Changing Lean from a noun to an adjective may have extended the brand, but it has also added many new levels of confusion, division, and diluted the purpose of the basic essentials of Lean and CI.
Lean and an entire universe of continuous improvement (CI) labels have been around for decades. There is absolutely no doubt that these initiatives work well when implemented correctly . . . At least for a while. Like many of you, I have observed the tendency of organizations to search for what’s next while failing to acknowledge their basic building block failures of sustainable CI success. This has always been the case for decades – It’s how the Western economy is wired. In the last decade consultants and practitioners have continued to respond to this what’s next syndrome with a blue ocean of new acronyms and brand extensions of the same basic fundamentals of Lean and CI. Every time a study group visits Japanese companies (like they did in the 1980s) they come back with a new, repackaged what’s next.
All of these various initiatives have their assumed philosophies, methodologies, terminology, biases, conflicts, and benefits. There exists so much overlapping knowledge between these Lean brands while some attempt to push the brand into something that it isn’t (e.g., Lean Business Strategy, Lean Leadership, Lean Culture, Lean Transformation, Lean Innovation, etc.). These are standalone competencies that are not Lean dependent but serve a much higher purpose of organizational greatness. The intent is understood but these competencies must be developed far beyond the Lean cause. Then there are those constant debates about the benefits of one approach over the other approaches. Even within a particular CI approach there is widespread confusion. Interview a dozen different individuals in an organization and you get a dozen different perspectives, goals and objectives, and definitions of the content in their CI initiatives of choice. So how can organizations expect to cascade a uniform story across the organization? That’s a real problem.
What’s Next – Lean IoT? Lean Robotics? Lean AI? Lean Everything Else?
Changing the word Lean from a noun to an adjective has not worked so well. The answer is not in a single point of view or another new brand label using Lean as the adjective! The purpose of this post is to stimulate discussions about how all organizations can achieve a higher order of success with their strategic and operational improvement journeys – In their own way.
Remember the Fugawi Indian Analogy?
Instead of mastering the basic essentials, this constant Lean and CI branding extensions have produced more rain on the CI parade than real benefits. Everyone jumps on the branding bandwagon of what’s next, but no one takes the time to figure out what kind of bandwagon is really necessary. These good faith efforts and best of intentions have added many new levels of confusion, division, and diluted the purpose of the basic essentials of Lean and CI. Today in far too many organizations, leadership and people are exhausted and more disengaged with formal CI and on to other more pressing issues of the moment. Others are blindly and deeply rooted into their daily Lean routines, TPS improvs, Shingo lingo, and KATA sonatas. Too many organizations are on a Concord Coach ride with their Lean, TPS, Kaizen, and other CI initiatives and refuse to change course.
To really top things off, there are organizations who conveniently dream up excuses to postpone improvement. Here are a few comments (I know your management would never say these things right?):
“Let’s put off dealing with this problem until we get through this quarter.”
“We finished our continuous improvement program years ago.”
“You fund it. There’s no money in my budget for improvement, and it’s not part of my goals and objectives.”
“We already know how to improve, and if we had more time we could do a better job.”
“We’re good, it’s been assigned to a Black Belt.”
(Feel free to share any similar comments with us that you have heard)
After decades of experience only a minority of organizations have culturally embedded and institutionalized CI as a way of life. What have they done differently? They view their efforts as an adaptive, integrated business system and ever-evolving operating model (in name and in practice) in their own way. Their operating model is well aligned to customers, business requirements, and talent/cultural development needs and they consistently achieve superior performance. For everyone else, they are stuck in a mode of mimicking Toyota or other organization’s programs, or merely going through the motions of tools, terminology, symbolic storyboards and signage, A3s and value stream mapping, KATA cards, and beautification exercises because it must be the right things to do. Incremental improvement has become creeping complacency.
