by tom gust an applied research project submitted in

Leading the Implementation of Lean Manufacturing

by

Tom Gust

An Applied Research Project Submitted in Partial Fulfillment

of the requirements for the Degree of

Master of Business Administration

Athabasca University

December 2011

Abstract

This conceptual paper explores literature describing Lean Manufacturing and the aspects

of leadership required for organizations to achieve success through the implementation of Lean

Manufacturing principles. The aspects of Lean manufacturing are identified to establish an

understanding of achieving success. Lean manufacturing has gained a widespread following

throughout the world across a broad set of organizations; however, for many organizations

successful implementation in terms of anticipated results remain elusive. Leadership remains a

common denominator among organizations as leadership is essential to an organization‘s

performance and success in achieving its objectives. As such a suitable leadership model

complementary with Lean Manufacturing is presented for organizations implementing Lean

Manufacturing.

Keywords: lean manufacturing, leadership, organizational structure

Acknowledgements

I would like to express special thanks to my wife, Kathy, and family for the support and

patience they demonstrated throughout the time of my studies. Also, I acknowledge and thank

God for the opportunity to study and for the resources provided along the way. Finally, I thank

Dr. Oliver Mack for his coaching and guidance through the writing of this paper.

Table of Contents

0 List of Abbreviations ............................................................................................................ 1

1 Introduction ........................................................................................................................... 1

1.1 Background of the Problem ............................................................................................ 1

1.2 Statement of Research Problem ...................................................................................... 2

1.3 Objectives ....................................................................................................................... 3

1.4 Hypothesis....................................................................................................................... 3

2 Research Methodology and Design ..................................................................................... 3

2.1 Methodology ................................................................................................................... 3

2.2 Assumptions .................................................................................................................... 4

2.3 Limitations ...................................................................................................................... 5

3 Lean Manufacturing ............................................................................................................. 5

3.1 Defining Lean Manufacturing......................................................................................... 5

3.2 Elements of Lean Manufacturing.................................................................................... 7

3.3 Elements of Lean Manufacturing Implementation ......................................................... 9

3.4 Culture of ―Lean‖ .......................................................................................................... 13

3.5 What is an ―Effective Lean Manufacturing Implementation‖? .................................... 17

3.6 Critical success factors for Lean Manufacturing Implementation ................................ 18

3.7 Critical success factors for Toyota ................................................................................ 21

4 Leadership and Management in Organizations ............................................................... 22

4.1 The Relationship Among Leadership, Management and Hierarchy ............................. 22

4.2 Leadership, Trust and the Nature of Trust .................................................................... 37

4.3 Leadership for Change .................................................................................................. 40

4.4 Leadership as a Lean Manufacturing Process ............................................................... 44

4.5 Leadership in Toyota .................................................................................................... 46

5 Integration of Lean Manufacturing and Managerial Leadership .................................. 49

5.1 Leadership for Lean Manufacturing and LM Implementation ..................................... 49

5.2 Organizational Structure and Compatibility with Lean Manufacturing ....................... 52

5.3 Implementing Lean Manufacturing as a System .......................................................... 55

6 Recommendations for further Research ........................................................................... 58

6.1 Study of Toyota: Is Toyota a Requisite Organization? ................................................. 58

6.2 Consideration of a 3rd

Dimension for Organizations .................................................... 59

7 Conclusion ........................................................................................................................... 60

8 References ............................................................................................................................ 63

LEADING THE IMPLEMENTATION OF LEAN MANUFACTURING 1

0 List of Abbreviations

LM Lean Manufacturing

LMI Lean Manufacturing Implementation

TPS Toyota Production System

PDCA Plan-Do-Check-Act

JIT Just-In-Time

CSF Critical Success Factor

SME Small to Medium Enterprises

ROI Return On Investment

ROT Requisite Organizational Theory

1 Introduction

1.1 Background of the Problem

Large numbers of manufacturers throughout the world have implemented lean

manufacturing (LM), a program for operational improvement extracted from the Toyota

Production System (TPS). Although LM promises huge improvements and the concepts are

relatively simple, most companies implementing LM are failing to make gains and at best are

underachieving. An Industry Week (2008) survey in 2007 revealed that nearly 70% of

manufacturers in the United States had implemented a LM program; however, only 2% of

responding companies fully achieved their anticipated results and 74% of respondents admitted

that they were not making good progress. The widespread adoption of LM and the ensuing poor

results has prompted much research into understanding the cause of the LM implementation

(LMI) failures. The research has produced reams of reports, books and consultants ever at the


ready to guide and assist those struggling with LM or those looking to embark on the Lean

journey.

Researchers have identified and listed common causes as to why companies fail with

LMI. Many have gone on to formalize the requirements and steps to follow for LMI success.

Leadership has been identified as a common cause for LM success and/or failure. This paper

focuses on leadership for LMI and for a sustainably effective LM program. As many LM

principles and concepts are suitable for the improvement of general operations they are

transferable to organizations outside of the manufacturing arena. As such, this paper will not

focus specifically upon manufacturers; rather, this paper spans the breadth of organizations to

which Lean programs are applicable. Leadership for LM and LMI is shown to be part of a

greater system of organizational structure and management with managerial leadership being

responsible for developing a fertile cultural environment of employee commitment, openness,

respect and innovation nourished with trust.

1.2 Statement of Research Problem

Organizations embark on the Lean journey drawn by the promises of increased

operational efficiencies, increased quality, increased value for their customers and ultimately

increased profits resulting from the reduction of costs. Unfortunately, for most organizations,

management develops a mental picture of the promised land without a clear understanding of the

obstacles and costs to be encountered along the way. However, of greater significance is that too

often management adopts an understanding of LM as a ‗bottom-up‘ driven process and does not

understand its role or its significance for success. Organizations engage in LM without

understanding the significance of leadership for LM success and neither do they understand what

leadership is required for LM.


1.3 Objectives

The objectives of this paper are:

1. To identify the criteria for determining when LMI and LM are considered to be

effective. This is important for determining what leadership is required for effective

LM.

2. To obtain an understanding of management and leadership so as to establish the

relationship between management and leadership and thereby understand the

requirements for effective LMI and LM.

3. To gain an understanding the impact of leadership upon LMI and LM.

4. To understand the leadership requirements for organizations undergoing the

transformative organizational changes included with LMI and LM.

1.4 Hypothesis

It is hypothesized that leadership plays a critical role for organizations seeking to

effectively implement and sustain LM. Further, it is hypothesized that the leadership required for

successfully implementing LM is directly aligned with the leadership required for organizations

to successfully achieve transformative change.

2 Research Methodology and Design

2.1 Methodology

This research paper is written as a conceptual paper with the research being a

comprehensive literature review through which a focus on the importance of leadership and the

role that it plays for an effective implementation of LM is developed. Many books, journal

articles, academic papers and research papers have been written about issues surrounding LM,


leadership and organizational structure. Many of the articles and papers are available through

online document delivery databases and academic libraries. Key search words for online

searches typically included:

Lean implementation

Managing lean implementation

Leading lean implementation

Leading vs. managing

Leadership

Leading change

Supplementing the information available through the academic sources is information gained

through management and Lean Implementation consultants.

2.2 Assumptions

This paper was written under the premise that LM as generally understood within

industry does not provide a template for leadership and neither does LM provide a specific

framework for developing leadership. As such, the assumption has been accepted that an

organization‘s leadership does not undergo significant development or enhancement with the

implementation of LM or specifically due to the implementation of LM.

Further, this paper was written under the assumption that there is no reason to draw a

distinction between the different types of companies or varying industries implementing LM and

all organizations implementing LM have been considered to be of one population.


2.3 Limitations

The assumed premise that the essence and characteristics of a company‘s leadership

remains unchanged by the implementation of LM places a limitation upon the research paper.

The research was conducted with the view that leadership remains essentially constant for

companies implementing LM and the results of LM implementation represent the dependent

variable. Further limiting the paper is that as a conceptual paper, the assumptions were not

measured or validated with primary research.

3 Lean Manufacturing

3.1 Defining Lean Manufacturing

Lean Manufacturing (LM) is a manufacturing philosophy that when properly

implemented can lead to manufacturing excellence; however, the implementation has a

situational dependency (Papadopoulou & Ozbayrak, 2005). Lean is commonly considered to be

an operational system that makes use of tools and methods developed by Toyota Motor

Corporation in an effort to improve quality and production on a continual basis through the

elimination of waste within the operation. In summarizing the book ―Lean Thinking‖ by James

Womack and Daniel Jones, Jeffrey Liker (2004, p. 7) notes that Womack and Jones define LM

as a five-step process: defining customer value; defining the value stream; making the

manufacturing process ―flow‖; ―pulling‖ the process flow from the customer back through the

system; and striving for excellence. Liker explains that LM developed through the efforts of

companies that observed the operational excellence of Toyota Motor Corporation and tried to

replicate the ―Toyota Production System‖ (TPS). Liker cautions that the tools and techniques of

TPS do not hold the key to Toyota‘s success. Rather, Toyota‘s success is based upon its ability to


maintain a learning organization through the cultivation of leadership, teams and culture, diverse

strategy and supplier relationships (Liker, 2004).

Liker (2004) refers to Toyota‘s overarching operational practices which are founded upon

14 principles as the ―Toyota Way‖. Operational excellence via the ―Toyota Way‖ follows a path

of removing seven forms of waste from the operation. Many companies have created their

operational definition of LM based upon the TPS tools and methods used to remove waste or

reduce costs. Anvari, Norzima, Hojjati and Ismail (2010) refer to LM as ―a business concept

wherein the goal is to minimize the amount of time and resources used in the manufacturing

processes and other activities of an enterprise, with an emphasis on eliminating all forms of

wastage‖ (p. 77). David Mann refines the definition. Referring to LM as ‗Lean‘, Mann (2009)

sees LM ―as more than a cost reduction system. Instead, at its essence, Lean is an improvement

system‖ (p. 24). Also with a focus on continuous product quality improvement and cost

reduction, Motwani (2003) draws from William Edward Deming to define LM as ―an

enhancement of mass production. Getting the product right the first time, continuous

improvement efforts, quality in products and processes, flexible production, and minimizing

waste of any kind are the enhancements that produce LM‖ (p. 339). Unfortunately, the

definitions of LM that focus on continuous process improvement and cost reduction lead to the

use of the tools and methods integrated in the TPS without drawing significance to the less

tangible basis of Toyota‘s success identified by Liker, namely the Toyota Way of maintaining a

learning organization.

Utilizing a holistic perspective, Roth (2006) takes a wider view of LM and includes some

of the intangible aspects of the Toyota Way in LM when he suggests that ―Lean is not a program

or an outcome, nor does it reside at an executive level or within the workforce. Lean is a way of

operating that spans from executive strategy setting for developing people and managing


business growth to the commitment of the workforce to continuous improvement‖ (Roth, 2006,

p. 15). Roth‘s definition draws attention to an operating system that spans all levels of the

organization, respects people, requires leadership and does not end. Employing LM to transform

an organization into a lean enterprise, as Toyota would be viewed, requires more than the use of

tools and methods found in the TPS. Taking the TPS away from the context of the Toyota Way

reduces the value of its tools and methods. Thus, LM cannot capture the equivalency of the TPS

without being integrated into a contextual setting equivalent to the Toyota Way.

3.2 Elements of Lean Manufacturing

The Toyota Way has been dissected into 14 principles as set out by Liker (2004, p. 6).

The principles can be divided into four levels or categories: philosophy, process, people/partners

and problem solving (see Table 1) (Liker, 2004).

Principle Philosophy

1 Base your management decisions on a long-term philosophy, even if it jeopardizes

short-term financial goals.

Process

2 Create continuous process flow to bring problems to surface.

3 Use ―pull‖ systems to avoid the waste of overproduction.

4 Level out the workload creating a steady balanced process.

5 Build a culture of stopping to fix problems and getting quality right the first time.

6 Standardized tasks are the foundation for continuous improvement and employee

empowerment.

