Five Principles of The Lean Way
In my last post, I explored the Values that serve as the foundation to thinking in The Lean Way, namely Learning Organization and Respect for People. Built upon that foundation are five Principles upon which all concepts, practices and methodologies of The Lean Way are based. Those Principles are:
An enterprise cannot sustain-ably implement Lean methodologies such as 5-S, problem-solving, continuous flow, visual management, etc. without broadly internalizing these principles, first into the thinking of executive leadership, then broadly into the company’s culture. I will briefly introduce each Principle below.
Long-term Vision means that short-term decisions are never made at the expense of the long-term objectives of the company. A good contrast is when a new leader takes over in a company where long-term vision is a guiding principle. In that situation, the new leader is expected to learn the culture of the company, the strategy that is currently being implemented and is expected to get on board with continuing the culture and strategy.
short-term decisions are never made at the expense of the long-term objectives of the company
Early after founding his company, like many new business owners, Robert Bosch took out a bank loan. Soon the bankers were trying to tell him how to run his business. Bosch decided that once that loan was paid off, his company would never take on debt again. 130 years later, this $80+ billion company still has no debt. This is an example of a long-term strategy that has been upheld from the company’s founder through every CEO to the present day and is one of the guiding principles that has made Bosch unique and successful.
In contrast, in a company lacking that Principle, a new leader will be allowed to come in and immediately begin to make expansive changes that drastically impact both culture and long-term strategy. This is very common in western culture where new leaders believe it is necessary to “make a splash” early in their tenure.
Total-System Focus recognizes the highly inter-dependent nature of a business enterprise. It stands in contrast from the Scientific Management position that it is possible to optimize the whole by optimizing the parts independently. The problem with this approach is that no process in any organization is an island unto itself, every process impacts other processes. Instead, process connections are understood to be just as important as the processes themselves.
The holistic analysis and design of the flow of value is at the center of Total-System Focus.
So, in manufacturing for instance, the focus expands beyond the performance of each machine and operator to how to supply materials, how to supply tooling, how to supply information, how to supply qualified labor, and so forth. Additionally, how shall we supply these things exactly when needed, with minimal waste, yet with very high service levels? The holistic analysis and design of the flow of value is at the center of Total-System Focus.
Quality First recognizes that quality drives delivery and cost. Not only in manufacturing, but in the delivery of any product or service, because delivering with perfect quality the first time is the fastest, least expensive way to do business. When quality is first, there are never decisions made that will supposedly improve delivery or cost at the expense of quality. When there is a quality problem, we stop to fix the problem instead of continuing to run to meet short-term delivery deadlines or revenue targets while defects pile up. When quality is first, processes to execute work are designed so that it is always easier to do the work right than it is to do the work wrong.
Quality First recognizes that quality drives delivery and cost.
Putting quality first involves having control over our processes to the point that we can deliver what we intend to deliver. This may not look the way you might imagine, as it is not achieved through micromanagement, rather through the science of statistical process control. When Quality isn’t first, a company is doomed to sort for quality (or worse, your customer sorts for quality!). This could be formal or informal and the company will be aware of it or unaware of it, but it will be happening. In manufacturing, it is not uncommon to find many “hidden factories” scattered through a plant where informal sorting, rework and scrapping operations are taking place.
Customer-Oriented means that we recognize that we are in business to meet the needs of the customer. Those needs include: How many the customer wants, how soon the customer wants them, the price as dictated by the market, the features the customer wants, the quality level the customer expects, and more. A company that is Customer-Oriented starts with the customer need and builds their product, production system, distribution system, delivery method, service approach, and every other customer-facing aspect of their business based on that need. Beyond that, a company will also study how the customer interacts with their product or service, then develop and offer new products, services or features that the customer didn’t even know they wanted. This practice is called Market-In.
Customer-Oriented means that we recognize that we are in business to meet the needs of the customer.
Within your processes, you also have internal customers and it is also important to understand their needs. When delivering a product, information, or service to internal customers it should be delivered at the time the customer needs it, in the quantity the customer needs it, in a manner convenient to the customer, irrespective of whether it is convenient to the supplying process to do so.
The contrast to this principle is Convenience-Orientation, where we do what is convenient for ourselves rather than focusing on the needs of customers. This doesn’t at all mean being lazy. It could mean we are currently producing in large batches that extend lead times to the point of customer dissatisfaction because that is the easiest way to run the process presently. The Customer-Oriented approach says we should do the inconvenient thing and modify our process so that it can satisfy the customer with smaller batches and shorter lead times.
A company that is Process-Centered gets results through robust processes as opposed to relying on the hero-efforts of their people. Companies that are not Process-Centered will often post job openings with the following phrases: “Must be comfortable working in fast-paced environment (because you will be under-resourced),” “Must be able to handle multiple priorities (because we will not make is clear for you what is most important),” “Must be able to overcome obstacles to achieve results (because our processes are broken).”
Fujio Cho, former Chairman of Toyota once observed,
“We get brilliant results from average people working in brilliant processes while our competitors get mediocre results from brilliant people working in broken processes.”
Fujio Cho, former Chairman of Toyota once observed, “We find that we get brilliant results from average people working in brilliant processes while our competitors get mediocre results from brilliant people working in broken processes.” Broken processes take a toll on your people, but they also take a toll on your business. One of the biggest problems with not being Process-Centered is that it is almost impossible to develop any kind of sustainable continuous improvement or problem-solving competency. If a process is not stable to begin with, efforts to improve it will be as successful as building a house on a mountainside during a mudslide.
This one can be a hard one to overcome cognitively because many leaders get to be leaders by being proficient heroes. If we fix the process, it removes the need for their skill set, and they can feel threatened. Where do they fit in such a culture?
Where does your company stand? Scoring your organization candidly on the continua below may be helpful:
No Continuity of Vision 0----1----2----3----4----5----6----7----8----9----10 Long-Term Vision
Point Optimization 0----1----2----3----4----5----6----7----8----9----10 Total-System Focus
Quality is Important 0----1----2----3----4----5----6----7----8----9----10 Quality First
Convenience-Oriented 0----1----2----3----4----5----6----7----8----9----10 Customer-Oriented
Hero-Effort Reliant 0----1----2----3----4----5----6----7----8----9----10 Process-Oriented
Do you like where you scored yourself? Where would you like to be in the next 6-12 months? Do you know how to get there? Use the contact form to set up a free initial consultation to discuss how to begin the transformation toward a culture that can sustain-ably implement The Lean Way.