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Chapter 1

A crisis rarely comes out of the blue but is the result of negligence, lack of focus, and lack of discipline. – Almost all crisis can be prevented by daily practice of hansei (反省, Japanese for ‘self-reflection’) and kaizen (改善, Japanese for literally ‘drive out the bad’ but more usually translated into ‘continuous improvement’)

In a crisis kaizen is useless because its success lies in incremental, sometimes even imperceptible, changes in and to the system to forgo disruptions and stress caused by radical changes.

In a crisis kaikaku has to be applied to get back on track as soon as possible. – Kaikaku will also help you to introduce lean management. Which will prevent crisis any other than the ones due to vis major (like earthquakes, floods or pandemic diseases, etc.)

As I said, do not let the crisis go to waste but implement lean management quickly and efficiently. Why is a crisis a gate-opener for lean management? Because lean management thrives on simplicity, and established enterprises have usually developed some very complex systems that are hard to dismantle in a non-crisis situation but that can be discarded with the flick of an imaginary wand when existences are at stake. – Under chapter 11 (‘reorganisation bankruptcy procedures’ in the USA), and other similar regulations in other countries, a lot of kaikaku is done and hardly any kaizen.

Complex systems operate with a lot of manpower. Simple systems, on the other hand, run with far fewer people, or even autonomously. Therefore, resistance to change is much more contested in a non-crisis environment. Leaving the comfort zone out of one’s own free will requires superhuman willpower – anyone who has tried to diet for any reason other than a medical one knows this. External forces furnish an excellent excuse to get long-overdue things done.

Having said that, it does not matter how severe a crisis is; the following, prevalent obstacles need to be overcome:

1) inner resistance -> only radical measures can break resistance;

2) slow learning -> triggering the instinct of survival speeds up learning; and

3) fast forgetting -> it is hard to forget a shocking experience.

Radical changes cause a lot of stress, therefore remind yourself of what Churchill had to say on changes might help to prevent crisis or at least to facilitate the implementation of change: ‘We must take change by the hand or change will take us by the throat.’

Implementing radical changes all by yourself is akin as pulling yourself out by your own bootstraps: extremely difficult and therefore hardly feasible. External help, like a ‘friendly’ kick in the butt should get you started. – Interim managers are professional ‘butt kickers’ and ‘arm twisters’, martinets really, who make you do what you have planned to do for a long time and never got around it. – If you have a martinet in your management team all you have to do is to vow to do whatever he says.

A word of caution to stakeholders and management:

do not use interim managers as stooges to implement your avowed solutions for mastering a crisis; you had ample time to do so before you hired external help! In the process of selecting an interim manager, look for the most impartial one. In the mid and long run, you do neither yourself, nor the company nor the selected interim manager any favours if you select someone to buttress your respective position. Usually, sticking to positions is what causes crises in the first place, because a battle of opinions (read: egos) can result in trench warfare where winning an argument becomes more important than saving the company.

That is why you should always have a BATNA (best alternative to a negotiated agreement, see ‘Getting to Yes’ by Roger Fisher and William Ury) ready so you do not sacrifice the company on the altar of oversized egos.

According to Seneca,

‘If one does not know to which port one is sailing, no wind is favourable.’

Therefore, it is an excellent idea to define a key performance indicators (KPI) baseline at the very beginning of a project, regardless of the state of the company: progress has to be tracked and displayed for everyone to see. Brief progress reports, preferably using charts to show trendlines and going easy on verbose written explanations, are vital. Information about the current state is what everyone in a crisis wants. Nothing breeds malicious rumours more than a lack of information.

Choose a room – in lean management terminology also called an obeya (大 部屋, Japanese for ‘big room’) – where all teams involved in solving the crisis can congregate regularly to discuss the best way forward. Display the latest KPIs and catch up on what everyone has achieved so far.

A word of caution on Key Performance Indicators:

Always, and I do mean ALWAYS, make sure you know where your figures come from, how they are compiled and how they are crunched before they get shown to the public. – Making sure is NOT just asking the controller whether he is happy with his data sources. – Making sure is to look for yourself by questioning even the tiniest detail about the data sources.

The power of figures is such that no matter whether they are true or false people tend to take them at face value and use them in their arguments.

