Lean Practitioners should Pay Attention to the Financials

Jason Burt

I am a firm believer of a long term approach to all company improvement strategies.  Whether you are using Lean Manufacturing, Toyota Production System, Six Sigma….Theory of Constraints or some other approach, It should be a longer term approach focused on creating a culture that empowers the entire company to improve and solve problems on a daily basis.  I’m not going to debate the “approach”…that was another blog post that you can read here when you feel the desire.  I want to talk about why some short term impact is important and how the company financials should play a part in your work.

As a lean consultant, I work with many different clients of varying knowledge in reference to Lean Manufacturing.  They all come to me for help with different business needs and struggles, and typically those needs are shorter term issues that need to be resolved.  These issues include cost struggles, quality issues, delivery problems, Lead time issues, and many other daily issues that business leaders deal with.  All real issues, all needing immediate attention, all issues that a Lean Manufacturing approach can address for the company. 

Now also as a long time Lean Practitioner and life long student of Lean (or Toyota Production System if you prefer), I also understand that taking a short term approach by implementing a bunch of Lean tools without a significant culture change will ultimately be unsustainable.  Any “improvement” gained from the work will be lost and the company will fall back to the previous level of performance.  

So why do I think it is important that we look at short term financial goals and look to the P&L for results.  Because part of that culture change includes the Leadership.  The Board of Directors, the Executive Leaders, the Senior Management….every single one of them needs to start on their journey of “shifting their mindset”.  The fact that the level of leadership that we are talking about is measured on a short term financial picture is the reality of the world we live in.  

So I take the “give and take” approach with leadership teams.  I GIVE them what they need right now to be successful, which is short term results that are moving the company in the proper strategic direction.  I then TAKE them to the shop floor to start showing them the power of Lean and how a long term approach to build the culture can shift the company today, tomorrow, and for the future.  

Shifting the thinking in the Leadership is your best chance to extend the vision of Lean and the impact it can have on a company.  Leadership is often looking month to month from a financial performance perspective….what if you helped them short term, and spent significant time with them on the shop floor developing their thinking.  Could the Leadership start seeing the improvement possibilities on a quarter to quarter basis, how about a bi-annual basis, multiple years?  Help the leadership, because they have the power to drive the culture change.

I often hear lean practitioners talk about why Lean has failed in companies and it typically has to do with lack of support from leadership.  

“leadership didn’t see the long term possibilities”

“they only wanted to implement tools”

“there was no investment in the people and culture”

And then I hear from Leadership about why it failed…

“all they were focused on was learning, I needed results”

“The company is in crisis, we have to have an immediate impact”

“I don’t understand how their work is going to move the needle”

In my humble opinion, they are both correct…and we need to find the middle ground that allows us to move forward.  So don’t be scared to help leadership with short term goals.  Use it as a way to develop a trusting relationship and then coach them on what the long term approach needs to look like.  This will allow you to slowly move leadership in the direction that will help the company, culture, employees, and the leadership.  

Sometimes we forget that every relationship is a GIVE and TAKE….especially when we are trying to help shift an entire culture within a company.  No journey is a simple straight line path…we have to be willing to find the balance to teaching and learning along with the realities of running a business.  

And of course, we are always willing to help.  Just check us out at ehiipconsulting.com.

Jason

Lean Manufacturing or TPS?  Who really cares?

Jason Burt

Yes, I said it….who really cares if it is called Lean Manufacturing or TPS…and I believe it 100%.  The truth is that there are many consultants and “experts” out there that focus way too much time criticizing work going on around us because of terminology and not based on knowledge of that persons approach.  

Disclaimer…

So my background is in the Toyota Production System (TPS).  I have worked with, for, and been mentored by Toyota for over 20 years in one capacity or another.  All of my learning and approach is based on TPS and I credit them with everything that I do in my consulting practice.  The reality is that I refer to or call what I do “Lean” on a daily basis.  And I am ok with that.  

Let me repeat “I call what I do ‘lean Manufacturing’ on a daily basis. And I am ok with that.”

The reality…

The truth is that the majority of my current customers and my target customers have heard the term Lean and have not necessarily become familiar with its roots based in TPS.  For that reason, I have embraced the term and use it interchangeably with TPS.  

The reality is “who cares”?  It is the thinking that really matters correct?  It is the approach that is important, right?  That is what is said by many leaders of our industry, yet some of those same leaders will be so quick to jump on someone over basic terminology that doesn’t mean squat.  I recently reached out to a connection on Linkedin who presents himself as an “expert” on this topic…and his arrogant response was “your lean is not the same as my lean”.  Now my question is simply…how would you know that seeing how we have never talked, worked, or even communicated together before me reaching out to connect…and ask him a question.  …I don’t get it.

What we should ALL be doing is recognizing that the terminology being used is purely based on where you came from, who you learned from….and that terminology is multiple times removed from where it originated.  It is the telephone game in real life for us adults.  

Example:  Is it pronounced Kanban (Can-ban) or Kanban (Kon-Bon)?  

