Learning From Lean Success and Failure

An increasing number of organisations are initiating lean transformation efforts in a hope to improve their performance considerably while reducing operating and manufacturing costs. Today, organisations can consult variety of resources such as books, articles, journals, websites and consultants after consultants to implement lean strategies successfully. However, you will be surprised to learn that more than 60% lean transformation efforts totally fail to produce desired results.

Some people argue that lack of proper training and understanding of tools associated with lean, not enough time, limited internal resource and inadequate funding are some of the reasons why lean transformation fails. Although, all these reasons are valid yet if you observe how companies go about their business when it comes to implementing lean strategies, you will realise that lack of strong leadership should be presented above all other reasons contributing to this failure.

The Fake Lean:
Before we move any further, it is pertinent to note that every organisation has its own interpretation of lean. According to some of them, the basic purpose of lean is to cut costs, improve quality and performance metrics do not need to change while utilising lean. Some organisations even believe that lean can only prosper in an environment where things like politics and blaming people for problems are very common.

Similarly, organisations fall into some very common decision making traps associated with lean. Some of them are as under.

  • Anchoring (lean is a continuous improvement tool for managers tool’s kit)
  • Status Quo (Improved processes will enable managers to outsource work and lay people off)
  • Confirmation Bias (Lean works only in operations)
  • Estimation (Use of lean tools will result in improved financial results and structural cost reductions)

Some leaders also get illogical by thinking that when there is no lean, there will be no cost savings. They also use yet abuse traditions by saying that they know what they are doing and blame people for the problems. Most importantly, only thing that matters most to them is the cost saving regardless of how harmful it is for the people.

There are many other factors which make organisations falsely believe that they have successfully implemented lean and are continuously improving. The most important of these factors is the abundance of point Keizen. They do have many effective and efficient processes but they fail to connect those processes successfully and ultimately, cannot meet customers’ needs.

Similarly, some organisations believe in the theory of zero-sum lean that is creating value for end user while eliminating wastes, unreasonableness and unevenness.
However, this approach sometimes gets very unfortunate and depressing for employees as companies start laying off people in numbers. On the other hand, abundance of Kaizen and Zero Sum lead to low employee engagement, motivation and participation in company’s affairs. In either case, both company and employees suffer from unwanted and in some cases, drastic consequences.

  • Difference between Zero-Sum and Non Zero-Sum Lean:
    Zero-Sum and Non Zero-Sum lean differ dramatically from each other. While the purpose of earlier is to benefit the investor only, the later takes into consideration the interests of all the stakeholders including end customers, general community, suppliers, investors and most importantly the employees who work so hard to make an organisation a success.

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Employees and supplier are two major contributors to any organisation’s success. Customers also want best possible products for the money they spend. Therefore, a company cannot compromise the benefits of all of them in favour of only one stakeholder otherwise it will go to rack and ruin very soon.

The Real Lean:
In the context of above discussion, some companies do implement lean strategies which are actually beneficial for all the stakeholders, not only for the investors. Real lean is all about understanding lean as a management system, not as a tool, programme or initiative. It does not enable a manger to rule others but it assigns him the responsibility to serve others especially the customers. To successfully implement real lean, all leaders must learn the principles of continuous integration and RP as well.

Similarly, they also have to eliminate anti-lean management metrics such as earned hours, standard costs and purchase price variance etc. from their armoury to make most of the real lean strategies. Most importantly, organisation cannot confine lean to certain departments and hope for the best simultaneously. To maximise the advantages of lean, they have to ensure that all the departments take keen interest in implementing lean strategies in their respective workplaces.

Finally, the real lean focuses on collective achievements instead of personal or departmental success. This is where organisations need leaders who are not only passionate about using lean strategies but they are equally passionate about the welfare and betterment of employees, customers and community in general. They have to focus on processes not people and should not indulge in any sort of blame game. They must remember that companies cannot grow continuously on the cost of people’s self respect.

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