The goal of any athlete competing in a race is to win. How much do they want to win by isn’t something athletes usually think about. They are content if the smallest margin of measurement results in a win. For example, a runner wins if they finish 0.001 seconds ahead of their nearest competitor. They would win if they finish 1 second ahead of their competitor. And they would win if they finish 10 seconds ahead of their competitor. Does it make sense to train for a race to win by a margin of 10, 100, or 1000 seconds? No, it does not. To finish 0.001 seconds ahead of everyone else is good enough. That’s a win.
So too in business. Winning by a little is good enough.
Winning in business is widely accepted to be wealth creation for shareholders. This has been so for hundreds of years and longer. Page 34 of my book The Triumph of Classical Management Over Lean Management contains an interesting chart titled “CEOs Wealth Creation Playbook.” There are 23 actions that CEOs can take, separately or in combination, to create wealth. And they can repeatedly apply these 23 ways of creating wealth. Each can be completed in much less time than Lean transformation. Hence, as we have seen over the last 30 years, there is very little pull for Lean transformation among CEOs. Occasionally, however, there is a CEO who wants Lean transformation. We welcome that unicorn CEO into our outstretched arms and do all we can to help them succeed. And we learn from them. But, otherwise, forget about Lean transformation and don’t expect much in the way of “Respect for People.”
CEOs want the company to be better than the competition — a little better. In the running race analogy, that would be 0.001 seconds or 1 second better at any point in time. The company does not need to be a lot better (10, 100, or 1,000 seconds) to win. Nor do they desire to be a lot better for extended periods of time because things will change — customers, products and services, markets, laws and regulations, policies, leaders, international trade, the weather, etc. Most CEOs want whatever tool will help them win today, not years from now. The big-name consultants have long realized this and are exquisitely constructed for dreaming up new tools (or re-packaging old tools) that will help CEOs win today.
Being a lot better is the opportunity that Lean management presents — 10, 100, or 1,000 seconds better. But, given that being a lot better is not truly necessary, Lean is therefore not necessary. There is no need for Lean. If a CEO wants to win big, they acquire another business or merge with a competitor. That is a quick-and-easy, fully accredited, method for wealth creation (at least initially). Why, instead, would a CEO create wealth the hardest, most complex, and most confusing way possible — Lean? Time has proved that to be an unreasonable expectation.
If we accept the evidence that has long stood before our eyes, we realize that Lean tools are all that some CEO thinks are necessary to be a little bit better than the competition. Most CEOs don’t truly think Lean tools are necessary. Unfortunately, Lean management is not competitive with the other choices that CEOs have to win in the marketplace — if only by a hair. It is sad to say this, but it is the result of not understanding the institution of leadership, the promiscuous and predatory nature of business, the central role of wealth creation in classical and neo-classical economics, and that substantial change in mindset and methods is a political problem, not a technocratic problem as it has long been thought to be.
So, where does that leave Lean management? Perhaps one day the need will arise for the replacement of classical management. That is our hope and we should keep trying because circumstances could change suddenly. Yet, the technological infrastructure in industry, whose build-out started in the early 1960s, is far along towards “hard wiring” classical management into information systems. It is unlikely that artificial intelligence will be bent, or bend itself via learning, in the direction of Lean management given that its programming is coded in classical management thinking and decision-making.
So, it appears that we have no choice but to make the best of the situation. That includes: 1) gaining a better understanding of the true nature of executive disinterest in Lean, 2) finding more intelligent ways to advance Lean management, and 3) teaching people how to use Lean tools more expertly so that better results are produced that reliably contribute to the small margin that is needed for the company to win. And there is no doubt that the development of new tools will remain the focus of future investment and sales efforts, as these are most able to provide the slight edge that CEOs need for wining in the marketplace.
In Chapter 5 of The Triumph of Classical Management Over Lean Management, I proposed two alternatives to Lean management, under the assumption that items 1) and 2), above, will take some time to achieve or might never be achieved. The first delimits leaders’ role in Lean management, asking them to commit to just two rules. The second alternative is a method for improving leadership a little bit — microchanges — just enough to contribute a small amount toward winning. It asks very little of managers, from CEO to supervisor, but will produce enough favorable results to make a difference.