Why Firms Fail At Lean

Efforts
Error #1 Situations

Allowing too much complacency

Error #2

Failure to create a sufficiently powerful

guiding coalition
Error #3

Underestimating the power of vision

Error #4

Under communication
Error #5

Permitting obstacles to block the vision

Error #6

Failing to create short-term wins

Error # 7

Declaring victory too soon.

• Until the change sinks deeply into the culture,

new approaches are fragile and subject to
regression
• Celebrating is fine, but any indication too soon
that the job is finished is a terrible mistake
Error #8

Neglecting to anchor changes firmly in the culture.

New behaviors must be made permanent.
Why Do So Many Change Efforts Fail?

• Fatal Omissions:
– Not addressing the concerns of individuals within
the organization.
– Not considering the effects on the organization as
a whole.
• Conclusion: Successful change leaders attend to
individual needs while remaining aware of the effects
of change on the whole organization.
MAKING LEAN SUSTAINABLE
LEAN = Rules
Vs.
LEAN = Tools
DEFINE LEAN AS A STANDARDIZED
WAY OF THINKING
 OVERVIEW

• THE 4 RULES TO SUSTAIN LEAN

• THE 5 PRINCIPLES OF LEAN SYSTEMS
• MAKING LEAN SUSTAINABLE
 LEAN = RULES NOT JUST TOOLS

• LEAN STARTS WITH RULES NOT TOOLS

• THE FOUR RULES
– 1. Structure every activity
– 2. Clearly connect each customer and supplier
– 3. Specify and simplify every flow
– 4. Improve through experimentation at the lowest
level possible - towards the ideal state
 LEAN = RULES NOT JUST TOOLS

• Rule 1 - Structure every activity

– Lean Is A System Not An Event
» Standardize everything that is done
» Make it a way of life not a “flavor of the month”
 LEAN = RULES NOT JUST TOOLS
• Rule 1 - Structure every activity
– Standardize Thinking
» Have all employees use a shared way of thinking
» Make decisions at the point closest to the information
needed
» Define and clarify the thinking
» The question is –What shared thinking, defined by rules
and principles, will be most effective at meeting the
strategic goals
 LEAN = RULES NOT JUST TOOLS

• LEAN STARTS WITH RULES NOT TOOLS

• Rule 2 – Clearly connect each customer and
supplier
– Internal – Each operation is the previous operation’s
customer
– External – Outside supplier base
 LEAN = RULES NOT JUST TOOLS

• LEAN STARTS WITH RULES NOT TOOLS

• Rule 3 – Specify and simplify every flow
– Product
– Material
– Information
 LEAN = RULES NOT JUST TOOLS

• LEAN STARTS WITH RULES NOT TOOLS

• Rule 4 – Improve Through Experimentation At The
Lowest Level Possible Towards The Ideal State
– See every problem as an opportunity to focus and move
toward the ideal state
– Decision making at the point of activity
 LEAN SYSTEMS

The 5 Principles
Directly Observe Work as
ACTIVITIES, INTER-CONNECTIONS AND FLOW

ACTION
ELIMINATION

SYSTEMATIC
SYSTEMATIC

PROBLEM
Create A

SOLVING
WASTE

Learning
Organization

REFLECTION
ESTABLISH AGREEMENT ON WHAT AND HOW

THE 4 RULES OF LEAN

 LEAN SYSTEMS

The 5 Principles
1. DIRECTLY OBSERVE WORK AS ACTIVITIES
INTER-CONNECTIONS AND FLOW
• Only through deep observation we can truly understand
the current reality
 LEAN SYSTEMS

The 5 Principles
2. SYSTEMATIC WASTE ELIMINATION
• We must move beyond simply thinking and talking
about waste
• Connect with your customer and always add value
• Relentlessly pursue elimination of waste
 LEAN SYSTEMS

The 5 Principles
3. ESTABLISH AGREEMENT ON WHAT AND HOW
• Standardization is the foundation for improvement
– Create High Agreement With No Ambiguity
• Sustainable change only happens at the systems level
– LEAN = RULES NOT JUST TOOLS
 LEAN SYSTEMS

The 5 Principles
4. SYSTEMATIC PROBLEM SOLVING
• See every problem as an opportunity to focus on the ideal state
• Decision making at the point of activity
 LEAN SYSTEMS

The 5 Principles
5. CREATE A LEARNING ORGANIZATION
• This is the glue that holds everything together
• Create frequent points of reflection
• LEADERS MUST BE LEARNERS AND TEACHERS
 MAKING LEAN SUSTAINABLE

• Start Changing the thinking of the organization

NOW!!!!!
• Keep moving closer to the ideal state -
Constantly
• Learn more on how to move the organization
forward
• Be committed on understanding it’s a long
journey to achieving LEAN
After the initial victory, how do we win
the war?
The challenge of staying lean, and the 10
decisions we should make.
Lean? We’re Already Lean

• We look, and what do we see?

– Somewhere in the organization someone is doing
lean.
– Isolated attempts with pride.
– No systemic effort.
– Another flavor of the month.
– Noninvolvement by workers.
– Indifference by management.
The End Result

• Dormant concept
• Few gains
• No true culture change.
• Management moves on.
• Workers become more resistant to
change as they learn to adapt.
The Big Question

How can we avoid this pattern?

Don’t Expect A Blinding
Flash of Insight!

• Mondini- Dimondi
• Small is big.
• Even mother natures builds a
plant one cell at a time.
 Your Decisions Make the Difference

• There is a set of decisions that can change your

experience.
• They are fundamental.
• They must be pervasive in the organization.
Decision 1: Set an Appropriate Pace

• It is a never ending story.

• A sprint will only leave you without the energy
to finish the journey.
• Methodical steps, no matter how small, will
accelerate the rate. (not insistence on speed)
 Decision 2: Involvement

• Are we going to exclusive or inclusive?

• There aren’t enough salaried personnel to pull it
off.
• Is synergy a reality or a myth?
• What does any individual need to be a good
citizen?
 Fatal Leap

NEED

INFORMATION

UNDERSTANDING

COMMITMENT

ACTION
Decision 3: Development

• Development is a business strategy.

• Development determines the quality of
implementation.
• You would never ignore the maintenance of a
machine.
• The return on investment has a triple digit
return.
Decision 4: Mutual Trust and Respect

• Trust is like a poker game.

• Trust is earned only over time.
• How can we honor each other?
• The lines are blurred but the responsibility is
still with management.
Decision 5: Open Information

• The old model has information as power and

therefore to be closely held.
• Problem solving is most effective if the current
situation is known.
• Some information can be closely held (profit
and loss).
Decision 6: Accountability

• Insist on it, but make a learning experience

from the event.
• Allow peer pressure.
• Hold management accountable for the Policy
Deployment.
Decision 7: Business Goals

• Don’t forget why you are doing lean.

• Lean at the expense of business performance is
unacceptable.
• The short run returns don’t always tell the tale.
• Share performance and challenges.
Decision 8: Leadership

• Noble leadership serves and receives in kind.

• Leadership is situational.
• Leaders can come from anywhere.
• Leading a team is different from leading an
individual.
Decision 9: Waste Elimination

• There will always be waste.

• Most of it is the result of a paradigm.
• It is a never ending pursuit.
• People, being the creatures they are, will have
to be challenged from time to time.
Decision 10: Recognition

• Reward those who follow.

• Recognize for true emphasis.
• Be genuine.
• Do it often.