7 Use visual control, thus no problems are hidden.

8 Use only reliable, thoroughly tested technology that serves your people and

processes.

People/Partners

9 Grow leaders who are thoroughly committed to understanding the work, living the

philosophy, and teaching it to others.

10 Develop exceptional people and teams who know and follow your company‘s

philosophy.

11 Respect your extended network of partners and suppliers by challenging them and

helping them improve their operation.

Problem Solving

12 Go and see for yourself to thoroughly understand the situation via first-hand

knowledge.


13 Make decisions slowly by consensus, thoroughly considering all options and follow

with rapid implementation of decisions.

14 Become a learning organization through relentless reflection and continuous

improvement.

Table 1: 14 Principles of the Toyota Way (Liker, 2004, pp. 37-40)

Associated with the 14 principles are many methods and tools (i.e. 5S, Kanban, poka-

yoke, Takt time, Heijunkam, Hoshin planning (Dennis, 2007)) which are often identified as the

elements of LM. Anvari et al. (2010) have noted that the first approach to LM for many

companies is the use of the ―set of tools‖ which assist in the identification and elimination of

waste. As the tools are applied, waste is eliminated and quality improves coinciding with a

reduction of production times and costs. Anvari et al. go on to suggest that Toyota utilizes a

different approach which encompasses more than the simple use of tools. They note that Toyota

targets the reduction of three types of waste (muda or non-value-adding; muri or overburden; and

mura or unevenness) in order to expose problems systematically and then use tools to rectify the

root causes of the problems exposed. Clearly both approaches to LM identified by Anvari et al.

fall short of the Toyota Way as presented by Liker as they do not address the importance of

Toyota‘s philosophy and leadership.

Womack and Jones (2003) propose ―Lean Thinking‖ to be the key element of LM. They

summarize LM as a five step process:

1. Accurately specify value.

2. Identify the entire value stream.

3. Make value creating steps ―flow‖ continuously.

4. Let customers ―pull‖ value from the enterprise.

5. Strive for perfection.

This five step process may be key to LM; however, this type of simplification of the Toyota Way

leaves LM as being significantly less than the TPS within the context of the 14 principles used


by Toyota. Mann (2009) warns that people too often equate LM with the tools used to reduce

waste, create efficiencies and standardize processes. ―However, implementing tools represents at

most 20 percent of the effort in Lean transformations. The other 80 percent of the effort is

expended on changing leaders‘ practices and behaviors, and ultimately their mindset‖ (Mann,

2009, p. 15). Mann‘s division of effort points to the significant role played by management and

leadership within the Toyota Way and which is evident in the 14 principles. An essential

characteristic of LM is the role played by managers as leaders and mentors for diffusing

continuous improvement throughout the organization (Roth, 2006). Slack, Chambers and

Johnston (2007, p. 469) in their text on operations management suggest that three key issues

define the lean philosophy: eliminate waste, involve everyone and continuous improvement.

Slack et al.‘s (2007) presentation reduces LM to a set of tools or methods for gaining efficiency

under the umbrella of what they propose to be three all encompassing issues of philosophy.

Clear identification of the elements of LM remains a matter of discussion and

interpretation. The various interpretations of LM arise from defining the elements of the TPS

outside of the context of the Toyota Way. However, it is clear that the elements of LM must be

wrapped in a context comparable to the 14 principles of the Toyota Way to obtain the full

potential of LM as the context includes a long term philosophy, leadership and respect for

people.

3.3 Elements of Lean Manufacturing Implementation

The majority of Lean Manufacturing Implementations (LMI) witnessed by Liker (2004)

are superficial with a heavy focus on TPS tools such as 5S, kanban, flow and just-in-time and

with companies failing to understand the entire system and the necessary surrounding context.

Not understanding the system, North American companies expend their effort working on the


process level, applying the tools. ―Unfortunately, many books about lean manufacturing

reinforce the misunderstanding that TPS is a collection of tools that lead to more efficient

operations….When looked at more broadly, TPS is about applying the principles of the Toyota

Way‖ (Liker, 2004, p. 34).

Undertaking a comparative study of LMI, Anvari et al. (2010) indicate that there are 3

phases and 21 steps to LMI. The three phases are: Stage 1: Preparation, Stage 2: Design, and

Stage 3: Implementation (see Table 2).

Phase Preparation Design Implementation

Step

1 Gap assessment Mapping the value

streams

Starting with a pilot

project

2 Understanding waste Analyzing the business

for improvement

opportunities

Starting the next

implementation projects

3 Establishing objectives Planning the changes Evaluating and sustaining

changes

4 Getting the organizational

structure right

Identifying indicators to

measure performance

Changing the material

supply chain systems and

philosophies

5 Finding a change agent Creating a feedback

mechanism

Selling benefits of lean

thinking

6 Creating an implementation

team

Pursuing perfection

7 Training staff in team

building and lean principles

Expanding the scope

8 Identifying suppliers and

customers involved

9 Recognizing the need for

change

Table 2: LMI — 3 Phases and 21 Steps (Anvari, Norzima, Roshnah, Hojjati, & Ismail, 2010)

Each organization embarking on the journey of LM and LMI is unique and each requires

a unique and appropriate approach. Recognizing this, Anvari et al. (2010) suggest that LM does

not start with the application of LM or TPS tools; rather, the journey must start with lean


thinking. The five step process summarization of LM as ―Lean Thinking‖ (Womack & Jones,

2003) is observed to be integrated into the three LMI phases as presented by Anvari et al.

As may be anticipated, the framework provided in Table 2 is succinct and mechanistic

providing 21 overarching generalized steps of ―what‖ to do without inclusion of detail. However,

it is readily observable that the framework does not draw attention to several key elements which

are found in the 14 principles of the Toyota Way and which are fundamental to ―how‖ Toyota

conducts its activities, namely the importance of people (culture), leadership, problem solving

and the ―Plan-Do-Check-Act‖ (PDCA) cycle. Typical of LMIs is a focus on ―what‖ to do with

less concern demonstrated for the ―why‖ and ―how‖ the action is done.

Often unsuccessful LMIs are blamed upon a failure to adhere to lean principles at the

lower levels of an organization (Mann, 2009). Mann points out that the lean ―tools‖ are typically

associated with the departmental level where the task-level work gets done; again showing the

strong association of using ―tools‖ to accomplish LMI. Mann (2009) contends that the actual

cause of failure of LMI is due to ―changed, weak, or absent support by senior leadership‖ (p. 17).

Mann (2009) proclaims ―There is a missing link in Lean [Implementation]‖ (p. 16).

This missing link is the set of leadership behaviors and structures that make up a

Lean management system. Lean management bridges a critical divide: the gap

between Lean tools and Lean thinking. Systematic Lean management separates

Lean initiatives that start well but falter from those that sustain initial gains and

deliver further improvement. Senior leaders play a central role in Lean

management. Their contributions are essential in:

1. Developing and implementing structures and processes that anticipate and

respond to the difficulties of a Lean initiative that crosses internal boundaries;


2. Transforming commitments to change into actual change, supporting and

sustaining new behaviors and practices;

3. Increasing the odds that process improvements survive the transition from

project mode to ongoing process;

4. Establishing and maintaining new, process-focused measures alongside

conventional measures of results;

5. Creating conditions in which a sustainable Lean culture of continuous

improvement can develop. (Mann, 2009, p. 16)

When considering the reasons for unsuccessful LMIs, Liker and Rother (2011) conclude

that a fundamental misunderstanding of TPS exists within industry in that the lean solutions are

considered to be the process to become lean without giving due consideration to the

philosophical thought underpinning the specific practices.

The essence of LMI is that of changing or transforming an organization to an operating

philosophy with a commitment to continuous improvement. By definition, continuous

improvement requires a process of continuous change. Organizational change efforts are always

met with some form of human resistance as the people affected by change experience emotional

turmoil, uncertainty and stress (Kotter & Schlesinger, 2008). Kotter and Schlesinger provide a

four step strategy by which managers can improve their chances of successfully dealing with

resistance and sustaining the organizational change.

1. Conduct an organizational analysis of the current situation to determine the elements

surrounding the need for change.

2. Conduct an analysis of factors relevant to achieving the change.

3. Select a strategy for change based upon the previous analyses.


4. Monitor the implementation and respond to situations that arise in a timely and

intelligent fashion.

These four steps can be loosely identified within the three phase LMI process set out by Anvari

et al. Kotter (2007) has identified eight common errors which have a devastating impact on the

success of transformations. He provides an eight step process for leaders to follow which

enhances the probability of sustained transformation (discussed further in section 4.5). Thus,

leadership is seen to be fundamentally important to the initial LMI and the subsequent period of

sustained continuous improvement even though the common understanding of LM has

essentially removed or diminished the role of leadership from the elements of LM and LMI

(Mann, 2009; Roth, 2006).

3.4 Culture of “Lean”

―A culture is a set of shared meanings, principles, and values‖ (Byron, 2006, p. 2). ―The

culture of an organization emanates from beliefs that its leaders promote and the historical

challenges that they have faced‖ (Roth, 2006, p. 16). Combining these thoughts on culture

suggests that the culture of an organization is a set of shared meanings, principles and values

which emanates from beliefs that its leaders promote and the historical challenges that they have

faced. Thus, the culture of an organization is largely a product of the organization‘s leadership.

The portion of an organization‘s culture attributable to the leadership grows if one allows for the

historical challenges coming from the journey the organization followed under the direction of

its leaders. An organization‘s culture is a product of its leadership. Daft and Armstrong (2009)

write in support of this:

The CEO and other top managers must be committed to specific values and

provide constant leadership in tending and renewing the values. Values can be


communicated in a number of ways—speeches, company publications, policy

statements, and, especially, personal actions. Top leaders are responsible for

creating and sustaining a culture that emphasizes the importance of ethical

behavior for all employees every day. (Daft & Armstrong, 2009, p. 355)

Culture provides members with the feeling of belonging. Culture exists on a visible level with

observable symbols (dress, slogans, behaviors, physical settings) and also on an invisible level

below the surface with values, beliefs, attitudes and feelings (Daft & Armstrong, 2009). Culture

serves to integrate members as it provides them with the knowledge of how they are to relate to

one another. ―It is culture that guides day-to-day working relationships and determines how

people communicate within the organization, what behavior is acceptable or not acceptable, and

how power and status are allocated‖ (Daft & Armstrong, 2009, p. 336). This knowledge within

the organization guides the daily activities, helps individuals make decisions and allows for swift

and timely action. ―It is only when organizations try to implement new strategies or programs

that go against basic cultural norms and values that they come face to face with the power of

culture‖ (Daft & Armstrong, 2009, p. 335).

Recognizing the strength, power and importance which culture exerts upon the success of

an organization, it is of value to consider the culture within a lean enterprise such as Toyota. The

first characteristic of the Toyota culture identified by Liker and Franz (2011) is that as a learning

organization, the culture is organic as it demonstrates adaptive processes with decentralized

decision making. A learning organization is based on equality, open communication and

collaboration with a culture that encourages participation (Daft & Armstrong, 2009). This

environment promotes creativity and innovation which provides Toyota with flexibility and

allows the company to adopt the changes of continuous improvement. Toyota has developed a


culture which engages the entire workforce and which leads, manages and drives quality on a

daily basis (Liker & Franz, 2011).

Central to the Toyota culture is the concept of PDCA taught to Toyota by Dr. W.

Edwards Deming (Liker & Franz, 2011). PDCA is continually repeated to reduce waste and

drive continuous improvement. PDCA was included with eight principles or disciplines of

problem-solving methods communicated by Fujio Cho, the company president, in an internal

document (The Toyota Way 2001) which served to initiate the formalization Toyota‘s culture.