Some organizations have conveniently changed the name of their activities to a business system, while not understanding what a true “business system” approach to strategic improvement really entails. Lean, Kaizen, TPS, Toyota KATA, Operations Excellence, and CI in general has splintered into various mutual admiration groups who are putting their own du jour programs of choice on the wall and admiring them . . . While nothing is really improving. It’s like fake news . . . Fake improvement! It’s time to step back and ask the proverbial Fagawi Indian question (“Where the Fugawi?”).
The World Has Changed How We Improve
Now let’s add in innovation, digitization technologies, and operating model transformation possibilities into the mix. The need for improvement is at a higher speed and magnitude than ever before. The capabilities to innovate, plan, deploy, and execute these quantum leap improvements have arrived. We all live in a change or fall behind quickly world. All organizations now need to focus on the masteries of innovation, digitization technologies, operating model transformation and CI. All are necessary for sustainable successes in the marketplace. If your organization is not so great at CI, it probably won’t be so great at the larger digital transformation challenges.
Let’s return to CI. If organizations are reacting and always fixing the same problems, then they don’t have a solid planning, deployment, and execution infrastructure. They are failing at CI but maintain a false sense of success through activity. A digital economy promotes predicting and preventing wastes to come into the organization before it arrives. Organizations that choose to remain in a detect and fix mode will never get operating model transformation and digitization right. There just isn’t time to do both. It’s time to change the CI model. There’s probably a stronger word for it than reboot – Like adaptive reinvention or renewal, a radical shift from the static and superficial “As-Is” copy-and-mimic practices in many organizations.
The Future of Strategic and Operational Improvement
First of all, organizations can do themselves a great service by stepping back and looking from the outside-in at their various CI initiatives. It’s an emotional competency called “Learning to see yourself” and acknowledge what you’re looking at even if it’s bad news. Remember, failure is just a temporary learning experience in a true continuous improvement environment . . . Unless organizations choose otherwise. If organizations ever want to turn things around they must be willing to put the keys down and rethink their journeys. More of the same is not an option for success. Statements like “We’ve been involved with Lean or TPS for years” are now highly subjective in terms of real value contribution. This recent evolution of Lean and CI branding has caused executives to lose interest in Lean and CI in favor of instant gratification and short term performance. They look at words like Lean Strategy, Lean Leadership, and Lean Culture and assume their Lean people are taking care of these things. The answers are not in copying some other organization’s way – It’s not your way, and many of the most critical success factors (e.g., leadership, strategy, culture, organizational dynamics, customer centricity, scalability, human capital, etc. ) are invisible and cannot be copied. It’s time to stop the variations on the same themes, and realign with an ever changing world with very different expectations of strategic and operational improvement.
Return to the Basic Business Fundamentals for Success
What are these basic fundamentals? They have nothing to do with a particular brand or label on an improvement movement. The basic business fundamentals address what the organization must accomplish to optimize competitive success. We help clients to define these basic business fundamentals using a “Jobs To Be Done” approach. A return to the basics of what makes organizations successful is a great place to reset any and all improvement initiatives. For example, within your own organization this will include but is not limited to the following points:
- Customer-Centric Market Focus: Understanding and fulfilling an unserved need with greatness, consistency, and best value;
- Creating the Customer Experience: Delivering the WOW factor to customers through service, ease, value, collaboration, support, and other valued attributes;
- Creative, Adaptive, Servant Leadership: Developing, engaging, and empowering the full brainpower of the organization;
- Innovation, Creativity, and Openness to Change: Understanding known, unknown, and undiscovered customer requirements (“Jobs To Be Done”). Embracing and recognizing the constant need to reinvent and improve (innovation + continuous improvement)
- Best Practices in Critical Core Processes: Sales, marketing, advertising and promotions, order entry, S&OP, supply chain management, finance, customer service, engineering, manufacturing, distribution and warehousing, transportation and logistics, etc. Also a willingness to disrupt these best practices for better best practices;
- New Product Development: Focused on innovation, speed, cost, minimum viable product (MVP). Quality, reliability and field performance are givens;
- Clear Strategy, Vision and Direction: This has become a real time challenge for organizations;
- Awareness, Communication, and Reinforcement of Purpose: The time of “launch and delegate” is over. Major change requires the fresh stream of new ideas, and communication emotionally connects people to this journey;
- Proactive Talent Management: This is deliberate and well planned human capital development (e.g., talent planning, acquisition, development, scaling, growth, etc.)