I’m sure you have an opinion, but doesn’t it really matter…or does the proper use and understanding of how the system is used to make customer/supplier connections important…and using it properly to highlight problems for problem solving…   That is what is important to me and should be for all of us as coaches and leaders.

What is Really important…

What is really important in the Lean Manufacturing versus Toyota Production System debate is that we are all learning and improving our approach daily.  We all have the same issue that we deal with…and that is sustainability of the system and the approach.  We all have our thoughts on why this is an issue, not focusing on the people development, Leaders not engaged, tool focus versus culture development.  They are all true, and I have seen each of those gaps in groups using “Toyota Way” an “Lean Manufacturing” to describe their approach.  So I honestly don’t think that the terminology is the issue.  In fact, I have ran into some great problem solving, people focused companies that haven’t really heard anything about Lean Manufacturing or TPS…but their thinking already further along than some companies on the path already.  So once again…I do not believe that terminology is a major problem that we should waste so much time and effort on.

What we need to do…

I would like to our industry of Lean/TPS consultants and Leaders out there working hard to implement sustainable continuous improvement cultures stop worrying about the words and focus on the approach.  

Making sure that our approach is people focused to develop highly capable problem solvers across the organization, and that it is designing a system to support that work across the entire organization…that is what is important to me and should be to all of us.  We should all be focused on making our approach and others better despite the terminology difference.  

So, if I am in conversation with someone or working with a new client and they decide to call THEIR system the… 

…Operational performance system 

…Toyota Way system

…Enterprise continuous improvement

…Lean Manufacturing approach

and they are using…

Value Stream Mapping  versus Material and Information Flow

Kanban versus Kanban

Standard Work versus Standardized work

I’m not worried, because I am working with them on their THINKING and their APPROACH, not telling them what words they need to use within THEIR culture that they are developing.

Do the words matter at all…

So, before everyone jumps in with their comments as to why I am wrong and terminology is important.  I will say that the consistency of the terminology is important within the companies culture to standardize communication.  If a Lean organization is going to properly train and communicate Lean concepts, there must be a consistent set of Lean terminology that is used and consistent thinking behind them.  

…So yes, of course standards are important…

Culture Change

Culture Change – It starts with you Mr. CEO!

Jason Burt

The Culture Change “Question”

A common question that is asked of me during my consulting adventures is “How do we create culture change?”. This is one of the most difficult issues to address within any business. I will often start working with an organization well after their pursuit of change and a new culture vision has failed and typically cost many dollars and hours of effort to provide very little results. The simple question is why? Why did all the efforts of leadership meetings, crafting the vision, employee discussions, and communication plans fail and end with frustration and the same culture that has been representative in the company for years? It is because you didn’t change. You, the CEO, President, Owner, Founder, Chief I’m-in-charge person, or whatever you call yourself did not change the way you lead. You did not change YOUR behavior….so why would the culture change?

What typically happens…

I see this all the time; the role out of the new vision is eagerly met with anticipation and excitement by some early adopters in the organization.   These are the individuals within your organization that want and are waiting for change. The leadership team is talking about the new vision, pointing in the new direction for a brighter company future, yet still behaving and operating under the same guidance of the old culture. After some period of time trying to operate under the premise of the new vision, lacking support and similar behavior from the leadership team, they eventually retreat back to the comfort and displayed culture that continues to surround them.

What to do…

If Leadership wants to create a new business model and the culture that is needed to support it, they must model the desired behavior. Leaders need to simply lead through their behavior, and this will create the ability for the organization to follow and the culture change to take root. I still believe in having a very clear plan as to how we want an organizational culture to look, what behaviors we are looking for, and the end result needed in a business context, but none of it will be sustainable if the leadership team does not lead.

One of the areas of failure with accomplishing this alignment of leadership behavior and the desired culture is lack of process. As with any desired business result, a defined process to accomplish it is the best way to succeed. So creating a Management System that supports, guides, and provides a context to the desired behavior is a necessity. For example, if a company wants to use problem solving as a basis for improvement within their company….they better have a clear process to highlight problems, prioritize problems, and a process for solving them. In addition, they must be celebrating finding problems as opportunities instead of seeing problems as a negative and continuing a culture of “problems are bad”. In this situation, a process can be developed to model and support the behavior and culture desired. A process can align the entire organization around the common vision that will create a platform for sustainable culture change.

Often organizations focus on process in terms of operations and miss the opportunity to apply rigorous processes in terms of how we manage. What is the standard work when it comes to being a leader? What is the proper way to coach an employee through a problem? What are the areas of the organization that I should be looking at on a daily basis, weekly basis, monthly…etc. These are all very important aspect to make sure we are focusing on the things important to the business and behaving in a way the supports the vision of the company. This is a place that many organizations need significant help and don’t even realize the gap exist in most cases.

So, if you are having difficulty with culture change in your organization, look at your own behaviors first, and then look at your Management System (Process) second. If you haven’t changed your behavior and you don’t have a clear process, then you better get to work.

Jason