To describe the culture of the Toyota Way, Liker (2004) cites Edgar Schein‘s definition of

culture as an apt description:

The pattern of basic assumptions that a given group has invented, discovered, or

developed in learning to cope with its problems of external adaptation and internal

integration, and that have worked well enough to be considered valid, and,

therefore, to be taught to new members as the correct way to perceive, think and

feel in relation to those problems. (Schein, as cited in Liker, 2004, p.299)

Schein (1996) identifies three sub-cultures within every organization that hinder or even

prevent organizations from learning when they fail to communicate effectively, understand each

other or be accepting of the others. The three cultures are the ―operator culture‖ which is

developed internally, the ―engineering culture‖ and the ―executive culture‖. The engineering and

executive cultures have a greater influence upon them from external sources due to their

professional training and associations than does the operator culture. The three cultures are often

not aligned, speak different languages and lack the trust of each other. Further inter-cultural

separation can be introduced along hierarchical lines. Each of the three cultures holds a valid

view. Creating mutual understanding among the cultures is required to bring them into alignment

and to become accepting of each other. Common values, a shared vision and a foundation of


respect for people (members) promotes mutual acceptance, communication, collaboration and

allows for organizational learning.

Organizations will not learn effectively until they recognize and confront the

implications of the three occupational cultures. Until executives, engineers, and

operators discover that they use different languages and make different assumptions

about what is important, and until they learn to treat the other cultures as valid and

normal, organizational learning efforts will continue to fail. Powerful innovations at

the operator level will be ignored, subverted, or actually punished; technologies will

be grossly underutilized. (Schein, 1996, p. 18)

A simplified concept of culture within an organization is provided by Mann (2009; 2010)

with the definition of culture being the way of doing things to get the work done. Culture is a

hypothetical construct which has observable effects giving evidence to its reality (Mann, 2010).

Culture should not be the target for change in an effort to transform an organization‘s processes

as culture is a product of, or an idea arising from what was experienced in the organization.

Culture being a product of the management system requires a change in the management system

to realize a cultural change (Mann, 2010). Mann points out that cultural group members are

invisible within the culture as that which is countercultural stands out and is highly visible within

the culture. This then generates the thought that leaders must be part of the culture to be effective

within the culture. That is, leaders and leadership have the greatest effect when they are invisible

within the culture and not standing out as distinct from the culture or being countercultural.

Cultures react and defend against that which is countercultural or requires change.

The importance of culture for successful LMI and sustained LM cannot be overlooked or

understated as the culture is a direct result of the organization‘s leadership and exposes the health

and wellbeing of the organization.


3.5 What is an “Effective Lean Manufacturing Implementation”?

For this paper ―effective‖ is considered to be synonymous with ―successful‖. As

―implementation‖ can be either a transitive verb or a noun, the context of the usage will identify

if the act of instituting lean is being discussed or if the discussion is about the means of the

action. In either case, ―effective‖ describes producing the desired result such that the effort or

means is successful. Associated with the concept of effective LMI is the term ―leanness‖ which

many authors use as a measurement of the degree to which companies have become ―lean‖

organizations. In this paper the concept of ―leanness‖ is considered to provide an objective

evaluation of the effectiveness of LMI with a higher degree of leanness exemplifying a greater

degree of effectiveness.

The difficulty and ambiguity in defining LM, as well as the elements of LM, results in

difficulty in defining effective LMI (Papadopoulou & Ozbayrak, 2005). The uniqueness of

organizations and their processes contributes to the struggle of defining LM. The values, goals

and purposes of LM can be seen to hold the same uniqueness for each organization. Regardless

of the difficulties in defining the concept, research efforts have been made to determine the

leanness of companies. Further complication arises from the continued evolution of LM thereby

creating a moving target. Papadopoulou and Ozbayrak (2005) suggest that leanness must give

consideration beyond the narrow view of using the set of tools, methods and practices; rather,

leanness must be considered in a holistic manner that transcends operational boundaries into all

aspects of the organization, including the company‘s management. This transcendence across

borders was recognized as exemplifying cultural change. Case studies conducted revealed the

common driving forces behind LMI were the goals of improving customer satisfaction

(increasing customer value) and reducing manufacturing costs (reducing waste) (Papadopoulou


& Ozbayrak, 2005). Further, sustaining change was determined to be essential for a successful

lean system and the development of greater leanness.

Soriano-Meier and Forrester (2002) followed the premise that if leanness could be

defined, it should be measureable through a quantitative assessment and the results should

correlate with actual changes made toward leanness and performance. Ten variables were used to

identify leanness: the elimination of waste, continuous improvement, zero defects, Just-In-Time

(JIT) deliveries, pull of materials, multifunctional teams, decentralization, integration of

functions, vertical information systems and managerial commitment to LM. Their research of

manufacturers in the ceramics industry showed positive results for measuring the leanness of the

companies involved and a positive correlation of lean changes made with performance measures.

Characteristically, successful lean transformations always involve changes in an

organization‘s culture and the organizational structure (Roth, 2006; Mann, 2009). Effective LMI

requires a long-term commitment to the pursuit of perfection and it is not achieved by reaching a

short-term attainable goal (Liker & Franz, 2011). Companies with effective LMIs are often

leaders in their industries as they are good at doing what they know and they are also effective in

helping their suppliers and customers improve (Roth, 2006).

3.6 Critical success factors for Lean Manufacturing Implementation

Many authors have studied the critical success factors of LMI in an attempt to identify

the formula for effective LM. Since that it is not possible to identify a single absolute definition

for effective LMI, it follows that neither has an exact or unique solution which ensures an

effective LMI been identified. Regardless, many critical success factors (CSFs) have repeatedly

been identified with varying degrees of importance being attached with each. Hamid (2011)

identified eight internal organizational factors and two external factors. The factors include:


Internal organizational factors

Top Management - which includes a firm and strong leadership, support and

commitment of top management, senior management involvement, and

leadership quality.

Training and Education - which includes the sharing of knowledge and

information, provision of technical skills and management skills, learning

about the improvement initiatives.

Thinking Development - the development of thought or way of thinking in

Lean principles or Lean Thinking.

Employees - which includes the empowerment of employees, employee

participation, teamwork, recognition and rewards.

Working culture - which includes environmental organizations, change

management, and barriers to change.

Communication - which includes the communication between top

management and employees, and communications-related to the improvement

initiatives.

Resources - which includes the financial resources and time.

Business planning - which includes a strategic approach, develop a vision and

goals.

External organization factors

Customers Focus - which include customer relations and customer engagement.


Government Intervention - which includes government policy, political change in

government, government mandates, and government support. (Hamid, 2011, pp.

1500-1501)

The list of critical success factors provided by Hamid is adequately representative of many of the

lists reviewed for this paper. Consistently throughout the literature reviewed, leadership and

management commitment is listed and ranked as one of the top CSFs (Achanga, Shehab, Roy, &

Nelder, 2006; Anvari, Norzima, Roshnah, Hojjati, & Ismail, 2010; Motwani, 2003). Also found

on lists of CSFs is a factor pertaining to culture or the change of culture. The inclusion of culture

as a factor is not unexpected given that the culture of an organization has been shown to be a

product of the organization‘s leadership. Often included with CSFs as a separate factor, is the

presence of a common vision which is also a product of strong leadership. Achanga, Shehab,

Roy and Nelder (2006) identified an abbreviated list for small to medium enterprises (SMEs) in

the manufacturing industry which identified CSFs to be leadership and management, finance,

skills and expertise, and culture of the organization. They conceded that in SMEs all four of their

CSFs are highly dependent upon the company‘s leadership. Achanga et al. (2006) questioned the

quality of leadership abilities which they observed in the research population; however, the

importance of leadership in SMEs was seen as simply accentuated within SMEs.

Taking a closer look at organizational culture as a CSF, it was shown that while defining

effective LMI, the aspect of sustained change and continuous improvement was seen to rely

upon a culture change. Papdopoulou and Ozbayrak (2005) noted the importance of interactive

communications between employees and management for a successful transformation and that

―removing the aspect of fear and anxiety improved the chances of sustainability and therefore,

resulted in the issue of trust coming to fruition. Trust by the workforce was found to be

paramount to the program‘s success‖ (p. 799). For lean success there is a need for true workforce


empowerment with ownership of improvement where the workforce is encouraged to actively

participate in decision making and problem solving (Papadopoulou & Ozbayrak, 2005).

3.7 Critical success factors for Toyota

―In the Toyota Way, it‘s the people who bring the system to life: working,

communicating, resolving issues, and growing together….the Toyota Way…encourages,

supports and in fact demands employee involvement….It is a culture, even more than a set of

efficiency and improvement techniques‖ (Liker, 2004, p. 36). Toyota relies upon the workforce

which is equipped with a set of tools; however, it is their culture which makes use of the tools

(refer to Section 3.4) to provide continuous improvement and to strive for perfection that

provides the success. Liker (2004) proclaims that the ―absolute core of the Toyota philosophy is

that the culture must support the people doing the work” (p. 176). This suggests that Toyota

employs a circular self-supporting philosophy in which Toyota‘s culture uses tools for

continuous improvement of the company while the company strives to build a culture supportive

of the company‘s people. This circular self-supporting philosophy is also present within Toyota‘s

mission. Although the mission does change over time, it always contains the following points in

the order listed:

1. Contributing to customers, society, and local communities

2. Contributing to team members and partners

3. Contributing to the growth and health of Toyota (Liker & Franz, 2011, p. 60)

Following the mission, Toyota contributes to the health and wellbeing of the surrounding society

which then provides the company with benefit through the societal health. Simply, the company

supports those around it and those around the company help support the company. Toyota has a


deep respect for humanity and that respect is incorporated into the company vision and culture

(Liker & Franz, 2011).

Toyota is an example of a company in which the operator, engineering and executive

sub-cultures communicate effectively with daily interactive participation, collaboration and

innovation. ―Learning and change are sustained through a system of distributed leaders in which

network leaders bring executive, line, and engineering occupational communities together‖

(Roth, 2006, p. 23). It is observable within Toyota that the three sub-cultures are aligned with

their values and a central vision.

4 Leadership and Management in Organizations

4.1 The Relationship Among Leadership, Management and Hierarchy

To ―manage‖ by definition is ―to exercise executive, administrative, and supervisory

direction of‖ (Merriam-Webster, 2011) while ―leading‖ means ―providing direction or guidance‖

(Merriam-Webster, 2011). Thus, management may be seen as acting administratively over the

operation of an organization whereas leadership refers to providing the organization with

direction. Kotter (1990) suggests the essence of management and leadership in the statement

“Management is about coping with complexity…leadership, by contrast, is about coping with

change‖ (p. 104). There appears to be truth in the statement; however, there is more to consider.

―The concepts of leadership and management are theoretical constructs that are hard to

distinguish in practice‖ (Schruijer & Vansina, 2002, p. 872). A clear split between managers and

leaders may lead to judgments on the alignment between the two with the thought that one is

good and the other bad; leaders being associated with change and managers representing stability

(Schruijer & Vansina, 2002). Such an association and arguments supporting one over the other


hinder objectivity and the understanding of the relationship between leadership and management.

When the two are integrated, leadership is observed as a key attribute of successful management

(De Meyer, 2011). Kotter (1990) suggests that leadership and management are two distinctive

and complementary systems of action which are both necessary in balance for a healthy and

strong organization.

Definitions of leadership in the literature are varied and often contradictory. De Meyer

(2011) suggests that ―too often leadership is associated with ‗taking power over‘ people, as

opposed to take power with people over the change process‖ (para. 3). Traditional thinking

associates leadership with formal command and control, or with a charismatic leadership style

where the leader has a strong influence over the followers (De Meyer, 2011). Further, in some of

the literature the terms ‗leader‘ and ‗leadership‘ are used interchangeably (Schruijer & Vansina,

2002), and as such, there is a need to clarify an understanding of the two.

