Is "lean" now just an over-hyped word that is losing its value?
Dear Gemba Coach,
I have spent the day with a group of people in the LeanIT, Agile, ITSM, IT4IT, DevOps, etc. worlds. We were all more or less saying the same thing; using the same words. In your opinion, is "lean" now just an over-hyped word losing its value?
The question is: is everyone really saying the same thing? In my experience, the words might sound the same, but the meanings people put into them can be quite different – much like the word “game.” It has so many distinct meanings and not one central meaning that covers them all.
value is in its usage – frameworks are used by different people to achieve different goals, and the same concepts can be interpreted in widely different ways according to objectives and preferred action paths. Much of human thinking is motivated, which means we know what we want to do intuitively, and then build an argument for it. So, let’s get back to basics.
Now for Something Completely Different
The word “lean” is meant to capture the different business paradigm Toyota cobbled together through endless experiments since the 1950s (actually, probably since the 1890s). Lean is a desktop icon for “completely different business approach invented by Toyota that you may want to explore in your activities to perform better by developing your people better.”
Upon clicking this icon, the first surface understanding is that if we look at each activity and eliminate the “waste” in it, we’ll have greater output at lower cost, and surely that’s a good thing? It is when it comes to low hanging fruit, but it will become soon apparent that this misses entirely the point of a “completely different business approach.”
Beyond “let’s eliminate waste from each activity,” lean thinkers then figure out there is something about the flow of value across departments that makes the organization more responsive to customers and more effective as a whole. At this stage, lean is interpreted as “let’s map all our value streams, increase the process efficiency ratio, and we’ll respond faster and better.” Again, this is not wrong and is indeed a rethink of the company as a whole, but hardly a “completely different” business approach; the re-engineering guys have been making this point since the 1990s.
What can be so “completely different” about lean?
Let’s backtrack even more. The mainstream understanding of what is a business hinges on a few key assumptions: (1) let’s invent and make a product or service that is good enough for some people to buy it, (2) let’s scale up rapidly through sales and marketing push, (3) let’s build operational facilities to sustain the sales growth as we go, and (4) let’s manage costs by looking for economies of scale (if we optimize resource planning through a central scheduling system it’ll be more efficient) or a footprint advantage (if we outsource this activity, where can it be done cheaper?).
Toyota’s strategic thinking went a different way: (1) let’s improve quality continuously so that, in each segment, when a customer repurchases they choose us again; (2) let’s improve flexibility continuously to be able to offer a wider range of products for customers to choose from on the same operational delivery processes, to respond better to spot market demand and get the most out of our fixed costs by saturating existing facilities; (3) let’s grow capacity progressively and carefully to avoid overcapacity; and (4) let’s manage overall expenses through constant kaizen and mindfulness from everyone working in the processes themselves.
Lean’s Radical Idea
Obsession with quality to customers (helping customers solve their own problems, not forcing customers to adopt our processes), flexibility in mix (being able to produce more items, more flexibly, and respond quickly), and flexibility in volume (better handling volume changes by item through the flexibility of the entire production system) cannot be upheld without the people doing the work themselves. This is pretty radical, and I don’t know whether the other frameworks you mention discuss this much.
Now, constantly offering new products, improving quality, mix flexibility and volume flexibility doesn’t happen easily, and certainly not with rigid systems. It’s all down to the ingenuity and good judgment of the people themselves. Which brings us to the second huge change: a management system based on the vitality of operations (through kaizen) and not on the discipline of execution. There is no other way to improve such difficult topics as quality and flexibility (it’s just hard to do) without the engagement of each person in their work, and the involvement of each person with their team.
Which means that in order to achieve a high level of engagement and involvement, employees have to see what’s in it for them. They have to see progress and trust in the commitment of the company to do what it can to support them in going further. Respect-for-people goes way beyond being nice. It’s a deep commitment to creating a work environment where people are safe from harm, where the obstacles they encounter are taken seriously, where their opinions count and where they will be supported in gaining greater expertise in their jobs and working better with their colleagues across functional barriers. Respect-for-people and mutual trust are the foundational conditions of kaizen, which is the driver of continuous improvement in customer satisfaction through quality, flexibility, and cost management.
- Ignore customer grumbling and they won’t switch to a competing solution right away but at renewal time. Looking into every single customer issue is the only way to understand what are real satisfaction issues, as opposed to concentrating on the top of the Pareto.
- Batching creates an overload on the weakest point of the system which triggers massive waste as operational issues are compensated by overcapacity, as appears when you try to reduce lead-times.
- Lack of ownership and engagement in the ways teams work generates mindless work and both quality issues and unnecessary costs, as appears when you try to lead kaizen in teams.
I think I know where you’re coming from. After all, although I started studying lean in 1993, it took me seven years to fully commit to it. I found it fascinating but just didn’t grasp it. In the meantime, I wrote a book on systems thinking, one on re-engineering, one on the impact of e-management on work (yes, I know, this was before 2001). These frameworks made so much more sense compared to what I understood of business. It took me years and years of stumbling in the dark to discover, from firsthand learning on the Gemba, that lean was not yet one more framework to apply to business as we know it, but a completely different worldview of how to compete in business. Sixteen years after deciding to go full in with lean, I’m still discovering and learning.
Lead With Respect Shares Tangible Practices That Develop Others, Says Author Michael Balle
Michael and Freddy Balle's book Lead With Respect portrays on-the-job behaviors of lean leaders which can be learned through practice. Michael explains how these can help fulfill the promise of lean by aligning the company’s success to individual fulfillment.
How Can Lean Affect Shareholder Value?
Lean can help challenge assumptions and surface opinions that ultimately improve shareholder value, argues Michael Balle.
Why Lean Is the Strategy We Need For Today's World
At all times, and especially in uncertain conditions such as today, lean is a learning framework, argue Michael Balle and Dan Jones.