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Are We "Doing Lean" All Wrong?

by Brent Wahba
July 17, 2014

Are We "Doing Lean" All Wrong?

by Brent Wahba
July 17, 2014 | Comments (20)

Somewhere in Ohio is a small healthcare management company that is the best Lean company, EVER. 

Ok, maybe that’s a bold claim, but they are, by far, my favorite example. I want to tell their story because not only are they one of the few that made and continue to advance impressive gains (> 2X throughput, 95% lead time reduction, 10X first time quality, etc.), but because they seemed highly unlikely to succeed at Lean to begin with, and then followed a path that would make nearly any traditional sensei convulse.

I met them about 8 years ago at the beginning of their journey. They work in a complicated, multi-sided market (2 sets of customers with opposing financial goals) in an industry with a lot of cost and quality pressure. They had a “family culture” which meant despite bickering across functions and complaints to the CEO, they still tolerated some pretty counter-productive behaviors. Sound familiar? They were, however, steadily growing and rightfully proud of “building an airplane while flying it” as they like to say. Oh, and they decided that “doing Lean” would be good, too. Not just dabbling, but applying “classical Lean,” which to them included a lot of philosophies, tools, and discipline. So off they went.

As is typical, they started by attacking their most troubled bottleneck process in Operations – one that was limiting their growth and causing the most customer dissatisfaction. They value stream mapped, standardized work, A3 thought, workload leveled their workcelled teams, gemba walked, etc. And for the most part, they failed miserably - not just on technique, but on real improvement. A3s became task lists, pitch boards went weeks without updates, and they complained about each other even more. After two years of this, I was starting to give up hope, but then a miracle happened! Seemingly out of nowhere, Lean emerged from within the organization, and all it took was a little unconventional Lean thinking.

At this point in a story, everyone wants “The Big Aha!.” "Just tell me what things I need to do like Danaher / Wiremold / that small company in Ohio… so I can copy them and get the same results!" Of course that never works or else we’d only have one book about Toyota, but I digress. The Aha for this company was not something they did, but rather something they stopped doing. They stopped striving to “do Lean” by following everyone else’s models of what a Lean company should look like. Instead, they inadvertently ran a series of experiments on how to take good business practices and apply them in ways that meshed with their current culture. This last point is hugely important and addresses a major reason for why Lean fails. People and the organizations they create change incrementally. If we ask too much, too soon, or even ask them too think too deeply, they will not change because the human brain doesn’t know how to make the mental leap. 

We often describe “resistance to change” as an issue of willingness, but a more appropriate description would be “confusion, cerebral shutdown, and retention of the current mental state.” Even though they conceptually understood how common Lean thinking could apply, this company really struggled to make it work directly because it just didn’t look or sound like them. It was only after they changed their focus to solving important business problems, in a way that meshed with their current thinking, that they started to improve more and more.

Uncontrollable unevenness in customer demand led them to create cross-training, hourly PDCA, and dynamic staffing. Their need to rapidly hire and train to support growth created “pull” for standard work. Having to constantly balance selling with Operations capacity led to a Sales & Operations Planning process. Not being able to improve enough function by function led to project “Stop the Madness” - a major overhaul of their value streams and org. structure. A need to better explain their service benefits to potential clients led them to fine–tune their offerings, create an enhanced quality system, and improve their value propositions. And having to coordinate these changes (while still building that airplane) led to a management cadence. This small Midwestern firm essentially re-derived Lean without studying Toyota, implementing 5S or ever talking about their North Star. And they only had to tweak their culture a little bit.

So what gives? Doesn’t this cart-before-the-horse path conflict with the way we’ve been taught?   

Organizations are complex systems, so it’s impossible to say any specific actions are the secrets to becoming Lean. But by reflecting on this improbable outcome, there are things I’ve noted that at least supported their Lean emergence. Try these at your own risk because they aren’t necessarily the right solutions to your specific problems:

  1. Their real goal was to become a more successful company, not to “do Lean.” They had a competitive, value-producing strategy to begin with and only used Lean to support it.  
  2. They didn’t try to solve too many problems at once – just the next strategic bottleneck. Their solutions were a mix of small, medium, and large changes up and down the entire organization, and with customers.
  3. They verbally leveraged only two major concepts: PDCA and “blame the process, not the people.”
  4. They paid attention to very few metrics, but really leveraged what they did use – both internally and in their value propositions. The CEO always stressed making decisions based on data.
  5. They didn’t like the concept “problems are treasures” (major eye rolls) or that they needed “everybody solving problems every day” (too depressing). So instead they found a balance of solving problems while better leveraging what was already working. Differentiating the two maintained cultural pride and motivation.
  6. They quickly learned they lacked capacity to work on improvements plus their day jobs. Starting with the most critical / overburdened process sounded logical, but only after management intervened to give them more bandwidth (often doing the front line work themselves), could the organization start to improve.
  7. They developed new tools while they were solving specific problems rather than trying to force fit the “Lean basics.” They never benchmarked.
  8. For staff who wanted it, Lean gave people opportunities to grow and advance. The few who realized that this wasn’t the culture for them self-selected their way out.
  9. While already stressed from growth, they did not push a “burning platform” as we are often told is necessary to drive change. FYI – some neuroscientists now believe that the extra stress from a real (or manufactured) crisis actually inhibits change by engaging our brains’ natural defenses.

