Reinventing “Lean Thinking”

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President, EELI Group Inc.
Izabela Waglay – the founder of the EELI Group Inc., a business design and change management consulting practice performing Business Design and Change Management consulting roles for a number of telecommunications and health industry service providers. Izabela has over 30 years global experience in the business and information technology field leading large, multi-national teams on business design, Customer Relationship Management (CRM) & Billing systems implementations and change management initiatives; recently completed a major business transformation engagement at Rogers Communications where she advised and assisted in the development of the transformation roadmap, establishment of the approach for the client experience driven business re-design, and execution of the change management program.

Has Lean delivered its full promise to date? Observing the evolution of the “Lean Thinking” concept in the past 30 years in North America is very interesting. A few years back,  the (yet another new) term “LEAN” was coined and brought forth, which I found fit perfectly in describing the main thrust of the philosophy and what the driving methodology was intended to achieve. 

I use the term “evolution” here, as “Lean”  was not a new invention, but rather evolved since the 50s’, and has been referred to as Just-In-Time (JIT), Cycle Time Management, Time Based Management, Time Optimized Processes, Lean and Agile to name just a few.  During the 80-ties I was introduced to the concepts of JIT & TQC (Total Quality Control). I realized very quickly that an operational excellence of the organizations primarily depends on the design of their end to end processes, associated workflows, and their process & people performance management. An organization first needs to concentrate on simplifying both: its and suppliers’ and partners’ processes before venturing out and attempting to automate complex processes burdened by a myriad of non-value-added activities.

Many organizations often realize, to their consternation, that they are unable to achieve the expected benefits of ‘Lean’ or automation. Therefore, they keep reaching out for new tools hoping that it will be a new ‘silver bullet’ that will finally bring the anticipated results. While the true “root cause” for the lack of success have not been truly examined, they simply turn to the next “Flavour of the Month”. By doing so, organizations create varied degrees of confusion amongst their employees and associates. Eventually, slowly but surely the organizations and their employees become disillusioned and their commitment to and support of the “Lean/Agile” transformation initiative is gone.

Lean is about Behaviour

Importantly first and foremost, “Lean” is a fundamental change in how the people within an organization think and what they value, thus transforming how they behave.  It is not merely a set of processes and practices found on the operations floor or in the administrative area. Positive results are achieved from changed process design and the supporting practices and policies once a common set of beliefs and principles are understood, internalized and adopted by all: leadership, front line employees, and the suppliers and partners. I believe that we will have to fundamentally change the way we deploy Lean Thinking in North America. Should we opt not to, we chance becoming proven monuments to the definition of insanity namely: “Doing the same things over and over again, and expecting different results!”

Here too lies the big difference between our North-American “business mentality” and approach compared with Japan. The Japanese have kept steadfast, never swaying away from their terms such as:  “Kaizen(Improvement),pokayoke(mistake proofing),kanban” (“Just in Time”), “gemba” (“the real place”), “muda”(waste), & ” muri” (imperfection). They made it a part of their business DNA. They live and practise those concepts every waking hour, as they have for over 60 years. They are truly committed to being part of their company’s success. In North America, on the other hand, we are constantly chasing yet another magical approach or a new management fad. We believe these are going to give us the right answers instead of facing the real reasons for our lackluster performance and committing to the implementation of the appropriate corrective actions. For over last 40 years, the North American enterprises were very much aware of and had full access to all these excellent methodologies and tools that deliver excellent results, as demonstrated by the Japanese companies.  Yet, very few North American organizations persisted with the implementation, deployed Lean correctly or secured full commitment of their people to the “Lean Thinking”. 

A “Lean” enterprise understands and sincerely believes in the fundamental virtue of its basic Lean principles. Within that Lean organization, everyone is focused on identifying and eliminating sources of waste and inefficiency. We look at the world through the eyes of our customer and seek to fulfill our customer’s expectations. We value only what our customer values. It is vital to note here, that we must focus primarily on the External, but we cannot forget the Internal customers in the supply chain. We have to anticipate change and learn how to be responsive and agile to make change our ally.  

