There’s someone I’ve mentored in Lean for a while now, let’s call him John, who has recently changed companies, now working for a large international mining company as a Lean Advisor.  They’ve actually got 3 vacant positions of similar roles after having a couple of those positions becoming vacant through personnel transfers.

John and I discussed options as to how I might be able to help them on a casual / consulting basis until those positions are filled, in order to keep projects rolling and increase the buy-in of the troops. John was very enthusiastic about the prospect of this support, given that he’s experienced it in his former company.

But…beware the bewildering budget!

John made the recommendation to his boss to get me in.  Though his boss was very supportive of the idea, the answer was ‘No’ because “the cost has to come out of a different bucket of money, of which there is none at the moment”.

Funny how budgets work (or don’t work).  In many organisations, constraints on taking money from the bucket on the left stops you investing to put heaps more in the bucket on the right.  If only the two buckets would use complimentary metrics and a common goal, for the common good of the company, instead of ‘I win, you lose’.

I used to often be frustrated with the approach to budgeting when I was looking after a departmental budget in my earlier days in a large automotive manufacturer. Too often in large organisations it’s easier to go with the flow, in lockstep, rather than breaking rank and pointing out the ludicrous nature in which we often run our businesses.

If it were our own money, and we were convinced that we’d get a huge return on investment by making the investment, then would we care which of our bank accounts the money from?  I guess not.  We’d shuffle the money around so that we didn’t miss out on the extraordinary benefits that the investment would return.  We would even go to the extent of borrowing money to fund a very sensible investment…and more over, we’d be viewing it as an investment, rather than a cost!

Many large organisations have procedures and policies that are ‘sacred cows’ that they don’t want to challenge. But at the same time, these organisations claim to aspire to become ‘Lean’. We really do need to get those at the top of the tree to lead the charge and declare ‘no sacred cows live here’. If the process or policy stops us from making beneficial change, then LET’S CHALLENGE IT.

One of the problems people at the lower ranks face, is that if they pop their head up to challenge the status quo, or the written policy or directive that has ‘come down from on high’, they’re afraid that they’ll be ostracied and labelled as ‘not a team player’. Unfortunately, that sometimes happens…and so we often do what is expected, march in sync, put up and shut up, perhaps even getting a pat on the head for being good boys or girls by not rocking the boat…(and a promotion if we’re lucky).

Sure, some people climb to high levels because they’re ‘yes-men’ and they don’t like people questioning their directives.

But my presumption is that most of those at the top of the tree are trying to run thriving businesses, and want the support of those below to make it so. They don’t want to be told just what you think they want to hear. They want to hear the truth so that they can do something to improve the situation. Sure, they may want to curb overall discretionary spending…and so they may put memos out to that effect. But they are usually wise enough to know a good thing when they see it, and can make exceptions to approve expenditure when it makes strategic sense.

The other thing that always amuses me about a common approach to budgeting that I observe, is that people view the budget not as a planning tool, but as something chiselled in stone that can’t be changed…at least not until after some specific date (such as the end of the financial year)…as if something magical occurs on that specific day.  Many a time I’ve heard people saying, ‘fantastic idea, that would save us heaps, but we don’t have it in the budget’…yet they have little (or big) pockets of ‘contingency money’ here and there, for the likes of breakdown maintenance…but refuse to spend a small amount on preventative maintenance ‘because they haven’t budgeted for it’.

For me, it’s sometimes like following someone down the street with money falling through the holes in their pockets, and the conversation goes:

Q:  “Hey buddy, do you know you’ve got holes in your pockets.”

A:  “Yeh, I know.”

Q:  “Then why don’t you sew them up?”

A:  “Because we don’t have money in the budget for cotton this year!”

Doh!

I keep coming back to the fact that Lean’s not about the tools.

It’s about the thinking! It’s about open and honest communication and a culture of continuous improvement, and for real benefits, company wide, it must be lead from the top. Our leaders must banish the sacred cows and not just make it safe for people to pop their heads up, but to actively encourage it. Who knows what fantastic ideas our people have that they’ve been too afraid to tell us about, that could make our organisations great? Lets ask.

© Copyright: Dennis Keay, 2011