The term leader refers to an individual person enacting a particular role as ‗leader‘

or from a particular role exerting leadership behavior. The term ‗leadership‘ refers

to a function, which can but is not necessarily fulfilled by a person. Leadership

can be shared and exerted by a group for example, or, may be part of an

organization‘s culture. (Schruijer & Vansina, 2002, pp. 869-870)

Although leaders and leadership are intuitively associated with management positions

within a company‘s hierarchical structure, much of the literature regarding leadership provides

little insight into the role of hierarchy. Hierarchy within organizations is often associated with

bureaucracy which has given the term ‗hierarchy‘ a negative connotation (Jaques, 1990; Grant,

2008). Jaques (1990) and Grant (2008) contend that hierarchical structures are essential as they

allow for creating efficiency, flexibility and coordination within complex organizations and that

organizational leaders intuitively recognize the value of hierarchy. ―Properly structured,


hierarchy can release energy and creativity, rationalize productivity, and actually improve

morale‖ (Jaques, 1990, p. 127). Jaques and Clement (1991) contend that a properly structured

hierarchy cannot be arbitrary and is found in a ―Requisite Organization‖ (explained in a

following section).

Leadership, Management and Hierarchy According to John Kotter

Kotter (1990) distinguishes between leadership and management and examines the

actions of leaders that create the distinction. He illustrates the different roles played by managers

and leaders with a simple military analogy whereby good administration and management are

fully capable of providing supervisory direction for an army during times of peace while, in

contrast, leadership is required to effectively or successfully take the army into war. ―Each

system of action involves deciding what needs to be done, creating networks of people and

relationships that can accomplish an agenda, and then trying to ensure that those people actually

do the job. But each accomplishes these three tasks in different ways‖ (Kotter, 1990, p. 104).

Both the peacetime and wartime situations include complexity; however, the wartime condition

presents a much larger dynamic of change. Kotter (1990) suggests that ―more change always

demands more leadership‖ (p. 104). He contends that leading an organization through change

starts with setting a direction or developing a vision with strategies for producing the change in

order to achieve the vision. Management requires planning; organizing; devising monitoring

systems and communicating the plan to delegate responsibilities; and setting the action into

motion. The corresponding leadership activity is to align the followers with the new direction

such that the action is coordinated toward the understood goal or vision (Kotter, 1990). Kotter

(1990) sees management as monitoring and measuring progress while solving problems as

required through the process of completing tasks, whereas leadership is required to motivate and

inspire the followers despite the challenges and obstacles that are encountered en route to the


goal. As management and leadership are seen to be complementary, both are required in

contextually appropriate measures to obtain the perfectly effective system.

Direction setting and planning are seen as distinctive activities because direction setting

includes an element of change while planning does not intrinsically institute change (Kotter,

1990). Kotter (1990) associates planning with management and ties direction setting with

leadership. Setting the direction is an inductive process taking in a broad range of internal and

external data, relationships and linkages to project a future condition, while planning follows a

set direction to produce orderly results (Kotter, 1990). Without a set direction, planning serves

little purpose because a plan can be justified for every eventuality whereas planning with a set

direction serves to check the reality of the vision (Kotter, 1990).

Aligning people with a common vision requires leadership and is not akin with

organizing people to implement a plan (Kotter, 1990). Alignment of people with a vision

requires communicating to create a sufficient understanding of a future that is not yet tangible

such that the group collectively chooses to strive toward the untouchable target, while

implementation of a plan includes provision of tangible steps. The willingness of people to reach

for the intangible is reliant upon trust, thus the credibility, integrity and trustworthiness of the

leader(s) is paramount to the degree of alignment achieved by the leadership (Kotter, 1990).

Further, empowerment of the group accompanies alignment as both the group and the individuals

of the group gain a sense of security to reach for the intangible knowing that it is a reality that

they are all striving to attain (Kotter, 1990).

Creating the motivation and energy required to overcome challenges or obstacles that

stand in the way of grasping something that has never been held is the responsibility of

leadership (Kotter, 1990). Overcoming adversity and achieving the goal strengthens the unity

and culture of a group through the created satisfaction, achievement and sense of belonging


through contribution. In contrast to leading change, Kotter (1990) describes managerial

processes as closer to fail-safe or risk-free with systems and structures designed to help ordinary

people behave in normal ways to complete routine activities.

It is important not to over-glamorize leadership while portraying management as

mundane and bureaucratic as this leads to the elevation of one over the other (Schruijer &

Vansina, 2002). ―Companies should remember that strong leadership with weak management is

no better, and is sometimes actually worse, than the reverse‖ (Kotter, 1990, p. 103).

Kotter‘s (1990; 1996) writings on leadership and leading change do not integrate aspects

of hierarchy; however, Kotter (2011) views hierarchal organization as an invention of the 1900‘s

opposed to change and inhibiting organizational transformations. Kotter (2011) contends that

organizations of the future require two organizational structures: a ‗Hierarchy‘ for optimizing

work and a larger, egalitarian and adaptive ‗Network‘ to recognize opportunities and exercise

change. Kotter (2011) sees the Network comprised of a system of teams from all divisions, areas

and levels of the organization, holding significant power and functioning in a decidedly anti-

hierarchical manner.

Leadership, Management and Hierarchy According to Peter Senge and Colleagues

Senge et al. (1999) view leadership ―as the capacity of a human community to shape its

future, and specifically to sustain the significant processes of change required to do so‖ (p. 16).

Senge et al. (1999) contend specifically that ―leadership actually grows from the capacity to hold

creative tension, the energy generated when people articulate a vision and tell the truth (to the

best of their ability) about current reality‖ (p. 16). Senge et al. (1999) cites Peter Drucker who

observed that ―Leadership is vision‖ and Proverbs 29:18 ―Where there is no vision, the people

parish‖ (p. 16).


In ―The Dance of Change‖, Senge et al. (1999) and associate Joseph Jaworski (1999)

contend that too many organizations are relying upon the top hierarchical leader to be the ―hero-

leader‖ providing all the leadership while leadership is not practiced throughout the organization.

Senge et al. (1999) recommend that organizations put their focus on ―leadership communities‖

rather than ―hero-leaders‖. They see leadership communities consisting of three types of leaders:

local line leaders, network leaders (or community builders) and executive leaders. Local line

leaders are ―people with accountability for results and sufficient authority to undertake changes

in the way that work is organized and conducted at their local level‖ (Senge et al., 1999, p.16).

Network leaders are a natural counterpart to local line leaders as they seek to create better results

by building community, networking as they carry and scatter seeds throughout their network.

Senge et al. (1999) suggest that paradoxically network leaders‘ lack of hierarchical authority

serves them better than hierarchical authority as they demonstrate leadership through social

networks relying upon the respect which they have earned. Executive leaders are one step

removed from the organization‘s direct value producing activities and have overall

accountability for organizational performance while having less direct influence on the actual

work processes other than through their leadership by example (Senge et al., 1999). “In essence,

leaders are people who ―walk ahead,‖ people genuinely committed to deep changes, in

themselves and in their organizations. They naturally influence others through their credibility,

capability, and commitment. And they come in many shapes, sizes, and positions‖ (Senge et al.,

1999, p.19). By comparison, management is seen as control in organizations with managers

focused on creating plans, implementing plans in a controlled fashion and at times, as a

hindrance to the growth of informal networks and the diffusion of innovative practices (Senge et

al., 1999).


Effective leadership for profound change starts with the deep commitment of a small

number of individuals and must grow with the leaders‘ participation rather than with efforts to

directly drive the change (Senge et al.). ―Effective leaders understand intuitively that rather than

driving change, they need to participate, being willing to change themselves‖ (Senge et al., 1999,

p.56) and further, they must create the organizational environment which inspires, supports and

leverages the capabilities and initiatives that exist at all levels. People learn from those whom

they trust and will only commit to goals which have meaning to them. Philip Carroll (1999) adds

that ―a position of leadership does not necessarily mean more rights and privileges; it means

more obligations. Leaders have to be more careful about their behavior…. Instead of loyalty, we

now ask for commitment. It is up to the organization and its leaders to provide the kind of

environment where people give that commitment feely‖ (pp. 207-209).

Senge et al. (1999) advocate that organizations need to learn a proper balance between

the traditional hierarchical governance and distributed empowerment; however, they

acknowledge that companies then face the problematic issue of knowing ―who is in charge‖.

Senge et al. (1999) briefly discuss the potentiality that if hierarchy is to survive that it may need

to be restructured along the lines of the ―Requisite Organizational Theory‖ (ROT) of Elliott

Jaques; however, they maintain a position of support for flexible governance mechanisms where

the structure is prescribed by the top executives and the middle and local managers provide

significant input as to how the governance processes function.

Leadership, Management and Hierarchy According to Elliott Jaques

Dr. Elliott Jaques (pronounced ―Jacks‖), a Canadian born psychoanalytical professor,

presents an alternative view on leadership, management and hierarchy which integrates

leadership as a functional responsibility of all managers and in which managers work within a

‗requisite‘ hierarchical structure designed around job complexity and manager capability. To


create an understanding of hierarchy, Jaques (1990) begins by explaining the general contractual

terms of employment by which each employee is accountable for ―doing work of a given type for

a specified number of hours per week in exchange for payment‖ (p. 128). The employee is

assigned the work by a manager, boss or supervisor who is properly held accountable for the

work done by the employee or subordinate. For organizational hierarchies to function properly

there must be an emphasis on this layered accountability for getting work done (Jaques, 1990). A

secondary issue to the accountability is authority such that the managers have sufficient authority

tied to their position in order to delegate work and hold their subordinates accountable (Jaques,

1990).

Jaques and Clement (1991) advocate that leadership has to do with certain types of role

relationships in which people work together in order to get things done within a particular social

structure. Jaques and Clement (1991) define leadership as ―the process in which one person sets

the purpose or direction for one or more other persons, and gets them to move along together

with him or her and with each other in that direction with competence and full commitment‖ (p.

4). ―Leadership is not a free-standing activity‖; rather, it is a function that occurs in some but not

all roles (Jaques & Clement, 1991).

Jaques and Clement (1991) present ―managerial leadership‖ (ML) in the contextual social

structure of the ―requisite organization‖. A ―requisite organization‖ is a values driven

organization with a properly stratified hierarchical managerial structure free from arbitrariness

and designed in accordance to Elliott Jaques‘ ROT (Jaques & Clement, 1991; COREinternational

& Craddock, 2003; COREinternational inc, 1998). As there are innate differences among people

with regard to skills and the capability to handle complexity, there is a natural hierarchical

structure that is definable and applicable to all organizations such that people are drawn into

positions that fit them well, providing the appropriate level of complexity and challenge


(Kleiner, 2001; Jaques & Clement, 1991). The ―most complex‖ multinational organizations have

seven discrete strata (1 to 7; 1 being ―front line‖ and 7 being CEO) of work complexity with

every work role being properly ―nested‖ in the appropriate hierarchical stratum and with only

one layer of management at each stratum of work complexity (Stratum 2 and above)

(COREinternational inc, 1998). Kleiner (2001) summarizes Jaques‘ ROT by comparing the

requisite organization with a double helix. ―On one side of the helix are the ―categories‖ (as Dr.

Jaques calls them) of people‘s ability to handle cognitive complexity. Each of us is born with a

certain potential ability to handle complexity‖ (Kleiner, 2001, p. 6). The other side of the double

helix is ―strata‖ of jobs identified by the level of complexity associated with the job. The level of

complexity associated with both the ‗categories‘ and the ‗strata‘ can be systematically identified

through a consistently repeatable methodology set out by Jaques‘ ROT (Jaques & Clement,

1991). The levels of complexity are associated with the time span of the longest assignment the

person is capable of handling or for which the job entails. The time span association with

complexity creates the natural and discrete layers for ‗categories‘ and ‗strata‘ as well as the one-

to-one correspondence between ‗categories‘ and ‗strata‘ (Jaques & Clement, 1991). The discrete

layers of personal capability and job complexity define a structure in which personnel can be

properly positioned such that they are aptly matched for their role. Further, in requisite

organizations the manager is of one level of complexity above his/her subordinates (Kleiner,

2001; Jaques & Clement, 1991).

