Organizational culture is defined as the underlying beliefs, assumptions, values and ways of interacting that contribute to the unique social and psychological environment of an organization. When implemented holistically and sustainably, Lean methods have been shown to promote a healthy organizational culture.
This isn’t a coincidence: Rooted in behavioral psychology, Lean methods emphasize respect for others, effective collaboration, transparency, and open and honest communication—all important building blocks of healthy, productive relationships. When applied throughout an organization, these positive relationships create a positive social and psychological environment.
It’s probably not news to you that happy employees are shown to be more creative, innovative, and stick around longer than overworked, unsatisfied employees. But how exactly do you build a healthy culture that lasts? It starts with a deeper understanding of the psychology of Lean methods—the values that make Lean organizations Lean, and how those values contribute to creating a healthier working environment on a macro- and micro-level. In this post, we’ll discuss those values, and how prominent psychological theories support them.
There are a handful of core Lean values that serve as the foundation for any Lean implementation. Without a firm understanding and practice of these values, an organization can’t truly call themselves Lean.
The first of these values is that the goal of any organization is to maximize customer satisfaction. This value dictates how funding and prioritization decisions are made, how information is collected, how teams are organized, and more.
Optimizing for customer satisfaction, instead of profit, tends to create a psychological environment rooted in respect, curiosity, and transparency (as opposed to competition, fear, and power). If the organization truly prioritizes customer satisfaction over profit, decisions will be made based on customer data—not the highest paid person’s opinions.
Second is the idea that the best business outcomes are achieved through respectful interactions throughout the value stream: Out of respect for the customer, Lean systems are designed to maximize customer value while minimizing waste (which typically reduces cost for the customer). Out of respect for their employees and coworkers, Lean leaders promote environments that allow everyone to do their best work. Within Lean organizations, team members continuously strive to optimize processes to allow everyone to deliver value quickly and effectively.
Related to the concept of respect is the celebration of diverse perspectives found in Lean organizations. Lean methods emphasize divergent thinking as a way to maximize value for the customer. Put another way, when you have all different kinds of people in the room, you’re more likely to consider each problem or opportunity from a variety of angles. This means you’re more likely to come up with a solution that will satisfy (or at least, won’t offend) the greatest percentage of your customers.
If you’re surrounded by people who look and think like you, it’s unlikely that you’ll come up with those ground-breaking, ‘outside-the-box’ types of ideas. In today’s world, it’s not hard to find cautionary tales from overly homogenous workplaces. Diversity can include diversity of sex, gender, race, and religious background, but also diversity of experience, perspective, and personality (we’ll discuss these later). But in order for an organization to truly maximize the impact of its diverse workforce, it has to also have a culture that values healthy conflict resolution.
Finally, Lean is rooted in systems thinking: At the macro and micro-levels, Lean encourages an awareness of how one action, behavior, or change might affect other parts of the system. Lean principles such as ‘optimize the whole’, ‘respect people’, and ‘build quality in’ are all rooted in the idea that by operating as a harmonic system, instead of as a cacophony of siloed teams, organizations can achieve greater outcomes.
Psychological Support for Lean Methods
Now that we’ve discussed the underlying values of Lean methods, let’s dive deeper into how these values are supported by concepts in psychology.
Maslow’s Hierarchy of Needs
If you took Psych 101 in college, or have read much about human psychology, you’ve likely encountered Maslow’s Hierarchy of Needs. This framework is used to describe how humans intrinsically partake in behavioral motivation and is typically illustrated as a pyramid.
At the base of the pyramid are physiological needs—things like shelter, food, and water. We physically need these things to survive. At the very top are where you find our need for self-esteem/self-actualization. The idea is that humans’ most basic needs need to be met before they will be motivated to achieve higher-level needs.
What does all of this have to do with organizational culture or Lean? A lot, actually. If the culture of your organization leaves you overworked and chronically tired (physiological), and fearful for job security (safety), it’s hard to think straight, much less unlock your full potential.
Lean methods tend to encourage the satisfaction of each of the lower levels of the hierarchy, so that employees can reach those higher levels of fulfillment and esteem. Lean/Agile organizations are more likely to support practices that enable employees to live healthier, more balanced lives within and outside of the workplace, helping to unlock higher levels of the hierarchy.
Lean organizations aim to:
- Physiological: Provide an environment that supports physical and mental well-being.
- Safety: Encourage transparency, accountability, and results-oriented success measures, to increase stability and maintain healthy morale among employees.
- Belonging: Promote the development of long-lived, cross-functional teams where differences are valued, and conflicts are handled in healthy, objective ways.
- Esteem: Provide opportunities for employees to learn, grow, and achieve goals.
- Self-actualization: Create an environment that allows for personal fulfillment, creativity, innovation, and a little bit of ‘choose your own adventure.’
Theory X and Theory Y
Another psychological concept supported by Lean methods is a motivation theory by Douglas McGregor, called Theory X and Y.
Theory X says that people are not intrinsically motivated to do their best work and will only do as they are told because they receive benefit from doing so (aka a paycheck). The role of the employer/boss is to maintain tight control over each workers’ activities, to keep them focused on achieving organizational goals. Theory X environments are characterized by a command-and-control type of leadership, and often contribute to low morale and high turnover rates.
Theory Y views motivation differently, saying that people want to do their best work, and are motivated to do their best and improve without a direct reward in return. A Theory Y leader’s role is to unlock the potential of their employees by providing what they need to do their best work. Theory Y-type leadership is encouraged in Lean organizations and is supported by many of the core Lean principles.
Psychological Impact of Lean Transformation
When undergoing a Lean transformation, it’s important to recognize how different members within the organization might react differently to the concept of a cultural transformation—and how various experiences with Lean might influence those reactions as well.
Leaders and managers might be motivated by the fact that their organization is finally embracing continuous improvement. They might be excited by the potential benefits of embracing Lean methods, like the speed and visibility that tends to accompany a successful Lean transformation. To them, building a Lean/Agile culture is a path toward sustainability, stability, and growth.
However, frontline employees, those new to the organization, and others might experience an organization-wide transformation a bit differently. They might feel threatened by concepts like ‘cutting waste’ or see such an overhaul as undermining the stability of the organization. Those more deeply ingrained in traditional business methods might also feel threatened or frustrated by the introduction of a new business methodology.
You can imagine how these different perspectives might clash at various points during a Lean transformation. This is why it’s important for leaders to create spaces where employees can feel comfortable discussing their perspectives on the changes as they’re occurring—what’s working, what isn’t, what feels right, and what doesn’t.
If employees who are initially resistant to the change are met with criticism when they try to voice their concerns, they might become even more frustrated and leave. It’s in both the employer and employee’s best interest to have open, honest conversations throughout the transformation so that any issues can be addressed before they have an unintended negative impact on everyone involved.
Success with Lean Methods
Success with Lean methods goes beyond simply cutting waste or improving workflow efficiency. Ultimately, what differentiates Lean from other business methodologies is its emphasis on people and process over profit.
By institutionalizing concepts like respect for people and continuous improvement, Lean methods empower both the individual and the organization to create a better world, one workplace at a time.