Lean emerged by leadership creating the right conditions for it rather than forcing too many philosophies and tools on top of what they were already doing. In a sense, they addressed the LEI Lean Transformation Model without asking themselves the 5 questions. 

Good scientists use more than just the Scientific Method – they also question their assumptions and understand the difference between correlation and causality. So far this company has achieved about 80% of the benefits of a sustained Lean transformation with only 20% of the effort and 5% of the religion. Are they really the best Lean company ever? To them they are and that’s all that matters. Their growth and customer satisfaction speaks for itself, while their pride in what they have accomplished will continue to drive them to get even better. And for the rest of us? This is only one counter-example (which by itself disproves causality) to the “doing Lean right” models we constantly see. It makes me wonder, have we made Lean much harder than it needs to be? Should we stop trying to “do Lean” and instead focus on creating the right conditions for an “organization-specific Lean” to emerge?

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
Keywords:  culture,  Transformation
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RalfLippold July 17, 2014
4 People AGREE with this comment

It can be so disturbing to come into a firm that is so "wonderfully" doing lean, achieven prizes as the "Best Lean Company" and then you see that they preach is by far not even close to what they really live. 

Hearing about this story somewhat from the edge of what everybody seems to expect from a successful company that has embraced on the lean path, is giving me hope that there are more of this kind around (not only in the U.S. but elsewhere around the planet, especially where engineering is so highly valued as here in Germany).

Questioning the assumptions and understanding the difference between correlation and causality - this is a major thing that I miss these days even in visionary (sounding) managers who are on top of lean development programs to bring the organization forward to become more competitive, and just more successful in the future. 

Thanks a lot Brent for this great story!

Ralf, passionate lean thinker for as long as I can think

PS.: It is all about PEOPLE that drives the process towards excellence



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Daniel Jones July 17, 2014
4 People AGREE with this comment
It seems to me the core starting point is realizing lean is about learning how to learn and then learning by doing what's important - the rest follows. Great piece. 

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Ken Hunt July 17, 2014
1 Person AGREES with this comment
Ah yes....learning, culture, and behavior. If we would just focus on those three things, our chances for success increase dramatically, as this piece illustrates.

Thanks for sharing this Brent!


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Todd Hudson July 17, 2014
3 People AGREE with this comment

Great piece, Brent. And, yes, we’re making Lean too complicated and pushing for changes and results faster than many people can handle them. At its heart, Lean is simple. It's about removing struggle for everyone... employees, customers and suppliers.

The PDCA cycle, normally applied to individual Lean projects, is a fantastic guide for managing Lean implementations. To wit,

PLAN as much as you can DO,

DO as much as you can CHECK,

CHECK as much as you can ACT on.

Otherwise, you have a wasteful Lean implementation, which is incredibly ironic.



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Bruce Gray July 17, 2014
2 People AGREE with this reply
Hi all,

It's simple: be led by the problems. Toyota was lead by the problems, FROM WHICH the so-called 'lean tools' emerged. 

Cheers, Bruce
Coventry,  UK.


Reply »

Irene Johansen July 17, 2014
Mmmmm... I like your PDCA cycle. They are linked, inextricably. I'd finish the cycle... ACT according to PLAN, and see what happens - then PLAN again...

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Irene Johansen July 17, 2014
2 People AGREE with this comment
Thanks for sharing this Brent. So many thoughts come to mind. I'll start with where I am.

This could be my company. I think you've seen my posts elsewhere, where I realized the culture of the company needed to change, and that I was trying to do too much, too fast... "Small moves, Ellie... small moves..." (CONTACT). I'm happy to say that, with many small moves by many people, a tipping point seems to have been reached, where culture is being directly addressed from the top down. I can't wait to see what happens next. This story gives me some ideas on how to contribute.

Another thought is on how "lean" came to be. Lean is a North American tag that really doesn't describe well what the concepts are, and hence (I think) has left it open to a lot of misinterpretation and misunderstanding. As another writer here stated, the TPS was born and grew out of inspiration from Deming, production problems, and an enterprising and persistent fellow (Taichii Ohno) from the middle of the pack who decided not to take no for an answer, and simply pushed the data "up" until he got an answer.

