Lean: Past, Present, and Future

This year, 2017, is the 20th anniversary of the founding of the Lean Enterprise Institute (LEI). It is an organization that has inarguably been the most successful and influential in shaping people’s understanding of “lean,” due in part to the central role that its founder, James P. Womack, and his associate, Daniel T. Jones, have played in bringing it into our collective consciousness. As an independent, unaffiliated outsider, I would like to share with you my reflections on this important period of time during which Lean grew immensely in popularity. With LEI as a central feature, I look back to the past, through to the present, and into the future of Lean. The overall aim of this blog post is two-fold: To make people think and to push Lean forward to evolve faster.

Preamble: More than 30 years ago, Taiichi Ohno warned: “…those who decide to implement the Toyota production system must be fully committed. If you try to adopt only the ‘good parts’, you’ll fail” (T. Ohno in NPS: New Production System, p. 155). Think about these two questions as you read the 20-year retrospective, below: 1) Is Lean, in fact, “only the good parts” of Toyota’s production system? If so, then it clearly sets people up to fail. Does that respect people? 2) Is Lean itself fully committed? Meaning, the researchers from MIT who gave us “lean” under the pretext as being synonymous with Toyota’s production system beginning in 1988, and today as synonymous with TPS and The Toyota Way? Have they been fully committed to adopting all the parts (mindset and methods), not “only the good parts?”

Let’s begin with the Past.

Twenty years ago I was a great admirer of LEI. I had high hopes that it would bring a lot of good to the business world – for all stakeholders, but especially to employees. And in some measure it has. There are many examples of organizations that, to varying degrees, have made many improvements over time that resulted in better outcomes for employees, suppliers, customers, investors, and communities. Through their sustained efforts, the world has learned of their interpretation of Toyota’s production system (TPS), known as Lean production from 1988 to 2008, and now Lean management.

But my admiration for LEI soon faded. Why? I felt that LEI had fallen behind in just 2 or 3 years after it was formed. TPS and Lean, while originally said to be the same, are actually very different, and the gap between the two widened over time as I learned more about TPS, as well as Toyota’s overall management system. I could clearly see a narrow focus on tools and that major elements were missing in Lean, resulting in the potential for managers to do harm to employees in the organizations that adopted it. Too often, harm actually did occur. That bothered me. As an outsider, it did not appear to me that LEIs leaders were bothered by this. That bothered me too.

Let’s be clear: Harm done to employees or other stakeholder is an abnormal condition. The normal condition is no harm, mutual benefit, and mutual prosperity. Efforts must be fully directed towards helping leaders and organizations understand and achieve the normal condition. That includes accurate representations of what Toyota’s management system is – mindset (especially), as well as methods – understanding in detail why some organizations succeed, and meticulous root cause analysis of organizations that failed in their Lean transformation process – of which there are many to study.

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This should have been the view of workers and their work 29 years ago when Lean first came to us in 1988 or when LEI was formed in 1997.

Everyone knows from my writing that I have been critical of LEI and its sister organization in the U.K. The criticisms have been many and varied, but several of the criticisms can be summed up this way: Slowness to recognize to new information and slowness to take action based on new information. For example, the “Respect for People” principle, which is essential for the proper functioning of TPS, has been evident throughout the long history of progressive management. Toyota made this explicit in April 2001, but it was apparent long before that. Within LEI, it appeared that learning had stopped, or was at least significantly delayed.  

It was not until 2007 that LEIs leader began to speak about the “Respect for People” principle, and not until 2014 that LEI became seriously focused on it. This omission, long in duration, damaged the Lean brand. But more importantly, it caused pain and suffering to employees in organizations where managers used Lean improve productivity so that they could cut labor costs by firing employees. The absence of the “Respect for People” principle for so many years gave business leaders permission to do harm to people under the name of Lean. To me, the silence from the global leaders of the Lean movement was deafening.

It is not the job of managers to cause human suffering. And it is not the job of LEI or other promoters of Lean to cause or contribute to human suffering. But that is what happened for the better part of twenty years.

A similar situation existed for leadership. It is again clear from the long history of progressive management that leadership plays a critically important role in the transition from supply-driven (batch-and-queue) conventional management to demand-driven (flow) Lean management. And, the depth and breadth to which leaders must change encompasses a wide range of beliefs, behaviors, knowledge, and practices pertaining to both people and business – economic, social, and political – as well as the differences between batch-and-queue processing and flow, and how to successfully transition from one to the other. These aspects have long been underappreciated by LEI, if even recognized.

Lateness in changing from Lean production to Lean management, lateness in recognizing the “Respect for People” principle, lateness in understanding the importance of leadership as well as the detailed differences between conventional leaders and Lean leaders, and lateness in studying and learning the root causes Lean transformation process failures. The information was out there, easily found and ready-made for distribution to eager and highly committed followers. This would have helped people closer to the time in which they actually needed the information. It surely would have averted harm to some people. And it would have averted harm to the Lean brand.

Let’s move on to the Present.

My graduate students and I have been analyzing various types of product, process, and business failures using the A4 method that I developed starting in 2004. LEI reminds me of one case in particular that we studied several times. That of Microsoft.

