-down and bottom-up
change processes, and the two must be used in conjunction to assure triumph.
2.4 Policy Literature Discussion
Within any enterprise, policies are used to construct the environment in which all
business, and change, occurs. This is especially true of any governmental organization,
including the US Air Force, and therefore, the three Air Logistics Centers. At OO-ALC,
OC-ALC, and WR-ALC, policies are set locally, as well as outside of the enterprise
boundaries by others within the military chain of command. Recent analyses of these
policies and contexts have revealed some intriguing facets of these enterprises.
In 1999, the General Accounting Office (GAO) issued a report that examined three
reform initiatives underway at the (five) Air Logistics Centers at the time. One of those
initiatives was Agile Logistics, which was an attempt to bring lean principles to the world
of Air Force logistics. This report identified a number of management changes that
would better support initiative implementation. Included in this list were:
* Developing an implementationplan that establishesstandardmeasuresfor
assessing whetherprocess improvement initiativesare achieving desiredgoals
and results;
* Assessingprogress toward implementing standardorganizationalstructures and
processes;
* Addressing weaknesses in information management systems used to manage
process and assess activityperformance, consistent with the Clinger/CohenAct
and Year 2000 requirements;
* Identifying costs offully implementing the initiatives and avoidingpremature
budget reductions in anticipationof savings; and
* Developing effective working agreements with other defense logistics activities
that are key to timely access to needed repairparts and successful implementation
of logistics reforms (GAO, 1999).
Of these changes proposed, all deal with policies internal to the enterprises. Of particular
interest is the recommendation regarding information management and the
Clinger/Cohen Act of 2000. This act deals with information technology and
management, and stipulates how new IT systems should be introduced and utilized. This
is an example of a policy set outside of the ALCs that greatly affects their transformation
abilities. Interviewees at each ALC indicated that this act has prevented them for
purchasing or implementing information technology solutions that they would have
preferred to see introduced.
The last two recommendations are also quite interesting. The "identifying costs"
proposal hints at the fact that while acting upon these reform initiatives, the ALCs
attempted to quantify and reinvest savings that never materialized (GAO, 1999). Policies
must be put into place to ensure this does not happen again. The last proposition
acknowledges the fact that the ALCs must work more closely with each other and their
customers in order to best reform their supply chain management skills. Policies that
encourage teaming and partnering can work towards achievement of this goal (GAO,
1999).
In addition to other governmental organizations, the ALCs have also been assessed by
outside groups and think tanks. In 2004, the RAND Corporation issued a report (part of
an on-going Air Force funded series of studies) that examined organizational levers that
could be used to enhance acquisition reform implementation. In particular, they looked
at WR-ALC, and attempted to identify the levers available to leaders to further adoption
of new acquisition processes. Through interviews and surveys, they found that the
following levers had either positive, negative, or no affects on process adoption:
* Trainingin acquisitionreform -positive;
* Attitude towardacquisitionreform -positive;
* Effective teaming - negative;
* Contractorpartnering-positive;
*
*
*
*
*
Leadershipconsistency -positive;
Performanceincentives - none;
Air Forcepartnering- none;
Performanceevaluation - negative; and
Job experience - negative (Chenoweth, Hunter,Keltner, & Adamson, 2004).
These results indicate that more can be done to increase new process adoption. Polices
should be developed such that the positive levers are emphasized, and the neutral and
negative levers are either reshaped or replaced.
Stepping away from the ALCs for a minute, there is another interesting example of the
negative aspects of policy on a governmental program, and the policy changes
recommended by an outside party: the Columbia Shuttle Disaster. The Columbia
Accident Investigation Board concluded, in August 2003, that the disaster was the result
of many technical and organizational failures. In their recommendations to be completed
before a return to flight, they highlighted the need for better public safety policy and
scheduling policies that allow questions of safety to be adequately addressed (CAIB,
2003).
In the ensuing two years, NASA has worked to create and implement these new
policies, and was successful in returning to flight in July 2005. Also, during this flight,
new techniques were used to observe all possible difficulties with lift-off, and new
measures were taken in-flight to correct damage found. There was a new recognition that
something could be done during the mission to save lives, rather than waiting to fix the
problems after a return to Earth. Enterprise transformation within a government context
is possible, but difficult and demanding,
2.5 Methodology
This research is the result of an inductive study based on the lean enterprise
transformation efforts at the three US Air Force Air Logistics Centers. It was inductive
because I developed the list of capabilities after reviewing the above-cited literature, as
well as after spending time at each of the ALCs, observing them and their transformation
attempts, in real time.
My work is an extension of scheduled LAI engagements with the three sites, including:
* Case study work at Warner Robins (January 2004)
* EVSMA at Ogden (December 2003 to June 2004)
* EVSMA at Oklahoma City (May 2004 to August 2004)
* EVSMA at Warner Robins (April 2005 to May 2005)
EVSMA is the Enterprise Value Stream Mapping and Analysis Process (Nightingale &
Stanke, 2005) developed at LAI to jump-start the lean enterprise transformation process
at enterprises throughout the aerospace industry. The three ALCs present one alpha-test
(OO-ALC), one beta-test (OC-ALC), and one gamma-test (WR-ALC).
My first introduction to life at the ALCs was through the case study work completed at
WR-ALC in January 2004. I was part of a five-person team that traveled to WR-ALC in
order to study recent lean transformation efforts in different parts of the enterprise. (All
of the case studies can be found at http://lean.mit.edu/l.
Personally, I was responsible
for the case study of their lean efforts surrounding the Purchase Request process. This
study presented me with new ideas regarding the change management necessary for
successful implementation, as well as a broader, enterprise view of lean as this was not
happening on the manufacturing floor.
I next had the opportunity to study the ALCs and their transformation efforts through
direct observations during the EVSMA process. At OO-ALC, I saw only the last few
meetings, while I was present for eight out of nine of the meetings at OC-ALC and two
out of two meetings at WR-ALC. These meetings gave me good insight into the inner
workings of the leadership teams. I was able to observe their interactions, their
disagreements, and their methods of assigning group priorities. I interviewed leaders
outside the meeting to understand their thinking and their past experience with enterprise
change. These interviews and observations, combined with my literature review, allowed
me to identify some capabilities that they were missing.
I deviated slightly from open-ended interviews with the leadership team and select
change managers at WR-ALC. During these interviews, I administered a twelve-part
questionnaire. The questionnaire was designed to introduce the twelve lean enterprise
change capabilities I had developed, and then question the individual regarding their
perception of the enterprise's current performance. In addition to recording precise
numerical responses, I also gave each respondent the opportunity to comment on my
questions. These comments proved quite useful for me in better understanding the
current state of lean enterprise transformation. Furthermore, after administering the
questionnaire, I asked each participant to perform a card sorting exercise. They were
asked to sort twelve cards, each printed with one lean enterprise change capability, into
two lists: first, to assess the current performance of the enterprise, starting from what they
do best and going to what they do worst; and second, to assess the future performance
needed in terms of what they need most to what they need least to make lean enterprise
transformation stick. The results of this questionnaire and sorting activity can be found
in Section 6.
All data collected were compiled, sorted, and classified when I returned to LAI. I
developed the list of twelve lean enterprise change capabilities through examination of
these data, organizational change literature, and the definitions included within LESAT
("Lean Enterprise Self Assessment Tool," 2001).
3
LEAN ENTERPRISE CHANGE CAPABILITIES..................
44
3.1
Introduction .............................................................................................................................
3.2
LESAT as a Preliminary Indicator .............................................................................................. 45
3.3
A Leadership Team with a Shared Mental Model................................
3.4
Planning and Implementation Process .................................................................................. 51
3.5
Balanced and Cascading System of Metrics ...................................................
3.6
Standardized Processes (and a Team to Track Them) ........................................
3.7
Compensation and Reward System ....................................................................................... 61
3.8
Developing and Deploying Vision and Mission ........................................................................
63
3.9
Communication and Public Relations Abilities ................................................
67
3.10
68
Change Management...........................................................
3.11
Cadre of Change Agents ......................................................................................................... 71
3.12
Context for Local Experimentation ............................................................................................. 72
3.13
Continued Learning and Self-Renewal ..................................................................................
3.14
Training and Education .......................................................................................................... 77
3.15
Conclusions ..............................................................................................................................
............
44
48
.......
55
57
75
79
3 Lean Enterprise change capabilities
3.1 Introduction
Analysis of the literature and incorporation of LESAT definitions and descriptions ("Lean
Enterprise Self Assessment Tool," 2001) with my own observations and field experience,
allowed me to create a list of lean enterprise change capabilities. All twelve of these
capabilities are necessary, but individually not sufficient, for successful initiation and
sustainment of lean enterprise transformation:
1. A leadership team with a shared mental model;
2. Planning and implementation process;
3. Balanced and cascading systems of metrics;
4. Standardized processes and a team to track them;
5. Compensation and reward system;
6. Developing and deploying vision and mission;
7. Communication and public relations abilities;
8. Change management;
9. Cadre of change agents;
10. Context for local experimentation;
11. Continued learning and self-renewal; and
12. Training and education.
Using this compiled list, any enterprise can be assessed according to the existence of
these capabilities, and predictions can be made regarding their chances for success.
Currently, there is no formal scale associated with maturity of these capabilities or their
state to determine readiness for lean enterprise transformation. Throughout the rest of
this thesis I will refer to current readiness levels in terms of low, medium, and high for
each capability.
3.2 LESA T as a PreliminaryIndicator
The Lean Enterprise Self Assessment Tool (LESAT) is a tool intended to appraise the
leanness of an enterprise, as well as its readiness for change ("Lean Enterprise Self
Assessment Tool," 2001). (The full document can be found at http://lean.mit.edu.) The
tool was designed by LAI representatives to complement other tools already developed
and in use, including the Enterprise Transition to Lean Roadmap (Figure 3.1). During the
development and research phases of these tools, academic, industry, and government
input was considered in order to make them as robust as possible. LESAT went through
alpha and beta testing between 1999 and 2001, and was released to the LAI consortium,
along with a facilitator's guide in 2001 (Hallam, 2003, Nightingale and Mize, 2002). The
assessment tool has also been translated into a version particularly suited for government
enterprises ("Government Lean Enterprise Self Assessment Tool," 2005, also found at
http://lean.mit.edu).
LESAT uses a five-point capability maturity matrix to measure performance. Assessors
are asked to gauge their enterprise according to both current performance or "as is" state,
as well as what they envision for future performance or "desired state." Throughout the
assessment, each lean practice and the related maturity levels are precisely defined. Also,
general descriptions of each maturity level are given at the beginning of each section in
order to maintain consistency across practices (Table 3.1). As compared with the lean
enterprise change capabilities defined below, a LESAT score of 1 to 2 corresponds to a
low maturity level, a LESAT score of 3 corresponds to a medium maturity level, and a
LESAT score of 4 to 5 corresponds to a high maturity level.
Maturity Level
1
General Description
Some awareness of this practice; sporadic improvement activities
may be underway in a few areas.
2
3
4
5
General awareness; informal approach deployed in a few areas with
varying degrees of effectiveness and sustainment.
A systematic approach/methodology deployed in varying stages
across most areas; facilitated with metrics; good sustainment.
On-going refinement and continuous improvement across the
enterprise; improvement gains are sustained.
Exceptional, well-defined, innovative approach is fully deployed
across the extended enterprise (across internal and external value
streams); recognized as best practice.
Table 3.1 LESAT Capability Maturity Levels - general descriptions ("Lean Enterprise
Self Assessment Tool," 2001).
The assessment tool is divided into three sections. This configuration allows different
elements of lean maturity to be highlighted and emphasized with particular questions.
The first section, "Lean Transformation/Leadership," assesses strategic integration,
leadership and commitment, value stream analysis and balancing, change management,
structure and systems, and lean transformation planning, execution and monitoring. The
outline of this section follows the LAI Transition to Lean Roadmap (Figure 3.1). The
second section, "Life Cycle Practices," examines enterprise level core processes
(including acquisition, program management, requirements definition, product/process
development, supply chain management, production, and distribution and support) and
key integrative practices. The third section, "Enabling Infrastructure," scrutinizes lean
organizational enablers (finance, information technology, human resources, and
environmental, health and safety factors) and lean process enablers (standardized
processes, common tools and systems, and variation reduction).
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Because LESAT was designed to assess "lean maturity" it is not organized to assess
enterprise change capabilities. However, there are parallel or related concepts for the
change capabilities in the leadership and enabling infrastructure sections of LESAT. To
help develop these connections between LESAT and the twelve change capabilities, and
use the LESAT scores to provide insight into the change capabilities, I will describe each
transformation capability and the associated LESAT section and question.
3.3 A Leadership Team with a Shared Mental Model
A leadership team with a shared mental model should embody the assumptions of both
Theory E (focus on economic value delivered) and Theory O (focus on development of
organizational capabilities), and should strive to balance the approaches suggested by
both theories (Beer & Nohria, 2000). The team must understand the interactions
throughout the organization, and have the capacity to optimize across the system, and
know that politically, as one employee stated, "Not everyone will win every day." The
EVSMA process can help develop this capability by encouraging honest discussion and
providing a forum for leadership communication, but it does not ensure that it will
persist.
This team must have one clear leader driving all efforts, but this leader should also be a
part of the team, and must share the same mental model. Everyone else should not be
expected to defer to the opinions of this leader all the time, but nor should team members
reject the opinions offered by the leader just out of hand. Everyone should be given the
opportunity to express innovative ideas free from judgment and pervasive criticism
(Isabella, 1990).
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implementation processes on a more regular basis. They will be able to agree on the case
for action, identify their future state goals, and collectively create a transformation plan
that will allow victory.
The first section of LESAT discusses and describes qualities inherent in a leadership
team that shares drive and motivation. In particular, I believe TTL link I.B - Adopt Lean
Paradigm - best captures the shared understanding needed by a leadership team. Included
within this section are the practices and maturity levels captured in Table 3.2.
The EVSMA process can instigate the formal process of leadership education, as well as
provide an environment in which a consensus surrounding a commitment to lean
enterprise transformation could be built. A high maturity level for all of these practices
would include the ability to make lean thinking integral to leadership discussions and
events at any site and any time. In order to move forward with this capability, and with
lean enterprise transformation, an enterprise will have to strengthen its leadership
commitment, better communicate this commitment and enthusiasm to the workforce, and
show specific examples of lean improvements in leadership processes.
However, developing this capability is bigger than just "executive development" and
typical team building exercises. The team must actively share views and attitudes, and
they must understand how they can work together for the greater good of the enterprise.
These activities should not be seen as part of the lean initiative underway, but rather as a
foundation for overall successful management. This quality is captured in LESAT
practices I.B.1 and I.B3: leaders must actively work to educate themselves in lean
practices together, and create a new vision of the enterprise that they all believe in. High
maturity in these practices would indicate an enterprise leadership team ready to proceed
with lean enterprise transformation.
3.4 Planning and Implementation Process
A Planning and Implementation capability entails an efficient and effective process
which brings lean concepts and tools to the truly enterprise level. This process must
allow senior leaders, and others, to connect strategic planning to financial budgeting and
resource (people, time, and money) allocation all the way through operationalization of
ideas and efforts.
Up-front planning is important, but follow-through is critical. Many transformation
efforts get stuck when then cannot generate and then sustain quick wins, and when they
cannot link individual successes back to the larger strategic goals of the enterprise, such
that everyone can become excited (Kraatz & Zajac, 2001). There is a difference between
planning and acting, and the latter should not be automatically substituted for the former.
This capability will go hand-in-hand with the system of metrics capability, as that
capability will provide a way to track the effectiveness and efficiency of this planning
and implementation process.
The planning and implementation process capability is stressed throughout LESAT;
likenesses of this capability can be seen in all three sections. Those practices that best
illustrate this capability and its relationship to the leadership team necessary to take
advantage of an efficient and effective process are found in Section I, and highlighted in
Table 3.3.
Throughout the EVSMA process, leadership teams are challenged to include lean projects
and efforts in their strategic plans. Stakeholder analyses are completed, and the
knowledge generated through this analysis will allow teams to balance long-term and
short-term stakeholder objectives as they move forward with their transformation efforts.
An enterprise with low LESAT maturity must work to develop a model through which all
lean efforts can be coordinated and aligned such that they can avoid sub-optimizing the
systems. As maturity levels rise, they must strive to allow local managers and employees
to correct mistakes and enable fast corrective action. Continuous improvement must be a
priority for teams with low to medium maturity levels. Otherwise momentum can be lost,
and transformation may stall. Teams with high LESAT scores on all seven of these
measures will be able to demonstrate the capability of an effective and efficient planning
and implementation process.
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A system of metrics should be designed such that it supports the strategic intentions of
the enterprise. The set should drive ideal behaviors at all levels, as opposed to behavior
devised purely to meet expectations. Ultimately, metrics should drive behavior that
results in the delivery of expected value to all stakeholders. Vikram Mahidar, another
LAI research assistant, has devised a graphical representation of the cascading nature of
an effective system of metrics (Figure 3.2).
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Figure 3.2 Conceptual design for the Lean Enterprise Performance Measurement System
(Mahidhar, 2005).
Quite importantly, everyone involved in collection of any data should understand the
rationale behind those metrics selected. This understanding will establish a sense of buyin from all employees. Also, if people recognize and respect the justification and
motivation for each measure, they may see a reduced incentive to "game the system" and
manipulate the way data are reported.
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At LAI, we subscribe to the idea that when it comes to enterprise level metrics, fewer are
better. Fewer metrics at the enterprise level allows for ease of reporting and ease of
problem solving (Mahidhar, 2005). This concept is also captured in LESAT (Table 3.4)
under practice I.C.4, but it is not expected until a level 3 maturity has been reached. This
indicates that enterprises with low capabilities are still able to instigate transformation
efforts, but must develop the capability further before success can be assured. Also,
metrics should not be used only for reporting and pure data collection: the data must be
used for learning and optimization across the enterprise. This is recognized by high
maturity enterprises, and is well defined in LESAT practices I.F.2 and I.G.2.
However, all of this does not imply a specific "balanced scorecard" approach (Kaplan &
Norton, 1996), but rather just the idea that metrics must be ingrained into the organization
and used to test and validate all improvement efforts, and used when making decisions at
all levels. For an enterprise to arrive at high maturity in this capability, this system of
metrics will become part of the new enterprise culture. Everyone must be trained to
appreciate metrics, and replace the "check the box" mentality of developing plans that are
never implemented and followed.
3.6 Standardized Processes (and a Team to Track Them)
Standardized processes and standard work are hallmarks of a truly lean enterprise. While
a new organization or enterprise can take the time to design effective and efficient
processes from scratch, this is virtually impossible for an existing and complex
enterprise. Because of this, any enterprise looking to embrace lean transformation must
work to document current processes, develop and standardizing new or existing process
where applicable, and continue to track these processes and their adoption by workers
and employees (Spear & Bowen, 1999). Standard processes allow workers the flexibility
to identify suspected problems, collect data as to the cause of this anomaly, and then
implement at solution as soon as possible. This greater flexibility allows change to occur
in that the "community of scientists" is free to work on local projects without approval
from higher levels.
