CHAPTER 10
Rethinking Tradition
EXPERTS IN FIELDS ranging from fitness to finance often point out that it is difficult to achieve success if you cannot first visualize it in your mind. Establishing a clear picture of precisely what success looks like offers a powerful means for staying the course when things get difficult. Like a beacon on the horizon, this vision of success serves as a guide, pointing to the final destination at each point along the way.
How does this relate to going lean? In many ways, advancing in lean maturity presents similar challenges: The journey can be long (particularly for vast, complex businesses, as described at the beginning of this book); it requires discipline and constancy of purpose; and it is easy to get derailed along the way. In order to stay the course, companies and institutions must come to envision precisely where they stand and where they wish to go. They must come to clearly see the reasons for their shift, the steps along the way, and the reasons that stagnating before they attain true lean sustainability cannot be an option. Their dynamic value assessment can serve as a focal point, but, like so many aspects of lean, this is only a tool. Gaining a deeply entrenched understanding of what lean dynamics is all about is what they need.
Yet many businesses and institutions do not begin by creating and sustaining a clear vision of their end point. In fact, the approach that many choose for going lean can, instead, contribute to obscuring this understanding from the outset.
Choosing a Path
Some lean researchers and practitioners emphasize the importance of learning by doing—jumping in and getting started as quickly as possible—and in doing so learning firsthand the power of what this approach can accomplish. While this makes sense within smaller operations, it can cause problems within more expansive businesses.
How can this be a problem? The greater the operational scope, the more workers’ span of insight tends to be compartmentalized. Proceeding without first restructuring to promote organizational flow, as described in Chapter 5, leaves people to come up with solutions based on a constrained perspective. As explained in Going Lean, this can prevent them from seeing the deeper lag and loss that their actions must overcome, causing them to simply “tamper” with a system they do not sufficiently understand.
Even worse, this leap to action can cause lean objectives to be trivialized. People come to see the application of lean tools and techniques as the focus of their actions, rather than setting their sights on achieving the deeper capabilities that these are intended to facilitate. This creates a mindset focused on waste reduction and marked by tool-centric approaches for gauging lean progress that can be difficult to overcome.
It stands to reason that conducting an up-front dynamic value assessment prior to embarking on any lean dynamics effort will go a long way toward preventing the emergence of such a damaging mind-set. Chapter 2 explains that its results can make the critical points clear when introducing the concepts and objectives of lean to the workforce, identifying ways for structuring the broader spans of insight, responsibility, and authority so that individuals can better identify and act on the challenges they will face. Doing this before launching into a lean effort can help by developing the means for all across the business to envision how a lean dynamics solution will ultimately look.
Recognizing the Limits of Benchmarks
Fortunately, as we have seen in this book, there are many examples from a diverse range of industries from which to learn. Businesses and institutions, large and small, offer diversity of experience through both succeeding and stumbling; their efforts have uncovered key elements that help point the way to lean advancement. Yet following their lessons too closely can be misleading.
For instance, when I visit a small manufacturer that has progressed substantially in its journey to lean, it is hard not to become excited at what it has accomplished. The same can be said of learning about organizations that have long ago reached an advanced stage of maturity. The specific actions they take, their tools and practices, and their focus on problem solving for continually improving their methods are held up as the key to success for all. These businesses demonstrate powerful results, clearly demonstrating the wisdom of their methods.
Yet each of these solutions applies to their particular circumstances: their size and industry constraints, the focus of their business, and their progress in advancing toward lean maturity. The presumption that these are interchangeable, that strategies will apply equally to any corporation at each phase of implementation, tends to misdirect attention. Organizations might focus on tools and methods rather than on creating the outcomes that lead to sustainable excellence in the eyes of the customers and the stakeholders. This focus can become a powerful force that distracts from a clear vision of success.
Rather than attempting to directly apply the tools or activities at prominent benchmarks, businesses and institutions will likely find far greater success by structuring a program based on the underlying principles they demonstrate. Not only will this create a more compelling argument to those across the organizations whose understanding and enthusiasm is critical, but it will much more closely reflect the changing needs of the organization or institution as it progresses through the stages of maturity.
Staying the Course
The ultimate goal of a lean dynamics program should be attaining a flat value curve—creating sustainable value across a broad range of circumstances. But keeping this perspective along the way can be challenging; organizations can easily become distracted by the successes they achieve along the way and then lose sight of this larger goal. And this distraction can lead them to backslide when they ultimately face circumstances that their interim state of progress is not yet sufficient to sustain.
