LEI CEO John Shook and Founder Jim Womack discuss the state of lean thinking past, present, and a possible future.
I’ve written in the past no organization can thrive without a challenge. And with the Lean Enterprise Institute (LEI) turning 15 this year, it struck me that this would be a good time to talk with founder Jim Womack about the challenges that led to the formation of LEI as a way to reflect on the current state of lean and LEI today. Over time Jim and I shared observations about the state of lean [Back to Basics, Lean for the Long Term]. We touch upon many of these ideas in the following talk, moderated by Tom Ehrenfeld, LEI editor.
As for our challenge at LEI, I would say that it remains to build on fundamental lean principles and pioneer new applications in lean thinking, to continue to learn and share with the Lean Community the full and integrated system of producing things and providing services through lean thinking. Lean reflection always deals with the current state RIGHT NOW. Goes to gemba, reflects deeply, and then begins at the ground level. So let’s go!
–John Shook, LEI CEO
LEI Emerges in Response to Need
Q: Jim, throughout the growth of LEI there’s a way in which your eletters cast you in the role of designated learner. You would go out to companies and share what you were learning and that, in a way, would help form a community. It felt like you were going out there discovering stuff and then helping everyone get on board learning lean with you. Can you talk about that?
“I was absolutely totally convinced that Learning to See would be an enormous loss of money. I just couldn’t imagine that you could have a bestseller with a bunch of hand-drawn maps in a big, funny-looking workbook with a format that was unlike anything else.”
JPW: In the ’80s, I was working with others at MIT, and we felt that the greatest burden faced as of 1990 was convincing anyone who wasn’t Toyota that they could be Toyota. We thought that there were some real benefits to society around actually creating some optimism about this. So our simple objective was, first off, to write down at a very high level, an explanation of what this Toyota enterprise, this lean enterprise, really was. And then to find out if there was anybody out there who could really do it. That led to the book Lean Thinking, and once that book was done it seemed to me that the next thing to do was create a sort of tool box for those who really wanted to do this. It was really important to make people aware of each other and to give them some courage and community. So that was the purpose of the Lean Thinking book.
Next we tackled the question that Deming had never really faced (and I am not Deming): how do you institutionalize this? I was just one person doing this without an organizational structure to carry this forward. And that’s how LEI came about. The idea of creating an institute came directly from Don Berwick, MD, [former administrator of the Centers for Medicare and Medicaid Services and former CEO of the nonprofit Institute for Healthcare Improvement (IHI)]. He started IHI around 1989-’90, and that became my model. And I am deeply grateful to Don for being the doctor and giving me the prescription to start an institute.
So by 1998 LEI had the first two things that became very important to be a viable institute. One, we had a really big conference. And two, we had a book to launch, which was called Learning to See. At the time, I was absolutely totally convinced that Learning to See would be an enormous loss of money. I just couldn’t imagine that you could have a bestseller with a bunch of hand-drawn maps in a big, funny-looking workbook with a format that was unlike anything else.
JYS: By the way, in terms of being pessimistic about Learning to See, as a coauthor I was also completely pessimistic. In fact I thought it was a bad idea from every angle and that nobody would buy it. And, in fact, that not only would nobody buy it but that it was good that nobody would buy it!
JPW: And of course you may have been right about that, John. What evidence do we have that Learning to See was a good idea? [Both laugh].
So we found our sweet spot, because when Learning to See was published people would call and say can you teach this to us? So then suddenly we had this large workshop program. And that’s where we were at the end of phase one of LEI.
Tools, Techniques, and Teaching Lean
Q: During that time, one of the things that happened is that lean tools became wildly popular. And while that may not have been by design, it became a very popular way in which lean ideas were spread and put into practice. What were the pros and cons of this?
JPW: Well I’ve always said that tools were not sufficient; but were they necessary? It just seemed to me that people needed a common language. All I had in mind for the tools was developing a common way of seeing a situation (in this case a value-creating process) and a common way of framing action, so that everybody who was involved could see it the same way, so that together you could see the current state and develop a future state. The idea was that we at LEI could mass produce (should I use that term?) tools that people could use, and we did, with no notion of whether people would even buy them.
Q: And maybe this is retroactively applied, but I’m not even sure that you were cynically boiling it down to tools—though I think that today that’s what some people took away from it.
JPW: I don’t think that anybody thinks there was anything cynical about our tools. These were earnest objects. We said, here you go give it a try and let us know about your problems and your successes. And people loved the tools.
Q: John, one of the things that you’ve talked about is the need to focus on both frontiers and fundamentals. And that there is still a need for companies to get it right at a basic level in order to be pushing the boundaries. How does this tie into your assessment of LEI and what you are absorbing about the state of lean; where are people in terms of their lean knowledge and needs?