The capability to standardize and track processes would likely involve a team or body of
people that would have a myriad of responsibilities:
* Identifying processes in which standard work could be designed and
implemented throughout the enterprise;
* Coordinating experts in every office or shop involved;
* Facilitating the design of the new work;
* Educating people on the new work;
* Providing coaching resources necessary for local leaders to train
people on the new work; and
* Collecting data for follow-up and documentation.
This team would also be a clearing-house for processes, such that in cases where
processes are similar, each team does not have to reinvent the wheel. They would also
manage all improvement practices, such that "lean" becomes an all-encompassing mindset, instead of just a set of tools to use. However this team should not be seen as the only
change agents in the picture. Instead, they can be viewed as supplementary to the
facilitators and coaches and change agents described below.
The capability encompassed by standardized processes and a team to track them is
codified within three questions in Section III of LESAT. This section focuses on
enterprise infrastructure necessary for successful lean enterprise transformation. In
particular, the practices identified in Table 3.5 discuss lean process enablers that will
enhance lean enterprise transformation.
An enterprise with low maturity in this capability will recognize that standardized
processes are important, and there may be small examples of efforts underway to tackle
this issue at the local level. It is not until medium to high maturity is reached that an
enterprise level capability of this nature is truly developed and then deployed. If an
enterprise struggles to document process improvements in a concise and easy to use
format that can be transferred easily, it will likely struggle with the overall transformation
process as well. Enterprises with low maturity levels must work to develop common
tools and systems which can provide easy access to and reuse of knowledge across
product value streams. Variation reductions should be attempted as a transition from low
to medium maturity in this capability.
3.7 Compensation and Reward System
Significant research and practical experience has shown that people like to be rewarded
for a job well done and for the implementation of new ideas (Jensen, Value Maximization
and the CorporateObjective Function, in Beer & Nohria, 2000). Any enterprise
attempting a lean transformation must have the ability to do this throughout their
enterprise, even where the unions or other organized labor groups are involved.
Compensation and reward programs can and should be used to reinforce positive
behaviors and transitions to new processes.
This system could also be used to stress the importance of metrics and follow-up, and not
just the "new idea" or process itself. The system must be designed such that either it is
the only be in place, or that it does not compete, directly or indirectly, with any other
program already in use. "Lean" activity, or another term that serves as a proxy for the
idea of being involved, and eventually managing, process improvement activities, should
be incorporated into the review and promotion process
The capability of a compensation and reward system is only hinted at by LESAT (Table
3.6). Within practice I.G.3, the level 3 maturity description includes recognition and
reward of people who successfully implement lean practices. This indicates that an
enterprise with low maturity in this capability will not have the ability to reward
successful people, and therefore might not be able to publicize these success stories and
encourage others to act in similar manners.
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However, this practice specifically speaks of leadership recognition and reward. I believe
this capability must include compensation and rewards for people at all levels throughout
the enterprise, and this is not currently captured sufficiently by LESAT. Practice I.D.5
looks for incentive alignment and this should be considered part of the capability of
compensation and reward. However, I do not think the tool goes far enough in promoting
necessary incentives for lean enterprise transformation. In particular, it does not
specifically mention which incentives hinder and which encourage lean behavior.
Enterprises with low to medium maturity levels should be expected to have some system
of compensation and reward already in place, even if these have not yet been tailored to
the goal of lean enterprise transformation. In order to move forward, they will need to
emphasize and design new systems that foster lean activity, and eventually do away with
those that jeopardize lean efforts. This alignment is necessary for high maturity, and for
successful lean enterprise transformation. Government enterprises will likely encounter
particular difficulties with this capability due to cultural elements and policies that restrict
the use of monetary reward systems, though some leaders have been able to overcome the
challenge.
3.8 Developing and Deploying Vision and Mission
Vision and mission statements can help further the cause of transformation, and can
enhance commitment to the tough road ahead (Armenakis & Harris, 2002). These
statements can help all employees understand where the enterprise is going and why, and
they can anticipate and neutralize resistance yet to come. The vision and mission
statements are important ways to communicate with all stakeholders and display the case
for action (Collins & Porras, 1996). This capability is linked to the "communication and
public relations abilities" capability, but is more concerned with what is being
communicated, rather than how it is being communicated.
Senior leadership must spend time developing appropriate vision and mission statements
that will capture the case for change and inspire the workforce to ready and willing to
transform. These declarations must be communicated effectively and continuously, and
they must resonate with the intended audience. Leadership communication style will be
very important for the development of this capability (Simons, 2002), as will the
entwining of this capability with communication and public relations abilities.
In addition to these brief but effective statements, this capability also encompasses the
more general concept of a new vision of the enterprise. This new vision should stretch
the imaginations of anyone introduced to it, and should inspire people to act for the good
of the enterprise (Collins & Porras, 1996). This is closely associated with the "leadership
team with a shared mental model" capability, and entails and team that has worked
together to adopt a future state vision for what they want their enterprise to look like.
The EVSMA process can help leadership teams build and agree to this vision, and allow
them to articulate their enterprise goals in less-than-business-like terminology.
LESAT includes the measurement of a practice (Table 3.7) that describes a lean
enterprise vision as a "new mental model of the enterprise." The maturity levels
associated with this practice mirror the process of adoption throughout the enterprise,
first with the leadership team, then with all employees, and eventually throughout all
stakeholders. This would generally correspond to the same maturity levels I have
envisioned for this capability. (It should be noted that I also used this practice as part of
the set used to describe a leadership team with a shared mental model. I believe
duplication is okay, as many concepts are captured by each LESAT practice.)
However, LESAT does not discuss the capabilities needed in order to first develop and
then deploy and reinforce this vision. Also, the assessment tool does not consider pure
vision and mission statements, which I believe are equally important. While having these
statements written down may seem contrary to the ideal lean culture of a learning
organization, I believe they are necessary, at least at the beginning stages of
transformation, such that all leaders can effectively communicate the same message. I
believe this process of agreeing to and writing down vision and mission statements are
important facets of this capability, and they must be addressed and adopted before lean
enterprise transformation is attempted.
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3.9 Communication and Public Relations Abilities
Lean enterprise transformation requires specific strategies for communicating goals and
objectives, as well as instances of data-documented success, throughout all levels of the
enterprise. But this is more than just a communication plan. This capability should be
designed to enhance cascading communication downwards, as well as advancing and
augment horizontal communication between silos and functional organizations
(Armenakis & Harris, 2002).
Communications within the enterprise are important, as are comprehensive
communications with all stakeholders. Enterprises are more complex than organizations,
and therefore communication abilities are particularly important as messages will need to
travel further and be communicated by a greater number of people. This capability
should also extend to relationships with the extended community and local area, as these
relations can make or break a transformation in a small community.
Section I.D of LESAT - Develop Lean Structure and Behavior - covers many of the lean
enterprise change capabilities, though some are defined better than others. In particular,
practice I.D.3 (Table 3.8) briefly discusses communications and the different levels
expected as maturity increases. An enterprise with high maturity would demonstrate a
myriad of avenues of communication throughout the enterprise, culminating in a
comprehensive system of two-way value pull. Information technology can and should be
used, but should not drive related strategic goals.
LESAT practice I.D.3 appears to be focused on information exchange for product
delivery, as opposed to communication of lean successes or the case for change. It is
possible for an enterprise to exhibit a high maturity level for this practice, but still have
difficulty communicating less solid concepts such as the original motivation for lean
enterprise transformation Enterprises with low maturity in this capability will have
problems communicating new processes and changes, as well as the rationale behind
those changes. This is an important distinction, and an observation that is not possible
using LESAT alone.
3.10 Change Management
Organizational change and enterprise transformation will not happen magically, unaided
by leadership. Efforts and initiatives must be championed and publicized to the fullest
extent possible. Everyone in the enterprise, from top leadership to middle managers to
front-line supervisors to workers must be involved with these activities (Wilkins &
Ouchi, 1983). True transformation will require culture change, and this change can be
managed by leaders who are equipped for the task.
LESAT does not directly incorporate a specific practice that can be best compared to my
definition of this capability - a combination of planning, capability, development of
change agents, and managers able to lead cultural change. Instead, all of Section I
describes leadership practices and management techniques that can be utilized to manage
change. Enterprises that are capable of achieving high maturity scores throughout
Section I will already possess the capability as I have described it. However, low scores
throughout these practices do not necessarily indicate an enterprise without any level of
this capability. Instead, they may have the recognition that it is important, and
recognition is often half the battle with this capability. I would recommend at least a
medium maturity level in this capability for any enterprise seriously considering lean
enterprise transformation.
The one LESAT practice which encapsulates at least part of the capability I am expecting
is practice I.E. 1 (Table 3.9). This practice looks for an enterprise level transformation
plan, which I do believe is necessary for the change management capability: you cannot
manage what you cannot chart and ask for. An enterprise with low maturity scores in this
practice may be good at local lean implementation, but they will lack the skills to align
these efforts strategically, and therefore not be able to control and manage the system as a
whole. Higher maturity enterprises will be able to balance all stakeholder needs, and
incorporate emergent behavior as needed.
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3.11 Cadre of Change Agents
As change is something that must be managed, there are people who can help with those
activities. This is everyone's responsibility. With that said, however, it is important to
identify a core group of people who can help identify areas ripe for change, facilitate
events, codify results and new practices, manage educational activities, and coach leaders
when needed. These people are change agents in job title, but can help everyone else,
throughout the enterprise, be change agents in their own spheres of influence.
This capability will likely involve a tiered system of people who are capable of
facilitating lean process improvements and collecting data for follow-up when necessary.
Goals should be set for the number of people trained at each level. Clear expectations
should be outlined in order to match the supply of these people with the demands of the
organization. Change agents can only foster lean enterprise transformation if they are
welcomed by the organizations that need help, and are encouraged to work with local
workers and managers to recognize processes that are ready for and receptive to change
and guidance. Also, these change agents can work with leaders such that the leaders will
champion their efforts, and work with the change agents to promote the benefits of their
services.
The description of lean change agents in LESAT practice I.D.7 (Table 3.10) is currently
too limited to meet my definition of a cadre of change agents. According to LESAT the
full capability I have described would not be achieved until a level five maturity has been
reached. I believe there is a discrepancy between this LESAT practice and the capability
I have defined. The LESAT designers believe that growing change agents is part of the
transformation process, and that transformation can proceed without the. Change experts
instead suggest that change agents can be seen as instigators for change, once the
transformation process has been initiated. The can work to convince others to change,
and can address instances of resistance as they occur. Also, I believe they can help the
enterprise attain level 5 maturities in other practices as well. There is a difference in the
timing suggested by LESAT and change experts that should be clarified in the future.
3.12 Context for Local Experimentation
The capability to provide a context for local experimentation will allow people at all
levels throughout the enterprise must to make local changes where they deem
appropriate. Yes, there should be body or team that acts as a clearinghouse for some of
the bigger ideas, to make sure they are compatible with the top-down goals for the
enterprise, but smaller ideas should still be encouraged. These smaller ideas should be
fostered, and not hampered, by the enterprise goals. Also, pilot projects can be used to
initiative small and management, yet beneficial, efforts, which can then be grown into
something bigger as the enterprise goals require.
Creating this context will entail creating a "community of scientists" driven by data
collection and feedback networks, as well as a body or team that is able to allocate
resources when necessary. This capability would be used to give people the ability to
"stretch" and think beyond the immediate requirements of the day. This will go hand in
hand with the capability to standardize processes, as through the process of
standardization, teams can be encouraged to solve their own problems through local
experimentations and application of the scientific method (Spears & Bowen, 1999).
LESAT describes two practices (Table 3.11) that can serve as proxies for assessment of
this capability. Practice I.D.4 describes employee empowerment and innovation. An
enterprise with a high level of maturity in the practice will have reached levels of
empowerment that enables swift and effective decision-making closest to the point of
use. Enterprises with low maturity levels will likely face resistance to change from
employees, as they have not yet been empowered to embrace lean principles and accept
new positions of responsibility and accountability.
The context for local experimentation capability also includes the ability to encourage
innovation, and this is captured in LESAT practice I.D.6. Again, though, I believe that
the traits found in maturity levels 4 and 5 must be present early in the transformation
process for lean enterprise transformation to be successful. An enterprise that scores low
on this practice will struggle getting their transformation initiated, as no employee will
believe that they will not be penalized if a local innovation is suggested, but then fails.
This suggests that when this is the environment present, the transformation process
should be initiated in a smaller pilot group with innovative leaders and receptive workers.
Successes and learning opportunities can then be publicized, and others can learn about
the benefits of lean enterprise transformation.
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3.13 Continued Learning and Self-Renewal
Continued learning and self-renewal will enable an enterprise to lean from its mistakes,
and easily incorporate applicable best practices from other industries or companies. This
capability entails more than just training specific people on specific topics, whether those
topics are lean or otherwise. This is about creating an environment in which people can
go to classes they think will help them in their jobs, or go to conferences through which
they can bring back new ideas to the enterprise (Senge et al., 1999).
This capability is about is about creating a "Learning Organization" and ultimately,
changing the culture of the transforming enterprise. This capability can teach the
enterprise how to utilize feedback and responses to initiatives to further new and greater
change. The process of continued learning and self-renewal is imbedded in the Toyota
culture, and not embraced well as an artifact to be viewed in isolation. Enterprises
striving to embrace a lean culture must work towards this idea wholeheartedly.
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LESAT does separate training and education from continued learning and self-renewal,
but this notion of a Learning Organization is mentioned clearly in Section III (Table
3.12). An enterprise with high maturity will regard intellectual capital as a corporate
asset. Without this capability, I would not expect to see employees that can actively
capture and incorporate lessons learned into future training and practices. The notion of
mentoring employees, as opposed to just managing them, is hinted at in practice I.D.4 (as
discussed earlier), and this too will contribute to the capability of continued learning and
self-renewal. This capability, while perhaps not essential at the beginning of the lean
enterprise transformation process, should be developed and enhanced as the
transformation processes moves forward.
3.14 Training and Education
Beyond the creation of a learning organization, lean enterprise transformation requires
training and education as to what lean is, at all levels of the enterprise. This will also
encompass the training necessary for new systems and new process development and
utilization, as well as maintenance of certification and educational programs already in
place. This capability would include the ability to grow and train the facilitators and
change agents discussed above.
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The capability to provide "just-in-time" training would be ideal. This means that when a
new process or procedure was introduced, workers would be trained just before
implementation, as opposed to months before or months after. This will enhance quick
adoption and will likely decrease the intensity of resistance encountered. This ability is a
hallmark of lean enterprises and learning organizations.
Training and education are mentioned in three practice areas within Section I (Table
3.13), and the practices described are adequately specific to meet the needs of the
capability I have proposed. Practice I.E.3 gets to the heart of the matter, and extends the
virtue ofjust-in-time training for all employees throughout the enterprise. Practice I.B.1
describes the education necessary for leadership, while practice I.A.3 talks about
leveraging the extended enterprise for further educational advancement. I believe that an
enterprise looking to embark on lean enterprise transformation must score high on the
leadership practice, and must look to develop the capability inherent in the other two as
time goes on, with employees receiving priority over stakeholders.
3.15 Conclusions
Lean enterprise change capabilities are necessary for lean enterprise transformation. I
have outlined and described the capabilities as I see fit, using academic literature, field
observations, and incorporation of LESAT descriptions where appropriate.
However, I must acknowledge that further work is needed. More research must be
conducted such that these definitions can be refined and made tailor-able to specific
enterprises. Precise maturity levels should be designed such that the purpose of these
capabilities can be communicated. Also, the understanding of the timing of these
capabilities is still in its infancy. Which is needed first, and which can be developed
concurrently? Are some more important in the beginning than others? As mentioned
above, I believe some of these capabilities require LESAT levels 4 and 5 maturity before
transformation should even be attempted. This proposition needs to be verified and
codified before true recommendations can be made. Once source for this confirmation
would be new studies (conducted by LAI and elsewhere) that connect these ideas to
actual changes and improvements in performance.
These capabilities are a step towards a new assessment tool that can be used by LAI and
any enterprise attempting lean transformation. The rest of this thesis will focus on my
attempt to assess three enterprises using these capabilities, even though they are still in
development.
4
UNITED STATES AIR FORCE AIR LOGISTICS CENTERS: A PRIMER
82
4.1
Introduction
82
4.2
Overview of the US Air Force
83
4.3
Overview of Air Force Materiel Command
84
4.4
Overview of the Air Logistics Centers
85
4.5
The Influence of Base Realignment and Closure
87
4.6
Conclusions
89
4 United States Air Force Air Logistics Centers:
A Primer
4.1 Introduction
The twelve proposed lean enterprise change capabilities can be used to assess complex
enterprises situated in dynamic environments. Transformation does not take place in a
vacuum, and it is important to understand the sphere of influence surrounding any
enterprise in order to fully comprehend the motivation and circumstances that may dictate
otherwise peculiar decision-making tactics. Some decisions that appear controversial at
first glance will reveal themselves to be well intentioned and appropriate if the larger
environment is better understood.
In order to better understand the incentives and stimulus for lean enterprise
transformation at the Air Logistics Centers, I set out to understand the Air Force itself.
The following discussion examines the Air Force, the place and role of the Air Logistics
Centers within the Air Force, as well as the unique opportunities at each ALC that led to
engagement with LAI. Transformation has been going on for a long time throughout the
Air Force, though results have been difficult to assess, and the next wave is forthcoming.
Secretary of Defense Rumsfeld has sent clear signals that he is looking for the US
military to redefine itself in light of the new forms of warfare encountered.
But really, this is precisely what transformationis about. Here we are in
the year 2002,fighting the first war of the 21st century, and the horse
cavalry was back and being used, but being used in previously
unimaginableways. It showed that a revolution in military affairs is about
more than buildingnew high tech weapons, though that is certainlypartof
it. It's also about new ways of thinking, and new ways offighting... And we
must transform not only our armedforces, but also the Department that
serves them by encouraginga culture of creativity and intelligent risk
taking.
Secretary of Defense, Donald Rumsfeld
Speech, National Defense University
31 January 2002
(""21st Century Transformation" of the US Armed Forces," 2002)
And the ALCs' recent use of lean as a driving force and enabler of their transformation is
seen as positive and fruitful.
Speaking of transformation,I am proud of the results achieved by our
ALCs using Lean principles to improve work processes andfunctions, and
I can assureyou that our operationalcommands along with our Secretary
and Chiefof Staff of the Air Force appreciateyour efforts as well.
General Gregory S. Martin
Commander, Air Force Materiel Command
(Martin, 2004b)
4.2 Overview of the US Air Force
Following World War II, the Department of the Air Force was created, and formally
separated from the Army, under the National Security Act of 1947 (FactSheet:
Organizationof the US Air Force, 2005). In 1958, the role and responsibility of the Air
Force was further refined and captured within the Department of Defense Reorganization
Act. Within this document, the Air Force was given the responsibility of, "organizing,
training, equipping and supporting combat forces for the unified and specified commands
(FactSheet: Organizationof the US Air Force, 2005)."