For decades, Microsoft’s success was largely due to its monopoly position in its primary marketplaces – operating systems and office software. Under the leadership of Bill Gates and Steve Ballmer, Microsoft achieved impressive gains in sales growth and profits. It succeeded in certain quantitative business metrics, but it failed in other areas that were less easy to measure.

Microsoft was a Windows-centric organization under Gates and Ballmer; everything must be about Windows, all the time. Every product and service must connect to Windows – even if it displeased customers. A similar dynamic seems to have long existed at LEI with respect to Lean.

Microsoft did not listen to outsiders or critics. It listened only to insiders, and especially those who were with the company for many years. It became insular, suffered from the not-invented-here syndrome, and thus missed many new opportunities to respond to and better satisfy customers. And it had difficulty learning from others. A similar dynamic seems to have long existed at LEI with respect to listening and learning.

Microsoft was good at buying technology from others and often did a good job of internally developing the product further, but it was poor at developing its own new products. Microsoft was slow to adapt and evolve as times changed. A similar dynamic seems to have long existed at LEI with respect to the evolution of Lean.

Over the past few years, Microsoft’s new CEO, Satya Nadella, eliminated the need for everything Microsoft does to be Windows-centric. He has invited outsiders and critics, to learn from them, and embracing things invented elsewhere as well as the people who invented them – including open-source software. Microsoft is now better able to adapt to changing conditions, innovate, and survive.

While Toyota has been and remains a great source of inspiration, ideas, and practices, they are not the only people or organization that LEI can learn from. LEIs constituents want information and training that will help them succeed in their particular circumstances, delivered in a timely manner, regardless of its origin – especially in the areas where LEI has historically been weak: Kaizen, leadership, “Respect for People,” and detailed analyses of Lean success and failure.

Windows remains a closed-source (proprietary) software system. TPS is akin to that; it is a closed-source management system. While there is sharing of some pieces of the source code, Toyota is under no obligation to share the entire code. Lean was presented to us in the past as a generic equivalent to TPS, and in the present as the generic equivalent of Toyota’s management system. Unfortunately, Lean remains more a closed-source management system than open-source – though, being “generic,” it should have been an open-source progressive management system from the start that everyone could contribute to and improve. As de facto gatekeeper for Lean and its MIT origins, major contributions from numerous sources, including Toyota, seem to have been purposefully excluded. For decades, large and important chunks of code were missing from LEIs interpretation of TPS despite its easy availability. This had a great effect on people and on outcomes.

Let’s conclude with the Future.

In order for LEI achieve its mission, “Make things better, through lean thinking and practice,” I believe it must gather up the useful pieces of code that exist at any point in time – past, present, and future – and incorporate them into a new open-source Lean management system. The future of Lean, in my view, is to generalize its applicability into new and relevant domains that satisfy the needs of organizations. Fundamentally, TPS, upon which Toyota’s management system is based, is a human information processing system. As I have written previously, it is a solution for information flow problems between humans within and between organizations, and also between humans and machines. This generalized feature is extremely important because blocked information flows cause innumerable problems for people, organizations, and society. Lean must be significantly upgraded to gain similar functionality to TPS and The Toyota Way as a human information processing system.

Beyond that, Lean should evolve into a system for improving human health in organizations. I have written extensively in this topic as well. Improving human health gives leaders a more substantive and impactful reason to adopt Lean management, and to learn how to practice it with distinction. My vision is that employees leave work healthier each day than when they arrived. Leaders should adopt that vision, and Lean management, with upgrades, can help them achieve it.

Lean as a solution for information flow problems and as a system for improving human health can evolve over time in series, or perhaps even in parallel. This time around, past errors must not be repeated in the presentation, promotion, and advancement of Lean. Lean must do good things for people and be unambiguously recognized for the good that it does. If Lean evolves in a way that continues to cause harm to people, then Lean might someday fade away.

Re-positioning Lean this way, and evolving it in this beneficial direction, simply recognizes Lean for what it is on its most fundamental basis. It will require some effort to change long-established perceptions of Lean, some of which are negative. But, moving Lean into this new direction will challenge everyone to think anew of what Lean really is. That, in the long run, can help Lean survive.

If Lean management evolves quickly in ways that are recognized as important to both business and humanity, then it is likely to survive long-term. Keep in mind that Lean could be on the cusp of being overtaken by digital transformation. While Lean management should be complimentary to digital business transformation, it appears that senior executives do not see it that way. They can use digital transformation as an excuse to quietly walk away from Lean transformation, which they have clearly personally struggled with, as well as their organizations.

I would like to close with two quotes by sensei from Shingijutsu USA:

Chihiro Nakao: “Use wisdom and ingenuity to protect people’s lives.”

Protecting people’s lives will emerge as a major challenge in the coming era of artificial intelligence, automation, and digital transformation.

Toshihiro Nagamatsu: “We are always at our worst. You may think you are a good company today, but make no mistake you are not…. There is no end. You must continually seek to improve.”

In a digital world, the survival of Lean management, and Toyota-style kaizen in particular, is essential because it will help assure that people remain connected to an authentic, tactile, and value-laden human experiences of teamwork and continually seeking to improve.

I hope my reflections as an independent, unaffiliated outsider are helpful and have given you much to think about in this New Year.

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