Jaques and Clement (1991) contend that leadership competence is a function of a

person‘s: cognitive power; values; knowledge and skills; wisdom; and the presence of any

serious personality defects. Cognitive power is measured and categorized within a matrix

combining four methods of cognitive processing (assertive, cumulative, serial and parallel) with

four levels of complexity (concrete or tangible, and three levels of abstraction). A personal


interview structured to measure an individual against the previously mentioned variables allows

for the individuals ―Current Actual Capacity‖ to be calculated determining the person‘s ability to

handle complexity (Jaques & Clement, 1991). In similar fashion, role complexity is measured

and categorized through a matrix combining four tasks types (direct action, diagnostic

accumulation, alternative serial plans, and mutually interactive programs) and four orders of

information complexity (associated with the levels of cognitive processing). Measurement of role

complexity with an association to the time span of longest assignment of the role allows for the

role to be positioned in the appropriate ‗strata‘ thereby creating the correct alignment with the

‗categories‘ or an individual‘s ability to handle complexity and (Jaques & Clement, 1991). The

systematic mechanism for assessment of both roles and individual capabilities provides a reliable

and repeatable process proper positioning of personnel within the organizational structure.

With a methodology for the structure and positioning of personnel in place (the

―hardware‖ of the organization) it is important to give consideration to the values and practices

of the organization (the ―software‖). Fundamental core values for requisite organizations are:

Mutual trust, confidence and reliability in role relationships.

Fairness and justice with recognition related to personal effectiveness.

Recognition of the value of the individual through providing treatment of all with

dignity and respect.

Freedom within the limits of clear boundaries which then provides empowerment.

Openness providing freedom from fear and from arbitrariness for all while expecting

participation from all. (COREinternational inc, 1998; Jaques & Clement, 1991)

As being contractual with employment, requisite organizations expect the following of their

employees:


Integrity to behave honestly.

Commitment to express one‘s full capability and effort.

Reliability to consistently meet one‘s commitments.

Initiative to create new ideas and/or methods.

Cooperativeness and collaboration to work together towards a common purpose.

(COREinternational inc, 1998; Jaques & Clement, 1991)

Jaques and Clement (1991) contend that ―leadership takes place not in a vacuum but in

relationships between people. Similarly, relationships between people take place not in a vacuum

but always within some kind of role relationship; that is to say, within a social structure‖ (p. 6).

Jaques and Clement (1991) suggest that ―there can be no such thing as a ―leadership‖ role, no

such thing as a leader-follower role relationship‖ (p. 6). They do not use the term ―leaders‖;

rather, Jaques and Clement (1991) use the term ―managerial leaders‖. The proposition Jaques

and Clement (1991) pursue is that everyone is capable of exercising effective leadership in roles

that carry leadership accountability, so long as they value the role, are competent to carry the

basic requirements of that role, and the role is properly structured with accountability and

authority, thus being within a requisite organization.

Jaques and Clement (1991) describe ―accountabilities‖ as those aspects of a role that

dictate the things that the occupant is required to do by virtue of the role and ―authorities‖ as

those aspects of a role that enable the person in the role to act legitimately in order to carry out

the accountabilities with which he or she has been charged. A major point for Jaques and

Clement (1991) is that ―the authority vested in a role is never sufficient to make it possible to

gain the fullest co-operation from those to be influenced‖ (p. 9); rather, just as a parent must earn

the love and respect of their children, managerial leaders or managers must earn the trust and


respect of their subordinates as ―without this personally earned component of authority that

engenders trust and respect, leadership effectiveness will fall flat‖ (p. 9). Jaques and Clement

(1991) explain that the ―role-vested‖ authority ―enables us to require others to do things at our

bidding; for example, to listen to us, or to take note of what we say, or even to follow orders or

instructions that we might issue‖ (p. 10). When properly used, the role-vested authority should

be enough to obtain satisfactory results from the contractually obligated subordinates; however,

it cannot ―release the full and enthusiastic co-operation of others‖ (Jaques & Clement, 1991, p.

10). Jaques & Clement (1991) contend that ―personally earned‖ authority is required to ―achieve

full, enthusiastic, willing collaboration between role-related people‖. ―Personally earned‖

authority substantially supplements ―role-vested‖ authority and is critical for anyone holding a

position with leadership accountability. Personally earned authority is not restricted to

organizational relationships; rather, it is an important feature of all human interactions and is

built over time within all relationships (Jaques & Clement, 1991).

Jaques and Clement (1991) contend that within today‘s society there is a fixation upon

the lives and practices of great leaders based upon the hope that teaching about them will provide

a way of improving leadership ―skills‖. They believe that the premise that effective leadership

calls for certain specialized personality characteristics and personal qualities is misconceived as

―the essence of managerial hierarchies lies in managerial roles‖ which carry leadership

accountability (Jaques & Clement, 1991, p. 17). Jaques and Clement (1991) see no conflict

between management and leadership as all managers carry leadership accountability. An

effective manager must be able to provide effective leadership as good management includes

good leadership. With leadership, ―planning, communicating, setting operational targets,

resourcing, follow-up and control, appraising effectiveness, coaching, merit recognition,

selection and induction, are everyday parts of ordinary managerial work‖ (Jaques & Clement,


1991, p. 18). Jaques and Clement (1991) contend that ―separating of leadership and management

(and administration) is a sign of the powerful confusion and vagueness that exist about the

meaning both of leadership and of managing‖ (p. 19). Further, they suggest that ―the basis of

this confusion between management and leadership is that leadership is endowed with virtue,

strength and creativity whereas management (and administration) is seen as concerned with the

mundane, dull and tedious everyday routines of work‖ (Jaques & Clement, 1991, p. 19).

Jaques and Clement (1991) contend that ―neither effective leadership nor effective

leadership development is possible unless the organizational conditions are right‖ (p. 28), thus

constituting the necessity of the requisite organization. Managerial leadership requires the

acceptance of primary values such as dignity and integrity of the individual, the establishment of

mutual trust and confidence, fairness and justice, openness, and absence of fear and autocratic

decree (Jaques & Clement, 1991).

Managerial leadership to be effective, must be authoritative and not autocratic…

We believe that effective managerial leadership is connected not with personality

make-up but with managerial competence based upon cognitive capability, values

and knowledge and wisdom (so long as there are no seriously deleterious

personality characteristics), which are all used in a requisite organization with

requisite procedures. (Jaques & Clement, 1991, p. xxv)

Jaques (1990) contends that managerial hierarchy is the best method of structuring the varying

levels of task complexity and the corresponding mental capabilities required to handle the

varying degrees of complexity (mental work) within an organization. The hierarchy also serves

beneficial for sustaining the development of future managers as managers positioned in strata

one and two levels higher identify suitable candidates from the strata level below that in which a

managerial vacancy exists (Jaques & Clement, 1991). Managerial hierarchy satisfies four


fundamental organizational needs: adding value to work as it moves through the organization,

identifying and creating accountability at each stage of the value adding process, positioning

people of the required competency at each organizational layer, and creating a general consensus

or acceptance of a structure that achieves these foundational requirements (Jaques, 1990). Jaques

(1990, p. 130) describes the managerial role as having three critical features:

Every manager must be held accountable for the work of subordinates and also for

adding value to the subordinates‘ work.

Every manager must be held accountable for sustaining a team of capable

subordinates.

Every manager must be held accountable for setting direction and getting

subordinates to follow willingly and enthusiastically.

For the managers to be accountable, they must have sufficient authority comprised of at least

four elements:

The right to veto any applicant who, in the manager's opinion, falls below the

minimum standards of ability.

The power to make work assignments.

The power to carry out performance appraisals and, within the limits of company

policy, to make decisions about raises and merit rewards.

The authority to initiate removal — at least from the manager's own team — of

anyone who seems incapable of doing the work (Jaques, 1990, p. 130).

The requisite organization creates the organizational hierarchy which matches job

complexity with personnel competency amid the proper alignment of authority and

accountability. With managers accountable for the work of their subordinates, the


responsibility and accountability for ‗getting the job done‘ is aligned within the

organization from ‗top to bottom‘ and ‗bottom to top‘. Further, with personnel fully

capable of the complexity of their job positioned within the hierarchy, each level is able

to add value to the layer below, is accountable to ensure the work is completed

appropriately and is capable of achieving their own responsibilities.

Reviewing these theories on the relationship among management, leadership and

hierarchy there may be a propensity to judge the contrasting views in an effort to

determine which is correct and which is incorrect. Rather than pitting one against the

other, there is more to be gained through the consideration of the progression of thought

within the views. Kotter starts the progression with his consideration of management and

leadership as separate actions. This analysis with a compartmentalizing prospective

provides a close examination of the distinct, identifiable characteristics of management

and leadership which sets the stage for what actions need to be done by those holding a

position of authority. Senge et al. extend the progression demonstrating the need for

management and leadership to be distributed throughout the organization with a

collaborative effort. This collaborative effort draws management and leadership together

as a component integrated within the organizational community. Jaques provides further

progression with ROT as a system for organizational management with a hierarchical

structure. ROT integrates the functions of management and leadership into the single role

of manager being accountable and responsible for managerial leadership. Within ROT,

managerial leadership roles are distributed throughout the organization through a

requisite hierarchical structure by which the innate and distinctive capabilities of

individuals to handle complexity is directly aligned with the discreetly defined levels of


job complexity included in the architecture of the organizational structure. The

progression of thoughts demonstrates a progression of complexity starting with an

analysis of separation and progressing to the formulation of an integrated system with

definition and blueprint for construction.

4.2 Leadership, Trust and the Nature of Trust

Accepting that both culture and change within an organization have arguably a strong and

direct dependence upon leadership, it is important to look at an elemental characteristic of

leadership that underpins the commitment of followers to leaders, that being trust. Although

executives are generally removed from any direct contribution to the value-producing process,

they do contribute to the success of the organization through direction setting, creating a

supportive environment and supplying the necessary resources; however, they build trust when

they demonstrate their involvement, commitment, credibility and sincerity of their support for

change through personally ―walking the talk‖ (Roth, 2006). Leadership is responsible for

creating a vision and setting direction with strategies to achieve the vision (Kotter, 1990). As the

vision is a projection to a future state, logic dictates that the journey will be accompanied with

unknowns and new experiences. Trust is a by-product of effective leadership if the

organization‘s leaders can remove the fear and anxiety stirred within people as they anticipate

the unknown that is to be encountered in organizational transformations (Papadopoulou &

Ozbayrak, 2005).

When considering trust, there is value in understanding why trust is of vital importance

and then further consideration will be given to the underpinnings of trust itself.

Trust is the main ingredient of the social glue that holds people together. It is the

criterion by which we ought to judge whether behavior is good, normal,


reasonable, moral, ethical, or whether it is bad, abnormal, unreasonable, immoral,

and unethical. It is the best point of focus for its etymologically close relatives

and bastions of the good society—liberty, freedom, justice, truth, faith and

confidence.…The terms are all related around the common idea of people in

union being able to rely upon each other as in the extended family and

wedlock….Justice in its turn takes us also to the togetherness notion,…Finally

faith as contained also in confidence, comes from the Indo-Germanic root

BEIDH, an abode, and kinship. We end up again in the kinsmen joined together at

home! (Jaques, 2005, pp. 396-397).

As humans are social animals, there is an assumption that human societies will hold to be good

that which increases the possibilities of survival for the species and ultimately for the betterment

of the species into the future (Jaques, 2005). Trust is the expression of feeling that the good

society should exhibit values which hold the good ―family‖ together, knowing that no member

would harm any other member and all are able to rely upon a mutual love (Jaques, 2005). Jaques

(2005) identifies suspicion and distrust as death to a family and of any social relationship. The

ability to live together and work together with liberty and freedom is truly dependent upon trust

(Jaques, 2005).

Within organizations, trust is reliant upon personal relationships and trust can only form

where people have an engaged interest in each other and they are able to distinguish one

another‘s qualities in order to know which aspects of one another are worth trusting (Senge et al.,

1999). Jennifer Kemeny (1999) aptly points out that ―you can trust someone completely—or not

at all‖ (p. 228), and that trust grows incrementally over time through the small ways in which

relationships are built. Organizations based upon transactional relationships are ultimately low

trust environments as individuals are focused on what they receive in the exchange for their


contribution to the transaction and there will not be a willingness to undertake risks or leave

themselves open to vulnerability (Senge et al., 1999). Senge et al. (1999) would not classify such

an organization as capable of learning as the people are not connected by a common sense of

purpose, shared core values and a mutuality to collaborate. Trust enables organizations to move

faster, move effortlessly and with minimal conflict (Lawrence & Lynch, 2011).

