Lean advocates—and I consider myself one—might do better if they stop talking about lean. Let’s face it: When executives and workers hear “lean,” not a lot of good happens. They think it’s yet another short-term management fad. Or a cost-cutting program that will lead to layoffs. Or some Japanese thing that only works for car manufacturers.
But when you look at many of the tools and concepts from the lean playbook, they’re really just good management that any leader would want to embrace.
The Wall Street Journal recently wrote about Larry Culp’s efforts to turn around faltering General Electric. Culp, of course, was Danaher’s CEO for 14 years, and is steeped in lean thinking through the Danaher Business System. Naturally, he’s trying to instill many of those elements to GE.
Consider hoshin kanri. As the WSJ explains: "Hoshin Kanri holds that all workers should understand the company’s strategy and how their role can contribute to it, enabling feedback and improvement to come up from lower levels."
Although the lean cognoscenti might find fault with some elements of that description, it captures the spirit of hoshin pretty well. But whether you call it “hoshin,” or “strategic planning,” or something else, it’s hard to argue that ensuring all workers understand the company’s strategy and how they contribute to it is just good business. What executive would advocate for ignorant, uninformed and disengaged workers?
Culp has also shifted focus away from earnings per share, which was once the most important metric at GE. Under Culp’s leadership, EPS is viewed not as the end goal of the business, but rather the result of well-managed operations. Lean experts will seize on this change as emblematic of a lean mindset—and although it certainly is, let’s not forget that in 1954, in The Practice of Management, Peter Drucker wrote, “The purpose of business is to create and keep a customer.” He explicitly did not argue for prioritizing profits above all else. So is de-emphasizing EPS “lean,” or is it just good management?
Lean consultants will point out that Culp embraces the lean practice of going to the gemba, the place where the work is done (typically the manufacturing floor). According to the WSJ article, Culp is often away from GE’s headquarters, visiting manufacturing plants to see how employees work and how the operations are running. He even brings top executives to factories to teach manufacturing practices. But this practice isn’t something exclusive to lean. Prior to the rise of the CEO as finance expert (as exemplified by a generation of leaders at GM), understanding how your operations work was typical—Andrew Carnegie, Henry Ford, Bill Gates, Andy Grove and many other legendary CEOs all had deep expertise in how their products were made.
In fact, if we get away from preaching the gospel of the gemba, we can simply point to the evidence that companies where leaders pay attention to their plants outperform companies where leaders don’t. In a new study from Stanford, "researchers found that plants where managers carefully monitored the manufacturing process, production targets, and employee performance, and used that data to inform decisions, were more successful. Plants where leaders infrequently reviewed performance indicators and targets, and promoted employees based on tenure or connections rather than achievement, fared worse."
You don’t have to talk about going to the gemba to make the point that close involvement with the shop floor leads to better results.
Let me be clear: I’m a lean consultant and author, and I’ve fully bought into the superiority of lean management over traditional management. I can’t imagine why anyone would want to run a company in a traditional, mass-production, command-and-control, profits-before-all-else kind of way.
But when we cloak solid business ideas in Japanese words and lean jargon, we unnecessarily create resistance and skepticism. We allow lean orthodoxy to displace common sense. And we do our companies, our clients, and ourselves a disservice.
Dan Markovitz is a Shingo prize-winning author, speaker, and consultant who helps companies accelerate their lean journeys. You can reach him at www.markovitzconsulting.com or @danmarkovitz.
