Lean Practitioners should Pay Attention to the Financials

I am a firm believer of a long term approach to all company improvement strategies and a Lean Financials focus is not typically considered long term.  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 with a Lean Financial Focus and how the company can benefit long term from the work.

The Lean Approach Matters

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.  

Lean Financials Focus for Leadership – Be Flexible

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.  

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 with a Lean Financials focus, and also 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.

Financials Focus Helps with Lean Commitment

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.  

Balanced Approach for Lean Success

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