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:
- 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.
- 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.
- They verbally leveraged only two major concepts: PDCA and “blame the process, not the people.”
- 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.
- 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.
- 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.
- They developed new tools while they were solving specific problems rather than trying to force fit the “Lean basics.” They never benchmarked.
- 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.
- 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?