When does lean fail? Under which circumstances?
One story in particular comes to my mind, although I’ve seen several cases like this in my career.
About a year ago I met with the CFO of a company with a few thousand employees. He told me about their lean journey, which they had started six years earlier. At the time, they had established a lean function as the competency centre in the organization within HR (since HR was considered the organizational “home.”) The lean office reported to a department head within HR and was four levels below the CEO in the org chart. Still, the lean function was supported by a significant budget and available as a ”free resource” on a first come, first serve basis.
The problem (as the CFO described it) was that management had particular expectations about lean. Just introducing lean was supposed to help the company to become even more competitive. His exact wording was: “We cannot see how our lean efforts have moved us forward.” This was interesting to me, so I asked if I could do some fact finding. I wanted to understand what was going on. This process also revealed some of the quick fixes and symptoms fighting that had been happening in the organization more recently.
I should mention that about six months before I met the CFO, the company got a new CEO. So it was no surprise to me that a question around the pay-off of the team’s lean efforts had come up. This work had required a significant financial commitment, and the new CEO needed to be able to justify its existence. For the newly appointed CEO, the next logical move was to move the lean office organizationally from HR to Finance, so that’s what he did. As a CEO of several international companies myself, I was all too familiar with this kind of reaction. “If it needs to be questioned, change the organization chart!”
In any case, here is what I learned and/or observed:
- This company got started with their lean efforts in a part of the organization that handled large amounts of errands/applications. The team identified problems like “long lead times” and “too much rework.” Initially, they brought in external support to help. As you might expect, they saw significant improvements in the short-term in terms of being able to not just identify, but address key problem areas. In general, this company began to enjoy a more positive work environment. Employees felt like they had a new sense of team spirit.
- After seeing early positive results, management decided to expand their lean efforts with a department by department “roll out” plan. The team got to work implementing lean tools and key ideas like communication boards, standard work, PDCA, and 5S.
- For five years, the purpose of the lean office was vague and unclear. This remained to be true even after it was moved from HR to Finance.
- Lean was always a staff function. The head of the lean unit had only rudimentary training and said it clearly: “I am relying on my very knowledgeable lean coaches.”
- There was no planned, systematic training and reflection opportunities available to the company’s own internal lean coaches.
- There were plenty of whiteboards all over the company visualizing targets, progress reports, suggestions for improvements, etc. But when I moved across and between offices, I noticed obvious differences between boards. It quickly became apparent that there was no management standard, which meant that there was no cross- functional improvement work either.
- One of the most basic lean concepts, ”value stream thinking,” was not present!
- A3-thinking and problem solvingdid not exist as a platform for change, a problem-solving concept, or style of management thinking. I could find A3s themselves, sure, but leaders and managers treated the A3 like a form, fixed template, or checklist to be mechanistically filled in.
- There was no formalized training for senior or middle management to build capability around problem solving and discuss what it means to create a “continuous improvement culture.”
Considering all of these things, what was the realproblem at this company? The head of the lean office and his superiors—none of these people had a deep understanding of lean thinking and practice as a completemanagement philosophy and system. But I can’t blame them. You don’t know what you don’t know. Thankfully, for this particular company, they had time to course correct. They were financially healthy enough to hide their failures and recover from what was essentially a failed lean program. But this is a luxury that most companies can’t afford.
The better way forward would have been to create a platform for continuous improvement and change built on respect for people. This is what gets everybody engaged in solving problems and improving performance. Lean thinking and practice is about shaping a successful progressive evolution of your business and creating the conditions in which customers reward your drive for perfection. To me, the real need for a change program is the result of not realizing the benefits of transformational thinking inherent in a continuous improvement culture.
I remind leaders that it all starts with awareness. There must be better ways of doing what we are doing, right?! Leaders must ask, “What do I have to do differently that makes the organization think and act differently?” You also have to become genuinely curious. “What do I need to know that I may not know? Where can I learn more and be inspired? Am I ready to question my own way of thinking and acting? And lastly, “Who do I trust to become our organizational coach? Who is someone who might support our transformation with integrity and heart?”
Be aware, you can’t possibly know what you don’t know. Perhaps the most important job of the leader right now is to stay curious!