A “Lean Agile” enterprise:

  • Develops an in depth, collectively shared, and continually evolving knowledge of its seamless, waste free process flows
  • Values the power of sharing information and open communication
  • Understands the criticality of  collaborative and transparent relationships within the organization as well as with its partners & customers
  • Has built in change management processes, practices, and capabilities to rapidly and effectively respond to any external or internal change stimuli or improvement opportunities

You cannot institutionalize all those characteristics without first obtaining true buy-in and commitment from each and every stakeholder (internal or external) who is expected to become part of this Lean Journey.

Remember: “People DON’T resist Change, they DO resist BEING CHANGED“!

Because Lean is about optimized process flows as well as beliefs and behaviours, it is applicable to any institution that delivers products and services to its clients (customers, patients, citizens).  Therefore, Lean methods and principles apply way beyond the operations floor and encompass the entire Enterprise in any type of industry, public sector, academia, or not-for profit. Its benefits pervade the entire institution. Once all employees adopt “Lean Thinking”, they are able to see the world through their customers’ eyes, and are passionate about finding and eliminating waste, they can improve any “process flows”, optimize cycle time and produce products & services of high quality.

Unfortunately, too many have been introduced to a very narrow perspective of “Lean Thinking”.  “Lean Thinking” was often viewed as a collection of practices which have been relegated to being appropriate only “on the operations floor.” As a result, the true transformational power of adopting “Lean Thinking” has often been lost, with organizations realizing only a fraction of its potential.

The true transformational power of Lean Thinking lies in its inherent ability to unlock the potential of the entire Enterprise: It can transform everyone and everything that an Enterprise does. In fact, when totally adopted, Lean Thinking cannot help but extend its transformational power both upstream to our supply base as well as downstream to our valued customers, forming the Totally Integrated Supply Chain!

In an interview with Karl Moore from the Globe & Mail (March 1st, 2011): “Business change that is more than the ‘flavour of the month“, John Kotter, professor emeritus from the Harvard Business School, sheds some needed light on HOW enterprises should condition and enable their employees to create an Agile enterprise that is highly flexible to understand, adopt, plan and deploy any change that the customer, market place, new technology, etc., dictate and expects nowadays.   John Kotter stresses that the organizations need to build into the way people think and operate, the idea of looking for opportunities and getting up each day with some sense of urgency to improve and eliminate waste.  As long as the organizations build in the teamwork as an integral part of its culture then when the change is being introduced, everybody in the organization knows intuitively what and how it should be done.  The effective and transparent communication beyond the traditional hierarchies is a key to fostering collaboration, accountability, and culture of innovation, customer service, and continuous improvement.  

Realizing the true benefits of the LEAN Enterprise

We have found that companies who have enjoyed the greatest success in transitioning to Lean are those that took a holistic approach. They have viewed and have treated their transformation as a fundamental restructuring of the extended Enterprise, i.e. including their suppliers & partners.  This business model re-invention always included all the end to end processes, organizational structures, business and information systems, workforce policies, incentive systems, and relationships with their partners meaning, customers, suppliers and employees.

In summary, to guarantee that the organization achieves and realizes the true attainable benefits of Lean Thinking, the organization needs to implement & institutionalize all the concepts, tools and structures listed below:

  • Learning Organization
  • Strategy Deployment – Hoshin Kanri
    • Ability to capture and cement strategic goals as well as flashes of insight using the collective thinking power of all employees to make their organization the best in its field
  • Value Stream Mapping
  • Evolution Planning
  • Team Facilitation
  • Installing a Lean Council
  • Measuring what matters
  • The Visual Enterprise
  • Unwavering commitment to the Continuous Improvement Journey
  • Celebrating Success

While it is important that each of the items is being addressed, it is equally critical that the organization’s senior leadership demonstrates ongoing commitment to the program and provides their emotional support. At the same time, the line management & front line employees and associates apply the Lean Thinking in their day to day activities and assume the full accountability for the outcome.  Their efforts and their emotional commitment is acknowledged and fully recognized. Emotionally committed employees build much stronger relationships with the customers, partners, and suppliers thus leading to establishing organizations ‘that Last’.

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