Lawrence and Lynch (2011) provide insight into the fundamental make-up and innate

human drivers which bring about trust with the premise that with this knowledge, organizations

can systematically achieve trust through the right kind of leadership. Lawrence and Lynch (2011)

suggest that human behavior in relationships can be logically explained through consideration of

an innate moral conscience within humans and the Golden Rule combined with four innate

driving motives:

Drive to Acquire—to compete for, secure and own essential resources.

Drive to Bond—to form long-term mutually caring relationships.

Drive to Create—first to learn, to comprehend one‘s self and environment, and more

fully to imagine and create.

Drive to Defend—to protect one‘s self, loved ones and possessions from threat or

attack.

As the environment and contextual situation stimulate the four drives in varying degrees,

Lawrence and Lynch (2011) contend that aware organizations can exercise a degree of control

within their environments such that desired behaviors can be positively influenced.

Environments that stimulate the drives to ―acquire‖ and ―defend‖ lower the levels of trust as the

individual focuses on self-service and correspondingly organizations that stimulate the drives to

―create‖ and ―bond‖ build the levels of trust among its members and customers (Lawrence &

Lynch, 2011). Cultures demonstrating character assassination and betrayal, aggression,


deception, manipulation, deniability and negativity are cultures that destroy trust, while cultures

that promote relationships, guardianship, companionship, friendship, partnership and

creationship develop strong mutually trusting environments with a distinctive competitive

advantage (Lawrence & Lynch, 2011).

How important is trust? Simply put: without trust, the creative intellect of

employees is severely diminished. In a fast moving world, trust spawns a massive

competitive advantage, enabling intensely collaborative teams to generate

innovations and make rapid decisions …. We neglect the issue of trust at our own

peril. Trust is the most vital thread in the fabric of relationships. Embedding a

system of trust into your organization yields enormous rewards for all

stakeholders. (Lawrence & Lynch, 2011, Conclusion, para. 1)

Organizational limits and constraints are experienced as liberating rather than as restrictive when

they enable people to mutually trust each other and to rely upon each other‘s collaboration

regardless of the vast range of differences in personalities (Jaques, 2005). ―Companies will

achieve competitive advantage by being structured and managed to effectively and consistently

understand and meet customer needs, thereby building trust….Only with a trust-enhancing

management system can an organization compete and win‖ (Tremlett, 2005, pp. 3-9).

4.3 Leadership for Change

Change is a new reality in the life of companies choosing to embark on the journey of

LM. Companies take on the changes of LM to bring improved value to the customer through the

reduction of waste and continuous improvement. The life of change being synonymous with LM

is demonstrated by the prominence of the PDCA change process cycle in Toyota‘s culture

(Liker, 2004). Ongoing process changes as part of the life of continuous improvement are


generally incremental and not seen as transformative in themselves. The large or transformative

change associated with LM is introduced when elements initially valued by the company change

and the changes in what the company values requires a change in the leadership and

correspondingly a change in culture (Mann, 2010). Such transformative change is so difficult to

achieve and sustain that much literature has been authored on the specific processes or practices

necessary for such transformations. The literature provides a variety of ideas with varying

directions to follow for success.

―Organizational transformation offers a paradox: No significant change occurs unless the

top drives it, and no significant change occurs if the top drives it‖ (Roth, 2006, p. 21). Roth‘s

(2006) position aligns or overlaps closely with Senge et al. (Senge et al., 1999) and Schein

(1996) when they identify three levels of leaders (executive, network and line) and three cultures

(operator, engineering, executive) that are required to communicate, accept each other,

understand each other and collaborate so as to diffuse the transformation throughout the

organization, ultimately sustaining the change.

Kotter (2007; 1996) has approached the topic of leading change from the perspective of

studying why transformations fail. Through this approach Kotter (2007; 1996) has identified

eight common errors made by corporate leadership which predominantly lead to failed

transformations:

1. Lack of a sufficient sense of urgency or allowing too much complacency.

2. Lack of a powerful guiding coalition.

3. Lack of a vision or underestimating the power of vision.

4. Grossly under-communicating the vision.

5. Failure to remove obstacles to the new vision.

6. Failure to create short-term wins.


7. Declaring victory/success too soon.

8. Neglecting to anchor changes firmly in the corporate culture.

Using the eight errors as a framework, Kotter (2007) created an eight step procedure to be

implemented by an organization‘s leadership for transforming an organization which directly

addresses each of the eight common errors.

1. Establish a sense of urgency.

2. Form a powerful guiding coalition.

3. Create a vision.

4. Communicate the vision.

5. Empower others to act on the vision.

6. Plan for and create short-term wins.

7. Consolidate improvements and producing still more change.

8. Institutionalize new approaches. (Kotter, 2007, p. 99)

Kotter (2007) provides greater detail and explanation for leaders wishing to employ his eight step

transformation procedure. Mento, Jones and Dirndorfer (2001) support Kotter‘s transformation

procedure and after studying various change models, present their own 12 step process:

1. Clearly identify the reason and context for the transformation.

2. Define the change initiative to identify the goal.

3. Evaluate the climate for change.

4. Develop a plan for the change.

5. Find and cultivate the sponsors of the change.

6. Prepare the target audience and the recipients of the change.

7. Create the cultural fit to sustain the change.

8. Develop and choose a change leader team.


9. Create small wins for motivation.

10. Constantly and strategically communicate the change.

11. Measure the progress of the change effort.

12. Integrate lessons learned in the journey. (Mento, Jones, & Dirndorfer, 2001, pp. 49-

56)

The approaches of Kotter (2007) and Mento et al. (2001) are very similar with slight variations

in the exact steps and both can be aligned within the simple four step PDCA framework

preferred by Toyota; however, it is clear from the earlier discussion of leadership and

management that following a procedural process does not capture or create the essence of

leadership.

Daft and Armstrong (2009) suggest that leadership for change requires leaders with the

appropriate personal qualities, skills and methods. They propose that the leader who effectively

implements change demonstrates a transformational leadership style; however, they provide no

further insight into what constitutes transformational leadership.

Jaques and Clement (1991) do not identify leadership for change, as leadership by their

definition does not identify a special type of leadership or a special condition for leadership.

Leadership is a function of responsibility associated with a role such as a manager‘s role (Jaques

& Clement, 1991). ―The emphasis in leadership competence is thus thrown upon competence in

role rather than upon some generic leadership competencies, for example, upon competency in

managerial roles rather than upon leadership competency which is separate from managerial

competency‖ (Jaques & Clement, 1991, p. 307).

The literature reviewed shows close correlation between the leadership actions for LM

and for generic transformative change; however, the underpinning element required for

effectiveness of the leadership is its overall competency.


4.4 Leadership as a Lean Manufacturing Process

David Mann (2010; 2009) contends that a lean management system is required for the

successful implementation of lean and for its sustainability. Within the proposed lean

management system, Mann (2010) identifies four principal elements:

1. Leader standard work.

2. Visual controls.

3. Daily accountability process.

4. Leadership discipline.

Mann (2010) mechanizes the management system by providing guidelines to itemize a leader‘s

work into a daily routine with suggested frequencies and durations for leader activities such as

daily start-up meetings, production checks on the floor, review of trend charts, continuous

improvement meetings, process monitoring, process auditing and floor time. According to Mann

(2010) visual controls are fundamental to the lean management system for process performance

tracking and assessment. Similarly, the daily accountability process employs a visual system for

exposing problems and ensuring the problems are solved which ultimately serves as a driver of

continuous improvement and as an aid for the leader‘s discipline (Mann, 2010).

Recognizing the importance that the leadership function plays in LM and LMI, Mann

(2010; 2009) has structured the role of leadership as a process within LM and provided a

framework for leaders of both LMI and sustained LM (see Table 3)

Leader

Attribute for LMI for Sustained LM

Passion for

Lean

1. Passionate about the

potential for lean to

improve the enterprise.

1. Same as for LMI

2. Willing to make personal changes in one‘s

own work, including using standardized

work for his/her own position.

Disciplined 1. Sets expectations, uses a 1. Same as for LMI


adherence to

process and

accountability

systematic process to

track/measure completion

of tasks.

2. Exhibits intense commitment to focus on

explicitly defining processes and

disciplined adherence to them.

Project

management

orientation

1. Prior project

implementation success.

2. Uses systematic process

for tracking performance.

3. Introduces corrective

actions.

1. Able to identify and assign corrective

changes based upon daily production data.

2. Use explicitly defined visual processes to

track and follow up on assignments and

take corrective action.

Lean Thinking 1. Understands lean

concepts.

2. Experience applying lean

concepts.

3. Communicates and

promotes lean future.

4. Teaches and applies lean

to projects on a daily

basis.

1. Serious about continuous improvement to

achieve perfection.

2. Sees with ―kaizen‖ eyes. (kaizen – means

good change)

3. Promotes and coaches a root-cause

approach to corrective action.

4. Has in-depth understanding of problem

solving to lead lean process improvement.

Ownership 1. Thinks and communicates

to lead, set direction,

change and improve area

of supervision.

1. Same as for LMI.

2. Eager to empower subordinates through

structured methods to elicit and implement

their ideas.

3. Acknowledges and celebrates

improvements made by others regardless

of their position.

Tension

between

applied and

technical

1. Understands the value

hidden in details and the

value of accomplishment.

2. Willing to listen to

technical experts and

implement their ideas.

1. Understands and values the details of LM

concepts/methods.

2. Actively supports continuous

improvement.

3. Strives for continuous improvement on a

daily basis.

Balanced

commitment to

production and

management

systems

1. History of effective give

and take with people and

ideas.

2. Evidence of process focus

beyond a ―hit the

numbers‖ approach.

3. Eager for greater

participation by

production people.

1. Personally treats process focus as crucial

to the area‘s success; is able to see

opportunity for continuous improvement.

2. Insists on compliance with requirements

for visual tracking process performance

and execution.

3. Insists on analysis and appropriate, timely

action on impediments to normal

operation of processes.

Effective

relations with

support groups

1. History of getting things

done with support from

operations support groups

such as engineering,

quality, production

control, safety, finance

1. Understands roles, responsibilities, and

expertise of support groups.

2. Incorporates support groups appropriately

in plans for improvement and responses to

problems.

3. Makes expectations explicit for group


and HR. performance in support of production

processes.

Measure

process

separately from

results

1. Breaks the project into

small steps with due dates.

2. Frequently assesses and

verifies completion status.

3. Acts to resolve problems

immediately as they are

identified.

1. Creates measures to frequently document

process performance and misses.

2. Establishes regular, frequent review of

process misses and trends over time.

3. Teaches and emphasizes cause analysis,

root cause solutions, and connections with

improved performance.

Table 3: Dimensions of Lean Leadership (Mann, 2010, pp. 138-140)

Mann (2010) supports the premise that an organization‘s culture is a product of its

management system. He argues the absolute need for a lean management system as outlined in

Table 4 with explicit definition of the leaders‘ work, processes and schedule. According to Mann

(2010) such a management system will produce and support a lean culture with the same genetic

make-up of standardization and discipline. Mann (2010; 2009) has not identified the softer

foundational aspects of leadership such as values, respect for people, credibility, vision and

relationships as he has focused on explicitly identifying tasks or accountabilities for

management. Mann (2010; 2009) has applied the tools of LM to provide a solution for that

which is lacking in failed LMI efforts, that being effective leadership. Mann‘s (2010; 2009) lean

management system provides a mechanistic description of what is required of lean management;

however, Mann‘s lean management system does not provide insight into how to perform the

contextual function of leadership and fails to capture the true essence of leadership as part of a

management system.

