Lean is about transforming the organization to achieve the goals of its various stakeholders – customers, employees, and stockholders.
Lean transformation is not instant nor easy. It requires time and effort, and more importantly right thinking.
Lean transformation takes place anytime and anywhere. It is evolving moment by moment, in the corporate boardrooms and in the shopfloor.
Since every organization is unique, transforming it to lean requires a situational approach. You cannot just copy another company’s success or implement what every lean book says. You have to look into your organization – its systems, purpose, processes, and people. Basically, you have to align your process works and people capabilities with that of your organization’s purpose in order to create and achieve optimum value for the business and the customer.
Asking questions is fundamental to Lean, ever since its beginnings at Toyota. Taiichi Ohno, Shigeo Shingo, and the countless technicians and workers who were involved in the development of the Toyota Production System, did not have outside models for lean. Instead they observed what’s happening in the process, asked questions about the problem and tried to find solutions by trial and error experimentation.
In understanding the lean transformation, you have to ask five fundamental questions:
What is the purpose of the change–what true north and value are we providing, or simply: what problem are we trying to solve?
How are we improving the actual work?
How are we building capability?
What leadership behaviors and management systems are required to support this new way of working?
What basic thinking, mindset, or assumptions comprise the existing culture, and are driving this transformation?
Fig. 1 Lean Transformation Model
Business Purpose
The survival of every organization is dependent on how well it solves the problems of its clients, and how efficiently it works. Therefore the purpose of any business will always have two aspects – the customer needs and the business needs. The organization must find ways to do better customer satisfaction and at the same time to achieve better bottomline profitability. This is the point where the organization must find exactly what value is expected. So, it has to know precisely what business problem to prioritize and tackle. Oftentimes, solving problems of the customer automatically solves the profitability problem.
Process
Once you know the business purpose – the problems to solve that impact both customer satisfaction and business profitability – you have to understand what work should be done, or what work should you be improving. The process answers what work should be done to achieve the organization’s business purpose. The process must allow the flow of value unhampered. It has to be robust, flexible, and responsive to situations. It is senseless to do improvement projects that are not directly aligned with the business purpose. Even in projects, the value must flow from customer needs to customer expectations, via aligned processes and projects. These improvement projects must ensure that processes are continuously available, capable, adequate, and flexible.
People Capability
People capability is more than just doing the roles and responsibilities assigned to them. In lean transformation, the people must be capable of evaluating their work in relation to the business purpose, and lean leaders must be aware of this. Everyone must know the basic work, how to respond to abnormal situations, and to actively engage in how to improve the process.
In Toyota, as well as in other Japanese companies, they employ a routine known as kata. Kata is a deliberate practice of routines done again and again until they master certain patterns. Kata is practiced by everyone, from workers to staff to managers. Mike Rother identified two types of kata, the improvement kata and the coaching kata. Central to improvement kata is conducting experiments to achieve multiple and sequential target conditions that aim to achieve a higher level objective, goal, challenge, or purpose. To be able to conduct the experiments, an employee must know the ultimate goal and the current condition. Since a goal are often cannot be achieved in a single experiment, target conditions between the current condition and the goal must be identified and achieved sequentially.
Fig. 2 Improvement Kata
Management System
Process control and people capability obviously do not happen by chance, rather they are carefully designed and executed. A management system must be in place to define, coordinate, and support them. A management system includes the top-down deployment of strategy to the operation through hoshin kanri, and kaizen improvement using PDCA and A3 problem solving, and the bottom-up daily process reporting and review. The Plan-Do-Check-Act (PDCA) cycle mindset is pervasive in lean transformation, being continuously implemented through stages of improvement and standardization, delivering an ever increasing value to everyone.
Fig. 3 PDCA Cycle
Leadership Behavior
And to be able to support and effectively and efficiently implement the management system, leaders must exhibit proper behaviors by acquiring the necessary soft skills. Coaching kata facilitates the learning process of the employee under the guide of a coach or mentor. The coach is well-versed in the management system and in implementing improvement kata. The coach establishes the goal as well as the series of target conditions that the employee/coachee has to achieve.
Mindset
Since lean transformation is situational, you have to clarify the basic thinking, mindset, and assumptions regarding the transformation you are about to undertake. One example would be whether you need an implementation mindset which you may use benchmarking or find best industry practices, or, you need a science-based approach by conducting experiments in your shopfloor.
Culture
Culture is the collective norm and behavior of the organization. What is the ideal culture you want in place in your organization? What is the current culture, and how far are you from the ideal culture?
Cultural change forms the foundation of lean transformation, without which transformation will not happen. But how to change the culture? John Shook provides a model based on his previous experience at the NUMMI, the joint venture car assembly between Toyota and GM. Shook said that it is more effective to change the behavior to change the thinking, rather than the other way around. The example he made was the andon cord used in NUMMI. When it was first introduced, his GM colleagues resisted the use of andon, to them it is about giving the workers the right to stop the line. But Toyota’s intention really was giving the workers the obligation to stop the line whenever problems occur. It is a powerful promise from the management that if a worker encounters a problem, the leaders will come to his aid. Respect for humanity is a culture deeply ingrained in Toyota.
Fig. 4 John Shook's Cultural Change Model compared with Edgar Schein's
