What's your definition of lean?
Dear Gemba Coach,
My company is adopting lean, which has so many definitions that I find it confusing. What's your definition and why can’t all these lean experts agree?
What an interesting question, and indeed hard to answer – for a number of reasons. Let me try and share my personal definition. But first, a bit of background.
The term “lean” was coined in the mid-eighties to describe a set of manufacturing techniques discovered in the Japanese automotive industry, mainly at Toyota, by opposition to mass production. At the time of publication, in 1990, Toyota was half the size of General Motors and two-thirds the size of Ford. Today, Toyota boasts 50% more revenue than GM and 70% more than Ford. It is valued more than GM, Ford and Honda combined. It is also as profitable as BMW, a luxury boutique. Clearly, Toyota was doing something different back then, and clearly, this has worked and is still working).
The question is: what?
Right from the start, different people had different opinions on what lean meant – opinions which still resonate now, more than 15 years after lean became visible in management circles. The opinions fall into three broad categories:
- Operational excellence: Lean is what we do, but done better. To many, lean is a box of optimization tricks to make the current business model perform, by applying improvement tools to every process, one at a time. The assumption is that if every part works better, the whole should perform better as well.
- Value stream organization: Lean is a different way to organize operations in order to maximize the flow of value to customers by establishing just-in-time throughout the supply chain, which requires kaizen – continuous improvement from the workers themselves in order to minimize waste.
- Business strategy: Lean is a worldview change about how to look at competitiveness, from the relationships with customers, with employees and with suppliers based on a problem-based developmental approach of every person and a radically different way of thinking about business.
The common aspect to these three perspectives is that they all agree “lean” is a form of “Gemba” management (Gemba meaning the workplace, the real place, where things happen, and value is added). Lean is clearly different from traditional management because it assumes one can only management meaningfully from standing right where value is being added and by looking for a better way, through kaizen (step-by-step improvement).
Still, as you can imagine, these three different interpretations lead to very different characterizations and practical approaches to lean. Lean can be defined as:
- A set of techniques to identify and eliminate waste from operations.
- A system of organization principles to maximize value and eliminate waste.
- A competitiveness strategy based on satisfying customers by ever better products by developing deeper understanding and greater teamwork from every employee.
Is Toyota Relevant?
Supporters of the first approach consider that most of Toyota’s techniques originate from the wartime U.S. Training Within Industry programs – refined by Japanese precision and the influence of the American quality guru W. Edwards Deming. Lean is mostly used to take costs out of operations by applying lean “tools” – i.e. Toyota-inspired work analysis techniques to every process and generating savings. With this in mind, the techniques can be safely taken out of context and applied to any process, regardless of the bigger picture. This approach has generated an entire industry of lean consultants who will run “savings” programs by rolling out applying basic techniques across the board, mostly focused on “eliminating waste.”
Defenders of the second approach agree that spot optimization seldom leads to global – or lasting – improvement and concur that the production of value must be accelerated throughout the organization. To do so, their focus is on 1) defining value more tightly (always a tricky exercise); 2) mapping and clarifying the path of value through the organizational silos, and if possible changing the organization to reflect these “value streams;” 3) making value flow by eliminating the traditional obstacles created by mass production, such as long batches and piece-rate productivity; 4) pulling value across the organization by using new techniques such as kanban and other just-in-time tricks, so that work is produced only as needed, when needed, and in the quantity needed and, finally, in order to do all; 5) constantly engage all employees in improvement by using the lean tools to identify waste and eliminated it – in the context of always accelerating the flow of value (or, technically, reducing the production lead-time between a single order and its delivery).
Proponents of the third approach take yet another perspective and seek overall competitiveness by obsessing on “one-time customer, lifelong customer.” This entails an obsessive attention to quality and delivery, starting with product or service design all the way to production and supplier integration. In order to keep one’s customers, one has to constantly improve the quality of the current products as well as broaden the product range by proposing innovative solutions. To achieve this, every employee is engaged by its management to think more deeply about what they do in terms of 1) visualizing their work processes and job purpose; 2) being more autonomous in problem solving; 3) working better with colleagues across functional borders, in order to; 4) feel greater responsibility, take more initiative, and have more creative ideas. With this worldview, lean is a thinking approach to stimulate each person’s greater understanding of the purpose of their job in the chain of value as well as how to better cooperate with upstream and downstream activities. Not surprising, succeeding at this ambitious plan of better managing individual talents and energies requires a completely different approach to both leadership and management, notably transforming the traditional chain of command-and-control into a chain of help.
The first two meanings of “lean” are by now rather well understood and codified in terms of:
- Operational excellence: codify Toyota’s improvement techniques and apply them piecemeal in any context.
- Value-stream organization: study deeply Toyota’s core principles and extrapolate them in different industries.
And by and large, the feeling is that the reference to Toyota is no longer quite as relevant as when we were all learning this stuff. The consensus is that what was there to learn at Toyota was discovered, captured, and written down a while back and that it’s now a question of leadership will and disciplined execution. Indeed, several lean practitioners are now ready to look beyond Toyota for new inspiration.
How I Define Lean
Proponents of the third approach remain puzzled by Toyota’s amazing competitive success and not so certain that all is understood. Their hunch is that is we are really looking at a business system paradigm shift – the feeling we had in the 1990s – most cut and dried explanations will really be a reversal to the mean: normalizing Toyota’s differences into what business already does, with an added plus of lean culture.
For this set of lean people, Toyota today remains very relevant, not necessarily as an ideal, but certainly as long-lasting representative of a different way of thinking we have not quite grasped right now.
Which is, you’ll have to guess where I stand, and why my own definition of lean is “the project to understand what Toyota does differently and see whether this is meaningful outside of automotive.”
Luckily, as opposed to other Japanese companies, Toyota has made tremendous efforts to spell out their business system, particularly in the forms of the Toyota Production System (another Toyota name for it is the “Thinking People System,” which is quite telling):
- Customer satisfaction;
- Resting on the pillars of jidoka and just-in-time;
- And the base of employee satisfaction through standardized work and kaizen;
- Itself resting on the foundation of mutual trust between employees and management.
And the Toyota Way, regrouping the fundamental values of:
- Continuous improvement: challenge, kaizen, and genchi genbutsu;
- Respect for people: respect and teamwork.
As well as Toyota’s business practices of 1) clarifying the problem, 2) breaking down the problem, 3) setting the target, 4) seeking root cause, 5) developing countermeasures, 6) seeing the countermeasures through, 7) monitoring both results and processes, and 8) standardizing successful processes. These practices are sustained by specific drive and dedication on:
- Putting customers first
- Always confirming the purpose of one’s work
- Developing ownership and responsibility
- Visualizing work and abnormalities
- Fact-based judgment
- Thinking and acting persistently
- Speedy action in a timely manner
- Following each process with sincerity and commitment
- Thorough communication
- Involving all stakeholders
This set of teachings, for lack of a better world, are there for anyone to study in the search of the true lean spirit – whatever that is in your specific context.
To my mind, there are two main reasons lean remains so hard to define in one single, stable way. First, the very extensive spread of perspectives on lean means that each person finds in lean what they seek – in a spectrum that goes from Tayloristic operational excellence to a Toyota-inspired full business strategy. Secondly, lean thinking continuously evolves, both at Toyota and in the understanding of observers and lean practitioners, so that it’s hard to pin it down and freeze it. Is a dead butterfly still a butterfly if it does not fly?
One of my favorite metaphors for lean thinking is seeing oneself as a green tomato plant – never red, never ripe, always growing.
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.