President's Column
Looking Lean:
Tell Us About Your Company
The first time I read Seth Godin's "Clean Fire Trucks" article, the little engineering voice in my head reacted: "Wait a minute, Lean thinking says that time spent keeping equipment and the workplace tidy repays itself many times over. Besides, I happen to like clean fire trucks."
But that's not Seth's point. I was once a volunteer firefighter who spent a lot of time washing the truck. I understand the importance of maintaining equipment so it’s available at a moments notice. But a clean truck is a shallow indicator of excellence. What really matters are less tangible traits, including rigorous recruiting and training, proactive work with the community, and a culture to always improve.
Just like a fire department, a company may have the appearance of excellence without being competitive (the Shingo Prize winning, yet bankrupt Delphi comes to mind). From the Lean Executive's perspective, Seth is asking: Does your company really have an effective lean culture that drives excellence and market competitiveness, or does it just look lean?
Take the “do we just look lean” test:
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Do you have a dedicated team of experts responsible for excellence and quality (looking lean)? Or do you continuously train and coach every employee to "learn to see" waste and opportunities on their own?
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Are people always busy with their normal tasks, regardless of customer demand (looking busy, if not lean)? Or are they encouraged, even expected, to set aside time for creating and implementing improvement ideas?
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Are people trained to follow well documented standardized work instructions (looking lean)? Or do you champion a culture that accepts, even expects, failures caused by trying new ideas?
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Is your Lean initiative focused mostly on Operations with activities like: value stream mapping, 5s, "Kaizen" workshops, and U-shaped work cells (looking lean)? Or does your Lean transformation encompass the entire value stream including Finance, Sales, HR, Engineering, and R&D? ("From call to cash"; see Bill Waddell's article.)
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Do you monitor your Lean transformation mostly by attending regular "steering committee" meetings (looking lean)? Or do you demonstrate your commitment to excellence with daily action like the Gemba Walk?
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Do you "manage by the numbers" using abstract cost-accounting metrics like direct labor utilization and cost variances (which don’t even look lean)? Or do you have a simple, effective management system everyone can understand that tracks current operational status with customer requirements?
There are plenty of fire departments with clean trucks, but only a relative few consistently achieve excellence. Just ask your insurance company. Likewise, there are plenty of companies that look lean, but only a few of these consistently achieve what they're looking for: Tangible improvement on the bottom line. Just ask their stakeholders.
It’s rare to find a company that goes beyond looking lean. I’m proud to say that many of our clients are among them.
What about your company? If you passed the "Looking Lean" test with flying colors, I'd like to hear from you. Send me an email to set up an phone conversation about your Lean transformation. What are you doing? What business results were achieved? What worked? What didn't work?
If you are achieving real transformation, I'll make your effort worthwhile and send you a Lean Affiliates golf shirt.
My intention is to identify leadership teams who are really making a difference. And maybe we'll learn from each other along the way.
-- Mark Edmondson Mark@LEANaffiliates.com
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| Dear Mark,
Our theme for this issue: Looking Lean. We explore what distinguishes "looking Lean" from organizational transformation that achieves significant bottom line improvement.
Two renowned change agents, Seth Godin and Bill Waddell, share their unique opinions about this topic in their edgy, thought provoking articles below.
As always, your comments and suggestions are welcome - please follow the links at the bottom to send a note to the editor, or to forward this eNewsletter to a colleague.
Yours in success,
The LEAN Affiliates Team
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Organizational Initiative
Clean Fire Trucks
By Seth Godin
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We live in a neighborhood where all the firehouses are run by volunteers. I don’t know how we’d get by without them... they do brave work, with little credit.
One thing you’ll notice is how clean the trucks are. “Why are the trucks so clean?”, a friend asked. After all, a clean fire truck isn’t a lot better at putting out fires than a smudged one.
Well if you put it that way...
The answer: Because when there isn’t a fire, the firemen wait for the alarm to ring. And while they’re waiting, the chief tells them to clean the truck.
Most organizations are staffed with people looking busy while waiting for the alarm to ring. Does this sound like your company?
Instead of going out to the community and working to prevent new fires, the mindset of most fire chiefs is to be ready for the fires that have already started. Hotel desk clerks don’t often take the initiative to improve service or make calls to generate new business—they stand at the desk waiting for business to arrive. Software engineers don't often get a chance to think about what they ought to create next—they spend most of their energy overwhelmed with an endless list of programming fires.
The culture of most organizations is about following instructions and waiting for the next task assignment. This orientation towards task completion may be simple to manage and feel safe – but does it foster excellence? On the other hand, encouraging employees to take initiative and improve their work is difficult to manage and requires acceptance of failure.
What a great way to describe a stuck but busy organization: "They sure have clean fire trucks."
Do you expect your people to look busy while waiting for the alarm to ring, or are you encouraging them to take the initiative and achieve real excellence?
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Drucker Knows Best
Principles for Real Manufacturing Transformation
By Bill Waddell
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We need to face the 1,000 pound gorilla in manufacturing: Lean has not consistently driven significant bottom line improvements for most companies.
Looking past the hype from industry magazines, vendors, and companies themselves, our own experience as consultants tells us that while many factories may look lean, real progress in terms of productivity, lower costs, and higher profits is usually local and incremental.
So how do we go beyond “looking lean” to achieve significant business results?
Drucker’s Lesson About Real Transformation
Sixteen years ago, Peter Drucker’s article, “The Emerging Theory of Manufacturing”, appeared in the Harvard Business Review. That is probably about the right incubation period for the rest of us to catch up to his thinking. Drucker points to four principles that define what’s needed for real transformation, and establishes the critical role of the chief executive. These principles are:
- Integrate the factory into the total value stream
- Instill a statistical quality focus across the entire company
- Implement a completely a new accounting model
- Treat the entire business as a system
As Lean practioners, we often use Drucker’s four principles to distinguish between a company that may “look lean” from one that is achieving significant, sustainable improvement.
Read the rest of Bill Waddell's featured article.
Purchase and download from Amazon a copy of Drucker's landmark article on manufacturing transformation.
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Recommended Reading
Rebirth of American Industry:
A Study of Lean Management
By Bill Waddell
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If you’re fascinated by the history of lean, this book does not disappoint. However, as LEAN Affiliate Bill Waddell points out in his introduction, this is not a history book... it is a management book.
It begins by reviewing the principles of the “Sloan/Dupont ROI management model” that GM adopted after 1920. Waddell then convincingly builds the case why adhering to those principles is the major barrier to Lean thinking.
A must read for the lean executive.
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