Changes from Batch Thinking are Hard to Navigate, but Lack of Lean Leadership is Top Obstacle, Expert Says

The following column comes through special arrangement with the Lean Enterprise Institute. It was authored by Lean consultant Art Byrne, an operating partner with J.W. Childs Associates, a private equity firm..

Recently a colleague asked me why Lean, which appears to be so simple, ends up being so hard for people to do. In my decades of leading Lean, in fact, this has proven to be perhaps the most important challenge.

Back when I was one of the two group executives at The Danaher Corporation, we were lucky to be the first and only US-based client of the Shingijutsu consultants. At the time Shingijutsu consisted of only three people; each had spent his entire career at Toyota, a good part of it working directly for Taiichi Ohno, the father of the Toyota Production System. These "insultants" (that's what they called themselves) started at two of my companies, Jacobs Chuck and Jacobs Brake, with Brake taking the lead under its president and great leader George Koenigsaecker.

Supply Chain Digest Says... The first reason why few succeed is that the approach is almost the exact opposite of everything we have been taught in the traditional batch world. What do you say? Click here to send us your comments Click here to see reader feedback

From the very beginning George and I saw Lean as the most potent strategic weapon that any company could have. We wondered why it had not been adopted more widely. One day at lunch we asked Shingijutsu President Iwata how Ohno could allow them to teach other companies about this weapon. He smiled, laughed a bit, and said to us: "I can tell you about the Toyota Production System. I can even take you and show you the system in action. But I bet you can't go home and do it."

Here we are 30 years later and Iwata's statement is still true. More and more companies today are trying, or have tried, Lean, but very few succeed. My guess (based on observation, and input from leading Lean consultants and other experts) is that only 4-6% of all companies end up becoming a complete Lean enterprise.

Why do so few companies succeed at Lean? It's not because Lean is so complicated; the fundamentals of Lean are simple and straightforward. Nor is it because Lean is capital intensive (in fact it frees up cash by waking up and putting to use the "sleeping money" dozing in excess inventory or other wastes.)

The first reason why few succeed is that the approach is almost the exact opposite of everything we have been taught in the traditional batch world. Second, roughly 90% of all companies that start Lean see it only as a cost reduction program and as a result, they miss the strategic and customer-focused aspects completely. They drop Lean on top of a traditional batch structure without understanding the Lean changes EVERYTHING. Third, the Lean community hasn't helped by focusing on Lean as a bunch of tools as opposed to a way to run your business. Few books discuss the complete business perspective of Lean.

Outweighing all of this however is the lack of Lean leadership. Most people have been taught the traditional approach of managing by the numbers, focusing on "make the month" targets. They essentially manage looking backwards at these results instead of managing forwards by improving processes as a means of improving future results. They find it difficult to shift to Lean leadership and its emphasis on eliminating waste in order to deliver more value to your customers and on creating a learning environment so that every employee can learn to contribute. On top of that, CEOs tend to have personality types that are not compatible with Lean: a command-and-control approach coupled with a risk-averse mindset.

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So what enables Lean leaders to succeed? Ultimately I think that it comes down to certain leadership characteristics. In our recent chat, Paul identified three traits he believes Lean leaders need in order to succeed. He or she must be humble, curious, and willing to be criticized - to admit when he or she is wrong in the face of evidence that a better way exists. I agree with Paul that these are indeed crucial.

In my new book "The Lean Turnaround Action Guide," I have however added a few more traits that I think are critical. A good Lean leader:

• Respects their people
• Has and demonstrates vision
• Is committed to driving the Lean fundamentals
• Recognizes that "the soft stuff is the hard stuff"
• Is accessible to everyone
• Practices "go and see" daily
• Sets stretch goals
• Take the leaps of faith
• Leads by example

This may sound like a lot, but they are natural habits for the Lean leader. The Lean leader always learns by doing, by being out front and hands-on, and never tries to manage from his or her office or conference room. No value adding is going on there. I always advise companies that are contemplating Lean that if you can't get your CEO to lead it then you are better off to just try and be the best traditional batch company that you can be. If you go down the Lean path without the leader you won't be very successful and will just get everyone confused along the way.

So, in summary, although the Lean principles themselves are pretty simple, without the correct leadership it is perhaps one of the hardest changes for any business to make.

But you can make a difference if you are willing to try. Just do it!

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