Like other organizations, military and non-military alike, the Air Force utilizes vision and
mission statements to inspire its workforce, including both military and civilian
personnel. The Air Force vision is: Global vigilance, reach andpower. The Air Force
mission is: To defend the United States andprotect its interests through air and space
power. These statements serve to remind people that they are working towards a goal
commensurate with national defense, and that they must strive every day to meet the
needs of the warfighter.
Air Force field organizations are divided into four components and their subordinate
elements. These components include: 9 Major Commands, 35 Field Operating Agencies,
4 Direct Reporting Units, and 2 Reserve Components (the Air Force Reserve and the Air
National Guard). All of these organizations fit together into a military chain of
command, which ends, ultimately, with the President of the United States acting as
Commander in Chief.
4.3 Overview of Air Force Materiel Command
Air Force Materiel Command (AFMC) is one of the nine Major Commands within the
Air Force. Its origins can be traced back to 1917, although the organization has been
renamed a number of times since then.' AFMC is headquartered at Wright-Patterson Air
Force Base in Dayton, Ohio. The current vision and mission of AFMC have been
combined into one statement: To develop, acquire and sustain aerospacepower needed
to defend the United States and its interests... today and tomorrow.
AFMC is organized into eight specific mission areas: product support, information
systems, supply management, depot maintenance, science and technology, test and
evaluation, information management, and installations and support. The command is
structured around 5 types of centers: Product Centers, the Air Force Research Laboratory,
Test Centers, Air Logistics Centers, and Major Specialized Centers. AFMC employs a
total workforce of over 90,000 people, including military and civilian personnel.
AFMC fulfills its mission of equipping the Air Force with the best weapon
systems through a series offacilities thatfoster 'cradle-to-grave'
oversightfor aircraft,missiles and munitions.
(Fact Sheet: Air Force Materiel Command, 2001)
4.4 Overview of the Air LogisticsCenters
The Air Logistics Centers are the maintenance, repair, and overhaul organizations of the
US Air Force. Just like you and I take our cars into mechanics for oil checks and
emergency repairs, the Air Force uses the ALC depot facilities for program depot
The historical names of Air Force Materiel Command are as follows:
1917: US Army Signal Corps Airplane Engineering Department;
Late 1940's: Air Materiel Command (AMC);
1950: Air Research and Development Command (ARDC - separate organization)
1961: AMC becomes Air Force Logistics Command and ARDC becomes Air Force Systems
Command
1992: These two commands are integrated into Air Force Materiel Command
maintenance (work that is expected and scheduled ahead of time) and unplanned depot
maintenance (emergency work that cannot be completed at field locations). In addition to
depot maintenance work, the ALCs also house some of the System Program Offices,
which oversee the supply chain management responsibilities.
There are currently three Air Logistics Centers: Oklahoma City, Ogden, and Warner
Robins. All three underwent a strategic structural reorganization during the fall of 2004
and spring of 2005. This reorganization was driven by AFMC headquarters and was
designed to make the ALC organization charts look more like traditional Air Force bases
(Martin, 2004a). The ALCs are now divided into four wings: Depot Maintenance,
Aircraft Sustainment, Combat Sustainment, and Air Base Support. Below the wing level
are groups and squadrons responsible for individual programs and products.
Location
Programs
Supported and
Logistics
Managed
Ogden ALC
Hill Air Force Base
Ogden, UT
Ballistic missiles, F16, A-10, C-130,
landing gear, air
munitions solid
propellants,
explosive devices
Oklahoma ALC
Tinker Air Force Base
Oklahoma City, OK
B-1B, B-52, 135-series,
E-3, B-2, engines
Warner Robins ALC
Robins Air Force Base
Warner Robins, GA
F-15, C-5, C-141, C130, U-2, C-17,
avionics and electronic
warfare systems
Table 0.1 Enterprise descriptions of the three US Air Logistics Centers.
4.5 The Influence of Base Realignment and Closure
The Base Realignment and Closure (BRAC) process is used by the US Department of
Defense (DoD) to redistribute workload and funding amongst military bases nationally
and internationally. This process is important to understand when studying the Air
Logistics Centers because the threat of BRAC weighs heavily on all on-going
transformation efforts. The risk of being closed can encourage transformation, while
survival can eliminate momentum.
The process is designed to close under-functioning or no longer needed bases and
redistribute the work and personnel to other facilities better equipped to perform the task
in question. BRAC also aims to save money, retire old technology and invest in new
technology, and better equip the US military to respond to the changing nature of war.
Impact to the local community is also considered, and this fact leads to a lot of political
maneuvering, as no politician wants any base in his or her district to be closed. The
process has three main components: DoD recommendations to the BRAC Commission,
BRAC Commission revisions of recommendations, and Presidential and Congressional
approval or rejection of the recommendations. BRAC is a force to be reckoned with, and
it is on everyone's minds as transformation at each ALC is motivated, initiated, and
sustained.
While there are currently three ALCs, there used to be five. Two other ALCs were
closed during the BRAC round in 1995 - Sacramento ALC at McClellan Air Force Base
in Sacramento, California, and San Antonio ALC at Kelly Air Force Base in San
Antonio, Texas. These closures resulted in workload and personnel being shifted to the
other three ALCs.
Current lean enterprise transformation efforts at the three remaining ALCs are being
conducted in light of BRAC 2005, as well as future BRAC rounds, although no one really
wants to talk about it. Data has already been collected in the past 2 to 5 years, and so
there is little to no chance of changes improving standings now, though future BRAC
proceedings are still possible to influence. One official even went so far as to explain
why he did not want to motivate employees with insinuations and fears of BRAC. He
said, "I do not want to use BRAC as a burning platform, because if I do, and we survive,
I will lose all momentum for the transformation." Even if this is the official position,
BRAC is still discussed in informal settings. Many workers implied that they believed
lean efforts would help them maintain a "competitive edge" over other commercial
maintenance facilities, and other military installations, thereby potentially sparing them
from BRAC.
The first round of DoD and Air Force recommendations for the current BRAC process
was issued in May 2005. All three ALCs were spared from this list. In July 2005, the
BRAC Commission made additions to the DoD recommendations, and again, all three
ALCs were left untouched. However, this does not indicate that the ALCs are in the clear
yet. Final submissions to the President and Congress will not be made until late August
2005, and the final decisions will not be voted on until September 2005. So far, the
ALCs have received little attention. But there is still a possibility of realignment or
closure. In particular, soon after the first round of recommendations was made, one
Pentagon official asked why each service (Army, Navy, and Air Force) had to maintain
its own depot facilities. Why couldn't they combine efforts to save money and time?
This question has not yet been fully answered, and will likely haunt the lean enterprise
transformation efforts in years to come. In the future, BRAC and lean enterprise
transformation will intersect, in perception and in reality.
4.6
Conclusions
The three Air Logistics Centers studied for this thesis are part of a larger, extended
enterprise that cannot be ignored. The history and current situations surrounding the US
Air Force are important pieces to the puzzle of lean enterprise transformation at the
ALCs.
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5 AN IN DEPTH EXPLORATION OF TWO LEAN ENTERPRISE CHANGE
92
CAPABILITIES .............................................................................................
5.1
Introduction ............................................................................................................................
92
A Leadership Team with a Shared Mental Model......................................................................93
5.2
94
5.2.1 Ideal Characteristics of this Leadership Team
95
5.2.2 Methods of Realizing This Capability
97
5.2.3 Ogden Air Logistics Center
101
5.2.4 Oklahoma City Air Logistics Center
103
5.2.5 Warner Robins Air Logistics Center
105
5.2.6 LESAT Scores and Their Implications
5.3
5.3.1
5.3.2
5.3.3
5.3.4
5.3.5
5.3.6
5.4
A Balanced and Cascading System of Metrics .....................................
Ideal Characteristics of this System
Methods of Realizing this Capability
Ogden Air Logistics Center
Oklahoma City Air Logistics Center
Warner Robins Air Logistics Center
LESAT Scores and Their Implications
107
108
109
110
112
115
117
Conclusions ...........................................................................................................................
119
5
An In Depth Exploration of Two Lean Enterprise change capabilities
5.1
Introduction
In earlier sections of this thesis, I have proposed and outlined twelve capabilities
necessary for lean enterprise transformation. I have proposed that these capabilities must
be possessed by an enterprise in order to initiate and sustain an organizational change on
the magnitude of lean enterprise transformation. The twelve capabilities have been
selected and defined such that they are an inclusive set: they should not be seen as
mutually exclusive, and all are necessary, but not sufficient for transformation. This is
not to say that these capabilities can only be developed or deployed in parallel, but rather
that the capabilities will likely play off of one another, and that the enterprise will benefit
from utilizing them simultaneously, as well as sequentially. There will be
complementarities between the capabilities (Milgrom & Roberts, 1995), as well as the
precedence of developing them successfully.
With that said, I have chosen to highlight two of the lean enterprise change capabilities in
this section. I have selected these two because the EVSMA process allowed me ample
opportunities to assess these through observations and interviews with senior leadership
teams. The following discussion will examine two capabilities (A Leadership Team with
a Shared Mental Model and A Balanced and Cascading System of Metrics) in the context
of all three Air Logistics Centers: Oklahoma City ALC (OC-ALC), Ogden ALC (00ALC), and Warner Robins ALC (WR-ALC).
Each of the three ALCs has struggled with both of these capabilities as well as lean
enterprise change as a whole. This is to be expected as directives to become a lean
enterprise, plan using EVSMA, and prioritize subsequent change and improvement
efforts shifts to become a new responsibility for ALC leadership teams. To the best of
my knowledge, each center is still working on developing a clear program for design and
collection of enterprise-level metrics. In terms of a leadership team with a shared mental
model, the difficulty is actually two-fold. On one hand, while some progress has been
made, the ideal state has not yet been achieved by any of the ALCs. On the other hand,
before they can work towards the ideal, they must understand why this ideal will be
beneficial, and they are still working towards that understanding. The ability to develop
and utilize these capabilities will help these centers sustain the lean enterprise
transformation already in progress.
5.2 A Leadership Team with a Shared Mental Model
A leadership team is comprised of all senior leaders from all functional areas of an
enterprise required to effectively manage the enterprise in question. A shared mental
model suggests that all team members will be on the same page when it comes to the
need for and the direction of change. They should all be committed to the best enterprise
possible, managed through continuous improvement and shared vision. They must think
with a systems perspective, and be ready to break down functional silos that hamper so
many enterprises. Through this systems perspective they can appreciate the fact that
value is created across functional boundaries, and requires cooperation and coordination
between what currently function more as silos.
Each ALC engaged with LAI in order to go through the EVSMA process. Because of
this common process and my access to the leadership team in observing EVSMA, I have
chosen to assess the three leadership teams during the time frames associated with their
EVSMA analysis. The ideal characteristics presented below are derived from my
experiences with the three ALC teams, as well as my exposure to academic literature and
sections and questions in LESAT.
5.2.1 Ideal Characteristics of this Leadership Team
In order to achieve the ideal state of this capability, a leadership team must first concur
on the need for transformation. They must agree on the "case for action" in terms of both
the rationale behind it, as well as the words that will be used to convey this message to
the workforce. They should share, amongst themselves, the same versions of their
current and future state analysis, and the method chosen to close the gap between the two.
All members of the team should exhibit the same level of commitment for the application
of lean principles and practices, as well as other improvement initiatives, at all levels of
the enterprise. This commitment to lean should be complimented by a desire by all team
members to think "outside the box" and reinvent the status quo.
In my opinion, this leadership team should exist within an open and honest community of
practice. (In this instance, the "practice" involved should include, but is not exclusive to,
strategic planning, financial budgeting, and general enterprise management.) The open
community implies that individuals should be able to speak openly without undue worries
about organizational politics or the office chain of command and the associated burdens
and restrictions. Innovative suggestions should be encouraged, taken seriously, and given
the appropriate consideration by everyone at the table, regardless of the origin of the
statement. Contrary behavior, such as whining and bickering between individuals, should
be limited and unilaterally disavowed. This does not mean that there is not room for
thoughtful disagreement and discussion, which should be openly promoted and practiced.
Communication with people outside of the leadership team (including employees,
customers, suppliers, and other stakeholders) should be purposeful and direct, while still
being informative and helpful. The team should attempt to speak as one voice, through
as few people as possible. Team members should strive to not make any contradictory
remarks or "under the table" comments. Also, individuals outside of the team that
possess pertinent and relevant information should be invited to speak to the group.
5.2.2 Methods of Realizing This Capability
There are a myriad of methods applicable for realizing this capability. What matters
most is the relevance of the method selected to the team in question. Team members
must want to realize this capability, and asking them to participate in activities that are
foreign and not well suited to their leadership styles will only cause the overall capability
in the team to be delayed or derailed.
I believe that generic team building exercises, if tailored appropriately, can help a team
establish a common understanding of each other and the transformation they are
attempting. Through these exercises, the team members can learn to speak the same
language in order to communicate effectively and efficiently, and to prevent wasting time
on semantics arguments. Also, they team must learn how to trust each other and
relinquish authority and responsibility when necessary for the greater good of the
enterprise.
In order for such a team to perform well, the "one leader, one thought" mentality must be
rejected. They must actively work against the common practice in hierarchical
organizations of deferring to whatever the boss wants or thinks. All team members and
their ideas must be treated equally, although the boss does make the final decision. In
order to facilitate more open communication, I have seen techniques such as "I like
(blank), I am concerned about (blank), and I would like to suggest (blank) ..." be used
successfully. Ground rules (such as no cell phones, no harsh criticism, and relative
secrecy about what goes on in the meetings) can be set to instill confidence and trust in
the group and process.
Before a leadership team can effectively convey the need for lean enterprise
transformation, all team members must be well versed in the practices and virtues of lean.
Traditional education and training in lean will facilitate learning and increased aptitude.
In addition, another great way to establish this competency and credibility is for the
leaders to be active and "lean out" some of their own processes. For example, senior
leadership teams could hold lean events to identify waste in the briefing process or the
VIP visit process. Additionally, they could support their staffs to work to identify
repeated fire-fighting activities, including their own reaction to these crises, and perform
support an effort for a root-cause analysis on each one. The benefits of these activities
would be three-fold. First, the leadership team would gain the knowledge and examples
and respect needed for effective communication with the workforce through personal
experience that is believable and real. Second, they are likely to save some of their own
wasted time that could be better used on further leadership activities promoting lean.
Third, the team will have worked together towards a common, yet small, goal, and will
have laid a foundation for a shared understanding.
5.2.3 Ogden Air Logistics Center
The EVSMA process began at OO-ALC in December 2003. The eight-step process was
completed over the course of (approximately) 180 days, with meetings lasting two days
every two weeks. The leadership team was comprised of primarily deputy directors (one
level removed from directorate leaders, with "directorate" being their term for each
functional organization), and the overall process was chaired by the director of the
Contracting Directorate. (Originally, both the base Executive Director and Vice
Commander served as team leaders. However, they both left OO-ALC in very early
2004, and so their leadership position was filled by the next most senior team member.
The Director of Contracting was originally the interim leader, but remained in this role
until the Executive Director and Vice Commander were replaced, which took some time.)
My observations of this team began in May 2004. During my first day with them, I
listened as the OO-ALC team briefed the OC-ALC team, seeking to learn from their
efforts, on the EVSMA process. At this time, the OO-ALC team exhibited some of the
qualities associated with a leadership team with a shared mental model. Throughout the
briefing session, the team spoke with one voice, and was unified behind one leader,
without deferring to any one particular point of view. There was open and honest
communication, and the participants seemed to respect each other readily. They were
quite proud of what they had accomplished, and were eager to share their work with
another leadership team.
Interviews conducted in June and July 2004 confirmed my initial impressions. Team
members felt that the fact that the team was made up of deputies, as opposed to directors,
probably made for a more relaxed and collegial atmosphere. Some suggested they could
openly share their ideas without the fear of political or organizational repercussions.
Additionally, many members highlighted the fact that their leader was a Director, and not
the Executive Director or the Vice Commander. This meant that they did not have one
opinion to which they had to defer at the end of the day. Everyone felt like an equal on
the team.
During a large percentage of the EVSMA process the Base Commander was kept
apprised of progress. This state of constant awareness was due to his active involvement
in the process, including daily out-briefs and participation in the visioning piece of the
process. This state was also enhanced by the fact that there was no Executive Director or
Vice Commander present. One leadership team member pointed specifically to this
detail in an attempt to explain why the team made so much progress so quickly. He felt
that because they had a direct line of communication to the Commander, they received
quick feedback, and that their "out of the box" ideas went directly to the Commander.
This helped the development of a shared mental model in that there was little time or
opportunity for the distortion that sometimes occurs as ideas are passed up through a
normal chain of command. They all agreed on where they were going.
Later, however, it become apparent to me that towards the end of the EVSMA process
and during the ensuing months, the leadership team was not fully unified in how to
achieve the goals they had specified. The shared mental model that had begun to develop
was put to the test between July and October 2004. During this time, a new Vice
Commander was brought in as the team leader (as the then Director from Contracting had
moved on to a new position at another base), the base was preparing for a significant
structural reorganization, and new personnel replaced approximately half of the original
team (due to a combination of turnover and restructuring). Not only was there a question
of whether there was a shared mental model, but actual turnover in team members created
a different shared experience in EVSMA and what was intended from the process.
Interviews and further observations revealed that this new team did not agree upon some
of the significant elements of the lean enterprise transformation process. In one example,
team members differed considerably over where and how the enterprise-level black belts2
should be utilized. Some believed they should be assigned to specific areas, while others
felt they should be available to whoever was interested in using their help and expertise.
Some participants believed the new cadre of change agents was qualified to work
independently, while others felt they should be paired with already hired outside
consultants.
Other disagreements in achieving a common resolution were observed. For example,
when it came time to develop new, enterprise-level lean projects, team members could
not agree on which activities should have priority. Also, many members still did not see
how their responsibilities were interconnected to other enterprise functions, and conveyed
these feelings in obvious side conversations. The new Vice Commander, who joined the
team as a new leader and did not share in their experience, expressing concerns and
skepticism for the transformation plan that the previous team had developed. There was
no longer a team with a shared mental model on how to move forward. The lack of a
shared mental model would require additional time and effort on the part of the
leadership team before they could agree on a new direction and priorities.
2 Eleven
enterprise-level black belts or change agents were selected by the leadership team during the
spring of 2004, and trained by Raytheon that summer. The leadership team was told by LAI
representatives that these change agents would help them further their transformation objectives.
100
5.2.4 Oklahoma City Air Logistics Center
Following the joint team (OO-ALC and OC-ALC) meeting in May 2004, the EVSMA
process was conducted over 90 days during June, July, and August 2004 at OC-ALC.
The leadership of OO-ALC insisted on accomplishing the EVSMA in 90 days, requiring
some changes to the process (now reduced to six steps). Again, meetings were held
every two weeks for two days each. The enterprise leadership team was comprised of the
base Executive Director (team lead) and most functional directors. The base Commander
championed the effort with a short kick-off speech at the beginning, and regular outbriefs
whenever on base for the meeting days.