And one more: I love your description of how this company bypassed the hurdles. They emerged out of where they were to become more connected, more effective, and more profitable, starting with their own culture and moving from there. Very cool, and very encouraging.

My company is growing. we have had, and will continue to have growing pains, but hopefuly, our pains will lead to good lessons, and our lessons will lead to a "Great Place To Work".

Thanks again!


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Brent Wahba July 17, 2014
Hi Irene,

Yes - I love your posts!  I'm looking forward to your Lean Post article on what you did in your organiztion to succeed (as well as what didn't work so well). 

Thanks and best,  Brent


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kevin kobett July 17, 2014
Great article. I believe lean should be fun and will lead to happy employees. A good way to appraise happiness with your job is the turnover rate. Has the turnover rate decreased during the last eight years?

Also, I would like to suggest an idea for your next article. Look at some employment ads for lean leaders. These ads are very complex, detailed and illogical.


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Brent Wahba July 17, 2014
Thanks, Kevin - I love the article idea!

You bring up a really great point.  While very serious about their work and taking care of their customers, this company actually has a lot of fun, celebrates their successes, and takes great care of their own people too.  Many organizations confuse discipline and "constantly solving problems" with a strict, depressing, military-like culture.  It really doesn't have to be that way.

Brent 


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Mike Bouyea July 17, 2014
Amen!  Thanks for writing this article!



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JohnPod July 18, 2014
Yes for the most part Lean is not being done correctly.  This sounds more in line with my belief of what Lean is and should be.  If we can not create a healthy workplace and society, then really what is the point?   



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Ville Kilkku July 18, 2014
One question kept bugging me while reading this post: was the company in question doing Lean at all?

They obviously achieved great success, but we cannot define Lean by its consequences, it becomes tautological! Lean = good? Surely that's not it.

I am also sure that attempting to define Lean will result in a big fight, as it is unlikely for us all to agree on any definition. I'll go ahead with one view regardless.

I personally subscribe to a very wide definition of Lean: Lean is the application of the Confucian strive for perfection applied to work - a company is Lean if it attempts to perfect itself and support its employees perfect themselves.

From this, we can derive three principles for Lean:
1. Maximize customer value (perfection of the product)
2. Minimize waste (perfection of the process)
3. Respect people (perfection of the individual)

Now, comparing these principles to the story, it is possible that the company was doing all three. From this evidence alone, it is not clear whether the company was committed to the perfection of the individual, respect for people.

If it was not, then I would not say that they were doing Lean. I do not doubt that great success is possible by subscribing only to the first two principles, but doing that would not, in my view, constitute doing Lean.


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kevin kobett July 18, 2014
I do not think you can achieve your first two goals without having respect for people.

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Ville Kilkku July 18, 2014
Why not?

Most companies in the world do not have the sort of respect for people needed to support their individual perfection. Many of these companies are highly successful. While they have perhaps not achieved perfection of the product or the process, they are ahead of their competitors at the very least.

To use an example that is a sort of a cliche already, think about Steve Jobs and the products of Apple. Are those products the result of respect for people?

I don't think it has been proven that Lean is the most effective way to run a business. If it was obvious, wouldn't all companies be led from the gemba?

Lean transcends other management paradigms precisely because it is also a value statement.


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JohnPod July 25, 2014
Depends on your definition of respect.  If you compare Toyota to Henry Ford, who said that the business, employees, and society are one and the same, then even Toyota falls short in this regard.  Toyota does not serve society, it serves its stockholders.  Cost improvements are not transferred into cheaper products.  This is theft. 
Our whole society lacks a basic respect for people, society, environment.  Just look around.   


Brent Wahba July 20, 2014
Hi Ville,

Due to space constraints on The Lean Post, we had to edit out some items including a more detailed description of your 3rd point, Respect for People.  This was not one of their major problems.  Yes they squabbled a bit when I first met them, but that was more like siblings than disrespect or undermining each other.  Their focus on "Blame the Process" helped them in that regard.

One of their founding principles is to grow and create jobs - not just make money.  And as they have grown, they have intentionally created new positions for those who wanted more responsibility and had proven their leadership.  They do expect their people to work hard, but when their people need something to get the job done, management is always there to support and coach.  When they moved into work cells, their CEO jumped in to help with the physical construction.  And he did it again a year later when the teams decided they wanted a different configuration. 

Over the years, I have gotten to know all their executives and many of their employees quite well.  They have all grown as individuals and leaders over that time and that is not because they were bad to begin with, but because respect is naturally part of their DNA.  It is part of leadership creating the right conditions for Lean to emerge - at all levels.
 