4.5 Leadership in Toyota

Toyota‘s success is rooted in its leaders (Liker & Convis, 2012). Over the years Toyota

has invested heavily in developing leaders with Toyota ‗DNA‘ who understand and live the

principles and values of Toyota (Liker & Convis, 2012). The TPS is an effect (not the cause) of

Toyota‘s leaders and leadership, brought about through the long-term engagement of consistent


leadership and which bears the fruit of consistent company performance and success (Liker &

Convis, 2012). The drive for Toyota‘s leaders to consistently strive for continuous improvement

of every aspect of the business is not based upon ROI; rather, striving for perfection is driven by

the company‘s principles and values of working together to achieve the corporate vision (Liker

& Convis, 2012). Liker and Convis (2012) identify the five values which drive Toyota leaders:

‗the spirit of challenge‘; a mandate to constantly improve performance (kaizen); employment of

firsthand knowledge and understanding (genchi genbutsu); teamwork; and respect. Liker and

Convis (2012) point out that Toyota values individual leadership; however, Toyota relies upon

institutional leadership which only works where there is individual leadership with a shared

driving philosophy diffused throughout the ranks of the company.

Toyota develops leaders rather than hiring leaders from outside of their organization as

―Toyota doesn‘t believe that leadership can be taught; it can only be learned by those who are

willing to self-develop‖ (Liker & Convis, 2012, p. 84).

Toyota considers self-development to be the key indispensable trait of leaders.

Only those who demonstrate a consistent devotion to self-development will

acquire the skills and fill the gaps in their own capabilities to become the effective

leaders that Toyota requires to maintain excellence. (Liker & Convis, 2012, p. 84)

The mission of Toyota‘s leaders is to add value to the company by placing the team in a position

to ―win‖ or add customer value. In so doing, Toyota has established a culture of developing

leaders such that leaders develop future leaders (Liker & Convis, 2012). Liker and Convis (2012)

explain that employees with leadership potential are identified early in their careers and provided

with opportunities to develop and advance within the company. The conventional view for

developing leaders often focuses on performance results and accomplishments achieved; while

the Toyota development program demonstrates a focus on process such that results are achieved


through the proper processes with the developing leader demonstrating self-development,

management skills and showing respect for others by helping them develop and advance (Liker

& Convis, 2012). Integral with the development of leaders is a balance of accountability by

which teachers are accountable for the development of their students and students carry

responsibility for their own learning (Liker & Convis, 2012). Within Toyota, leaders are born

with abilities; however, leaders must also learn to be leaders; thus, Toyota leaders are found to be

humble and learning rather than charismatic or proud and conquering (Liker & Convis, 2012).

Toyota is a company with a hierarchical structure where leaders are found at every level

of the company and diffused throughout the company as being a leader and developing leaders is

part of the culture (Liker & Convis, 2012). The hierarchical structure is seen to enhance the

development of leaders because the hierarchy provides a vantage point for leaders to observe

leaders at lower levels who are candidates for advancement and provide mentorship. Liker and

Convis (2012) suggest that Toyota‘s development of leaders at all levels within the company

demonstrates good alignment with Peter Senge‘s model of the learning organization. Toyota

addresses the matter of standardized work for leaders as a means to standardize the tools,

methods, or even checklists used by leaders; however, it is not meant to standardize the leaders‘

work in a manner that removes the aspects of learning and development. Toyota believes that if

the proper ―means‖ of management is employed, the results will be self-evident and thus, the

process followed is ultimately important (Liker & Convis, 2012).


5 Integration of Lean Manufacturing and Managerial Leadership

5.1 Leadership for Lean Manufacturing and LM Implementation

Toyota‘s success is not built upon the tools of LM; rather, it is built upon a deeper

philosophy based on its understanding of people and human motivation (Liker & Convis, 2012;

Liker & Franz, 2011; Liker, 2004). Toyota built success upon ―its ability to cultivate leadership,

teams, and culture, to devise strategy, to build supplier relationships, and to maintain a learning

organization‖ (Liker, 2004, p. 6). Values deeply rooted into Toyota‘s philosophy have provided

the company with consistency of leadership over the long-term, thereby enhancing Toyota‘s

ability to sustain their success (Liker, 2004). The literature reviewed and Toyota as a specific

example, clearly demonstrate and attest to the necessity of effective leadership for both LM and

LMI.

Change for the purpose of continuously improving and striving to attain a state of process

perfection are the essence of LM; thus, companies embarking on the journey of LMI have set

themselves on a course of change and organizational transformation. Allowing Toyota to

effectively deal with continuous improvement changes is the entrenchment within Toyota of W.

Edwards Deming‘s PDCA framework for problem solving (Liker, 2004). In their writings

addressing the role of leadership for sustaining change, Kotter (2007) and Mento, Jones and

Dirndorfer (2001) have developed frameworks for leaders to follow in order to achieve

sustainable change, thus demonstrating their support for following a systematic and repeatable

process to effect organizational change. LM and LMI require an organization‘s leadership to

orchestrate incremental changes in a controlled and methodical manner aligned with a central

vision in order to create a progression toward the desired state of perfection.


Organizations enhance their ability to implement change and maximize the benefits

obtained, by creating the proper conditions within the organization (Dennis, 2007).

Organizations that achieve the benefits of LM exhibit cultures demonstrating openness, trust,

mutuality of respect among all employees, teamwork, employee training and involvement, and a

focus on adding value for their customer (Dennis, 2007). Organizational traits such as these must

be purposefully cultivated and developed over time through the efforts of the organization‘s

leadership. ―The organization is a human community. It is a living system, like the plant or the

teenager. There is no one driving it. But there are many tending the garden‖ (Senge et al., 1999,

p.21).

The shared beliefs, values, principles and practices of an organization‘s human

community are observed through the behaviors within its culture. Cultures cannot be created or

changed in an instant as building a culture is an incremental process and only be transformed

gradually through time. An organization‘s culture is a product of its leadership (Roth, 2006; Daft

& Armstrong, 2009). The literature has shown that three elements serve as catalysts for an

organization‘s ability to adopt and sustain the continuous improvement process. These three

elements are: leadership; change process; and accountability with responsibility. Leaders and

change processes of effective LM organizations must be an active part of an organization‘s

culture such that they indistinguishable within the culture and thus are able to operate invisibly

without being seen as counter-cultural. Being part of the culture, the leaders and organizational

changes will not be met with resistance. Further, if the members of an organization are

accustomed to taking on the responsibility of and being accountable for achieving results, they

function with the commitment and initiative to continually improve without offering resistance

or requiring continuous coercion.


Accepting that Toyota‘s success rests upon more than an ingenious set of management

tools and that an organization‘s leadership plays a critical role in the success of LMI and

continued LM, the aspect of defining the required leadership is considered. Liker and Convis

(2012) explain that Toyota strives to be a ‗learning organization‘ aligned with Peter Senge‘s

model; however, Toyota also draws upon concepts such as Blanchard‘s ―situational leadership‖,

―servant leadership‖ and others. Toyota‘s leadership is not tied or associated with any one type

of leadership, specific leadership traits or charismatic leader (Liker & Convis, 2012). Thus

leadership for LM and LMI should not be defined as a specific type such as ‗transformational

leadership‘ or even purely ‗situational leadership‘. The literature reviewed has shown that as a

minimum, the leadership required for effective LM and LMI must:

1. Provide long-term consistency being based upon philosophy and values reaching

beyond self-service.

2. Be equipped and competent for sustaining change.

3. Provide the organizational conditions and fertile environment for sustaining change.

4. Be integrated within the culture and diffused throughout all levels of the organization.

5. Demonstrate an integration of leadership, management and hierarchy.

6. Provide value to the organization through competency.

As it has been shown that LM and LMI cannot be adequately defined through their simplification

into a set of tools or following a check-list or formula, it is not prudent to reduce LM and LMI

leadership to a style or a formalized check-list. LM and LMI cannot be effective without the

complementary functional aspects of leadership and management to address the complexities and

changes of evolving an organization‘s operation toward perfection.


5.2 Organizational Structure and Compatibility with Lean Manufacturing

The literature reviewed has demonstrated the importance of leadership for LM and LMI

through the aspects of vision, transformative change, development of culture and sustaining

continuous improvement. Trust, mutual respect among employees, and distributed leadership has

been shown to be critically important for both effective LM organizations and requisite

organizations; however, it is important to demonstrate the compatibility of Requisite

Organizational Theory with the principles of LM.

Liker and Convis (2012) have described Toyota‘s leadership as being integrated with the

organization‘s management within a hierarchical structure. To look at this in the light of lean

principles, first consider Kotter‘s (1990) presentation of leadership and management as two

separate identifiable actions which can lead to an understanding of leadership and management

as two separate entities. The perception of leadership and management as separate entities

creates confusion as to who is responsible for leadership and who is responsible for management.

Confused responsibilities are not lean as such a situation incorporates inefficiency, redundancy,

overlaps or even an absence of the required leadership or management. Also, Kotter‘s (2011)

concept of an organizational structure consisting of a ‗hierarchy‘ and a ‗network‘ is not

consistent with lean concepts as it also establishes a situation ripe for confusion over

responsibility and accountability which promotes the wastes of inefficiency, redundancy and or

omission.

In contrast, Jaques‘ (1991; 1990) ‗requisite organization‘ demonstrates good alignment

with lean principles as managers clearly carry the role responsibility of leadership leaving no

confusion, overlap or omission of the leadership or management duties. The integration of

management within a requisite hierarchy creates an organizational structure with clearly defined

roles, accountability, responsibility, and authority with people positioned in congruence with


their competency and capability. Order, definition and efficient action are elements of lean and

requisite organizations.

Authors such as Roth (2006) have emphasized the necessity for distributing leadership

throughout all levels of an effective LM organization. Senge et al. (1999) have supported this

same position regarding distributed leadership for learning organizations. By design, requisite

organizations distribute leadership throughout the organization as all management and

supervisory positions carry the role responsibility of leadership (Jaques & Clement, 1991). The

distribution of leadership throughout an organization ensures that all parts of the organization

operate with empowerment and alignment with the corporate vision as Liker and Convis (2012)

observed in Toyota. Requisite organizations are designed to accomplish the same.

Roth (2006) suggests that studies of Japanese management methods show that Japanese

companies rely heavily upon informal authority and this is readily apparent in Toyota. This may

first appear to be conflicting with Jaques‘ requisite hierarchy; however, Toyota does not rely

solely upon informal authority. The formalized and informal authority observed within Toyota‘s

leadership aligns directly the role-vested authority and the complementing personally earned

authority which Jaques identifies as necessities.

Toyota has demonstrated the ability to develop consistency in its leadership over the long

term through its deliberate efforts to identify leadership candidates early in their career, mentor

them and provide opportunities for self-development (Liker & Convis, 2012). Toyota‘s

development of leaders is not arbitrary; rather, using the vantage point provided by hierarchy,

leadership candidates are carefully chosen for progression to positions of greater responsibility.

Similarly, the requisite organizational theory establishes a structure where managers must have

the capacity to handle the complexity of the position. Requisite organizations use their hierarchal

structure for identifying suitable candidates for vacancies such that managers one and two levels


higher than the vacancy identify candidates from the level below the vacancy (Jaques &

Clement, 1991). Both Toyota and a requisite organization strive to avoid the waste which results

from placing a person into a position beyond their capability (and or below their capability).

Proper placement of personnel demonstrates respect for the individual and maximizes their

potential as people perform best when they are challenged within and not beyond their

capability. Managers with the capacity to handle the complexity of their position are able to

handle the accountability of the position with the responsibility of adding value to the work of

their subordinates (Jaques, 1990).

Toyota‘s sustained continuous improvement shows a commitment to addressing root

causes of problems rather than treating symptoms. Chris Argyris (1977; 1994) describes this type

of organizational learning as ―double loop learning‖. Although Argyris (1977; 1994) does not

align double loop learning with any particular organizational structure, the concept is easily

addressed within the requisite organizational theory. Single loop learning which can be

compared to the treatment of symptoms does not rectify a problem as effectively as does

addressing the root cause (double loop learning) (Argyris, 1977; 1994). Double loop learning

includes greater complexity than does single loop learning. Double loop learning is easily

ensured within requisite organizations as managers being accountable for the work of their

subordinates have the innate capacity to consider a degree of complexity more than their

subordinates, thus all problem solutions can be addressed with two levels of complexity. Both

Toyota and requisite organizations benefit from a hierarchical structure with an inherent capacity

for double loop learning.

