Lean Production, Employee Stress, and Management Strategies

Introduction: Lean Production and Worker Stress

The growth of high-efficiency production techniques — including lean manufacturing — combined with the increasing use of analytical tools and approaches to tracking employee and departmental performance data has created significant stress for workers throughout global manufacturing and service organizations. This has been exacerbated by management teams who, in many cases, lack emotional intelligence (EI) and the ability to create an environment of transformational leadership in their organizations. These two components — EI and transformational leadership — can lessen the impact of lean manufacturing and production techniques on worker stress, yet much of the research in this area shows that this is the exception rather than the rule.

First, there is often a lack of ownership at the C-level for forcing change to existing processes and making them consistent enough to be managed efficiently. What is consistent across much of the research into the stresses caused by lean manufacturing initiatives is that C-level executives frequently fail to support them fully, adding a new set of tasks — often inconsistent with a person's existing job — to their responsibilities. Confusion and a sense of futility often result, as workers struggle to determine what to accomplish first. This is common in organizations that impose lean production techniques solely for cost reduction, without being fully committed to transforming the organization and making it more effective at the individual contributor level.

Second, lean production techniques and their accompanying performance metrics place undue stress on many workers as organizations seek to quantify their contributions. As analytics software applications become increasingly commonplace, dashboards are used to measure everything from the time it takes to create a new document, to close a call in a call center, or to create a new customer record. This approach of over-measuring performance simply because the tools exist to do so is also driving stress levels higher in many organizations.

Six Stressors of Lean Production Environments

Third, many organizations aggressively promote lean manufacturing as a strategy for higher productivity yet ultimately use it only for cost reduction. This is a critical mistake many manufacturers make, and it often becomes the main focus that companies continue to pursue as opportunities to grow through better use of their employees pass them by. Lean manufacturing and production framed as a cost-reduction strategy — regardless of how it is presented — causes major stress for workers.

Fourth, the lack of support from cross-departmental leaders and the continued siloing of critical information resources — despite company-wide voiced support for lean production — also causes significant stress. When lean production initiatives and strategies are put into place, workers are often forced to justify and fight for their jobs, as cost reductions and layoffs are sometimes the primary benefits companies seek from these strategies.

Fifth, the pressure arising from compliance requirements in conjunction with the adoption of lean manufacturing techniques is generating substantially higher levels of stress than were previously typical. The Sarbanes-Oxley Act (2002) has served as the impetus for many organizations to fully adopt lean production techniques and push dozens of performance metrics down to the job level. Compliance requirements are forcing many companies to adopt a very aggressive approach to monitoring employees' activities from a financial standpoint.

Sixth, the influence of lean production on employee privacy is also becoming a critical issue. The use of electronic monitoring for the purposes of benchmarking performance and reporting time and cost savings from lean production strategies is becoming pervasive.

In summary, there are many stressors at work in organizations that choose to adopt lean production techniques. Foremost among these is the reduction of individual jobs to tasks that can be quantified, studied for improvement, consolidated, and then reshaped into standardized procedures that can be performed anywhere in the world. The push to measure performance and results is also being driven by the broad range of analytical applications available today. All of these forces are combining to drive workers to higher levels of stress than ever before, while simultaneously making their work habits, personal habits, and approaches to their jobs more recordable, quantified, and scrutinized than ever. Clearly, a strong set of strategies is needed for alleviating the stress of lean production through more effective management approaches that account for the rapid shift toward globalization and the relentless pursuit of lower cost per labor hour.

First, there is the critical issue of job ownership. In lean production environments, this is typically the first casualty of a worker's role. What needs to happen, however, is that the time and cost savings from lean production should be used to allow workers greater freedom in defining their jobs and how they manage them.

This concept of ownership is well highlighted in the research of Alstyne, Brynjolfsson, and Madnick from MIT, who in several papers report the importance of fostering and promoting ownership of tasks through transformational leadership. In their study of the correlation between task and team ownership in lean production and systems implementations, Alstyne, Brynjolfsson, and Madnick (1997) comment that "the very act of decentralizing decision-making — asking workers for their values and then taking them seriously — can have a positive effect on the change process by giving employees a sense of ownership and responsibility." Their earlier work further demonstrates the impact of ownership theory on change management: "Theories of ownership, for example, suggest that decentralizing the use of data and decisions can boost quality levels in systems users control themselves" (Alstyne, Brynjolfsson, and Madnick, 1995).

Strategies for Alleviating Stress in Lean Production

Second, lean production forces workers together from widely divergent cultures, creating a very high level of stress and even conflict over time. When one considers the experience of a young, assertive manager for Schindler Corporation attempting to align his company's culture with that of India while simultaneously imposing lean production standards on Indian workers, the conflicts become immediately apparent. In the Harvard Business Review case study Silvio Napoli at Schindler India (a) (2003), the trials of a manager intent on pushing his own culture of lean production excellence onto his Indian workers are described at length. Mr. Napoli is told by his senior management that he must be "part monk and part warrior" when approaching the definition of Indian production centers (Silvio Napoli at Schindler India (a), 2003), yet he doggedly pushes for exceptionally high and unrealistic performance standards for Indian workers, many of whom have no familiarity with lean production at all. As a result, Mr. Napoli experiences culture shock — as does his family — while also facing the challenges of building a supply chain and implementing a complex lean production process to sell elevators in India. Schindler Corporation ultimately fails to attain its objectives, primarily because Mr. Napoli fails to recognize how lean production initiatives and the absence of task ownership make the roles of Indian sales, engineering, and service personnel nearly impossible to fulfill.

The cultural distances involved in implementing lean production — and their exacerbating effects on a company's competitive landscape — are addressed by Porter in The Competitive Advantage of Nations (1998). Applying Porter's analytical framework to the issues Mr. Napoli faces, one of the greatest stumbling blocks is that Napoli has no sense of how his lean production strategies are affecting the perceptions of Indian employees and customers. He views lean production as the primary goal rather than the integration of operating philosophies or worker attitudes. His approach is uncompromising, and the lack of cultural integration in this case illustrates how a singular focus on lean production can blind executives to the broader demands of managing diverse teams.

For Napoli and other leaders who focus exclusively on lean production at the expense of building a collaborative team environment, tensions between their teams and the rest of the organization also escalate. According to Susman and Dean (1992), one of the major reasons for ongoing conflicts between teams in lean production environments is the lack of clarity around key lean performance metrics and the highly process-centric nature of manufacturing's transformation. This lack of clarity surrounding goals, metrics, performance expectations, and accountability forms the basis of a deeper disconnect with the lean manufacturing strategy.

The myopic manner in which Silvio Napoli managed the lean production process at Schindler India is a microcosm of how many organizations globally are managing their own transitions into lean initiatives. Napoli's failure underscores how globalization, while praised as a cost-reduction strategy, is far more difficult to execute than it appears. In chasing the cost reductions made possible by offshore manufacturing, many companies expose themselves to precisely the challenges illustrated in the Napoli case study. The effects of lean production on new initiatives can actually impede the cultural integration aspects of entering new nations and regions.

Conclusion: Lean Production as Cost Reduction Mirage

Sarbanes-Oxley Act (2002). Passed by the U.S. House of Representatives and U.S. Senate, 2002.

Susman, G. I., and J. W. Dean Jr. "Development of a Model for Predicting Design for Manufacturability Effectiveness." Integrating Design and Manufacturing for Competitive Advantage. Oxford University Press, 1992, pp. 207–227.

Silvio Napoli at Schindler India (a). Harvard Business Review Case Study, 2003. http://harvardbusinessonline.hbsp.harvard.edu