“Today there seems to be much discussion of management and an emphasis on how to integrate the tools, but I think the pendulum has swung too far.”
JYS: I tried to emphasize from early on that this is a management system, and that these tools are management tools that support a system and approach to producing things and to providing services—and that they were getting pulled out of context. We go to extremes one way or another. Today there seems to be much discussion of management and an emphasis on how to integrate the tools, but I think the pendulum has swung too far. I think the tools and techniques (and we use those words together) are powerful. Lean thinking and practice does entail tools and techniques.
There is great wisdom that has been built into those tools and techniques over years of practice. There’s a craft involved in actualizing, adopting, and adapting the tools and techniques. And when folks dive into them with a great desire to master them, there is great reward: for the company, the customer, and for the individual. Lean thinking and practice is a most rewarding thing to learn. And that is why there was that tremendous excitement that Jim saw—that we all saw—15 years ago around the founding of LEI.
And now, as we near the end of 2012, there are two observations to make from this. One, while many of us like to think we have matured and moved on to bigger and better things, there is a new and growing generation of individuals who can benefit from adopting the lean basics. Sometimes we tend to forget this fact, to the detriment of newcomers. Michael Ballé has recently been making that point himself.
And two, I think that we can all look and observe that the rigorous deep learning associated with using lean is unfortunately still all too rare today. We need new ways to introduce these ideas and tools to companies and individuals that still haven’t learned to learn. One of the big problems we are facing today that wasn’t there 15 years ago is that there is so much noise about lean. Fifteen years ago if you wanted to read about lean there were 5, 10, or maybe 20 books at most. Now there are new books coming out every day. There are blogs everywhere. Jim found the first half dozen lean consultants 15-20 years ago. Now there are thousands. The words of lean have become part of the common vernacular.
So what you have is a proliferation of the words along with a superficial understanding. As a result, many companies and individuals have a superficial encounter with lean and understandably think that that’s all there is—”We have kanban; we have A3.” This is a serious problem and I think that it is incumbent upon us to address that. And that speaks to the fundamentals that I talked about when I arrived at LEI 18 months ago, when I made a commitment to continue to introduce them and to introduce them with new understandings.
When it comes to frontiers—introducing lean thinking and practice to new areas—you can paint a rosier picture of what has happened. Fifteen years ago, lean was applied only to discrete manufacturing for large automotive and aerospace companies. And that was it. Now it is used in many ways, and one of the most remarkable ways is how it is being used in healthcare. Lean started in healthcare about 10 years ago and 5 years later started gaining momentum. And you can look at that and see nothing but a good story. But, one which still has a long way to go; we still can’t take our eye off the ball.
Sustaining Lean Transformations
Q: You two have talked about the ongoing difficulty in developing a replicable “transform and sustain” model—how do we create organizations that can do this and do this sustainably. Is that more true today than when it started, or is it more of a pressing need?
“If you could get inside the heads of all the managers of an organization and give them a different way to think about management that would be your ‘transform and sustain’ moment.”
JPW: Well I think one problem we’ve had—and I should take some blame for it—is the binary model of “0/1”, or “leap” thinking. I can tell you that there was a sort of exhilaration about watching some of this early kaikaku kaizen stuff. I watched it with my own eyes. And the best guys to watch it with were the shingi [shingijitsu] guys. They were the best at theater that there ever was. You could stand there in the middle of the factory on Friday having been there on Monday and convince yourself that the world could be made anew. And not only that but that it could be done pretty quickly. And hey—who could have a problem with that?
But the unfortunate thing that followed was a misconception that lean was something done once. There was an overemphasis on this dramatic moment of transformation. While we all talked about kaizen forever, the real thing that people wanted to hear was this is going to be over and done with.
I now believe that if you could get inside the heads of all the managers of an organization and give them a different way to think about management that would be your ‘transform and sustain’ moment. But we’ve had a tough time with that. We have struggled from the get-go with line managers to actually take interest. The world had gone down the path of “line does and staff thinks and by the way staff also fixes mistakes.” So I think that the very biggest problem we have stumbled across in our paths is a model of what managers could do—which I have generically called modern management.
The Mind of the Lean Manager
Q: One of LEI’s most popular recent books has been Managing to Learn, which, while I’m not sure I could say what it was originally conceived as, really turned out to be a book about coaching and mentorship. John, do you think that this topic is a piece of lean that had not been focused on as much utill then?
JYS: Well, I never would have dreamed that there would be so much attention paid to the subject of the book so many years after I first encountered it. It was introduced to me as a mentoring process that was completely entwined with the management model so covering it as a discrete topic was not something I considered. Before doing the book, I thought that nobody would ever understand what I was talking about if I ever really tried to talk about this subject.