Even the widely accepted benchmark of lean seems to have been affected. During the 2008–2009 recession, Toyota suffered its first annual loss in seventy years. It is difficult to fault the company, since its industry was hit particularly hard (and the company’s losses were far lower, and took a much smaller toll than those of many of its rivals). To Toyota’s credit, it did stick largely with its no-layoff policy (maintaining its other characteristics relating to advance lean maturity), recognizing the critical need to sustain a workforce that had become its most valuable asset—and sustaining workers’ trust in the company, critical to the company’s success.1 Still, it was surprising to see that Toyota did not respond as well as businesses like Southwest Airlines, whose value curve remained flat.
Toyota’s performance seemed diminished in other ways, falling short of what many believed it might have demonstrated. Most noteworthy was how it was forced to recall millions of vehicles for safety issues—a real surprise for a company so advanced with lean. Toyota seems to have explained part of the cause: It became caught up in the race to become number one and deviated from its earlier strategy, shifting aim to growth and market share.2 In doing so, the company deviated from other core lean dynamics principles; rather than preparing for whatever came its way, “our flexibility was only upward,” explained Ray Tanguay, Toyota’s executive vice president of North American production.3 The result appears to have been a dramatic drop in customer trust—a critical loss for a lean organization.
In today’s increasingly dynamic environment, it is easy to forget how vulnerable any business is. But Toyota’s stumble makes clear that any firm can fall backward in lean maturity. Organizations must fight the temptation to drift from the pathway to sustainable lean, planning for the serious challenges that might occur. Establishing and maintaining this mindset will serve as a powerful force to keep companies marching ahead, advancing in lean maturity as a way to better overcome the uncertainty that likely lies ahead.
Seeing the Art of the Possible
If businesses and institutions are to genuinely succeed, they must come to terms with the reality that today’s conditions are strikingly different from those that many were built to sustain. They must begin by accepting that creating a fundamentally different result requires the application of a fundamentally different approach. Entire industries must cease to cling to practices that worked well for the conditions of the past and let go of the presumption that existing methods can simply be tweaked, not fundamentally changed.
Going Lean provided specific examples of the challenges facing diverse manufacturing and service companies. It compared leading businesses head-to-head, assessing their value curves to identify the distinct differences between those that displayed the principles of lean dynamics and those that did not. From airlines, to retail, to automotive manufacturing, Going Lean showed how companies of various sizes and different constraints can thrive within today’s increasingly dynamic conditions if they open their minds and accept this new way of doing business.
Today, the urgent need for change among organizations is only growing. Educational institutions, for instance, face serious problems, yet they do not seem to be able to see far enough past their deeply held traditions to begin the dramatic transformation that they so desperately need. Lag appears to be tremendous; institutions appear so deeply entrenched in their rigid organizational structures that they seem to find it difficult to envision how they might begin to change. Yet the growing need to respond to dynamic challenges, whose implications affect people and industries across the nation, means that higher education stands to reap tremendous gains from embracing lean dynamics.4
Health care is another industry in which a new vision is desperately needed. It is astounding how far some hospitals have progressed in attacking some of the basic problems that escalate costs and put patients at risk. With hundreds of thousands of people purportedly dying each year from preventable causes, including medical errors or infections during their hospital stays, and with medical mistakes now a leading cause of death, those making progress, like PRHI, deserve great praise.5 Yet it is equally astonishing to realize how few health-care organizations seem to have made these advances and how much more must be done.
Finally, think about America’s manufacturers. Rapid changes in customer perceptions, combined with escalating fuel prices and increasingly global competition, have made competing based on past presumptions a losing proposition. In a business climate where competitors’ labor costs mean that the playing field is far from level, operational improvements alone are no longer enough. Moreover, customers expect more; they want personalized solutions that can deliver exactly what they want, at the highest quality and the lowest cost. Those who can best meet this expectation are likely to become the dominant forces of the future.
Creating strong, sustainable value in this environment takes more than implementing tools and tactics. Leaders and executives, managers, and workers across corporations and institutions must recognize that the crisis is upon them and that the time has come for change. They must see that shifting away from tradition is not the risk; the real risk comes from clinging to a sinking boat under the delusion that the situation will somehow improve on its own.
Where, then, should organizations begin? We have seen throughout this book that advancement begins by learning to recognize the gaps in the traditional methods for managing processes but also that the solution does not directly follow the problem. Rather than directly addressing process problems, the first step is to rethink value—fundamentally restructuring what they do to better suit today’s dynamic business environment. Conducting a dynamic value assessment and then identifying transformational focal points based on pressing customer and business needs, as described in Chapter 6, can point to specific, measurable, and actionable initiatives that will begin to create real transformation.
This is the vision that should guide lean efforts. By progressing down a pathway that increasingly extends individuals’ insight and involvement, businesses and institutions can progressively address their real challenges, and those of their customers, within an integrated solution. Doing so can create astounding results and open the doors for additional ways and new opportunities for meeting the emerging needs of the future.