I always try to make this room accessible to all employees because, as I have mentioned before, people crave information in a crisis. Letting them follow the progress helps to get them on your side – or at least prevents them from opposing you behind your back – by encouraging them to discuss matters openly. Keep everything as simple and as transparent as possible. Although it might sound outlandish but it is much easier to get to a complicated system than to a simple one. Why? Because the complicated system was not set up – it evolved usually by a series of well-intentioned quick-fixes. – But as we all know ‘There is nothing so permanent than a temporary solution.’ – Milton Friedman

A simple system, on the other hand, is the result of simplification, which is an active process of making something easier. – During the entire journey out of the critical situation you have found yourself in, keep in mind Einstein’s apt observation:

‘If you can’t explain it simply, you don’t understand it well enough.’

The best way to explain something – anything really – is by visualisation. Visualisation is the most versatile and maybe also the most powerful tool in the lean management toolbox; use it extensively. Here, too much is better than not enough. Why? Because much like the child in Hans Christian Andersen’s fairy-tale ‘The Emperor’s New Clothes’ who pointed out that the emperor did not wear any clothes at all but was, in fact, totally starkers, it reveals everything and has no regard for status, politics, ideology or any other face-saving measures.

A word of caution on saving face:

No one likes to be blamed and shamed, especially publicly. However, in a crisis, all must be revealed so that problems can be solved as closely to their roots as possible. Psychology has extensively scrutinised people’s associations and dissociations. Mentally sane people, a minority of the human beings, know exactly when they should associate with or dissociate themselves from events. Those prone to depression, like to associate themselves with negative events like:

‘I am so unlucky. Of course, this has to happen to me after I’ve already lost my job, my car broke down and my partner walked out on me at the drop of a hat’

and dissociate themselves from positive ones

‘A stroke of luck my foot! This only happened to lure me into a false sense of security that my ordeals are finally over.’’

Those prone to megalomania do the opposite: they associate themselves with the tiniest success, whether they have been involved in creating it or not

‘I and my team made it happen again! Where would they be without me?’

and dissociate themselves from failures

‘How many times did I ask for XYZ to be removed from my team? They should have sacked them ages ago! No, they shouldn’t have given XYZ a contract in the first place!’ or ‘My plan was perfect. Unforeseeable circumstances and the incompetence of some team members who I didn’t select for this task have led to this failure, which could have been prevented if the powers that be had just listened to me.’

That is why one of the three principles of kaizen is to not blame or shame anyone but to focus instead on the problem and ask ‘why?’ at least five times to find out the real reason. A conclusion about shame by Alexander Pope closes this short excursion:

‘No one should be ashamed to admit he is wrong, which is but saying, in other words, that he is wiser today than he was yesterday.’

Decisions make or break success in times of crisis. The ‘break’ part is a certainty if no decisions at all are taken. There is no worse situation in a crisis than being in limbo because no decision has been made by the people in charge. Thus, all heads of departments have to decide on critically important issues on the spot. Standstills should be prevented at all costs because people become restless and listless quickly and easily. This can lead either to lethargy or to sedition – both are hard to handle. Therefore, it is better to let people march in the wrong direction and turn them around than leave them wondering what happens next. Having to keep order when nerves are frail because livelihoods are at stake or to rekindle spirits once despair has settled in is definitely not something you want as a manager when in a crisis; as Joan Baez had it,

‘Action is the antidote to despair.’

A word of caution on management:

I encourage all managers to remind themselves that covering one’s backside is a very short-term strategy. This is especially true in a crisis. Each and every manager who does not stand firm in the face of danger will be (best-case scenario) ridiculed or (worst-case scenario) loathed for such incompetent behaviour. Just remind yourself that even after more than a hundred years, the description of the British army in World War 1, ‘lions led by donkeys’, is still around. Managers’ high salaries should reflect their ability and willingness to take on responsibility, not the size of their inflated egos. One of kaizen’s 10 core beliefs is humility or even ‘servant leadership’. Why servant? Because managers have the power to remove obstacles so that their direct reports can use their own expertise to their full extent, thereby achieving overall success for the company. Your direct reports know that you are the boss, so you neither have to show nor tell them. Instead remember Albert Schweitzer’s thought on leadership:

‘Example is not the main thing in influencing others. It is the only thing.’

KAIKAKU: Ups & Downs

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