Lean management is simple to grasp and understand, but many find it difficult to apply in their companies. I am sure there are many and various reasons, but simply put; lean requires almost everything to change, and change diametrically. In order to become a truly lean company your leaders and employees must learn to think differently.
This article is the beginning of a series that will show how to develop a truly Lean Management System. We are starting with the fundamental Lean Thinking. Here’s the big-picture diagram.
I know you are looking for practical things. And the way your leaders and peers think about their work is very much practical. It governs their behaviors. We must create lean behaviors so that lean things happen throughout the company.
Here’s some examples:
1. Traditional companies create vertical organizations with executives housed in distant and unapproachable offices. The hierarchy has independent specialist departments that are coordinated to support a wide range of products, processes, and services.
Lean companies organize themselves around horizontal, customer-focused value streams staffed with all the skills needed to give exceptional customer value. Executives and leaders spend much of their time at the value streams where the value is created.
2. Traditional manufacturers seek to build large batches of product so as to achieve “economies of scale” by calculating “economic order quantities”.
Lean companies strive to make products one at a time using single piece flow. Similarly, make-to-order job shops use project planning tools to achieve efficient production. Lean companies use pull systems with frequent visual planning and non-stop flow.
3. Much of the executive talk in classic western companies revolves around the stock price, and these numbers are posted in the newspapers and discussed endlessly by TV pundits.
Executives in lean companies focus their attention on the value created for the customers. This does not mean that stock price is unimportant; it just means customer value is more important.
These different ways of thinking must be the foundation of our Lean Management System.
While lean methods are easy to understand, they require different ways of thinking. Many company leaders have gained their success and seniority using the old thinking. It would be natural for them to be hesitant. Yet to gain the astounding success lean companies achieve, we are required to think “leanly”.
These are the five fundamentals of Lean Thinking†.
These principles are aspirational. They drive all lean change and improvement. Many companies (probably most companies) think of lean as a series of shop-floor tools and methods. Bad mistake. Lean is the outworking of these principles. We develop tools and methods to make us better at doing these five things.
A vital part of building a Lean Management System is making an about-turn in your company’s thinking. If everyone can (over time) learn to think around these lean principles, your management system will have a firm foundation.
HOW IS THIS DONE?
These kind of changes must be done by the company leaders. If they change their thinking and behaviors then everyone else will understand the change and will be able to safely follow.
A good starting point is to develop an A3-style document showing the “current state” of the company’s thinking. The “future state” will show the actions coming from lean thinking. The company leadership team will then develop the steps needed to adopt these fundamental changes. One common output of this is to write (or re-write) the company’s Values, Principles, and Behaviors. These provide tangible instructions on how to act, to relate, and to make decisions.
GET MORE INFORMATION.
1. Videos of the Five Principles.
2. Diagram of the Five Lean Principles.
3. “The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company” by Art Byrne
5. Conferences: Lean Accounting Summit Conference, Jacksonville, FL,October 8-9, 2015
Our next post on the Lean Management System will delve further into the basic Lean Thinking needed before you get started with lean transformation.
† “Lean Thinking” by Daniel Jones and James Womack. Free Press 2003