The final consideration of organizational structure and LM is the aspect of trust. ―An

underappreciated, yet critical, part of operational excellence and Toyota-style leadership is

trust...the Toyota leadership model depends heavily on trust…Trust is built into the Toyota


system‖ (Liker & Convis, 2012, pp. 206-207). Liker and Convis contend that trust is required to

drive the ―no-holds-barred‖ commitment to strive for operational excellence. Trust is a

foundational principle within requisite organizations as the competency of managerial leadership

is founded upon capability, respect, integrity, accountability, openness and creating trust. Jaques‘

explanation of the benefits of a trust-inducing organization concurs with lean principles.

Anti-requisite practices…cause individuals to feel burdened and fettered lacking

in freedom and prey to injustice.…But true liberty and freedom lie in the creation

not of less organization, but of trust-inducing organization….Organizational

clarification and the move toward increasingly requisite practices is not

experienced as a threat to freedom and liberty. On the contrary, the clear

articulation and teaching of requisite organization is experienced as giving

increased flexibility, increased freedom and liberty, lessened bureaucracy, greater

justice and fairness. (Jaques, 2005, p. 400)

5.3 Implementing Lean Manufacturing as a System

―Toyota views a company as a total system, or an organism with two modes: it either

grows through daily improvement or it deteriorates‖ (Liker & Convis, 2012, p. 12). The concept

of organizations as systems is not unique to Toyota. Daft and Armstrong (2009) present the

concept of organizations as systems containing sub-systems. They put forward Henry

Mintzberg‘s theory of organizations containing five parts or systems: technical core; technical

support; middle management; administrative support; and top management. Further, it is

appropriate to view organizations as a system or an organism given that the foundational

building block of an organization is an organism; that is each person in the organization.

Through years of evolution and development Toyota‘s leadership has created a successful and


growing system through which the company and its employees have been able to adapt and

learn.

Paul Tremlett (2005) suggests that the main reason that companies fail in their efforts to

understand and emulate Toyota is that they do not understand or manage their organizations as

systems. ―They do not fully accept that, or act as if, their organization is a whole that cannot be

split into different parts without losing its defining properties‖ (Tremlett, 2005, p. 2). Ernst

Glauser (as cited in Tremlett, 2005) contends that system scientists are clear that ―systems cannot

be understood through analysis, e.g. separating the parts and looking at the parts

separately…systems can only be understood through synthesis…the exact opposite of

analysis…since the behavior of the system is not the sum of the behavior of its parts, but the

product of its interactions‖ (p. 2). Tremlett (2005) adds that systems have both structure and

processes which must be considered together due to their interaction and interdependency.

If we consider leadership as a sub-system of the organization, it follows that as part of the

organism it is either improving or it is deteriorating. Further, it can be observed that leadership is

either effective or ineffective. The effectiveness of leadership can be graded as a ‗pass‘ or a ‗fail‘

independent of its style, mode or the characteristics of the leader(s). The leaders of an

organization interact with customers, employees, each other and the environment and they make

decisions as to what is good and right for the organization (Senge et al., 1999).

It has been observed that LM processes are tightly dependent. Good LM processes flow

from one to the next exposing problems if a piece of one process falters. Such a situation then

requires a root cause correction and improvement. Thus it follows that if leadership is missing or

inferior to the rest of the system, the flaw (ineffective or missing leadership) or symptoms of the

flaw will quickly be exposed. If ignored, deterioration continues. If corrected, growth and

improvement takes place.


Unfortunately, organizations with ineffective leadership seldom recognize and are

arguably not capable of recognizing their existing condition of poor leadership. Symptoms are

often misdiagnosed as being strictly caused by operational process flaws. Thus, organizations

jump into LM based on the prospect of gaining benefit from an effective set of business tools

without recognizing the prerequisite for success; effective managerial leadership.

Since organizations require effective leadership for success with LM and LM does not

provide an effective leadership mechanism, organizations with ineffective leadership embarking

upon the LM journey have two real options for success. The options are:

1. Develop a system of effective leadership prior to LMI.

2. Develop a system of effective leadership concurrently with LMI.

In either case, the task of developing effective leadership is daunting and unlikely to happen

without a paradigm shift. ROT provides organizations with a paradigm shift complementary with

LM. Choosing the first option, organizations can first develop an organizational structure,

managerial leadership and culture that facilitate LM success by becoming a requisite

organization. ROT and the resulting managerial leadership can be expected to provide increased

operational efficiency on its own prior to LMI. Option 2 presents greater challenges and risk as

LM success is reliant upon effective leadership which is being concurrently developed. Adopting

ROT while implementing LMI may be viewed as implementing a system change nested within a

system change which will undoubtedly cause the organization to experience compounding

growing pains. The potential pay-off for the additional risk may be a shortened time frame for

transformation.

Companies adopting ROT principles gain effectiveness through improved morale and

increased productivity as individuals work in roles aptly matched with their capabilities while the

organization develops leaner organizational structures (COREinternational & Craddock, 2003).


Over the years many research studies have been conducted which support and validate the

concepts of ROT for managing the complex organizational systems (COREinternational &

Craddock, 2003; Marion & Uhl-Bien, 2001; Zaccaro & Horn, 2003; Craddock, 2002).

Organizations implementing ROT develop an organizational structure and management system

with observable correlation to that of Toyota and thereby enhance the potential benefits available

through LM.

6 Recommendations for further Research

6.1 Study of Toyota: Is Toyota a Requisite Organization?

LM is a process with a set of formalized tools and processes for organizations to employ

in the effort to improve their operation with waste reduction and continuous improvement;

however, LM must be part of a larger system which provides the necessary leadership in order to

achieve LM effectiveness. Toyota has developed a management system, The Toyota Way, which

is exemplary of what is required for effective LM. Elliott Jaques‘ organizational structure and

management system based upon innate human psychology, the Requisite Organizational Theory,

establishes an organization complementary with LM based upon the many observed alignments

between Toyota and requisite organizations. Considerable research and study has been done on

both LM and requisite organizations; however, there has been little research conducted to

directly compare the two organizational systems. An appropriate start for further research in this

area is to study Toyota from the perspective of the Requisite Organizational Theory. Is Toyota in

effect a requisite organization? In what aspects does Toyota stray from being a requisite

organization? Where does the Requisite Organizational Theory offer benefit to Toyota in their

journey of continuous improvement toward perfection?


6.2 Consideration of a 3rd

Dimension for Organizations

On several occasions the literature reviewed has referred to elements normally considered

spiritual or religious. This can be explained given consideration to the spiritual element within

the basic building block of all organizations; namely the spirituality of the human being.

Literature explaining organizational leadership has brought forward the concepts of servant

leader, trust and the Golden Rule, all having connections to the spiritual aspect of humans.

Literature reviewed cited the Bible and gave reference to the teachings of Jesus Christ, the

Koran, Confucius and Zen masters. Researching ‗double loop‘ organizational learning uncovered

Bateson‘s Level III learning (Hawkins, 1991) and ‗triple-loop‘ learning (Peschl, 2007) probing

deeper into learning, spirituality and wisdom.

The literature review on LM begins with the single dimensional aspect of a set of

business tools and quickly expands to adding the second dimension of organizational structure

and leadership. Many of the concepts were reviewed with two dimensional considerations:

management and leadership; systems having process and structure; and single and double loop

learning. The two dimensional considerations appear to provide a solid understanding of LM and

organizational systems. However, the spiritual aspect of humans adds another dimension to

organizations. ―In working…man not only attempts to satisfy his own needs and desires, but is

also attempting to fulfill a command of God himself‖ (Percy, 2010, p. 15). This additional

dimension remains only lightly touched upon. What can be gained by organizations through a

greater understanding of this third dimension?

Toyota has gained success through its organization system and building upon a deeper

philosophy of serving the greater surrounding societal system. Supporting a philosophy of

serving the greater society John Paul II (as cited in Percy, 2010) wrote in his letter Redemptoris

Custos:


Man works with the intention of carrying out specific tasks that enable him to live

his daily life. In addition, he carries out certain tasks in order to be of service to

others. He works to support his family, friends, and society. Work is thus not only

a personal reality, but also has an important social dimension which can and

should be understood as an expression of love for oneself and one‘s neighbor.

(John Paul II, as cited in Percy, 2010, p.16)

What can organizations expect to gain with the integration of LM‘s business tools, the

organizational structure and management of a requisite organization and an understanding of a

further reaching third dimension?

Moreover, it is becoming clearer how a person‘s work is naturally interrelated

with the work of others. More than ever, work is work with others and work for

others: it is a matter of doing something for someone else. Work becomes ever

more fruitful and productive to the extent that people become more

knowledgeable of the productive penalties of the earth and more profoundly

cognizant of the needs of those whom their work is done. (Phan, as cited in Percy,

2010, p.162)

7 Conclusion

Lean manufacturing has been developed as a system for organizations to use to improve

their operations. LM is touted to save companies money through a process of identifying value

and reducing waste. The prospect for companies is improved quality, reduced costs and

increased customer value. LMI has been formalized into simple steps and methods marketed to

companies as a system to evolve their operation into a LM organization. Unfortunately, LM has

been drawn from a larger system, The Toyota Way (Liker, 2004), and in so doing LM and LMI


too often operate outside the bounds of its most important initial context; an effective

management system. The effective management system is crucial as through its structure and

process, the management system provides leadership which is the lifeblood for LM and LMI.

It is important to understand that while LM as a system is transferable outside the

environment and management of Toyota to other companies and environments; however, when

LM is transferred it is critical that LM is understood to be sub-system of a larger system. LM

must be developed into a ‗new sub-system‘ that is customized and adapted to suit the new

environment. There must be recognition for all interactive parts of the newly blended system.

Toyota recognizes this and does not expect the Toyota Way to be exactly the same in each and

every Toyota plant; rather, when the Toyota Way is implemented in a new plant the integration

must be adapted into a new life form suited to the new environment.

The key to Toyota‘s success is not LM. The key to Toyota‘s success is leadership. LM is

a product of their leadership. In a similar fashion, Toyota‘s culture is a vital element to Toyota‘s

success; however, it is not the key to their success since their culture is also a product of their

leadership. Toyota‘s leadership has created a culture of leaders developing leaders in an open,

respectful, innovative, collaborative environment committed to continual improvement, striving

for perfection. The culture flows from the leadership and is nourished with trust.

LM truly raises the operational capability of an organization through the employment of

clever business tools developed by Toyota. The tools are extremely effective and relatively

simple. In the right hands, the tools seem to take on a life of their own; however, the success

attained through the use of the tools is totally dependent upon the handler; that is the

management or managerial leadership.

Another facet of the Toyota organization developed by its leaders is a hierarchical

structure that complements Toyota‘s managerial leadership. The organizational structure


provides Toyota‘s leaders with a framework that enables the visibility of leadership candidates

such that leadership candidates can be identified, mentored and developed. The hierarchical

structure and development of selected candidates aligns competency with roles. Toyota‘s

managerial system has proven its effectiveness over the long-term with consistently positioning

capable people in the appropriate positions.

Typically, LM and LMI programs do not provide insight into the importance of

leadership and neither do they provide insight into how to provide the leadership. Elliott Jaques‘

Requisite Organizational Theory provides an organizational system which aligns with LM

principles and delivers effective and competent managerial leadership. The many similarities

between Toyota and a requisite organization speak directly to the compatibility and synergies

that an organization can anticipate obtaining by combining LM and requisite organizational

theory. Combining Requisite Organizational Theory with LM forms a pathway to a complete

organizational system where effective leadership is equipped with an ingenious set of business

tools resulting in a successful ―lean‖ organization.


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