I was able to observe all but one EVSMA session with the OC-ALC team. From the
beginning, I sensed that not everyone agreed with everyone else, especially regarding the
purpose of these activities. While some team members seemed genuinely interested in
sharing their ideas, there were others who waited for the Executive Director to give his
answer before speaking. Other team members seemed to play devil's advocate, and often
it appeared to me that they did so in jest. Conversations occurred that seemed to be open
and honest exchanges of opinions, but when the Executive Director offered his thoughts
everyone quickly deferred to his position. My insight was that the team shared a mental
model with regard to the role of authority in group decision-making, but they did not
necessarily share a mental model related to the path of transformation.
101
One characteristic of an ideal leadership team with a shared mental model for lean
transformation is the ability of all team members to individual and collectively
consistently think at an enterprise level. This skill would enable them to see past
differences between practices or functions, and make judgments that are best for the
whole system. The leadership team at OC-ALC struggled at times to decide what would
be best for the enterprise as a whole. This struggle was due in part to the overlap and
contention between the EVSMA process and preparations for the AFMC-driven
structural reorganization of the enterprise. During EVSMA sessions and discussions, it
appeared to me that some team members had pressing issues on their minds. Many
reported going back to their desks each evening to work on reorganization related
problems. They suggested that this work distracted them from the enterprise level
thinking they were supposed to be cultivating in the EVSMA sessions. This situation,
managing multiple change efforts with different values and concepts, is an example of the
dilemmas often faced by senior leadership: they want to embrace an enterprise view, but
outside forces require them to maintain a functional focus.
The case for action at OC-ALC was intelligently debated and agreed upon by the
leadership team at the start of the EVSMA process. The team appeared to understand
why they were transforming, and what types of benefits they should expect along the
way. While this observation would lead to a conclusion that the team did share a mental
model of transformation, statements collected during individual interviews were not as
uniform. Answers given by team members indicated that they agreed on why they were
102
transforming, or at least attempting to transform, but they did yet not agree on the
planning required to sustain a transformation process.
In a turnover similar to that of OO-ALC, OC-ALC also experienced a change in
leadership. A new Executive Director, who was to be the leader of this effort, reported
early to his new position at OC-ALC to participate in the visioning and project planning
stages of EVSMA. He was enthusiastic and openly stated that he subscribed to the need
for change. During subsequent follow-up, however, I observed that as a leader he was
challenged to maintain the momentum for the transformation process. It was uncertain
regarding the priorities of projects, and there was hesitancy to allocate additional, new
resources for future lean projects. With this uncertainty, the team remained poised for
action, but without taking the initiative themselves to commence new projects.
5.2.5 Warner Robins Air Logistics Center
The WR-ALC leadership team was larger than the teams at both OO-ALC and OC-ALC.
The WR team was comprised of 17 primary members, as well as four supporting
members, some of whom chose actively participate. Facilitators from Simpler
Consulting3 who had prior experience working with the senior leadership at WR-ALC
supplemented LAI's EVSMA process leadership with the team. Also, the EVSMA
process was conducted differently. The first five steps were done over a 5-day period in
one week in April 2005. Step six was a month later, integrated into an already planned
3 Simpler Consulting provides outside support and guidance for WR-ALC lean activities throughout the
enterprise.
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2.5-day strategic planning offsite in May 2005. The compression of time to conduct the
EVSMA process represents the difficulties of leadership teams to find the time to develop
shared understanding and common plans to lead this type of strategic effort.
Prior to the beginning of EVSMA, I predicted that the shorter time frame employed
would lead to a stronger sense of a shared mental model. These thoughts were based on
the assumption that a rushed schedule would encourage people to not argue, and require
them to readily accept other people's positions. I thought the press for progress in a short
time would have resulted in a more readily shared sense of purpose and case for action.
However, I also realized that this pressure does not necessarily equate to a functional and
progressive shared mental model, only one there is no room for discussion and debate,
and that an agreed to and common plan must result.
My prediction proved to be incorrect during WR's EVSMA sessions. Instead of causing
unity, the shorter time frame caused an increase in fractured thought as team members
did not have the time needed to understand each other's ideas. Additionally, the time
pressure caused many team members to concede to the Commander's opinion whenever
he made it known. An analysis of factors undermining a shared mental model revealed
that the repercussions of the AFMC mandated structural reorganization (to fit the air base
wing structure) were just settling in. This restructuring took away the power and
authority people had, and the EVSMA process, coming on the heals of these changes,
created an opportunity to complain and promote their individual perspectives.
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In order to best utilize the amount of time I had to interview each leadership team
member at WR-ALC, I administered a short questionnaire verbally. I asked each
participant to answer between 2 and 5 questions for each of twelve lean enterprise change
capabilities. I then used these questions to actually define each capability and addressed
any further questions they may have had. I then also had each leadership team member
perform two sorts of the twelve capabilities to have them assess the current and desired
state of each (the results of this questionnaire can be found in Section 6).
The results of both of the interviews and these capability sorting exercises showed very
different views held by team members. This indicates that as they were planning and
using EVSMA, a shared mental model had not yet developed in terms of lean enterprise
change capabilities necessary for successful transformation.
5.2.6 LESAT Scores and Their Implications
I believe that successful lean enterprise transformation must be driven by a leadership
team with a shared mental model. The leadership team attempting to instigate this
transformation process must be situated in an organization or enterprise that already
possesses at least a medium maturity level in these capabilities. Each of the twelve
capabilities is aspects of what is needed for transformation. For example, if
communication is not consistent and strong, messages are be muddled, direction can be
unclear, and the workforce will be uncertain and unlikely to rally to the cause. This
maturity level for a shared mental model translate to average LESAT score for section
105
I.B - Adopt Lean Paradigm - of at least 3 points. In particular, I would be more
optimistic for realization and utilization of this capability if the scores of practices I.B.1 Learning and Education in "Lean" for Enterprise Leaders - and I.B.2 - Senior
Management Commitment - were even higher and approaching maturity level 4.
Enterprises with average scores below level 3 must make dedicated efforts to enhancing
this capability before moving forward with broad transformation efforts. (Please see
Table 3.2 for a full description of these LESAT practices.)
The average LESAT scores reported by the leadership teams at OO-ALC, OC-ALC, and
WR-ALC as shown in Table 5.1. These scores are below 3 in all four associated
measures, are mostly consistent with my observations, and indicate that these teams are
not yet sufficiently integrated and prepared for the journey ahead of them and their
enterprise. They must continue to meet on a regular basis to define and agree to a new
mental model that will collectively support and enable the case for change.
LESAT Practice
I.B.1 - Learning and Education in "Lean" for
Range of Average ALC Scores
1.8 to 2.4
Enterprise Leaders
I.B.2 - Senior Management Commitment
I.B.3 - Lean Enterprise Vision
I.B.4 - A Sense of Urgency
1.6 to 2.0
1.2 to 1.8
1.6 to 2.1
Table 5.1 Reported average ALC LESAT scores for practices associated with
the "leadership team with a shared mental model" capability.
One caveat to these scores is the fact that LESAT was completed by all three teams early
in the EVSMA process. The LESAT was given to examine overall current state lean
maturity as part of the planning process, and not, as is the case in this thesis, to assess
106
change capabilities. If LESAT were administered again, now that the EVSMA process
has been completed, I expect that these scores would have improved at each ALC. I am
confident that with continued work, all three ALC leadership teams can achieve the
maturity necessary to move forward with their transformation efforts.
5.3 A Balanced and Cascading System of Metrics
A balanced and cascading system of metrics that assesses total enterprise performance is
not an easy capability to develop and deploy. Stability of this capability requires a
defined set of metrics that complement each other, establishing an appropriate sense of
harmony. The metrics should be balanced such that at the same time as they are pulling
information up to the top of the enterprise, they are driving innovation at the bottom. The
set should cascade throughout the enterprise such that it incorporates effective and
relevant measures at every level as needed (Mahidhar, 2005).
During the EVSMA process, leadership teams are challenged to review their current
enterprise level metrics (to the extent that they exist at this level) and assess their
relevance against major processes, stakeholder values, and stated objectives and goals. I
observed this process at two of the three ALCs, and have spoken with people at all three
ALCs about their metrics extensively. My assessments, which follow, are based on these
observations and conversations. As noted previously, my evaluations are done against
the ideal state; and not through comparisons of one ALC to another.
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5.3.1 Ideal Characteristics of this System
A system of metrics should be designed such that it supports the strategic intentions of
the enterprise (Mahidhar, 2005). The set should drive desired behaviors at all levels, as
opposed to behavior devised purely to meet expectations. Ultimately, metrics should
drive behavior that results in the delivery of expected value to all stakeholders. Vikram
Mahidar, another LAI research assistant, has devised a graphical representation of the
cascading nature of an effective system of metrics (Figure 5.1). When it comes to
enterprise level metrics, fewer are better (Kaplan & Norton, 1996). Fewer metrics at the
enterprise level allows for ease of reporting and ease of problem solving.
-i
Metric Cluster
Metric Set
/
N>\
\tN
Individual Metric
Figure 5.1 Conceptual design and hypothetical example for the Lean
Enterprise Performance Measurement System (Mahidar, 2005)
Quite importantly, everyone involved in collection of any data should understand the
rationale behind those metrics selected. This understanding of the rationale for metrics
will establish a sense of buy-in from all employees. Also, if people recognize and respect
the justification and motivation for each measure, and keep this balanced with how they
are going to be held accountable for data collection and results, they may see a reduced
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incentive to "game the system" or manipulate data so that they look good or avoid
censure.
5.3.2 Methods of Realizing this Capability
There is a significant amount of writing, both academic and management related,
regarding proposed and recommended systems of metrics (Kaplan & Norton, 1996). The
point of this section is not to review these possibilities and suggest the system I believe to
be most suitable. Instead, in keeping with metrics related to change capabilities, each
leadership team should review the possibilities for themselves and their enterprises. The
final selection should be made according to the goals and needs of the enterprise, and not
the preferences of functional or other leaders.
One scheme I have thought about that is available for this selection process is the use of a
task force or integrated process team. This integrated team could be assembled to review
the possibilities and then select the appropriate model, followed by adapting the model to
the specific situation. The team should strive to choose a system that measures all value
stream and processes (including lifecycle processes, enabling infrastructure processes,
and leadership processes) according to quality, cost, delivery, and overall financial
health. However, the need for this information (from many organizations, disparate
information systems, and levels of the enterprise) must be balanced with the need for
simplicity and lack of complexity. This task will not be easy, it will take time, and the
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commitment to undertake it will help to develop the competencies and experience to
succeed over time.
In 2005, Air Force Materiel Command announced a Balanced Scorecard (BSC) effort
that would extend to all three Air Logistics Centers. BSC is a strategic management tool
developed by Kaplan and Norton (1996). It is used in industry to enable corporation
leaders to measure and manage all aspects of the organization and balance financial
perspectives with other business indicators, including internal business processes,
learning and growth measures, customer expectations, and general vision and strategy
elements. Each ALC currently has a task force assigned to this project, with an eye to
developing BSC measures that will roll up into the AFMC BSC (which is designed to
follow a cascading or pyramid approach). These efforts are on-going, and hence
complete information is unavailable. In the following discussions, I will examine these
BSC efforts along with other metric efforts.
5.3.3 Ogden Air Logistics Center
The OO-ALC leadership team did an assessment of their metrics as part of Step 3 of the
EVSMA process. However, at the time, the leadership team felt that with the BSC effort
in progress, it was not necessary to also address metrics in the EVSMA context. They
acknowledged that they tracked too many metrics, but they did not want to tackle these
issues on their own until they had guidance on BSC efforts from AFMC. It is important
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to note the importance of alignment in the ALC with AFMC in this, as well as other,
areas.
Towards the end of the EVSMA process, the leadership team was asked to devise a
BHAG (pronounced "be-hag", standing for Big Hairy Audacious Goal, from Collins &
Porras, 1996) that would inspire and drive change throughout the enterprise. To
supplement the words chosen as their vision statement - Be America's Best! We will be
the benchmark provider of logistics capability sustaining our Nation's war fighters - the
team also formulated four enterprise-level metrics. Each of these metrics, with associated
goals set for 10 years from EVSMA completion, would be tracked in the future:
1. Support system availability at 90% or better;
2.
Support Readiness at 100%;
3. 50% reduction in flow time; and
4.
25% cost reduction.
The outlining of these metrics and associated goals was the first step towards metric
system development that encompassed whole enterprise. It can be viewed as a system of
systems, as opposed to a collection of individual and unrelated programs and product
lines. The metrics that could conceivably cascade from these four are not perfect, and
care will need to be taken to assure the correct behavior is being driven, but overall, this
was a needed clarification of the enterprise goals.
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At OO-ALC, I was shown a good example of how high-level enterprise metrics can be
used to uncover behavior at much lower levels and push the whole enterprise forward.
Following EVSMA, a team of blackbelts (Raytheon-trained change agents), along with a
Raytheon mentor, attempted to drill down and expose the root cause drivers of F-16
aircraft availability (Christopherson & Stanke, 2005). They found that while past efforts
had been focused on depot maintenance activities - activities that are specifically
performed at OO-ALC - there were two other sources of activities that result in nonmission capable (unavailable) aircraft. These other sources that were contributing to less
than 90% availability numbers: non-mission capable due to supply and non-mission
capable due to maintenance in the field. This team found that they could influence the
non-mission capable due to supply number through lean activities focused on parts
missing due to supply as these parts were actually maintained on-site at OO-ALC.
Before EVSMA and BSC efforts there were no connections between metric systems and
the measurements used to track them at OO-ALC. Currently, work is underway to link
EVSMA metrics and BSC and create a comprehensive enterprise-level balanced and
cascading system of metrics. The leadership team has acknowledged the need for this
system, and is working to develop and deploy this capability.
5.3.4 Oklahoma City Air Logistics Center
Early in the EVSMA process at OC-ALC, the leadership team was asked to compile all
of the metrics they regularly report. When this list was compiled, approximately 1300
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metrics were identified as being reported to the Base Commander or AFMC headquarters
on a regular (either weekly, monthly, or quarterly) basis. These measures were all quite
specific. Many metrics asked for the same information, just presented or spun in a
slightly different manner. Interviewees suggested that these duplicates were often the
result of past problems or troubles: if a problem occurred, a supervisor would institute a
new measure, thinking this would prevent the problem from occurring again.
Historically, the purpose of these measures was not feedback and assessment of
performance improvement, but reporting for purposes of monitoring and control of
performance.
In response to this compilation of metrics, LAI facilitators encouraged the OC-ALC
leadership team to identify five to ten enterprise level metrics that would track their
progress towards their strategic objectives. This list of nine metrics had been assembled
during a leadership off-site meeting earlier that spring, and was presented as follows in
Table 5.2.
Strategic Objectives
Achieve high performance on every
high important stakeholder
expectation
Lead the AF on the Air Force
Climate survey results
Eliminate cost growth
Eliminate the manpower shortfall
Reduce cycle time for every process
by 50%
Deliver on cost - every time
Metrics
Number of entries in high importance/low
performance quadrant of customer value
prioritization matrix
OC-ALC AF climate survey scores compared to
AF averages
Aggregate cost of delivered products and services
in then year dollars (monthly annually)
Manpower requirement less authorized
Cycle time for each process vs. "pre-lean"
baseline
Percent on cost for all delivered products and
services vs. budget
Deliver on time - every time
Percent on time for all delivered products and
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Deliver a quality product (material
and intellectual) the first time
Improve aircraft availability by 20%
by implementing PBL
services vs. schedule
Number of deficiency and other error reports
Aircraft availability
Table 5.2 Strategic objectives and linked metrics developed by OC-ALC, Spring 2004.
The leadership team had designed these strategic objectives and metrics together, so it
was not surprising when, during an analysis step of EVSMA, it became apparent that they
were aligned in a one-to-one fashion. Each strategic objective was linked to one
particular metric that would assess progress.
The objectives and metrics presented were a good step towards the capability of a
balanced and cascading system of metrics. The nine measures were designed to report
enterprise-level assessments, but could be divided into program specific components and
cascaded down into lower levels easily. This system was presented as a first draft that
would be worked on in the future.
As with the other ALCs, OC-ALC is currently driven to create their own Balanced
Scorecard based on AFMC efforts. I have not yet seen the culmination of this work.
Therefore, I believe I can conclude that they are still working to develop and deploy this
capability, but they have not yet fully realized its potential.
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5.3.5 Warner Robins Air Logistics Center
Interviews with senior leaders at WR-ALC revealed that the center currently reports (or
at least compiled) fewer metrics on a regular basis than OC-ALC: only 1000 instead of
1300. But 1000 is still too many (Nightingale & Stanke, 2005). Based on my
observations, I found that early on in their lean journey, activities and efforts at WR-ALC
were focused on reducing flow days, with the subsequent success of also reducing costs.
Quality and rates of re-work were less well tracked, as these were more complicated to
quantify. The WR leadership team recognized the need for a new system of metrics.
Soon after the new Commander arrived at WR-ALC in 2004 he unveiled three strategic
objectives for the center and a set of high-level metrics that were to be used to track those
objectives (Table 5.3). It should be noted, however, that there is not a one-to-one
relationship between the objectives and metrics listed. Simpler Consulting, who had been
hired previously, helped to collect the information regarding current status and
opportunities for future work using these metrics.
Strategic Objectives
Create and Sustain a Healthy, Fit, Ready
Workforce Operating from a Quality
Installation;
Deliver and Sustain High Performing
Capabilities On Time, On Cost; and
Create an ALC Normalized within the AF
Culture that Embraces AF Core Values.
Metrics
100% Training Attendance
50% Injury Reduction
10% Reduction Formal Grievances
10% Reduction EEO and MEO
DUI Incidents
95% Due Date Performance
20% Increase in Aircraft Availability
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Reduction in MICAPs
Reduction in Backorders
Reduction in Customer Wait Time
Improve Technology Insertion;
2% Reduction of Total Cost for FYDP
5%or less Price Change Impact to Net
Sales - SMAG
100% Leadership Training
Medical Screenings (plan v. actual)
100% Training Templates Created
Achieve ICI of 75% by 2010
Improve Work Environment
Table 5.3 Strategic objectives and goals proposed by General Collings at WR-ALC,
Spring 2004.
These strategic objectives are a good starting point for a well-rounded system of
enterprise-level metrics. The first two clearly state the Commander's intentions for a
productive and healthy workforce (which he reinforces with a "People First... Mission
Always" newsletter), that is capable of delivering products on time and on cost. 4 My
outsider view of these metrics, however, is that they are not sufficient to meet my
definition the capability required for enterprise change. As Table 5.3 shows, there is not
a one-to-one relationship between the listed objectives and metrics. It is my opinion that
the metrics used by WR-ALC are neither balanced nor consistent at the enterprise level.
Some of the measures are too tactical, while others too difficult to collect and therefore
virtually unattainable. The specific measures need to be consistently manageable from
an enterprise level, yet still interpretable by lower level workers in order for there to be
the needed balanced and cascading system of metrics required for a capability needed to
support enterprise change.