“Everyone is now talking about a problem-solving culture; that it is a management mindset. On the surface that might seem like a good thing, but the fact is you cannot separate management from work.”
But, over the past five years it seems everyone is now talking about a problem-solving culture; that it is a management mindset. On the surface that might seem like a good thing, but the fact is you cannot separate management from work. And yet that is what everyone does. And this takes us back to the fundamentals: how do you do the work and manage the work at the really micro-level details where the work takes place? You can’t separate management from that level of granularity as some sort of abstract notion. The integrated model that is lean thinking in practice brings to the table a value on improvement of the work itself. These things are truly integral and, by the way, I don’t see other change or improvement models doing that. We separate them in order to understand them and talk about them but we have to recognize them as integrated.
So has there not been enough focus on management? I don’t think that’s necessarily true. But there’s a focus on management that has been misplaced—not unlike the way the early tool focus was misplaced. And it’s out of context. You take the tools out of context and they lose their power. You take the role of management out of context and it loses its power. Concepts out of context are lifeless.
Q: One of my favorite books that LEI has released in the past five years has been The Birth of Lean, which traces how it evolved. And it speaks to your last point because it shows lean to be a series of countermeasures that emerged right at the workplace from people dealing with very real problems. There’s a quote that I’d like you to read about Ohno, which is:
“What became clear during my work with Ohno-san is that his chief interest was something other than reducing work-in-process, raising productivity, or lowering costs. His ultimate aim, I gradually learned, was to help employees assert their full potential. And when that happens, all those other things will occur naturally. I put the question directly to Ohno-san at the end of our six months of intensive work under his guidance.
“Ohno-san, I’m grateful for everything you’ve done for us over the past half year. And I want you to know that I was completely wrong about the kanban. I thought of it entirely in terms of reducing work-in-process, raising productivity, and illuminating problems. Of course, it is good for all those things. But your basic aim is something else, isn’t it? You use the kanban to create a positive tension in the workplace by reducing work-in-process, and that motivates people to do better than they ever thought they could do. Isn’t that what you’re really aiming for?” (Excerpt from page 41 of The Birth of Lean)
JYS: What we see in this passage is the power of the tools as they were intended to be used. From this way of using tools, there is a specific management style, specific management techniques, and management actions.
Take a manager who establishes a kanban system, for example. That manager recognizes that he or she is going to manage in a different way because when kanban get lost, I have to react. When I find a kanban that doesn’t match the parts, I have a problem. When I have a kanban system in place that is working as it should, I should be working with the staff to reduce the level of inventory and improve customer responsiveness.
At this very micro level I will be behaving very differently as a manager. That is not a Jim Collins or Peter Senge type of high-level management concept, but a very micro-level approach of how I would act and react in a specific situation, engaging staff in active and responsive ways. The tools and techniques themselves, by their very design, enable and even force us to bring those tools and techniques to bear at the workplace with rigor. And that is the fundamental that is often left out and that is why we have tools and management together at the same time. One of them may precede the other in time to some degree, but both of them must be present for the system to work.
JPW: There are still unanswered questions about how you change the mentality at each level of the people who are doing the managing and then that helps the people who are doing things all the way down. That’s what we’ve all struggled with. There was one company (Toyota), at one place, at one time that to a remarkable degree trained us and trained a large number of managers who could think in this way. And yes they had the tools. And so the managers learned to think in a certain way but they had the tools.
Waves of Change
Q: It seems that large groups of people take away different ideas at different times. Initially there was an emphasis on value-stream maps; today there are many A3s and it has become part of the lexicon. And people do it for many reasons—to formalize PDCA, to foster more scientific thinking. There is a lot more talk about a problem-solving culture which I think is a good thing. And of course it’s more than that. What does this say about the adoption of lean and where it is going?
JPW: Well I’ve written a little bit about waves. We look out at the economy right now, and we’re supposed to have learned how to eliminate the business cycle, and yet we still have this wave action. And these new ideas do seem to come along in waves. They produce a lot of zealotry, they release a tremendous amount of energy, and you get spectacular examples of advances that can’t be sustained. But when the wave recedes I think the ocean is probably at a higher level than where it was before. And there are those of us who are a little disappointed—we thought we were going to raise the level of the ocean permanently. And waves are not a bad thing as a way to help people see the higher level. It turns out that it is hard to sustain at that highest level.
