Ask Art: Why do you say the CEO needs to become a lean expert?
I say that because in every truly successful lean conversion I have witnessed over many years the one common trait has been a CEO with a deep commitment to lean thinking and practice. I realize that this is probably a shocking idea to most CEO’s since they are taught to manage in a traditional way—and are generally rewarded to do so. I would guess that more than 90 percent of all CEO’s see lean as some sort of cost reduction program or “manufacturing thing.” They consider it logical to delegate this work down to the VP of Operations. After all, the CEO has lots do and not enough time to get closely involved. Perhaps calling 1-800-lean-consultant could bring the lean knowledge that we need. The right consultant could train the VP of Operations and keep the CEO informed. “You have my full support.”
So while this makes sense in the traditional way of thinking, leaders (as opposed to traditional managers) really need to think differently. No successful lean CEO started out as a lean expert. What they did do was come to understand the power of lean as an unfair strategic weapon and see that they needed to learn all about it if they were going to maximize the gains for their company. They also understood from their early exposure to lean that it was almost the exact opposite of the traditional management approach and realized, as a result, that to successfully implement it was going to require major change that would be uncomfortable for just about everyone—including themselves. This would require leadership on their part, and not the traditional command and control management they had grown up with.
They understood that they couldn’t delegate this one. They had to lead it but how do you lead something you don’t know that much about? Well, then they needed to learn more but how? There are books and seminars that can give you the right concepts and principles and they all absorbed that as fast as they could. But they soon found out that you couldn’t really learn lean that way. You only can learn it, really learn and understand it, by doing it. This meant being on many kaizen teams and being on the shop floor, working hard to see and understand the waste that exists in their companies that they never could see before.
That’s how I came to understand lean. I was very lucky that when I went to Danaher as one of the first two Group Executives and engaged the Shingijutsu consultants early on. They were four former Toyota executives who had spent their careers at Toyota, and for the 10 years prior to forming their consulting company, had all worked directly for Taiichi Ohno implementing the Toyota Production System (TPS) in the Toyota Group Companies and at Toyota’s first tier suppliers. They started consulting for us at two of the companies in my group, Jacobs Chuck and Jacobs (Jake) Brake. My office was in the Jake Brake factory so I spent a lot of time on the shop floor with the consultants when they were with us running kaizens as did the presidents of both Chuck and Brake. We were learning at a very rapid pace. We took them to dinner every night and pumped them for even more information. We heard lots of good Ohno stories about how he constantly pushed them to get better. We were their only U.S. client for four years and during that time we all became expert at lean. We decided early on that no matter what they told us to do we would do it even if we thought it was the craziest thing we ever heard. About 50% of the time it was but we did it anyway. We learned a lot from this. The changes didn’t always work the first time but we never let things go back to the way they were. We stayed with it and made it work giving us big gains and a lot of important learning.
I was the Group Executive, so in truth, I didn’t need to spend a lot of time on the shop floor or at dinner with consultants. I understood early on, however, how strategic the TPS approach was so I wanted to learn and become an expert. This proved invaluable when I left Danaher to become the CEO of The Wiremold Company. I was the only one at Wiremold with knowledge of TPS and as a result I could clearly see the waste that existed. More importantly, I knew how to organize the structure (value stream) and kaizen activities that would help us remove the waste and grow. I saw that if you don’t have the lean knowledge as the leader it is hard to understand the opportunities and even more difficult to convince your team to make the changes. The resistance to change will be very strong.
As an early example at Wiremold, I was out on the shop floor and stopped at one of our rolling mills. “How long does it take to change over this machine?” I asked. The answer was 14 hours. I said, “Oh no we can’t have that we need to get it under 10 minutes.” I had never seen a rolling mill before but my lean knowledge made me comfortable that this was possible. At the same time, I knew that everyone there when I said that thought I was nuts. If I had just said get it to 10 minutes and left, then not much change would have happened. Instead, I organized a series of kaizen teams to attack the problem. It took over a year but we got that changeover to 6 minutes. Now that really changes things. Word spreads. People listen. They can accept new challenges when the leader knows what is possible and can show them how to get there. It is multiplied by seeing the leader out on the shop floor working with everyone else to make improvements. By the way, we more than quadrupled in size and increased Wiremold’s enterprise value by just under 2,500% in a little over 9 years.
So, this is why it is important for the CEO to become a lean expert. Knowing what is possible, being willing to challenge people to get there and then showing them how to get there are essential ingredients to a successful lean conversion. You don’t have to start out as a lean expert but you have to understand why it is important to become one.