By Mike Loughrin, CEO of Transformance Advisors
Lean is Number 1
It seems like everyone is working to make their organization lean!
And in fact, many organizations are improving performance and changing their culture through effective lean transformation programs.
In contrast, other organizations are simply using a few common techniques from the lean tool box. Sadly, they are just scratching the surface and are far from reaping the big rewards available to those taking a comprehensive approach.
There are also many organizations where solid lean programs exist in one functional area, but senior executives have not seen the possibilities, or they lack the courage, to expand lean to all functional areas.
Common Elements
To understand the gap between the leaders achieving big gains and the laggards taking small steps, let’s explore the common elements of lean transformation programs.
Our research and experience indicates the following four ingredients are key indicators of success:
- Methodology: Lean is defined as the systematic elimination of waste. A critical aspect is the systematic approach defined by the five principles of lean (specify value, identify value streams, create flow, leverage pull, and seek perfection) and inherent in the techniques found in the lean tool box.
- Measurement: Research identifies creating a sustainable organization as the top priority. Another priority is the ability to measure the cultural transformation. It is important to measure both the improvements in your value streams and the cultural changes within your organization.
- Community: The power of a community is the ability to share best practices and drive the development of new techniques. There is great opportunity to learn from other organizations who have addressed similar challenges and then “give back” by helping others.
- Coaching: There is no need for anyone to recreate the wheel. It’s best to leverage the experience of internal and external resources with the skills and experience you need. In addition, educational programs, assessment tools, and program management templates are all available to speed the process and increase return on investment.
Leaders vs. Laggards
Using these four indicators of success, let’s examine the differences between the leaders and the laggards:
1. Methodology
Leaders
The leaders take a very systematic approach when applying the five principles of lean and leveraging key concepts such as the types of waste. Tools such as value stream mapping have prescribed steps which, when followed, produce excellent results and allow an organization to develop a culture of continuous improvement.
Laggards
The laggards find one or two techniques from the lean tool box which seem easy and they overuse these techniques in an attempt to cut costs in a chaotic manner. Not following the systematic approach built into each lean tool will often result in an unsatisfactory outcome.
2. Measurement
Leaders
The leaders will assess all of their value streams and then focus attention on areas which need improvement. They will measure performance and celebrate improvements. In terms of the cultural transformation, the leaders will conduct periodic surveys of employees to measure progress and make course corrections as needed.
Laggards
The laggards will not begin with an assessment of their value streams; they tend to focus attention on symptoms. For example, they might work to “fix” the forecasting process instead of reducing cycle time in order to reduce the need for forecasts. Tracking the cultural transformation is not part of the plan for most of the laggards.
3. Community
Leaders
The leaders will join the lean community and be visible at lean educational and networking events. They will seek to learn
Laggards
The laggards will not have the time or money for attending lean educational and networking events. Most will not have success stories they can share and they cannot benefit from the concept that it is better to give than to receive.
4. Coaching
Leaders
Leaders understand the techniques from the lean tool box are systematic and how they are most effective when people are coached to use them correctly. Large organizations tend to develop internal lean experts who can help others get started with improvement projects. Many small and medium organizations will leverage experienced consultants who coach their employees with an emphasis on “teaching them how to fish.”
Laggards
Laggards tend to learn by skimming articles and viewing a few webinars. They stick to one or two techniques from the lean tool box and usually perform the easy to understand steps while skipping those which seem difficult. Another popular method is to hire a lean expert – everyone knows lean is number one and everyone has it on their resume! This approach can work very well if you hire someone with experience at one of the leaders. It can be a disaster if the so-called lean expert used to work for another laggard and has left a wake of mediocrity behind them.
Summary
Lean is number one because it has a rich history of success. Those who focus on the systematic elimination of waste supported by a comprehensive approach are the leaders. Those who chase cost cutting in a chaotic manner, without the desire for a cultural transformation, are the laggards.
The return on investment between the leaders and the laggards is great. However, there is good news for the laggards. They can get on the road to success by leveraging the four critical ingredients of lean transformation programs.
We do not need leaders and laggards! Through a comprehensive lean transformation program, all members of the lean community can win with lean.
Mike Loughrin
Mike Loughrin is the CEO and Founder of Transformance Advisors. He also teaches for Louisiana State University Shreveport and is on the board of directors for the Association for Supply Chain Management Northern Colorado.
Mike brings exceptional experience in industry, consulting services, and education. Mike has helped organizations such as Levi Strauss, Warner Home Video, Lexmark, and Sweetheart Cup.
Keeping a commitment to a balanced life, Mike loves downhill skiing, bicycle rides, and hiking in the mountains. See one of his trails of the month at: Little Switzerland.
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