JYS: And here’s another thing that is different. The auto industry today is not the auto industry that it was 20 years ago. It’s amazing to read quotes now from the executives of the big three who are talking about things like matching capacity with demand—they now say that this is how we run our business. That was a quote to that effect from [Ford Motor Company President and Chief Executive Officer] Alan Mulally last week. And that’s amazing. General Motors has made it clear that they will not keep running their factories and building up inventory and finished goods unless the market meets it, which is absolutely heretical today from 20 years ago. And it is easy not to see it, this progress. We can go to see some companies that are disappointing but at the same time, when you look at the whole automobile industry now you can see that it is radically different, radically better.
“Everybody in the car business got better. It’s hard to buy a bad car today. And that didn’t just happen through accident.”
JPW: And by the way I think one of the things we’ve learned is that one of the easiest things to deal with are product quality problems. And to some extent that’s through rework. But if you go into big car plants today, run by the good companies, there are not a lot of rework areas. Everybody in the car business got better. It’s hard to buy a bad car today. And that didn’t just happen through accident. People sort of perceive this as a natural thing, that, “Oh we just learned how to make good cars.” Well actually not. This is incredibly hard. And to make good cars without making them over and over again is really hard.
We should note that part of Toyota’s difficulty has been that they raised the water level. And so they are not competing against the pre-Toyota world but the post-Toyota world, which, by the way, looks sort of like … Toyota.
JYS: So there have been macro changes that you almost don’t notice. Also we have seen these other things come and go—business process reengineering, six sigma. Lean has shown a staying power. And lean in fact is just the word lean—there was pretty much a decade before that of just-in-time, which is essentially the same thing operationally, done by the early pioneers who had had the Toyota training. It might not have been described as completely as lean but it was there for 10 years before, on the same trajectory. That means we have more than 25 years of trying to discover Toyota’s knowledge—and to do it. So I think it is pretty remarkable to have this much staying power. And I think that this highlights the fact that we have found something that is deep and lasting.
When I think about what Jim accomplished through LEI in the early days, the word courage comes to mind. I think providing courage is a lot of what LEI has always done. Being encouraging, being helpful—encouraging people to try new things.
Can Lean Change the World?
Q: One more thing, which is that LEI has really accomplished quite a lot. Not to play Barbara Walters, but how does it feel?
JPW: There are two ways to judge. One is by results and one is by process. And the conventional way to measure what you did is by the results. When I look back I reflect on the actions that I took in relation to the actions that could have been taken. Did I run the best process we could have run regardless of the results? I have no regrets looking back. Would it have been nice if I had started LEI five years earlier? I had no idea when The Machine that Changed the World came out that it would do what it did. I thought it would be a failure, and that we are talking about something that nobody wants to hear about. I waited five years partly because it didn’t dawn on me just how much interest there would be. But so what?
I don’t have any regrets about what we have done. Has it been perfect? Of course not. Could it in hindsight have been better? Yeah. But I feel pretty good. I don’t know how much we have really changed the world. That’s the results part. But I’ll say this: I’ve got a lot of admiration for people who do great sincere work in a losing cause. We don’t really know how to deal with that. What do you do with the brilliant and virtuous losers?
“I think in times ahead there will be a wide realization that you can’t get away from thinking about the work if you really want to create value. And value is a good thing.”
As for the future. I think that the path of the world has been quite understandably to try easy things. Automation is easy. Managing by results—what could be easier?—you don’t have to think about the work at all. You just think about punishments and bonuses. We know that those ways of thinking have very distinct limits.
And we are in an age of pretty advanced stagnation in the advanced countries in the last 25 years. Economies are not growing. People’s standards of living are not growing. People’s sense of fulfillment is not growing. Managers’ levels of fulfillment are not growing. Against this background it’s fair to say that we in the Lean Community are needed. The problem is not a lack of need but our stumbling efforts to figure out how to respond to that need. I don’t have any doubt that there actually is a need. In the short term there may not be a want but I think in times ahead there will be a wide realization that you can’t get away from thinking about the work if you really want to create value. And value is a good thing.
So because of the difficulties that society is facing lean, if not society, has a bright future. I am short-term pessimist and a long-term optimist.
JYS: I am surprised by this in a different way. At the time that Machine came out I was on the other end of the IMVP research—working at Toyota. And in Toyota City we had no idea what an academic understanding of our system might mean to the outside world, but within my small circle it was a big bombshell. It was a sort of vindication and even a little gratifying to know that others had been watching what we were doing. I thought that was interesting. And that was 20 years ago. It is surprising to me now to see all the things that have happened in this lean movement.
To Jim’s questioning whether he should have started sooner, I think we would still have the same problems to overcome. That’s the way of the world. But what we have to offer is a way of thinking and a set of practices associated with it that still has tremendous value and can help any company, any individual. That’s why we are still at it.