Thanks for bringing this up,

Brent     


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Steven Kiebach September 30, 2014
This is an inspiring article.  And when you think of their path in regards to Toyota.  They both were small when they embraced change, the both had tough issues, they both valued their people, and they developed tools to help them through their problem solving process.  They had their own unique problems to deal with.  They kept learning from their mistakes, they experimented, and they both embraced PDCA and valued the customer.  

To me what I learn from "Lean" is that is makes me take a harder look within myself.  It motivates me keep thinking and learning.  We can't copy Toyota (or Lean), but we can learn some key points:  1) We value our customers, 2) we value our people, 3) we value our community and 4) we value our way of thinking to continuously support the frist three.


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David Bovis October 02, 2014
I like the fact you recognise 'Cerebral shutdown' in your article. 

For far too long we've thought about change in the western world as a 'Logical' process (PDCA / PDSA) when in fact, and as I realised after 10 years leading Lean around Europe (12 years ago), improving organisational performance is all about people changing their minds. Which is largely an emotional process, inside peoples heads - not on factory floors. If we don't facilitate change with the view that we're altering neural wiring and firing patterns - we're kidding ourselves and not addressing 'Root Cause'. 

Change to 'process' the way it is done today is often an 'enforced change' onto 'people' by an authority figure (boss or consultant). The effect of such an imposition on the human brain slows the change process down at a deeper level and in ways most change agents didn't even begin to imagine before the revolution in neuroscience over the last 5 years started spelling it out! 

The Japanese knew this, not in the scientific sense we know it today, but from a deeply engrained philosophical wisdom, inherited through the Shinto religion reflecting the best principles of Confucianism, Taoism and Buddhism, leading to 'beliefs' (wiring and firing patterns) like 'Kaizen' ? ? - Kai Zen (Japanse) Ge Sun (Korean) Gai Shan (Chinese) - which best translates as 'On-going goodness (benefit) to all, with no one-person gaining at another's expense'. 

Now we have the neuroscience and facts around the responses in neural circuits like the impact of the Dopaminergic mesolimbic pathway on attitude (including all your buzzwords like ownership, empowerment, engagement etc.) which scientifically prove the benefits of a 'Kaizen' mentality and Hoshin in practice - the same benefits the Japanese recognised 'culturally' and intuitively the Keynesian Capitalist West was too arrogant to acknowledge in the early 1970's .. and still is to a large extent today! 

The other good point you make in your article is; 'They stopped trying to do lean and started doing what worked' (or words to that effect). This comes down to the neuroscience and psychology of motivation. A phrase I use a lot in my training is 'Ultimate intent and purpose' - if your goal is to copy others and 'be lean' - you're barking up the wrong tree - that's not a sufficient 'intent and purpose'.

Shigeo Shingo and Taiichi Ohno didn't have anyone teaching them the tools - they had a clear vision of what 'good' looked like (a la 'Goodness' in Kaizen) and they found solutions to ensure they continuously got closer to becoming that vision of 'Good' (parts per billion by 1968 etc. before Motorola and Mr Bhote even thought about calling the Shainin Method Six Sigma to win the Baldridge award!) 

To 'be lean' (as we call it today), leaders have to be able to replicate the approach taken by leaders in Toyota, they have to innovate, find solutions and be neurologically and psychologically aligned to a common purpose which is of benefit to all, with no-one person gaining at another's expense (ideally, now and in the future). Instead, they fail to challenge their philosophy and focus on end of month via tools and techniques. 

In a Keynesian Culture perpetuating greed, (i.e. 6 and 7 figure bonuses for bankers), etc. the 'leadership' beliefs we really need to tackle are those within the boundary of the current fiscal culture we've created and accept as 'good for all' while we still suffer hidden slavery, homelessness and the abuse of children in social care among other horrors in a so called 'developed world' ... alongside incredible inefficiency in the public sector continuously driving up tax's in a stagnant or shrinking economy on a finite planet. 

It seems Aristotle was right (when covering his own arse to Alexander) he said, "In a monarchy, aristocracy or polity, Corruption is considered to be apparent, when 
the acquisition of wealth becomes a-priori over the acquisition of virtue."


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Brent Wahba October 02, 2014
Thanks, David, these are great comments.  I would like to expand by adding a few points I made in my book, The Fluff Cycle:

1) Work is accomplished through a complex combination of Strategy, Process, Culture, Capabilities, and Tools.  Focusing on only 1 or 2 rarely leads to change.

2) What we recognize as "problems" in our Continuous Improvement world are really just symptoms of the way the human brain works and often doesn't work.  Neuroscience isn't always "logical," but it is reality and we need to leverage it better if we want Lean to succeed more often.

Brent


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