As the Toyota Production System left the shop floor, evolved into Lean thinking, and spread across industries far and wide, it’s worth asking: How is it working for the companies that have embraced it?
The answer is mixed. We often hear from business leaders who want to know why Lean is less effective than they had hoped. Nearly three quarters of Lean initiatives fail to produce added value.
Today, Lean is used in a wide variety of industries and business initiatives. Lean tools that were developed to improve quality and reduce waste in production processes are now being applied to services and other purposes far removed from the assembly line. Has Lean been stretched beyond its capacity?
Point B's Perspective
A Lean initiative is only as effective as the team that drives it and the organization that supports it. Based on our experience leading hundreds of operational improvements with our clients, the basic structure should be the familiar Plan, Do, Check, and Adjust:
- Plan includes identifying the current state, creating a future state, and analyzing the gap between them.
- Do includes choosing which Lean tools to use and beginning implementation.
- Check includes testing and measuring the results.
- Adjust enables change necessary to reach the defined goals.
This provides the framework for the four keys to a successful lean initiative:
- Operate from a customer-centric point of view. Strong lean organizations have a clear perspective on who their customer is and what they value and how the organization itself is perceived by the customer. Healthcare is a good example of this perspective in action. Lean medical facilities are no longer physicianfocused. Instead of being told, “The doctor can see you next Wednesday,” at Virginia Mason Medical Center in Seattle, patients are asked when they would like to make an appointment. Likewise, components that are traditionally seen as being customer service-focused are re-examined. Don’t spend more time and money improving waiting rooms when you can focus on reducing wait times. This type of shift is not easy, but when customers become the focus you are taking the necessary first step for Lean improvements.
- Ensure the right skill sets are on the team. Lean encompasses a wide variety of functions, from change management to analytics. The team’s capabilities must match the desired outcomes of the customer. It takes the right team members with the right skills to do the right work. Skills should include knowing the work, understanding the customer, innovation, working together, visioning, and a dogged sense of overcoming every obstacle. Without the application of these skills, the Lean effort will be either tepid or lost in a swirl of ineffective activities. In our experience, we have found that Lean teams segment into one of four types, as described in the graphic to the right. Some Lean efforts may be well executed, but have little organizational influence— Flash in the Pans. Their Lean efforts may be marginalized from the really important events in the organization. Other Lean efforts may have wide impact but not deliver. This can happen when Lean resides under strategy; you may see lots of meetings and puffery, but little action—thus the moniker Impenetrables. Another dynamic: when both execution and impact are low, everyone looks for something better to do—these are the Distractors.
- Develop leadership support. A team may be effective and still be unable to make change happen or make it stick. Success is shaped by leadership and how the Lean team fits into the organizational structure. The leader must be able to make things happen when needed and also coach others to enable things to happen. The people who drive Lean changes must be able to execute and ensure that these changes will actually be implemented and sustained. Although outcomes may never reach perfection, it’s important to strive for a blend of organizational influence and ability to execute that head in this direction. This requires a blend of strategy, analytics, operations and people. Lean works when the team is right and its efforts have the right level of influence. This calls for senior level sponsorship and clear accountability of outcomes.
- Build a strong daily management system. Lean is not a quick fix. Some companies have applied Lean like a coat of paint, without doing the necessary prep work or the daily maintenance work. Continuous improvement means continuous management. The ultimate goal of Lean implementation is for all employees to use Lean tools every day. This isn’t easy; without a daily management system, it is impossible. The makeup of a daily management system depends on the work, but all have two characteristics in common: visual control and regular management attention. Common for visual control is a productivity board, detailing in real time how the work is flowing. Management attention is a mix of checking, consulting and coaching employees either individually, in teams or in regular huddles. Without these four keys to success, organizations can work hard, but achieve only marginal results. We recently worked with an organization that was contemplating abandoning its Lean program. For more than a year, our client conducted multiple Lean projects to address isolated problems across multiple departments, with little to show for its efforts. Employees’ interest in participating was waning. Once they learned what was truly involved, they invested the time and effort to embed the necessary changes. Our client is now well on the way to becoming a full-fledged Lean organization. When influence and execution are in harmony, the future can come into view and something close to Perfection can be achieved. The Lean team can effectively traverse the organization—breaking down silos, publicizing results, coaching others, and developing new Lean leaders through their efforts.
The Bottom Line
Organizations must develop strong Lean teams with deep and wide influence. Lean tools by themselves are not enough. There must be a framework in which Lean can reside and thrive. People need to change the way they think about the work they do. Problems must be visible and the future inspiring. Communication must be clear and continuous across the organization. When Lean tools are expertly applied with such organizational support, they become powerful agents for lasting improvement. Lean is earning its keep. But like any tool, how it’s used makes all the difference. With the right kind of organizational support, Lean does stretch beyond the factory floor.