- No Fear Engagement and Ownership: Engagement is the norm, experimentation and new learning and a wealth of new experiences without consequences is a must for personal and cultural development
- Business System Best Practices: Best-in-class practices for leadership, strategy and alignment, deployment planning, execution, and sustainability of new gains;
- Innovation through new people + new thinking + emerging technology + open experimentation;
- Integration of the right digital technologies (e.g., predictive and preventive business analytics, mobility, cloud-based visibility, real time performance dashboards, real time process and equipment diagnostics);
- Velocity, cost, efficiency, quality, perfection, margins and making profit, growth, investing in the future, agility, talent either in company’s DNA or you cannot compete;
- Continuous idea streams followed by innovative, rapid-fire improvements (Amazon model). Simple, low overhead improvements, laser targeted, easy to implement, quick market results;
- Execute Correctly and Swiftly, Achieve the Desired Results: Most companies oversimplify change so they underplan and under-execute (Weak at execution and sustainability);
- Balanced Performance Scorecard: Right balance between short term (financial performance) and long term (CAPEX, talent development);
You get the idea. The objective is to define the basic business fundamentals for success in a way that is totally removed from the standard spectrum of improvement offerings. The focus is more on building opportunity harvesting and problem-solving competencies independent of embracing and practicing a particular CI approach of choice. It’s a big mistake to layer on Lean, Kaizen, TPS, KATA, or any other improvement initiative (especially technology) unless the basic business fundamentals for success and the corresponding what, why, who, when, where, and how details are well analyzed and defined and widely understood. These details change much more frequently in a digital economy so the “means matching” is a continuous challenge and improvement horizons are shrinking. The need and possibilities for improvement are greater than ever before in the history of improvement.
Every organization’s journey is unique in terms of operating model transformation and CI opportunities, and the canned, single perspective solutions are the wrong approach. The basic business fundamentals for success should drive the type and focus of change and improvement initiatives. The future successes of strategic and operational improvement requires a more holistic business system approach that embraces innovation, operating model transformation, emerging technology, human talent and cultural development, and CI as the sustaining factor. All of the elements for success are tucked under the business system or operating model framework. For the best performing companies at improvement, it’s an extension of their current business system best practices. These organizations have a huge advantage at digital transformation.
Architect Your Own Business System – In Your Own Way
Here’s an interesting hypothetical question: If you threw all CI philosophies, approaches, methodologies, tools and techniques, etc. into a basket and were asked to develop a tailored XYZ Business System using only 20% of the content of the basket to drive your basic business fundamentals for success, what would you do? This proliferation of branding, philosophies, and approaches is all good stuff but it’s confusing as hell to people. It’s like each week the menu changes, the direction changes, the priorities change. In your own way means consolidating and rolling in this scope, depth, and breadth of CI under a common umbrella (XYZ Business System) that fits your customer expectations, business requirements, and cultural development needs. The rest is there in the background and can be tapped when the basic fundamentals drive the need.
Next, organizations must design and develop the operating architecture of their XYZ Business System. This has nothing to do with Lean, TPS, Kaizen, KATA, or any other CI branding. The architecture defines the company’s operating model. Below is an illustration displaying an example of this holistic, integrated approach. On the left is our Lean Business System Reference Model framework. It was named Lean for a book (Global KATA) but the word could be replaced with the name of your organization, It is a living work-in-progress and our perspective of a true business system architecture, which may be differ slightly from your organization’s required architecture. It’s a useful guide based on decades of client experiences and benchmarking data – But don’t try to copy and mimic it. More thought and work is required to adapt this reference model in your own way.
