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Is "lean" now just an over-hyped word that is losing its value?

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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.

Where, then, is the unique value of lean? Discussing the words and concepts – not much. Practicing lean on the Gemba, however, teaches you different ways of reasoning firsthand. For instance:

  • 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.

Problem finding is a much bigger issue than problem solving, as becomes evident when you get real with andon

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.

There is no value in the word “lean” – it is what it is. A signpost. In fact, there is no value in knowing more about lean. The value is in learning lean.

6 Comments | Post a Comment
Chris January 30, 2017

Awesome article

Bob sanchez January 31, 2017

Good article.  Most people get hung up on following a documented process than learning and applying.  Gemma is a hard philosophy  to teach since most everyone   has a bias.  I am constantly   learning.

John Dennis January 31, 2017

Good article. Well written Michael. Some interesting and thought provoking points.  Not sure that problem finding is MORE important than problem solving....however I agree that it is an extremely important and an underrated activity and skill and businesses need to pay more attention to it.  

Ralf Lippold February 1, 2017

Excellent article, Michael. 

What I have seen very often is that "lean" is brought in from the outside or special expert groups within the organization to make processes more efficient in order to lower costs. 

In these cases, employees are reluctant to become active themselves mainly because WIFM (What's in it for me?). Especially as "lean tools" and their appropriate use are lectured to them (pretty much as every one of us knows we are not so keen to get lectured, especially in areas where we are quite proficient).

Creating the psychological safety, active participation in the process and a positive WIFM for employees shall be the art of leadership that must be achieved by managers and top-level executives. Definitely not an easy task to do in a world where single problem solvers and heroic acts are more appreciated than collective learning and continuous improving value creation for the customer (whether it is the end customer of the colleague next in the downstream value creation process). 

Edgar Schein's article on the "three cultures" is highlighting some essential points that in today's "lean hype" are too often forgotten or put aside http://sloanreview.mit.edu/article/three-cultures-of-management-the-key-to-organizational-learning/

Phil Godfrey February 1, 2017

This article hits home for me. Thanks! By the way, if you'd like to feel my pain, imagine trying to coax and convince government employees to think and improve. 

Peter Barrett February 23, 2017

Too many beautiful words Michael.

Lean is not a radical idea,.... just ask your Granny !

It is a diluted concept of the Toyota-Production-System,

                    ( lost in translation).

 The result is a one-eyed knock-off, of TPS that never quite gets it right, because its starting point is always somewhere in the middle . However Lean looks and sounds radical in the kingdom of the blind, but seeds more questions than solutions.

Let's get back to the basics of TPS.....its HISTORY and  CULTURE. 

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