The large majority of lean transformations will fail. Sorry, that’s just the sad truth. It doesn’t have to be this way. The reason for this failure rate is simply because lean has two fundamental pillars and most organizations don’t know about let alone understand the importance of the second. These two pillars are:
- Create value from the perspective of the customer by reducing waste and promoting continuous flow
- Respect for people
Lean actually differs slightly from traditional TPS in the first pillar, with most organizations focusing on reducing waste while Toyota promotes creating flow. Although the approach is different, for the most part the tools are the same and the end goal is still to create value from the perspective of the customer.
In lean thinking there are seven primary forms of waste: unnecessary transport, unnecessary inventory, unnecessary motion, waiting, overproduction, overprocessing, and defects.
These forms of waste are present in manufacturing – and also in office and administrative environments. In fact, you can find them at home. Did you cook too much food for dinner last night? Did you have to wait in line to take a shower? Did you have to search for hours to find a tool in your cluttered garage?
Identifying the customer and then looking for waste – and value – from the perspective of the customer is far harder than it sounds. To add even more complexity, some forms of waste may even be necessary, such as regulatory paperwork. Some activities may appear to be waste for one customer and not another – is a long commute a waste of time? To some it is, to others it is a valuable time to relax and refocus.
I have come to believe that respect for people is probably the most important pillar – and the least understood or accepted – and therefore the primary reason why most lean transformations fail.
This pillar grew out of the concept of “autonomation” at Toyota – meaning automation with a human touch. At Toyota and in TPS machines aid humans, not vice versa. To this day when you visit a Toyota factory you will see far more humans than at comparable factories of other automakers, and robots are primarily used in dangerous processes and to lift heavy assemblies.
People are the core value-creator of a real lean organization. In fact, many lean leaders considers unused human talent as another form of waste.
Respect for people takes many forms. With employees the concept aims to create an environment where ideas, knowledge, creativity, and experience are valued. Traditional accounting practices measure the cost of the pair of hands, but do not measure the value created by the brain attached to the pair of hands. The lack of a value offset is why traditional accounting drives decisions to move factories to lower “cost of labor” countries – even if hundreds or thousands of experienced, creative people are replaced by even more people with less knowledge.
Respect also applies to customers. Problems are taken seriously and every customer is considered to be very important. This is part of why Toyota failed with their series of recalls in 2009 and 2010. Instead of holding to a strong culture of respect for customers, the company tried to battle the issue for years before the negative perception and press became too great. Imagine how different those years – and the resulting cost financially and in reputation – would have been if Toyota had publicly treated each incident as being extremely serious.
Respect should also be promoted to suppliers and the community. Engaging the entire value stream and business environment in continuous improvement efforts and knowledge development can pay huge rewards in terms of trust, ideas, and support.
In 1990 Womack and Jones could not have anticipated the problems associated with “lean” rhyming so nicely with “mean.” Not a day goes by without some reference to a “lean and mean” organization. Real lean is definitely not mean from a people standpoint.
Real lean companies leverage productivity improvements to capture new business, thereby keeping people impacted by those improvements employed. Some real lean companies go so far as to pledge that there will be no layoffs due to lean efforts – that is often necessary to get buy-in for what can appear to be job-threatening improvement programs. And real lean companies like Toyota are generally not unionized simply because the employees are already treated with respect and often paid better than at comparable organizations.
Lean is about people. Leadership is about people – including ourselves. That’s the foundation for our exploration of how lean can help transform personal and organizational leadership.