4 The last objective is less clear to me, and despite repeated efforts, no one was able to succinctly explain
the concept of"a normalized culture" to me.
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The objectives and metrics were briefly revisited during the senior leadership strategic
planning off-site in May 2005. At this meeting, participants acknowledged that the
process was too rushed, and that they were not given adequate time to truly consider
revisions or replacements. In fact, instructions had been given reminding teams to not
replace or remove any metrics without full group approval. Requiring the whole team's
approval to make changes seems contrary to the idea of fewer enterprise level metrics
being better. It will be necessary for these metrics to be re-examined in the future to
better enable this change capability.
As with the other ALCs, WR-ALC is also developing their own Balanced Scorecard to
link into the AFMC BSC. The leadership team hopes that the BSC, along with the
General's metrics, will combine to generate a system of metrics that brings WR-ALC
closer to attaining this capability.
5.3.6 LESAT Scores and Their Implications
From the perspective of a balanced and cascading system of metrics as a lean enterprise
change capability, in order for lean enterprise transformation to proceed smoothly,
enterprises must understand their current performance as measured against enterprise
objectives, have a clear vision and goal for performance in the future, and possess a
balanced and cascading system of metrics that will allow them to utilize other change
capabilities to move from one state to the next. The initial metric system does not need to
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be refined or perfect, but it must exist and it regular use such that an understanding and
following is built. I believe an enterprise about to embark on a lean enterprise
transformation journey will likely start with a low to medium maturity level for this
capability. A low to medium capability maturity level refers to average LESAT scores in
the corresponding practice areas between levels 2 and 3. Enterprises with average
LESAT scores below level 2 would be expected to have difficulty charting progress and
demonstrating success, as well as identifying areas that should receive high priority
attention. (Please see Table 3.4 for a full description of these LESAT practices.)
All three ALCs reported scores for LESAT questions related to a balanced and cascading
system of metrics that I feel is currently inadequate for sustaining, if not initiating, lean
enterprise transformation (see Table 5.4). These low LESAT scores confirm my
observations and indicate that OO-ALC, OC-ALC, and WR-ALC all must work to
increase their maturity within this capability before their metrics capabilities will help to
further the cause of lean enterprise transformation.
Range of Average ALC Scores
1.1 to 1.6
1.5 to 1.8
LESAT Practice
I.C.4 - Performance Measures
I.F.2 - Tracking Detailed Implementation
I
1.4 to 1.8
I.G.2 - Monitoring Lean Progress
Table 5.4 Reported average ALC LESAT scores for practices associated with the
"balanced and cascading system of metrics" capability.
Again, it must be noted that LESAT was conducted at all three sites at the start of the
EVSMA process, before the current BSC efforts were underway, and especially before
the leadership team that completed the BSC assessment were briefed on AFMC directives
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and progress being made for those metrics at that level. As discussed earlier, the ongoing
efforts of BSC efforts at AFMC level have held back the development of enterprise
metrics at ALCs. If LESAT were re-administered after the BSC design phase is
complete, it is likely that these scores would rise to levels needed for greater success in
initiating lean transformation. I believe each ALC is capable of developing and
deploying a balanced and cascading system of metrics, and that they have begun this
process with their BSC efforts, even if this is not adequately reflected in the initial
LESAT scores.
5.4 Conclusions
This discussion and the LESAT measures have exposed the low levels of capability
maturity amongst the three US Air Force Air Logistics Centers. They are working to
build a leadership team with a shared mental model. They are all in the midst of
developing new systems of metrics, but are unsure of where that will take them. What
can they do to accelerate their progress?
First and foremost, I believe each Air Logistics Center must acknowledge that the
importance of these two, and the other ten, enterprise change capabilities. Each center is
currently working towards making lean enterprise transformation a reality, though I have
observed them having trouble making the transition from strategic and enterprise
planning to action-oriented progress and change activity. The development and
deployment of the set of twelve change capabilities can help them in this pursuit.
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Once they have committed to the concept, they must allocate resources to the
development and deployment of these lean enterprise change capabilities, capabilities
that they can immediately put into use. For example, a leadership team can have a shared
mental model regarding the case for action, even if they are unable to agree on other,
more tactical elements of transformation. While they work on extending their shared
mental model from the case for action to the specific action, they can build a
communication plan and inspire the workforce to change. Eventually, they will have to
collectively cross the bridge of tactical decision-making, and perhaps adopt a strategy of
centralized planning, followed by coordinated, decentralized execution.
The two lean enterprise change capabilities discussed here are just part of the broader set
needed to initiate and sustain transformation. The following section examines one ALC
and its performance and maturity for all twelve enterprise change capabilities.
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6 AN IN-DEPTH DISCUSSION OF WARNER ROBINS ALC
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6.1
Introduction
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6.2
6.2.1
6.2.2
6.2.3
Lean Enterprise Transformation at Warner Robins ALC
Phase I: 1999 to 2002
Phase II: 2002 to 2004
Phase III: 2004 to Present
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6.3
Warner Robins ALC and Twelve Lean Enterprise change Capabilities
6.3.1 A Leadership Team with a Shared Mental Model
6.3.2 Planning and implementation process
6.3.3 Balanced and Cascading System of Metrics
6.3.4 Standardized Processes (and a team to develop and track them)
6.3.5 Compensation and Reward System
6.3.6 Developing and Deploying Vision and Mission (shared understanding)
6.3.7 Communication and Public Relations Abilities
6.3.8 Change Management
6.3.9 Cadre of Change Agents
Context for Local Experimentation
6.3.10
Continued Learning and Self-Renewal
6.3.11
6.3.12
Training and Education
The Future of Lean Enterprise Transformation at WR-ALC
6.4.1 Successes Predicted
6.4.2 Challenges that Must Be Addressed
6.4
6.5
Conclusions
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136
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146
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149
151
153
157
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6
An In-Depth Discussion of Warner Robins ALC
6.1 Introduction
Throughout this thesis, I have suggested that all twelve enterprise change capabilities are
necessary to initiate and sustain lean enterprise transformation. In the previous section, I
examined two of the capabilities as embodied at all three Air Force Air Logistics Centers.
In order to better explore the applicability of all twelve transformation capabilities, I will
now look specifically at the Warner Robins Air Logistics Center and their abilities to
meet each of the proposed characteristics needed for successful commencement of
enterprise transformation.
WR-ALC was chosen for this analysis because of the ongoing research relationship with
LAI. LAI visited the ALC and made some initial observations of lean and change
activities in September 2003, and returned in January 2004 to complete four case studies
of lean initiatives. These case studies included a general overview and history of lean
and other change efforts, an examination of the C-5 and C-130 maintenance activities,
and an assessment of lean improvements in the administrative process of purchase
requesting. (These case studies can be found at http://lean.mit.edu.) Subsequent to these
research endeavors, I continued to sporadically stay in contact with WR-ALC officials
over the following 15 months. WR-ALC has been welcoming, open, and supportive of a
research relationship with LAI.
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In April 2005, LAI was asked to return to WR-ALC, to partner with Simpler Consulting
in order to guide a team of leadership personnel through LAI's Enterprise Value Stream
Mapping and Analysis (EVSMA) process. I observed this weeklong process and
returned one month later to attend the continuation and follow-up held as part of a
leadership offsite strategic planning session. During this time I also interviewed leaders.
My observations from each of these sessions have contributed substantially to my
understanding of lean enterprise transformation efforts at WR-ALC, and enabled me to
assess, using my framework, their lean enterprise change capabilities.
Following the EVSMA meeting, I interviewed 14 of the 17 leadership team members
individually. During these interviews we went through an informal questionnaire
designed to explore their personal assessment of the WR-ALC enterprise according to the
twelve capabilities I described to them. The questionnaire responses provided me with a
qualitative and quantitative data on which to base my appraisal of their capabilities and
weaknesses.
Of the three Air Logistics Centers I studied, I have the most complete understanding of
efforts and activities at Warner Robins. I am well versed in both their history and their
current efforts. Because of this, I have chosen to use Warner Robins as a case study
against my twelve lean enterprise change capabilities. As noted previously, all
comparisons and assessments will be done against the ideal state, and not in comparison
to other ALCs or other governmental enterprises. I will start my description with a
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review of WR-ALC's historical lean and change efforts as this context is important to
understanding the current state of its change capabilities.
6.2 Lean Enterprise Transformation at Warner Robins ALC
Since it's inception in 1999, the Warner Robins lean program has gone through several
shifts of focus, as well as several leaders and motivating factors. What follows is a brief
discussion of three phases of activity and efforts.
6.2.1 Phase 1: 1999 to 2002
The current flavor of lean thinking was first brought to WR-ALC in May 1999 and was
introduced in a limited fashion within the F-15 Avionics shop. Funding for this program
came from the AFMC ManTech Initiative and allowed Warner Robins to experiment
with lean without significant resource investments. Early efforts were not particularly
successful, and resistance and reluctance on the part of front-line workers was significant.
However, some strides were made encouraging workers, managers, and consultants alike;
enthusiasm and implementation soon spread to other areas of F-15 work, including the
wing shop and general program depot maintenance (PDM).
In February 2000, a new Commander arrived at Warner Robins. He endorsed lean as a
tool for continuous improvement, and galvanized its adoption throughout other areas
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within the WR-ALC depot maintenance enterprise. By May 2001, lean efforts had been
expanded throughout the F-15, C-5, C-130, and C-141 depot maintenance programs.
Thinking beyond maintenance activities, the new Commander required all senior leaders
to undergo lean training, and hosted a regularly scheduled Friday breakfast meeting
dedicated specifically to discussing lean activities. As reported by Roth (2004, p. 3 1), to
the new Commander, the essential part of lean was, "the lean thought process. I like the
way it forces you to examine what you're doing to identify what you're really about, the
end product you're producing, and the essential steps to produce it." This involvement of
all senior staff in the "leans thought process" marks the beginning of the expansion of
lean efforts at WR-ALC away from individual programs and into the enterprise setting.
6.2.2 Phase 1: 2002 to 2004
A second Commander arrived at WR-ALC in February 2002. He was soon persuaded by
his predecessor and Lean Thinking (Jones and Womack) to continue to lean efforts
throughout his command. 5 "[The second Commander] declared his continuous
improvement focus to be the institutionalization of lean across the enterprise (Roth,
2004)." In order to do this, the second Commander introduced the concept of a North
Star: a mission statement around which the enterprise could rally and attain. Warner
Robin's North Star was, "We provide combat capabilities for DoD warfighters and our
allies through superior sustainment and deployment of combat-ready forces."
5The fact that lean initiatives were continued in light of leadership succession is quite remarkable in and of
itself.
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Additionally, the second Commander adopted the notion of antelopes, which he heard
about from former Speaker of the House Newt Gingrich. Gingrich spoke of antelopes as
the food without which lions cannot thrive, even though they can meagerly survive just
by eating lots of chipmunks. By analogy, the second Commander's antelopes were those
(stretch) goals and (revolutionary) improvements without which, he believed, Warner
Robins could not thrive. These antelopes were:
1. Create a World Class Depot through Comprehensive Lean Deployment &
Benchmarking;
2. Implement Comprehensive Public-Private Partnerships; and
3. Develop our Workforce through Enlightened Leaders, Technically Proficient
Workers, and Cooperative Labor-Management Relations.
The articulation of these antelopes gave the second Commander talking points through
which he could explain and further the case for change throughout the enterprise.
The second Commander refined the case for action and the lean communication plan
(which was formalized and documented in late 2002 with the Concept of Operations and
the Operation Plan for transformation). He continued lean efforts in the maintenance
areas and also expanded lean initiatives into the realm of senior leadership and the Rest
of the ALC (known by the acronym ROTA). He codified the Friday meetings held by his
predecessor into the Lean Corporate Council, which met bi-weekly with all senior leaders
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in attendance. At these meetings, each leader was responsible for presenting the lean
activities up coming and on going within their respective areas. These meetings brought
everyone onto the same page for lean enterprise transformation, and encouraged all
leaders to understand their contribution to the larger enterprise.
As lean proved successful within the depot maintenance arena, these tools and practices
were applied to administrative activities, beginning in the fall of 2002. Small successes
were won and demonstrated within areas such as Personal Computer Installation, Foreign
Military Services: Modification Kits, and Foreign Military Services: Tech Orders. The
first attempt at a lean initiative geared towards eliminating waste in more than one
directorate (a sub-organization within the WR-ALC enterprise) at the same time was the
Purchase Requesting Initiative, which was instigated with a center-wide value stream
mapping event in December 2002.
The second Commander clearly championed the lean process, and strengthened its
adoption throughout his command. Lean activities could be seen everywhere, in the
maintenance, administrative, and leadership arenas. Can the sum of all of this activity
truly be labeled lean enterprise transformation? I do not believe so. Enterprise
transformation, for there to be a change in state, requires more than just the cumulative
sum of lean activity. Lean activities can yield organizational change, that is based on
lean, in pockets, but enterprise transformation requires coordination across activities and
a larger, enterprise strategy.
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6.2.3 Phase II: 2004 to Present
In February 2004, the second Commander left WR-ALC, and was replaced by the new
and now current Commander. In an article published in the base newspaper, the Robins
Rev-Up, the second Commander praised the lean efforts he observed:
You have accomplished a lot, and I'm confident the improvements will
keep on coming. We've made great strides in deployingLean throughout
the Center and the Wing. I'm encouragedby your willingness to try new
ideas and take some risks in the way we do business. It is paying off every
day in the form of reduced waste and improved efficiency and
effectiveness, and its garneringrecognitionfrom aroundour Air Force,
the Departmentof Defense and industry as well. (Wetekam, 2004)
During the month of his arrival, the current Commander was asked about his dedication
to lean and his role as the new commander. His response included the following excerpt,
also from the Robins Rev-Up:
"Lean is a greatinitiative," he said. "Any time you can streamline
processes to be able to increaseproductivity, lower costs andprovide
more capability out the door to the warfighteris a winning situation. I
would be absolutelyfool heartedifI didn 't continue to embrace it."
(Askew, 2004)
Are these truly equivalent statements, designed to further the same goal of lean enterprise
transformation? I do not think so, and it seems that the workforce and proponents of lean
were suspect. The second Commander had grand holistic visions of enterprise change
using lean as a driving force, while the current Commander saw lean as a tool that could
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reap some benefits for the warfighter. From these quotes, I propose that one Commander
described lean as an end in itself and the other described lean as a means to an ends. I
sense an appreciable unevenness in these comments. The second Commander saw lean
as a new culture that could transform his enterprise, while the current Commander saw
lean as more focused on tactical or business decisions. In the face of initiating or
sustaining transformation, I am tempted to think that the former method of
communication and focus would have been more successful if allowed to continue. In
part it illustrates the extent to which the workforce, and its culture, requires top leadership
direction to continue with a program that they consistently described as personally and
organizationally beneficial. The important note here is that leadership did change, and
the ALC at all levels of the enterprise responded accordingly.
While lean initiatives have continued under the current Commander, his vision statement
of "Be a valued Member of the World's Most Respected Air and Space Force" (along
with the short moniker of "People First... Mission Always") has replaced the second
Commander's North Star. (This change in vision is typical in that each successive leader
is required to show his capability and leave his mark on the enterprise.) The current
Commander pushed forward with three new strategic objectives for the center:
1. Create and Sustain a Healthy, Fit, Ready Workforce Operating from a Quality
Installation;
2. Deliver and Sustain High Performing Capabilities On Time, On Cost; and
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3. Create an ALC Normalized within the AF Culture that Embraces AF Core
Values.
In my interview with the current Commander, he stated that lean is a toolbox for
continuous improvement, but does not think that transformation of his enterprise should
be driven by those principles and practices alone. He wants to transform Warner Robins
into an Air Force Base any military man would be proud to work at, and he does believe
that lean can be used to do so.
At the request of the current Commander, LAI was asked to bring the EVSMA process to
Warner Robins in April 2005. Later interviews I conducted with senior leaders
established the two-fold motivation for this request. First, the current Commander,
perhaps because of the successful legacy of lean at WR-ALC, believed that EVSMA
could bring his leadership team together to develop a strategic plan that would result in
attainment of his three goals. Second, the current Commander believes in the notion of a
normalized Air Force culture with standardized processes. Given that the other two
ALCs had been through EVSMA (in the Spring and Summer of 2004 respectively), to be
"normal" the ALC under his leadership go through the process as well. The EVSMA
process, including a Strategic Planning offsite in May 2005, is the most recent
development in the Warner Robins journey through lean enterprise transformation.
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6.3 Warner Robins ALC and Twelve Lean Enterprise Change Capabilities
Warner Robins Air Logistics Center has a successful history of lean activities and
transformation results. An assessment of this history leads to the following questions:
Which of my proposed twelve enterprise change capabilities do they possess and which
have they not yet developed? How can WR-ALC leverage their current capabilities,
invigorate those that existed in the past but lapsed, and develop the additionally needed
new capabilities?
In the following sections I will attempt to answer these questions for each of the twelve
enterprise change capabilities. The descriptions and conclusions presented come from
my observations while on site, interviews with leadership team members, and the
structured questionnaire and sorting of change capabilities conducted with EVSMA team
members.
Lean Enterprise change Capability
1. A Leadership Team with a Shared Mental Model
2. Planning and implementation process
3. Balanced and Cascading System of Metrics
4. Standardized Processes and a Team to Track Them
5. Compensation and Reward System
6. Developing and Deploying Vision and Mission
7. Communication and Public Relations Abilities
8. Change Management
9. Cadre of Change Agents
10. Context for Local Experimentation
11. Continued Learning and Self-Renewal
12. Training and Education
Current Status
Low
Low
Low/Medium
Low
Low/Medium
Medium
Medium
Low
Low/Medium
Low
Does Not Exist
Low
Table 6.1 Current state of twelve lean enterprise change capabilities at WR-ALC, as
assessed by the author.
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6.3.1 A Leadership Team with a Shared Mental Model
As discussed previously, the Lean Corporate Council (under the second Commander) was
quite fruitful in building a leadership team that could openly share ideas and ask for help
on a regular basis. Participants were observed (in January 2004) sharing information
readily and taking responsibility for extra tasks proscribed by the second Commander. It
is likely that this venue provided a forum through which a shared mental model could be
built. However, this body was disbanded when the current Commander arrived. While
senior leadership team meetings still occur, I am not aware of whether there are any
leadership team meetings (other than EVSMA) specifically dedicated to lean activities.
During the summer and fall of 2004, WR-ALC and the other ALCs underwent an AFMC
and DoD mandated structural reorganization. This change left behind the matrixed
organization structure of product and maintenance directorates in favor of an Air Force
normalized wing-group-squadron structure complete with support organizations
responsible for training and policy. Based on interviews and observations, this
reorganization has left a few senior WR-ALC leaders unsure of how they fit into the new
hierarchy. These uncertainties are not in terms of formal authority, but in terms of
unwritten authority and responsibility. As is typical of any corporate restructuring, the
resulting power shifts have left some unhappy with their new positions and uncertain of
their strength within the enterprise. Until these new positions with their power and
authority bounds are sorted out, the members of the leadership team do not fully know
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where they stand, and this uncertainty is unlikely to limit their development of a shared
mental model. The very fact that formal authority is so important to some leadership
team members limits the ability of the ALC's leadership team to form a collective resolve
in lean enterprise transformation issues.