The most successful organizations have adapted a business system approach to their initiatives with the formal elements of leadership, strategy and alignment, deployment planning and prioritization, change awareness-communication-reinforcement, talent and human capital development, flawless execution, balanced performance management. This architecture is their operating model engine and runs like a high performance engine, including frequent tuning and upgrades to increase system performance.
Integrate Innovation, Digital Technology, Transformation, and CI
On the top left of the diagram is the Fuzzy Innovation Zone. This is where a steady stream of new ideas and possibilities are conceived. Obviously organizations can’t do everything and there are many unknowns to each of these ideas. It is not known if some are even feasible. A formal down-select process takes innovation to the next level (The Transformation Zone) where more definition, goals, and expected outcomes are added. Assumptions about operating model strategies and digital technologies are formulated.
In the Fuzzy Innovation Zone and Transformation Zone, the proposed ideas are non-deterministic in that they are unpredictable and involve choices between indistinguishable options and possibilities. At this stage, transformation is an open ended journey without concrete solutions to business challenges. Lighthouse Pilots provide the sandbox of experimentation where non-deterministic ideas are translated into workable and executable deterministic solutions, or discarded through lessons learned for other options and possibilities.
In the Alignment, Planning, Deployment, Execution, and Sustainable Results Zone, the XYZ Business System provides the integrate architecture to do this successfully. This is a more deterministic problem solving zone where more structured waterfall-like improvement approaches can be used with great success. The diagram displays three distinct zones. In real life there is a lot of grey area between zones. For example, some Lean initiatives are pretty innovative and clever, and may result in a breakthrough. Not all transformation strategies require Lighthouse Pilots, only the ones where high uncertainty, risks, costs, and customer/market disruptions may occur. Many operating ideas can be implemented immediately. Innovation and transformation rarely hit the intended mark and require CI efforts to fine tune these dramatic changes.
The major difference in this business system or operating model infrastructure is that everything is well integrated, and driven by the basic business fundamentals for success. It’s a concept and proven approach for greater business improvement successes because it aligns and connects the full spectrum of improvement possibilities from innovation to transformation to CI. This is much different than a variety of du jour initiatives and single point perspectives running and hoping to address the basic business fundamentals or applied without knowledge of the basic business fundamentals. These initiatives should be connected as their impact is far reaching across the organization.
No single point improvement initiative is all inclusive or all encompassing. In other words, organizations are kidding themselves with just a Kaizen, just a KATA, just a TPS, just another single point initiative. CI initiatives are most effective at improving the As-Is conditions of work, but it does not tell you how to optimize the basic business fundamentals for success. Many CI initiatives are narrowly focused and address only a small or the wrong increment of total improvement opportunities. All of this points to the organization’s need for an integrated business system approach to improvement, and to redefine, consolidate, and re-point their strategic and operational improvement initiatives to achieve greater success now and in the future.
Share your own thoughts and experiences. How should organizations move to a higher order of improvement?
So what’s your organization’s next step? The first step is a Operational Transformation Diagnostic, whether you find the time and resources to conduct this on your own or seek outside help. Our specialty is small and mid-sized companies. For the typical $100M+ facility this thorough diagnostic and reset effort can be completed within 3 weeks.
Postponing your own effort or continuing on the same course is not an option. Take the first step now and see a big difference in operating performance within 30, 60, 90 days and beyond.
Terence T. Burton is President and Founder of The Center for Excellence in Operations, Inc. (CEO), a management consulting firm specializing in strategic and operational transformation. Terry has four decades of extensive operations, quality, engineering, mergers and acquisitions, and supply chain experience as a hands-on practitioner, interim operations leader, and executive in several corporations. He has led consulting engagements in a wide spectrum of industries, having consulted with over 350 clients in 23 countries on their strategic and operations improvement initiatives. Terry can be reached directly at firstname.lastname@example.org