The long-term success of companies like Danaher, Fortive, Herman Miller, Parker Hannifin and many others, have all validated the power of lean thinking and practice. But if that’s the case, why aren’t there more exemplars? And why do so many companies either intentionally misconstrue Lean, or fail to realize its full promise over time?
Long-time Lean veteran Mark Deluzio has recently published Flatlined: Why Lean Transformations Fail and What to Do About It. Join him, Art Byrne, Jim Womack and host Tom Ehrenfeld in a wide-ranging conversation about the ongoing gap between operations at most companies—and an ideal Lean state.
Some highlights from their conversation:
Art Byrne (9:00): “Lean is not a cost reduction program. It's a strategy. And it's a cultural mentality of how you look at the business.”
Jim Womack (11:56): “We’ve got way too many guys who went to business schools and learned how to do functional analysis and listen to Michael Porter about how to be competitive which is by avoiding competition. And so we get the mess we got…But not all is lost. I think the challenge for us right now is to think through what options we might have going forward.”
Mark Deluzio (20:00): “This is not a cost reduction program. But, if you do all the other ones right, cost falls out of this automatically. It’s just a by-product. The problem is when there's a maniacal focus on cost. And that's wrong, because you've got to drive the drivers of costs that will get you the cost that you want….This is about profitable growth, not about cost reduction.”
Art Byrne (24:50): “I think one of the things that any company—and any CEO—has to do first, is you need to define what is operational excellence going to be for you? And it's not a bunch of KPI type of measurements. It's not things like increased gross margin by three points or some goofy thing like that. It's what I call driver measures. The things that, if you do these things over the next 5 or 10 years, you will have a completely different company.”
“Stretch goals represent the Toyota respect for people principle, because by having stretch goals, what you're really saying is, "I believe that my people can do extraordinary things if we give them the right targets and assist them in learning how to implement those," as opposed to most people say, "I can't give my people those kinds of stretch goals. I'll lose them, they'll just go away. They'll think it's impossible."
Mark DeLuzio (31:43): “If you want to make change, I really do believe you have to challenge people. You cannot be afraid to not offend somebody. And you want to be respectful. People will get offended, because you're calling them out on it.”
Jim Womack (37:35): “Line managers themselves would have to actually understand their process and they would have to actually engage with their superiors in a discussion of how to improve their process….this is not hope as a plan. We're not talking about hope here. We're talking about: what are you going to do? And we've created a whole continent and a whole generation of managers who don't know anything about their process.”
Mark Deluzio (40:00): “Awada told me six sigma was ‘no good.’ 3.4 parts per million. Why do you accept that? Why aren't you thinking about zero? ‘3.4, no good.’ Do the math on airplanes. If the airlines flew at six sigma, we'd have a crash every three days.”
Art Byrne (47:25): “I think of Lean as a time-based growth strategy, because what it does really is every time you remove waste, you shorten the time it takes to do anything.”