In May 2005, I had the opportunity to interview fourteen of the seventeen members of the
WR-ALC leadership team. I prepared a short, structure questionnaire designed to
introduce each of the twelve lean enterprise change capabilities, and then assess the
enterprises current performance based on the responses recorded. Participants were
asked to respond to initial statements on a scale of 1 to 5, with I being "I strongly
disagree" and 5 being "I strongly agree." Comments and concerns were also noted, and
team members were encouraged not to limit themselves to a numerical response.
Additionally, I asked each participant to sort two stacks of cards. Both stacks included
twelve cards, each labeled with one lean enterprise change capability. In the first round, I
asked team members to rank the capabilities, from best to worst, in terms of the current
performance of the WR-ALC enterprise. In the second round, they were asked to sort the
capabilities again, this time from most important to least important, in terms of those that
are necessary for transformation to stick. (The complete results of this questionnaire can
be found in Appendix A.)
The results of the interviews and the sorting exercises were two-fold. First, I gained
some important insights into the current performance of the WR-ALC enterprise on each
of the twelve lean enterprise change capabilities outlined in Section 4. This section is
133
based primarily on the questionnaire responses and surrounding discussions I had with
these leaders.
Second, I was able to assess the level of maturity associated with the enterprise change
capability of a leadership team with a shared mental model. If the team had a shared
mental model, I would have expected to see scores less than one standard deviation from
neutral within the questionnaire responses (Table 6.2) and groupings of highly ranked
capabilities during the sorting exercise (Figures 6.1 and 6.2). I observed neither of these
occurrences, supporting my concern that this leadership team is still developing a shared
mental model. (This assessment is a purely descriptive conclusion based on my own
sense of the data - nothing has been statistically tested or verified due to a small sample
size (n=14) and my statistical testing inabilities.)
Standard
Enterprise
Change
1.
A
2.
Planning
.
Leadership
Team
and
Balanced
3
Capability
Average
with
a
Shared
Implementation
and
Mental
Model
Process
Cascading
System
of
Metrics
4. Standardized Processes and a Team to Track
Them
5. Compensation and Reward System
6.
7.
8.
9.
Developing
and
Communication
and
Change
Cadre
Deploying
Vision
Public
and
Relations
Mission
abilities
Assessed
Deviation
Status
3.27
0.60
2.40
0.50
2
91
1.90
1.50
0
+
59
-
0.25
0.34
2.10
0.41
2.91
0.48
3.14
0.56
2.94
0.57
-
-
Management
of
Change
+
Agents
10. Context for Local Experimentation
1.97
0.43
11. Continued Learning and Self-renewal
1.83
0.44
12. Training
and
Education
1.40
0.28
I°
- score is less than 1 StDev from neutral
- score is more than 1 StDev from neutral
- score is more than 2 StDev from neutral
Table 6.2 Average scores, standard deviations, and assessed status for each lean
enterprise change capability, based on questionnaire results reported by the WR-ALC
leadership team. (Scoring: 1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4 = Agree,
and 5 = Strongly Agree.)
.
-
-
.
.
.
.
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I
Task Given to ELT Members: rank these capabilities (from best to worst) In
terms of the current performance of the WR-ALC enterprise
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Figure 6.1 Sorting exercise results: current state rankings.
Task Given To ELT Members: rank these capabilities (from most important to
least important) that are necessary for transformation to stick
E
gj ' .
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2
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Figure 6.2 Sorting exercise results: desired state rankings.
135
EW
,
J
As shown in Table 6.2, the results of the questionnaire show a team that does not agree
on the questions asked. The team only agreed on the presence of two capabilities
(leadership team with a shared mental model and change management). On two other
cases (planning and implementation process and cadre of change agents), they agreed that
the capability did not exist, but they have now recognized the need for them. For the
other capabilities assessed, the standard deviations presented indicate that they do not
share a mental model regarding the importance or presence of these capabilities.
The results of the sorting exercise confirm this conclusion. In both the current state and
desired state assessments, there was no consistency as to the top three capabilities
deemed important. For example, in the current state exercise, six of the twelve
capabilities were ranked "best performing" by leadership team members. If this team
shared a mental model regarding important capabilities for their transformation process, I
would have expected to see a more condensed grouping of capabilities (such as only one
or two) ranked "best performing." The number of capabilities which received a ranking
of 1, 2, or 3 in the current state exercise was 10 out of 12, and 9 out of 12 for the future
state. Again, for a team with at least approaching a shared mental model I would have
expected (at most) five capabilities to reach this top three tier.
6.3.2 Planning and implementation process
Within an enterprise, strategy and policy provide direction and vision for any attempted
transformation, as well as guidance for business as usual. Successful lean enterprise
136
transformation is likely to be predicated on established, strong, and broadly-based
mechanisms for strategy and policy development and deployment. Warner Robins
showed evidence of this capability through the vision and goals stated by the second
Commander (and then altered by the current Commander) and through the policies put
forward in the Concept of Operations for Transformation (which was subsequently
abandoned, or at least not mentioned recently).
When asked about a planning and implementation process (to link strategic planning with
budgeting and project prioritization), interviewees all indicated that they are currently
struggling with this process. This finding was surprising as the strategy and policy
infrastructure described in the 2004 Case Study indicates that it was once readily
available. Participants felt that it was quite difficult to link strategic planning to daily
decision-making, and they could not foresee this getting any easier in the near-term
future. Furthermore, many attested to the fact that very little program and product
planning is ever linked directly to over-arching enterprise-wide financial or personnel
planning. In part, these are connections that EVSMA is designed to develop and make,
and so this process should be starting as the planning process continues.
One interviewee spoke very candidly about the relationship between the Wings and what
they called the "functionals" or support organizations, such as financial management,
contracting, and human resources. The interviewee stated that the "functionals" are still
seen as supporting agencies to the Wings, as opposed to integral parts of the planning and
implementation process. It was suggested that there continues to be a pervasive "check
137
with them later" mentality, which is in direct opposition to the ideal "define requirements
together up-front" mode of attack. In addition to staff or support organizations not
having sufficient power in planning, a common complaint in most corporations, this
comment indicates the ongoing uncertainty still resident at the Wing restructuring
continues to settle out.
Of interesting note is the discrepancy I uncovered regarding the notion of the "color of
money" and its impact on the planning and implementation process. (The "color of
money" is a term used by people in the ALC to describe the discrete buckets of money
allocated every year for specific activities within programs. Once Congress has allocated
money during the budgeting cycle, it cannot be moved or shifted to another activity or
area. This results in funding problems and shortages in some areas, and un-movable
surpluses in other areas.) Some of the participants felt that the "color of money" was a
problem and barrier to easy planning and transformation. Others, however, believed that
it was not a problem, and rather an excuse used by people incapable of seeing the true
root cause of a poor planning and implementation process. This difference is significant
and indicates that even before an effective planning and implementation process can be
developed and deployed, leaders at senior levels need to be active and engaged in
analysis of improvements and implementation of change so at to not let these beliefs
derail the changes that need to be made.
138
6.3.3 Balanced and Cascading System of Metrics
Successful lean transformation requires that progress and improvements be measured to
provide feedback, guide progress and provide a basis upon which success can be
declared. Lean enterprise transformation requires that this notion be taken one step
higher, such that there is alignment of metrics throughout the enterprise regarding
progress and setbacks, and so that the system can be optimized and improved globally
rather than locally. Creating a consistent, coherent and coordinated system of metrics
that is then cascaded throughout the enterprise is a difficult task, but one that is essential
to overall transformation progress. As of January 2004, Warner Robins had four systems
of measurements, all somewhat inter-related to each other and the stated goals of the
center: on-going programmatic measures, improvement activity measures, the metrics
cockpit, and the (Simpler) maturity assessment. There did exist, even at that time,
concern about the number of measures, their use for control and monitoring rather than
feedback, and the lack of an ability to cumulatively understand benefits of lean activities.
Typical of large governmental entities, WR-ALC collected a significant amount of data
on an on-going basis to satisfy a myriad of legal and regulatory requirements. Regardless
of how these data fit into their lean enterprise transformation, this information had to be
collected and reported. The best that could be hoped for was that this data collection did
not inhibit resource allocation to other processes, and did not drive behavior counter to
lean efforts. Unfortunately, it does take the time of many people to collect and report
139
data, and when it is not associated with performance feedback and reporting, its value for
lean transformation is questionable.
Lean transformation, as facilitated and motivated by WR-ALC and Simpler Consulting,
requires a significant amount of activity through lean events. In order to ensure efforts
were being initiated, Warner Robins chose to track the number of events occurring and
planned within specific organizations. Each organization was given a target number of
events, based on the population they employed.
In order to create visibility for lean successes throughout the enterprise, WR-ALC
developed and adopted the Metrics Cockpit view in April 2002 (Figure 6.3). This cockpit
was designed to display improvement activities within a number of depot maintenance
areas. The cockpit allowed everyone to be familiar with all efforts at a very cursory, but
sufficient and visible, level.
Figure 6.3 Warner Robins ALC Lean Metrics Cockpit (Roth, 2004).
140
In 2003, a lean maturity assessment tool, based primarily on a proprietary tool developed
by Simpler Consulting, replaced the Metrics Cockpit. This tool was referred to as the
Spider Diagram, in which results are displayed in a web-like figure (Figure 6.4). The
assessment tool allowed each organization, and the enterprise as a whole, to be assessed
according to a4-point scale (where 1 is least lean and 4 is most lean) on twelve
characteristics of a lean enterprise. This was a visual management tool that could be
incorporated into all communication activities (Visual management tools were also used
extensively in maintenance and production cells). Under the second commander, Warner
Robins set a goal of achieving level 3 lean maturity score in all categories by 2006.
Leader's
Commizment
Visual Manag4
ration
Lowest Cosa
Si
Rapid
Improvement
A chieving Lot
Size of One
Defect-Free
rocess Control
On-Deo
Deployment
Breakthrough
Figure 6.4 Lean Maturity Assessment Spider Diagram (Roth, 2004).
During the spring of 2004, the senior leadership of WR-ALC developed a list of 17
metrics to be tracked at the enterprise level. These metrics were designed to align with
the three objectives outlined by the current Commander early in his tenure at WR-ALC.
As of May 2005, some of these metrics had targets and goals associated with them, while
141
others had yet to be defined completely. This metric set included eighteen items (see
Section 5, Table 5.3).
The metrics included within this set vary significantly according to scope, target, and
ability to be easily tracked. For example, a 20% Increase in Aircraft Availability is a true
enterprise-wide metric that will push people to think outside of the box and challenge
usual business practices. This metric can be contrasted with DUI Incidents, which only
applies to military personnel, and is very limited and specific in its area of interest. DUI
Incidents was chosen because it was simple to measure and thought to be an important
indicator or the safety culture and orientation of the ALC workforce. However, an ideal
balanced and cascading system of metrics would not be asymmetrical; it would include
these same types of metrics at different levels, and then role them up into a few larger,
enterprise measures. An asymmetrical set of metrics does not lend itself to tracking and
measuring progress and lean enterprise transformation. This recognition was shared by a
number of leadership team members. However, while the leadership team acknowledged
the limitations of the current metrics, the supporting collection system, and the need for
more metrics work, none of them seemed inclined or "forced" to dedicate the time and
resources necessary to making bring about metric system improvements. Revision of the
current set of enterprise-level metrics was discussed and debated at the senior leadership
off-site meeting in May 2005. Too little time was allotted in this meeting to make any
progress.
142
My experience with other experts in this field suggests that an optimal set of enterprise
metrics would contain between 5 and 10 metrics, with a smaller number being preferable.
I expected the WR-ALC team to eventually work towards condensing their list of
metrics. However, they had been told that no metric could be eliminated without consent
of the whole team, and their suggestions would be better taken as proposals for revision
instead of withdrawal. While this idea may have produced desirable results with
sufficient time, the constraint of whole group approval was likely to prevent any
reduction from happening. In the end, after only 2.5 hours of team discussion, it was
decided that the current list was sufficient and that no significant modifications were
needed.
WR-ALC is also working on a Balanced Scorecard (BSC) project. This assignment was
dictated by AFMC; all three ALCs need to develop a BSC that can be easily rolled-up
into the system that AFMC Headquarters is using. For WR-ALC, this project took the
three goals outlined by the current Commander and developed an aligned set of
enterprise-level metrics. This draft of the BSC is shown in Figure 6.5. These efforts are
a step in the right direction towards a balanced and cascading system of metrics, but this
current version will need additional work to support lean transformation. Many members
of the leadership team thought that it was more important to "wait and see" what was
developed by AFMC Headquarters before developing their own system
As assessment of Warner Robins against the ideal of this enterprise change capability is
remarkable in that they do not appear to have a balanced and cascading system of metrics
143
fully developed and utilized at this time. The previous research suggested that they did
possess this ability at some point in time. In the future, it will be interesting to explore
the transition and loss of the capability, including possible causes and drivers of this
experience.
Figure 6.5 Warner Robins current draft balanced scorecard.
6.3.4 Standardized Processes (and a team to develop and track them)
One of the fundamental principles of lean is the notion of standard operating procedures
for all processes, a process often called "standardized work." Standardized work creates
a baseline condition for continual improvement activities, allows for cross training of
workers, more frequent job rotations (several times per shift) and consequently reductions
144
in cell flow times and material costs while increasing reliability and quality. What is
counter intuitive is that standardization, which seems rigid, actually creates greater
flexibility. As standards are set and well known by a work group, they quickly notice and
can address deviations. The result of standardization also provides performance
measurements and a basis from which to make and track the benefits of continual
improvement activities. Standardization of all on-going processes usually consists of
three steps: identification and documentation of the current process, elimination of waste
and non-value added steps, and most importantly, transition to and implementation of the
improved process.
At Warner Robins, the leadership team subscribes to this lean philosophy - they expect
that the standardization of all processes will improve performance. Their standardization
efforts will establish a baseline that everyone consistently follows, and from which
quantifiable results can be measured in the future. They have already begun discussions
to create a team that will be responsible for the documentation of process across the
enterprise. Team members, however, were split as to how the personnel and job
description system in place might limit their ability to assign the right people to this task.
Team members were in disagreement as to whether or not the people who would be
asked to follow these standardized processes would value that standardization (both the
process and the end results) as well as whether or not they would follow the standardized
and potentially altered processes. It seemed to me that these team members were
following an outdated industrial engineering mental model, where they supposed that
they would develop and impose standardized work on others. The basis tenant of lean is
145
to train the people on new techniques, including process mapping, and have them create
the standards that they themselves would use, and later refine, in conducting their work.
Given the different views of standardized processes, it might be said that WR-ALC does
not yet possess a standardized process enterprise change capability. Given the active and
ongoing nature of the discussion, they are working towards it. The developments needed
include not only subscribing to the idea of standardized work, but influencing the overall
organizational culture to be more receptive, trusting teams in developing their standards,
and taking advantage of the lean principles of standardization, measurement, cross
training, and frequent job rotation.
6.3.5 Compensation and Reward System
All but one member of the leadership team at WR-ALC stated that there is currently no
enterprise-wide incentive or reward system for people who take part in lean events, or
even for those who make suggestions for new continuous improvement activities. An
alternative point of view pointed out that people in his wing receiving Notable
Achievement Awards, which included monetary compensation. He said, "All wings have
the ability to do this, but they don't know about it or don't use it." Even without specific
programs set up for recognition of lean activities, team members agreed that similar Air
Force-wide programs were supporting local efforts.
146
When asked whether participation in lean events or efforts should be a condition for
promotion, the team was again split. Some felt that this idea was a logical way to
encourage participation and therefore encourage further knowledge sharing. On the other
hand, some participants felt that while counting lean event participation should be
considered in the general review and promotion process, this should not be a condition
for promotion. As a condition for promotion it potentially required extra available time
and that penalizing people with more time consuming or difficult jobs would be
inappropriate. Also, it did not recognize the importance of producing results, but merely
counted activities. While being active in lean events develops skills that produce better
results, it is not the same as recognizing the improved end goal of improved results.
The discussion and contending positions held by leadership team members illustrates
their efforts to improve the linkage between measurement, results and compensation. As
mentioned earlier in the discussion on shared mental models, this kind of team effort,
although time consuming and at times frustrating, does lead to a shared understanding.
That shared understanding should enable the eventual common and coordinated action
required to develop the compensation and reward system enterprise change capability.
This local shared understanding is particularly important in the ALC setting where there
are other Air Force and AFMC programs, as mentioned by the leader whose wing won an
award, that could be implemented locally and be consistent with AF policy.
147
6.3.6 Developing and Deploying Vision and Mission
The current Commander has introduced a vision statement for WR-ALC that was adapted
from AFMC Headquarters' statement: Be a Valued Member of the World's Most
Respected Air and Space Force. Additionally, he outlined three objectives for the center:
1. Create and Sustain a Healthy, Fit, Ready Workforce Operating from a Quality
Installation;
2. Deliver and Sustain High Performing Capabilities On Time, On Cost; and
3. Create an ALC Normalized within the Air Force Culture that Embraces AF
Core Values.
Concurrent with these statements, the current Commander advocates the bumper sticker
motto: "People First... Mission Always." He has made it is clear that from the highest
levels of leadership at WR-ALC that he has a vision and mission and communicates it
singularly.
All members of the leadership team said that they understood this vision and that it
guided them in their work. Most leadership team members also stated that they spent
time developing and communicating this vision, even if it was not as much time as they
would have liked to dedicate to this task. The result for the enterprise is that there is a
leadership team that is listening, embracing the capability of vision and mission, and
148
using their vision and mission to maintain focus and drive changes consistently across the
enterprise.
In my probing about the extent to which the vision was widely shared, approximately one
year after this vision statement was developed and accepted, leadership team members
stated that they were uncertain if the majority of people on the base could state the vision.
Some of the leadership team members were concerned that even if some workers could
state the vision, they would likely struggle to understand how it guided them in their daily
job. All the leadership team members were optimistic, however, that the "People First...
Mission Always" moniker was catching on.
With all of this in mind, it is seems to me that WR-ALC has the capability to develop
vision and mission statements, but has not made the broader dissemination of vision a
sufficient priority so that leadership team members take the time that they stated that they
know they need to take to have it widely understood. The challenge of communicating
vision and mission so that leaders are confident it is heard broadly and guides activities,
is linked to WR-ALC's communication and public relations capabilities, which will be
addressed next.
6.3.7 Communication and Public Relations Abilities
During any lean enterprise transformation, communicating the case for change and
progress along the way to the whole workforce is difficult and requires significant time
149
and effort. These efforts include not just communicating success, but celebrating their
accomplishment with recognition and also admitting failures that could to be learned
from. The leadership team members stated they were proficient in their communications,
utilizing both the base newspaper (The Robins Rev-Up) and the current Commander's
newsletter (People First... Mission Always). In interviews with personnel at levels
below the top leadership, they did not share the view regarding that the message was
getting out, particularly with regard to the message on lean transformation. This
variation in perception was especially evident as some of the managers asked to
implement changes for the senior leadership team stated that they were unclear regarding
the rationale for all the lean enterprise transformation endeavors. It is not uncommon that
there are differing views for the clarity of communication in organizations. The top
leaders are sending messages that they think are clear, but members of the organization
ask to behave different or make changes are not entirely certain of what is being asked of
them. The current challenge for WR-ALC is in recognizing, discussing and addressing
this gap in communication.
When I asked senior leaders about the current Commander's communication abilities
directly, the majority of them said that he was consistently on-message and was, for
example, "convincing in his communication about the need for lean enterprise
transformation." In terms of public relations and communications with the local
community, most leadership team members acknowledged that communication regarding
lean transformation was limited to because of the importance and prominence of
communications regarding BRAC activities. Many suggested that while they could strive
150
to be better at this, there really was no need to provide more information about lean at
this time. The local community readily appreciates the presence of the base. For
example, I observed a preponderance of "Every Day in Middle George is Armed Forces
Appreciation Day" or EDIMGIAFAD signs all over town.
In summary, I believe that pieces of the communication and public relations enterprise
change capability are present at WR-ALC. I could be critical in that these capabilities are
not currently being leveraged as well as they could be, however, given the overwhelming
importance of BRAC, it is understandable. It should also be noted that communication
and public relations are seen by leadership team members as two distinct capabilities. It
is important that they become seen as one whole, and as an enterprise change capability,
so that there is consistency and forcefulness in both internal communications as well as
external public relations that reinforce the lean transformation efforts.
6.3.8 Change Management
The change management needed for lean transformation is a new concept for many of the
senior leadership team members at WR-ALC. The Air Force, and WR-ALC, are run in a
command-and-control, military-based fashion. This style of direction and management
includes military and civilian base personnel. Also, this top-down management style
extended into the realm of change: reluctance or resistance for whatever reason was
forcefully met with power from hierarchical authority - directives to change because the
boss told you to.
151
Not everyone subscribed to this historical view of change and the role of hierarchical
authority in forcing change. In a presentation given at the May 2005 leadership offsite,
the Director of the Organizational Culture Office at WR-ALC, made a presentation to the
leadership team titled, "Role of Culture Change in Our Enterprise Value Improvements".
This presentation proposed that culture was something that could be actively managed
and changed, that some cultural changes were needed, and that the results would be
tangible, emotionally pleasing and result in greater efficiency. The leadership team stated
their receptiveness to these ideas, and said that they put in the time and effort to
effectively manage cultural change.
In the past, WR-ALC attempted to find the right people to initiate cultural change. One
example is the Change Agents, now called Change Managers. These people were
facilitators of lean. The change in their title was made in order to convey the need for
organization leaders to be responsible for change, while experts in the process of change
and improvement helped them to "manage" that process. WR-ALC had created the
Change Managers as a resource to leaders. Like many organizations, the members of the
senior leadership team acknowledged that they needed to spend more time with their
assigned Change Managers, as well as the middle managers and first line supervisors to
ensure that cultural changes continued.
Leading cultural change is not an easy task. When asked, senior leadership team
members disagreed on how well they had managed cultural change in the past. Some
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believed they personally had done an okay to good job, while being critical of what they
saw as the involvement of other leaders. Leading cultural change is a significant day-today activity, one which is often subtle as people watch what you do more than listen to
what you say. Without spending time to discuss what other leadership team members
are doing, it is easy to not understand one another's efforts and state that cultural change
is neglected. One team member who said they had not done a good job in the past,
"because if we had, we wouldn't be where we are today", echoed the latter position. The
discussion at the leadership team level challenged them to consider the whole enterprise,
and not just their functional areas, in thinking about cultural change as a holistic topic.
The level of discussion and concern shows that WR-ALC is on the right track to
developing and utilizing change management approaches as an enterprise change
capability. I believe that it is important to praise them for the sheer realization that
culture and change are processes that can be managed, as this is a notion quite removed
from invoking managerial authority to force change in the industrial complex of an ALC
and what is thought of as a classic military bureaucracy.
6.3.9 Cadre of Change Agents
In order for lean enterprise transformation to be successful, an enterprise must have the
knowledge and expertise to guide new participants as the journey unfolds. This
knowledge and expertise is often resident in specific people who facilitate, support, and
marshal change activities. The case studies complete in 2004 indicated that at Warner
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Robins, these coaches could be divided into two categories: those that were resident
within the enterprise, and those that were contracted and brought in to provide guidance
from the outside. This distinction is important because a lean enterprise transformation
entails a build up of resident capabilities and an organization that is not dependent on
outside guidance.
The coaches developed within the enterprise were resident in three groups. First, there
were personnel within the Plans and Programs Transformation Office. The people in this
group worked to create the enterprise-wide policies and plans that would facilitate lean
implementation. They also maintained a library of materials available to anyone leading
improvement events. The second group of people included the Change Managers
discussed above. The Change Managers were each responsible for motivating and
coordinating lean and change efforts in specific organizations and functional areas. The
third group was known as the Red Horse Team, was an internal team of on-site
facilitators. The Red Horse team member often had industry experience and lean training
from outside WR-ALC. They were co-located and worked together as a team and were
assigned to work with specific Change Managers and their organizations. The Red Horse
Team members were brought in to help in the more challenging and complex
improvement efforts, when years of knowledge regarding WR-ALC were needed.
Early in their lean enterprise transformation, dating back to the initial MANTECH
experiment that brought in consultants, the WR-ALC leadership recognized that they
needed outside help and knowledge for successful lean events or initiatives. They
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continued to work with Simpler Consulting, who had come to them on the MANTECH
project, and contracted them directly. Simpler consultants were contracted to be at the
ALC to lead events on a regular basis, and the transformation office scheduled which
lean efforts they would lead or support. WR-ALC has adopted many of Simpler's lean
practices and assessment techniques as their own, and continues to work with them as
their efforts move from lean activities to more strategic, enterprise level efforts.
When I returned to WR-ALC in 2005, I expected to find the change agent enterprise
change capability in a mature state, continuously utilized and leveraged to promote lean
enterprise transformation. I anticipated that senior leadership would be taking advantage
of the Change Agents, Simpler Consulting, and the Red Horse Team and transformation
office staff at every opportunity. When I spoke with the leadership team members, they
were uncertain of the effectiveness of their capabilities to utilize these resources
effectively. Several leaders felt the Change Managers assigned to them were ineffectual,
and that they had not made clear their expectations or definitions for their responsibilities.
Many managers agreed with my concern that even if their roles were clearly defined, the
people and the services they provided were not adequately valued or utilized by the
enterprise.
The leadership team members look to external causes for their assessment that there were
ineffective people in these roles. Some leaders said that broader human resources
policies constrained the people that were promoted into these new and often senior
positions. Others said that the lack of formal job descriptions that prohibited attracting
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the best people from taking the jobs. Another theory offered suggested that many
managers just did not want to give up their best people to these positions. What leaders
that complained about these issues did not do was take responsibility for their own role in
developing and utilizing this change agent capability to promote lean transformation
The differences between what was found in 2004 and 2005 could be due to working at
different levels in the organization. In 2004, when working on case studies, the people in
the transformation office, Change Managers and Red Horse Team members were my
direct contacts. I heard them individually and collectively complain that they needed
better support and involvement from the division directors they were supporting. In
2005, when I interviewed the EVSMA team members, the division directors, they
expressed concern about the skill of the people in these roles. What this all suggests is
that the change agent capability resident at WR-ALC needs to be further developed and
utilized. It appears that the supply side of the equation is questionable (are these really
the best people) and the demand side is weak (leaders are not putting these people to use.)
The use of change agents is an area where top WR-ALC leadership should require
activity, recognizing that initial efforts will not be perfect, but let forcing the activity
develop the relationship, competence and confidence between division leaders and this
enterprise change capability.
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6.3.10 Context for Local Experimentation
I found it very difficult to explain the capability that encourages and fosters a context for
local experimentation to senior leaders at Warner Robins. The concept and its value
seemed unfamiliar to them, suggesting to me that had yet to embrace or develop this
capability. The leaders understood the ideal of the "community of scientists" but they
were not sure how this idea could be applied outside of local lean efforts and projects at
an enterprise level. What this indicates to me is a continued reliance of senior leaders
seeing themselves in decision-making positions for improving organizational
effectiveness. With that worldview of their role, it is easy to understand why the need for
autonomous learning and local or diffused environments that provide opportunities for
learning is foreign.
On a positive note, leaders did say that they were no specific policies that would punish
people for trying new ideas and failing. Local experimentation was neither advocated nor
actively discouraged; rather the concept is just neglected, at WR-ALC. In thinking about
the concept, several leadership team members said that there were not adequate resources
available for experimentation, especially in terms of time. People tended to focus on
their daily jobs and could not take the time to work on efficiency or effectiveness gains
unless specifically told to do so. There were a select few leaders that did say that the
resources were available. Perhaps, as described earlier, it really is just a matter of leaders
telling people to take the time and use the resources to experiment in making
improvements?
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One question regarding developing a context for local experimentation is the role of
leaders in providing permission, support and resources. At WR-ALC there no longer is a
senior leader, enterprise-level forum that reviews all lean projects, as had been the case
when the second Commander hosted bi-weekly Lean Councils. The current team
members agreed that an enterprise-level forum would stifle creativity and had decided to
leave the review and approval process for lean events with middle and line managers.
Given the stance of the current leadership team on local experimentation and enterpriselevel forums to review lean efforts, it was no surprise to me that its members did not talk
about innovative, local efforts. Given that I had seen these efforts take place a year ago,
that there were still Change Agents and lean experts resident in the various divisions, I
presume that these local efforts are still ongoing, but within the purview of middle and
line managers. What WR-ALC could do to further develop its enterprise change
capability utilizing local experimentation is to sanction and foster it at the management
team, enterprise-wide level without burning it with a potentially centralized and
bureaucratic review and approval process. Gaining a balance between local autonomy
and centralized decision-making is a constant challenge for commercial organizations,
and appears to also be a challenge for government sites. In order to succeed at lean
enterprise transformation, and develop a "community of scientists" ideal culture, it is
necessary to leadership teams at government sites actively work on this balance.
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6.3.11 Continued Learning and Self-Renewal
Continued learning and self-renewal at individual and organizational levels are hallmarks
of a "learning organizations." Learning and renewal are distinct from traditional training
and education programs. The WR-ALC senior leadership team recognized and openly
spoke to this idea during the May 2005 strategic offsite meeting. The team spent nearly
two hours discussing definitions of "workforce development" and "training and
education." "Workforce development," as they defined it, would be consistent with the
capacity for continued learning and self-renewal.
Understanding of the difference between the two terms is just the first step in developing
and deploying this capability. At the end of this two hour discussion, the current
Commander stated that he was concerned with traditional training and education. To
ensure that those efforts were not diluted, he asked that training and education remain a
stated priority in any formal documentation or communication of the ALC's strategic
plan. The focus on training and education may have diluted the efforts at developing a
capability for continual learning and renewal as only the people that were part of the
leadership team discussion will know the intent of the leadership team to promote these
ideas.
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6.3.12 Training and Education
Adequate and appropriate training is well developed at Warner Robins. Like any other
area that has positive benefit, there is still room for improvement. When it comes to
specific skills required for job certification, they have programs in place that meet
workers' needs. In some ways, this capability is currently measured by the "Butts in
Seats" metric, a metric that tracks training attendance. As is typical in many
organizations, tracking attendance at training does nothing to indicate the relevance or
effectiveness of that training. Where I found deficiencies in training was in looking
beyond explicit technical skills, at such items as "just in time training" for new processes
or lean improvements.
Senior leadership team members recognized that longer-term training and education
requirements are more difficult to quantify, assess, and meet than skills training. Several
team members spoke to issues of"mentoring." saying that it largely non-existent between
the average worker and supervisor. As a team they realized that, to date, they have been
focused on tactical, short-term, direct application training. The time has come for them
to extend these training to the general education, professional development, and skills
necessary for successful lean enterprise transformation. The next step will be for the
leadership team to develop a plan that closes the gap between their recognition and their
responsibility for initiating action.
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6.4 The Future of Lean Enterprise Transformation at WR-ALC
As suggested by the actions needed relative to the twelve enterprise change capabilities,
this next year will be a critical time for lean enterprise transformation efforts at the WRALC. My assessment against the ideals of all twelve lean enterprise change capabilities
revealed a number of opportunities for future success, as well as challenges that must be
addressed before victory can be declared.
6.4.1 Successes Predicted
The cadre of change agents currently deployed at Warner Robins is poised to be quite
effective, though they, as any professional, would benefit from more training and support.
In addition, the Simpler consultants currently on contract are very helpful and are a great
supply of innovative ideas and continuing support. Leaders need to be active in the
enterprise to convince people of their capabilities. With greater leadership involvement,
the change agent cadre will gain further experience and on-the-job training. This
reinforcing loop forms a virtuous cycle that will help enhance all lean and change
activities. WR-ALC has already invested a significant amount of resources in its change
agent cadre capability, and it should continue to be leveraged to its fullest extent.
The communication and public relations capability is well developed and currently
utilized internally and externally at WR-ALC. In addition to the avenues discussed
previously (the Robins Rev-Up base newspaper and the current Commander's People
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First... Mission Always newsletter) there are also "lean walls" throughout the industrial
complex publicizing lean activities and their results. Also, plasma screen monitors and
general posters throughout the repair and maintenance facilities are used to communicate
to workers on a regular basis. Beyond printed methods of communication, the current
Commander holds "Commander's Calls" - town-hall style meetings for everyone on base
held in the WR-ALC Convention Center. To ensure that his messages are broadly heard,
the Commander has declared them to be mandatory for all personnel. Continuing to
advance this capability will enhance the lean enterprise transformation underway.
The senior leadership team at WR-ALC is progressing in its way to creation of a team
with a shared mental model. They have acknowledged the need for more time together,
sought to develop greater cohesiveness, and have committed to team building activities.
They are actively working to cut down on the amount of time they spend "fire-fighting"
on a daily basis and hoping to replace this time with more effort on thinking together and
encouraging innovation. They desire to be true leaders, and not just managers.
A balanced and cascading set of metrics will be essential to initiate and sustain lean
enterprise transformation. While the leadership team has struggled with this capability,
they are currently making great strides are being made in this direction. The AFMC
mandated balanced scorecard efforts is being taken seriously at WR-ALC. A team has
been dedicated to devising and designing the system is making progress with this task
(Figure 6.3). As they complete the development mode they will need to steward the
deployment activities that will soon follow.
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6.4.2 Challenges that Must Be Addressed
WR-ALC is currently not well versed in the ideals of a learning organization, or in their
case, a learning enterprise. Based on my interviews and observations, they are not
striving to become one. Not embracing learning ideals could be a problem as they
continue to move the lean efforts beyond shop floor and administrative tactical lean into
strategic planning and financial budgeting. As an enterprise, they must learn how to learn
from their successes and failure, and alter processes to build upon their experience for
future success. If they cannot take more of the initial steps to do this new, their lean
journey will become mired and more difficult in the future.
The balanced score card efforts, both at AFMC and local levels, are steps toward overall
enterprise-level metrics at WR-ALC. It is currently unclear whether the new scorecard
will replace other metrics, including the enterprise-level metrics listed previously. This
decision and distinction should be made carefully and quickly. It should be
communicated to the entire workforce, especially to those employees involved with data
collection. The current uncertainty surrounding this metrics and the BSC causes some
confusion. Ideally, the current list of enterprise-level metrics should be shortened,
balanced and integrated with the BSC efforts.
Greater effort, particularly in dedicating more time to the task, is needed by senior leaders
in sharing the vision and objective statements of WR-ALC. Leaders' acknowledgment
that most people would not be able to recite the vision statement suggests that it must be
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revitalized if it is to be an effective tool in lean enterprise transformation. Vision
statements are powerful tools that need to be used to convince the workforce that they are
active participants in this lean journey, and that their contribution to the enterprise is
valued.
As the senior leadership team of WR-ALC goes beyond standard team building exercises
they will better develop their shared mental models. Currently there is disagreement on
some issues, and various leaders might be sending different messages to the workforce.
The leadership team needs to be act and been seen as a unified force behind
transformation. As the Wing restructuring is completed, power and authority will be
resolved, and communication barriers among leadership team members and their
organizations must be broken down.
Cultural change, and change management more broadly, is rapidly becoming a priority
for the senior leadership team. While they have said that cultural change is something
they are concerned with and actively managing, they also admitted that they do not have
the time or the full team commitment to do much together in this area. Several leadership
team members have said that they will deal with cultural change later, and that it is
secondary to the actual process changes and standardizations they are trying to establish
Cultural, process and standardization changes are not either-or or sequential issues, but
items that need to be dealt with holistically and together.
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6.5 Conclusions
Lean enterprise transformation is currently a work in progress at WR-ALC. To
accelerate the transformation and their success, the senior leadership team should take
decisive action on the proposals made during the EVSMA process and the May 2005
strategic offsite meeting. If they follow through with these projects, and ensure a
seamless transition from leadership involvement to leadership championing, they will
have established procedures to implement new ideas the next time around.
This team must also continue to address the challenges of capability development as part
of lean enterprise transformation. They must be prepared for the current Commander's
eventual departure, and again gain the support of whoever will be their new Commander.
Also, at some point in time, they will need to balance their in-house Change Agents and
Change Managers abilities with their reliance on outside consultants. They may decide
that have already achieved the correct balance, but the question should regularly
reviewed.
Most important, as the lean journey that began in 1999 enters a new enterprise-level
phase, the leadership team needs to actively consider developing its strengths across all of
the twelve lean enterprise change capabilities that I have developed, described and
proposed as integrally linked to lean enterprise transformation.
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7
7.1
7.2
73
POLICY BARRIERS TO CHANGE AND CONCLUSIONS .....................
168
Lean Enterprise Transformation at the US AF Air Logistics Centers ................................ 168
Policy That Create Barriers to Change ...........................
7.2.1 Fiscal Policies
7.2.2 Human Resources Policies
........
170
172
174
Broader Theory of Lean Enterprise Transformation ........................................................... 176
167
7
7.1
Policy Barriers to Change and Conclusions
Lean Enterprise Transformation at the US AF Air LogisticsCenters
Lean enterprise transformation is a journey that takes many years to travel and there may
never be a static end point. Significant resources must be dedicated to sustainment of
lean enterprise efforts; otherwise backsliding, or even worse, false starts, may become the
norm. If traditional mindsets prevail, particularly with the workforce and management's
treatment, it will always be an uphill battle to be lean. Compared with their aerospace
industry counterparts, the Air Logistics Centers are a decade behind industry practitioners
of lean.
Lean enterprise transformation is difficult. Within government and military entities there
will be even further challenges, but the goal is not impossible or unattainable. My
observations of the three US Air Force Air Logistics Centers (Ogden, Oklahoma City,
and Warner Robins) have convinced me that with adequate resources and training these
enterprises can develop the change capabilities required for lean enterprise
transformation.
In order to succeed, the ALCs will need to understand the twelve lean enterprise change
capabilities as I have defined them, appreciate the value in them, and allocate the
resources necessary to foster, augment, and utilize them. Doing so will allow them the
freedom to engage and implement all new initiatives, and strive for continuous
168
improvement. In the beginning, some of the capabilities may be more important than
others (such as a leadership team with a shared mental model, a balanced and cascading
system of metrics, and an effective cadre of change agents), but successful transformation
will not be possible without all of them.
At the same time, LAI can help these enterprises better assess and understand their
current capabilities through expansion of the Lean Enterprise Self Assessment Tool
(LESAT). LESAT can aid in the education and training of leaders, and help them
identify the gaps and opportunities for enterprise-level focus and change. If identification
of deficient capabilities can happen sooner, lean enterprise transformation will likely
occur more quickly.
It is very difficult to predict or recommend where the Air Logistics Centers should or will
go from here. Lean enterprise transformation is quite difficult, and no silver bullet will
guarantee their success. However, they will likely stand a better chance of survival and
sustainment if they all focus on developing and deploying the twelve lean enterprise
change capabilities developed in this thesis. Currently, leadership and managers at all
three ALCs are good at making plans, but have difficulty in implementing those plans.
This predicament of planning without action could be due to their lack of enterprise
change capabilities. They may have a plan, but they may lack a convergence on the plan
by the leadership team, a process to link the plan to the resources necessary, and a cadre
of change agents ready to help implement the plan. Without all of these change
capabilities, transformation will forever be stalled at the planning step.
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Life at an ALC is anything but stable for upper management and senior leadership, and
perhaps too stable for the bulk of the civilian workforce. This balance must be shaken in
order to encourage and spur capability development and deployment, while still meeting
the needs of US warfighters.
In order to develop and deploy these twelve lean enterprise change capabilities, the ALCs
will need to own their processes and responsibilities, making sure they are aligned with
AFMC processes, and challenging the direction provided when necessary to achieve
appropriate alignment of activities and goals. In order to do this effectively, they can and
should rely on consultants and their industry counterparts, until they develop their own
internal capability. Also, they can look to LAI for observation, feedback, and research on
vexing future problems and obstacles.
7.2 Policy That Create Barriers to Change
Even with the help of EVSMA, LESAT, LAI, and the greater understanding of the
capabilities needed, the ALCs will still face obstacles along the road of lean enterprise
transformation. They must be ready for these obstacles, including those that appear, at
first glance, to be outside of their control. Many of these obstacles are monuments.
Monuments, in traditional, manufacturing-centric lean parlance, are large, fixed assets
that are quite difficult and expensive to change or modify, such as large tools or test
170
equipment. By expanding this notion to the strategic and financial level, it is easy to see
that some policies and practices will be monuments for the ALCs. Included in this
category, are fiscal policies and human resources policies that may impede a lean
enterprise transformation within an ALC (Table 7.1)
Categories of Policy Barriers to Change
Examples of Each Category
Directive to break even
Budgeting cycle that discourages savings
Fiscal Policies
and reinvestment
Advanced inventory requirements
Human Resource Policies
definition
Restrictive hiring and promotion policies
Rapid and regular leadership turnover
Lifelong nature of civilian employment
Table 7.1 Examples of policy barriers to change identified during interviews of ALC
leadership teams.
The purpose of this discussion is not to point out obstacles and monuments that will stop
any ALC lean enterprise transformation dead in its tracks. Rather, I am pointing these
out in the hopes of drawing attention to issues that must be addressed at the outset of any
lean enterprise transformation in a government setting. By addressing them early and
often, it might be possible to decrease their impact and destructive nature, ultimately
preventing people from using them as poor excused for what "cannot be done." The
function of policy is to set conditions to enable certain results, and thus by highlighting
current policy that inhibits lean transformation, and the suggesting future policy that can
enable this process, I can better enable the efficient and effectiveness of key government
enterprises that we depend upon in our country.
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7.2.1 Fiscal Policies
The ideal characteristics of a planning and implementation process capability entails an
efficient and effective planning and implementation process which brings lean concepts
and tools to the truly enterprise level. This process must allow senior leaders, and others,
to connect strategic planning to financial budgeting all the way through
operationalization of ideas and efforts. ALC leaders, however, felt that this was difficult
in light of policies that restrict the allocation of resources, the reinvestment of savings,
and the freedom of leaders to finance objectives at will.
Within the US Air Force, unlike other commercial endeavors, there is no profit motive.
The end goal of the ALCs is to break even: they should not make money, but they should
also not lose money. What results is a tricky numbers game in which prices are set
according to customer (other Air Force bases and warfighters) desires, and not according
to cost recovery or profit gain. This situation results in no financial incentives for
increased efficiency and effectiveness of production. (It should be noted however, that I
have observed this attitude beginning to change. Due to the extended duration of the
conflicts in Iraq and Afghanistan there is a greater awareness of the need for the military
to become more cost effective.)
Without this profit motive, the viability of the enterprise as a whole is harder to
understand, and this leads to difficulties in convincing average workers to transform.
They are often happy with business as usual, and since they personally cannot profit from
172
increased efficiency, and they know the base itself cannot as well, they are less inclined
to embrace new procedures. It is possible to use pride (both personally and
nationalistically) in a job well done to support the warfighter as motivation, but this may
not be adequate in the end. Other ways to encourage employee transformation include
performance pay, improved working conditions, and greater job security. All of these
possibilities fit under the capability of a compensation and reward system.
In addition to the lack of profit motive, interviews with leadership team members
revealed that the ALCs also face a culture and budgeting cycle that discourage, and
perhaps even negate, savings. In a typical commercial enterprise, money that is saved
due to increased effectiveness and efficiency can be reinvested into the system, and
further improvements can be made. At the ALCs, if a savings is documented, the same
amount of money will likely be removed from their congressionally determined budget
during the next cycle. There is very little opportunity for reinvestment, and virtually no
opportunity to move money saved at one process to another. In order to get around this,
ALC personnel have begun to experiment with "cost avoidance" as opposed to "savings,"
but this work-around will not be successful in the long run. Without savings, it is hard to
demonstrate success. And without demonstrated success, it is tough to achieve cascading
change that would sum to lean enterprise transformation. The AF culture does not
reward risk-takers (Forseth, 2003), and so people do not go out on a limb to find the
initial resources necessary for local efforts.
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Just-in-time inventory is a hallmark concept of any truly lean manufacturing or
maintenance facility. However, this ability is contingent upon a flexible requirements
program and responsive supply chain management. Leadership personnel suggested that
the current habit of advanced requirements definition (which is often conducted 2 years
ahead of time) prohibits the adoption of true just-in-time delivery options. Unless the
ALCs can work with the rest of the Air Force and the Department of Defense to change
this procedural cycle, this will likely remain an un-movable monument in the path of
their lean journey.
7.2.2 Human Resources Policies
The capability inherent in a cadre of effective change agents implies that the correct
people can be selected and transferred from one job to another, with or without a
promotion, easily. Also, it assumes this is a desirable, well recognized, and not careerkilling position to have. Within government enterprises that also employ a unionized
workforce, such as the ALCs, this has proven to be particularly difficult. Seniority
requirements often impede the selection of young, bright employees with new ideas and a
desire to change their workplace. Because job definitions and descriptions are written
quite stringently, it is very difficult to move people from one job to another when
transformation efforts and lean improvements necessitate it. Also, job level assignments
prevent senior experienced people from holding these positions without moving
backwards in their career track. Commercial enterprises, with and without unions, have
learned to work around these obstacles. In industry, for example, serving as a lean expert
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or black belt is often a prerequisite for promotion to senior executive positions. The
ALCs should learn from their own difficulties, as well as from industry experience, and
move forward in conquering this obstacle.
Lean enterprise transformation requires momentum, and a large factor behind that
momentum generation is commitment and sponsorship on the part of senior leadership.
However, at the ALCs and other military enterprises, the process of career advancement
for senior leaders, both civilian and military, compels people to move from one job to
another at a regular pace that is determined outside of the context of local efforts. At the
ALCs, the characteristic tenure for a senior military leader is between 18 and 24 months,
regardless of current activities, time constraints, or leadership requirements. Lean
enterprise transformation can barely be initiated in that time frame, let alone sustained.
And once a new leader moves in, there is no guarantee that he or she will continue the
efforts of his or her predecessor. In fact, AF culture rewards leaders with new ideas, and
therefore Commanders are even expected to shift the focus of an enterprise when they
arrive. Continuity of ideas, and in turn, lean enterprise transformation, is not currently
valued by the Air Force. This rapid leadership turnover will remain an obstacle until
federal guidelines and tendencies are shifted such that longer tenures and levels of
commitment are valued. A new balance much be struck between consistency in
leadership and military professional development.
Conversely, the average civilian employee at all of the ALCs is employed by the ALC for
their entire career ("Final Report of the Commission of the Future of the United States
175
Aerospace Industry," 2002). Also, in the government and union environment, it is very
difficult for employees to be laid off or fired. Many lifetime workers do not feel
compelled to embrace change, and are happy to follow out-of-date procedures, mostly
because they know that little can be done to them in the form of repercussions. They do
not purposefully do things poorly, but rather resist change to remain in their comfort
zones. These circumstances for workers and leaders add up to an atmosphere in which
many workers believe they can "wait this out" or just wait for the next "flavor of the
month," in terms of both the Commander and the initiative in progress. Again, this does
not foster an environment ripe for learning and growth, and lean enterprise change is
likely to be stymied unless this attitude, and the policies that encourage it, can be changed
or removed.
7.3 Broader Theory of Lean Enterprise Transformation
Throughout this thesis, I have identified two levels of lean enterprise change capabilities:
1) those associated with strategy formulation, setting the vision and goals, restructuring to
get resources aligned with objectives, and achieving economic value; and 2) those
associated with engaging the broad workforce, developing organizational capability,
passionate people, learning and change. These two categories are basically Theory E and
O changes (Beer & Nohria, 2000). Policy and parent organizations can influence and
direct the Theory E components, while programs, commitment, training, human resources
policy, and other opportunities that are practiced locally influence Theory O changes.
Clearly, enterprises need both Theory E and Theory 0, and the challenge is one of
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alignment and making them cumulative rather than conflicting. That means how you
treat, resource, lead, and integrate changes into transformation is different for these two
levels, and needs to be recognized in the Air Logistics Center settings.
The twelve lean enterprise change capabilities encompass both of these categories.
Theory E changes require expertise, data, analysis, and a strategic process to come up
with great plans. Theory O requires educating people, getting them active and involved,
directed by vision, learning, and making changes (and reducing barriers that limit
learning, enthusiasm and action). Currently people are seeing both types of changes as
similar, and therefore not supporting or organizing these efforts and the transformation as
best as they could.
The ALCs are struggling with lean strategic planning, and lack the capabilities to
implement results and plans generated by EVSMA. They are having difficulties with
these plans, which can be characterized as broadly Theory E, and are strategic and
typically done by organizations higher up in the military chain of command. However,
they have seen more success with Theory O-type programs that get people involved - like
quality, action learning, and specific training activities. Yet, sustaining transformation
requires Theory E and Theory O, as well as the ALCs and their extended enterprise
working together, and the understanding of the way in which the twelve capabilities are
all present and appropriately directed can help the Air Logistics Centers, and the Air
Force, do this more effectively.
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Additional research, as well as tools and assessments, need to be developed to enhance
the understanding and interactions of the twelve lean enterprise change capabilities I have
defined within this thesis. We need to learn more about their impact on enterprise
transformation, and the appropriate timing for development and deployment throughout
the enterprise. This new assessment technique can then be used in conjunction with other
LAI tools, and can assist enterprises in evaluating and appraising their readiness for lean
enterprise transformation.
This work builds upon a tradition of LAI engagement with the US Air Force, and extends
theories and practices of organizational change up to the enterprise level. These
capabilities address a gap identified in ALC attempts at lean enterprise transformation:
when is the enterprise ready to begin? I truly hope LAI and the Air Force and continue to
work and learn together as we begin to understand the applicability of these twelve
capabilities.
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APPENDIX A - Results from informal questionnaire of WR-ALC leadership team.
1
2
3
5
4
U,
AleqaJdenh Tex
I.
entidc
d:haSk-'W- a"'.:nMsituwfflmqonwq
1
2
3
4
5
0
3
1
9
1
3.0
0.9
I can easily make innovative suggestions in the
1
2
3
4
5
0
4
0
5
5
3.0
1.3 1.6
When innovative suggestions are made, we all take the
1
2
3
4
5
0
5
4
5
0
2.0
0.9
0.8
The facility's senior leaders share the same level of
ntmentfor lean enterprise transfonmation
comd
1
2
3
4
5
1
3
5
5
0
3.0
1.0
0.9
le
Through theEVSMA process my views on whereWe
change
not
as an enterprise did
need to focus
1
2
3
4
5
2
5
0
5
2
4.0
1.4
2.0
2a
fr
he AIC has an effective planning process
inplementing initiatives firom the DoD, AF, or AFMC
1
2
2
3
3
4
4
5
5
0
6
5
2
1
3.0
0.9
0.9
1
2
3
4
5 '3:4
0
4
0
9
1
3.0
1.0
1.0
1
2
3
4
5
0
5
1
4
4
3.0 1.3 1.7
at
treligning1
2
3
4
5
1
5
1
7
0
3.0
1.1
3
4
2
6
1
4
1
4.0
1.3 1.6
2
3
4
5
0
7
4
3
0
2.0
0.8 0.7
2
3
4
5
0
6
0
6
2
3.0
1.2
1.5
la
The senior laders
lb
of the ALC all agree onwhat our
strengths ae and what we wamt tobe great at
enterprise leadership team
time to consider them
d
2b
ythoughly
for
process
hIbe
ALC has an effective planning
2
we have developed
hnplementinginitiatives
Every time we try
to make achange, the
color
of money
is aproblem
2d
usto,we a g
When dchage quires
aulthloritywithresponsibility
for
Iam confident that we have agood sysemn
measuring work unit performance
3b
too
many details1
we lose
up our metrics
When we role
to make them effective at a high level
and
the metrics Ineed toprovide leadership
S ISet
direction in my areas of responsibility
3d
3e
1
2
3
4
5
0
5
2
7
0
2.0
0.9
0.9
1
2
3
4
5
2
10
0
2
0
3.0
0.9
0.7
We have aculture that values and follows standardized
1
2
3
4
5
2
5
3
4
0
3.0
1.1
1.2
Standardization of all prcesses will improve our
1
2
3
4
5
0
0
0
5
9
1.0 0.5 0.2
Itis easy for
us to assign good people to the task of
1
2
3
4
5
3
7
2
2
0
3.0
1.0
1.0
Participation in lean
efforts and activities should be a
condition for promotion
Air Force incentive prograns (such as the Ideas
associated monetary award)
Competition and the
undermine local initiatives and behaviors
1
2
3
4
5
0
4
3
4
3
3.0
1.2
1.3
1
2
3
4
5
2
11
1
0
0
2.0 0.5 0.2
I understand the WR-ALC vision and it guides me in my
1
2
3
4
5
0
0
0
6
8
1.0
0.5
0.3
and communicaing
time
developing
Leders spends
1
2
3
4
5
1
2
1
9
1
4.0
1.1
1.2
vision of WRIfIasked three people at random what the
Iwould get arelatively
ALC is, Iam confident
consistent vision
1
2
3
4
5
2
7
2
3
0
3.0
1.0
1.0
peformance
4c
developing and tracking standardized process
5
5b
work andleadership
6b
6c
1.2
the
metrics he needs to nmrun
Geneal Collings gets the
ALC
It is impoant that
we initially
develop our balanced
score card autononnmously from AFMC efforts
prIcesses
4
0.9
this
vision with the wodrkforce
184
8u
.0
L
g
L
?
1
2
3
4
5
2
3
4
5
0
2
3
7
2
3.0
0.9
0.9
2
3
4
5
0
3
1
6
4
3.0
1.1
1.3
2
3
4
5
1
0
1
6
6
4.0
1.1
1.2
2
3
4
5
0
5
6
1
2
3.0
1.0
1.1
2
3
4
5
0
3
3
7
1
3.0
0.9
0.9
2
3
4
5
4
9
0
1
0
3.0
0.8
0.6
2
3
4
5
4
6
3
1
0
3.0
0.9
0.8
2
3
4
5
0
8
3
3
0
2.0
0.8
0.7
2
3
4
5
1
7
4
1
1
4.0
1.0
1.0
2
3
4
5
0
3
5
6
0
2.0
0.8
0.6
2
3
4
5
0
2
1
11
0
2.0
0.7
0.6
2
3
4
5
3
3
4
4
0
3.0
1.2
1.3
2
3
4
5
0
1
4
8
1
3.0
0.7
0.6
2
3
4
5
2
6
1
4
1
4.0
1.3
1.6
2
3
4
5
0
3
2
8
1
3.0
0.9
0.9
2
3
4
5
0
8
3
3
0
2.0
0.8
0.7
2
3
4
5
0
6
3
5
0
2.0
0.9
0.8
2
3
4
5
1
1
1
11
0
3.0
0.9
0.9
2
3
4
5
2
7
2
3
0
3.0
1.0
1.0
2
3
4
5
2
9
1
2
0
3.0
0.9
0.8
2
3
4
5
2
8
1
3
0
3.0
1.0
1.0
7. Communication andPublic Relations abilities
7a
The Robins Rev-Up is a good way to get important
information to the work force
I put significant time and effort into communicating the
case for change to my reports and the work force
General Collings is convincing in his communication
about the need for lean enterprise transformation
7d
We communicate effectively why and how we are
changing to our local community
8. ChangeManagement
Our leaders actively think about, manage, and change
our organizational culture
7b
8b
The only people who can change organizational culture
are top leaders
We have been able to effectively manage needed
cultural changes in the past
9. Cadre of Change Agents
9a
We have a consistent and appropriate definition of
change agent skills and responsibilities
Being a change agent is an important and highly valued
9b
role; we get our best and brightest people into these
positions
9c
Our enterprise currently has a cadre of effective change
agents
It is widely understood that leaders and managers are
9d
responsible for change; change agents are there to help
in those efforts
Government hiring policies do not inhibit our ability to
appoint who we want as change agents
10. Contextfor Local Experimentation
10a Leadership supports managers that encourage local
experimentation
8e
10b There are adequate resources available to support and
encourage the needed levels of experimentation
10c An enterprise level team approving all projects could
undermine the innovativeness of local experimentation
11. Continued Learningand Self-renewal
11a As an enterprise, we encourage and reward
risk taking
1 b People who are innovative and fail are encouraged to
try again
We actively seek out and implement best practices from
other settings and industries
12. Trainingand Education
Our people have the skills and capabilities when and
12a where they are needed for the transformation we are
attempting
12b For those people that do not have those skills, we have a
plan in place and a commitment to close that gap
Our managers and supervisors understand the need to
12c and are skilled at training and mentoring their direct
reports
1
1
1
1
185