What is Lean – Minimize or Maximize?

The Continuous Improvement, Six Sigma, and Lean Group on LinkedIn posed the question “What is Lean?” a couple of months ago, requesting responses in just three words. Now, several people who responded would fall into the “does not follow instructions” category, but the answers were very enlightening and wide ranging.  In some ways it is a bit concerning, the fact that members of a group such as this have such varied opinions, but it’s really not surprising.

I have taught Lean Sigma Green Belt classes and defined the goal of Lean as “the elimination of waste” (and Six Sigma as the elimination of variation), but as I have progressed through different organizations, my view of Lean has changed, or should I say, evolved to one that focuses more on increasing value.  However, how one defines Lean depends on the situation.

For example, when trying to first implement Lean in an organization, especially an organization that is hemorrhaging cash, trying to sell a higher level, more philosophical (to some) view of Lean is the surest way not to ever get it implemented.  Selling Lean as a way to eliminate waste (interpreted as “cut costs”) provides the best chance for success (with success being defined as the approval to start introducing the concepts in the organization).  After all, these executives are in a “show me the money” mode, and Lean can certainly do that!

Most organizations start Lean as a program or initiative, but many times it never really gains the traction to become ingrained in the culture, or become the “way the company does things.”  Part of the reason for this results from never being able to get past the initial focus of elimination of waste, which most managers translate to cost cutting, to the higher level view of increasing value (with respect for people).

As practitioners, evangelizers, or philosophers of Lean, I believe we need to keep moving organizations toward the goal of increasing value, and to do that, we need to change the conversation.  One that moves us from minimizing (wastes) to maximizing (value).  Although it can easily be argued that by eliminating waste, value will be increased; it can also be argued that by increasing value, waste will be eliminated.

As humans, we are conditioned to respond to certain stimuli and form opinions base on the way information is presented to us.  To that end, think about your first thoughts on the following statements:

“I want to eliminate waste in the organization”

“I want to increase value in the organization”

Which one invoked more positive thoughts?  Which one had you thinking about the long term with growth and expansion, and which one about the short term with cutting and contraction?  Minimizer or Maximizer?

Back to the three word response for the question, “What is Lean?”  My answer: Value, Respect People.  With a more expanded goal of “increasing value through continuous improvement with respect for people.”

What are your thoughts?

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3 thoughts on “What is Lean – Minimize or Maximize?

  1. Glen, This definition is very helpful. Although the news media focuses on negative headlines and politicians do use negative ads to put down their opponents, most people do respond better to the positive lanaguage. Positive psychology is now the hotest new stream of psychology because it focuses on what is working and what is right rather than on what is wrong. For example, our people development programs begins by focusing on a leader’s philosophy or values about their employee’s work ethic. If I believe my employees are basically lazy and are just showing up to work to get a pay check, etc. We are going to treat them that way. In other words, we are going to micro-manage them. On the other hand, if we believe our employees really want to work and innovate and be productive, then I am going to be a good gate keeper, empower them, and find ways to manage the motivation process based on the employee’s need for growth. The Achieving Manager study has demonstrated the direct correlations that I think speaks to your point. Rather than focusing on what needs to be eliminated, focus on what we can do better and in most cases that kind of approach naturally leads to eliminating wasted time, effort, and resources. I hope to learn from others’ imput here as well.

  2. Glen,

    you have an interesting question about what is lean and is it better to minimize cost or increase value. However it’s defined, I believe there is a larger, major difficulty. Realizing either option. Let me give an example.

    Say a company produces 50 widgets a minute. In the marketplace, there are enough competitive ‘substitute product’ widgets, that they can’t move the market. Equally, they operate in a competitive environment so they can’t raise the price of widgets nor are they large enough to effect the demand for widgets in the short term (in one to two years.)

    This, to me, is the situation most companies operate it. With that as background, onto the question of eliminating waste or increasing value.

    If I eliminate 5% of the waste in the production process, how is this realized? Do I need 5% fewer inputs? Do I need 5% fewer workers? Do I need 5% less floor space and I can get rid of the excess floor space? Or, does it take workers 5% less effort to produce the widgets?

    From my experience, it’s the amount of effort required to produce the widgets that is decreased by 5%. The problem is, those darn workers just don’t start producing 5% more widgets. Instead they just burn 5% fewer calories to produce the same widget. Great for the worker, but what does it do for the company?

    Peter Drucker had a heuristic rule, that if you can’t effect productivity by at least 40%, the improvement will just be lost to the water cooler. If you’re in a situation like Jack Welch created, where the company lays off 10% or 20% of the workers each year, then the incremental improvements translated into fewer workers required each year to produce the same number of widgets. However, without creating that type of competitive environment, it’s hard to see how incremental improvements translate into profitability. (Writing this, I suddenly had an epiphany about why Welsh cared so much about HR and Training.)

    Then there’s the question of increasing value. If I increase the value of my widget by 5%, can I increase the price? Very unlikely. Yes, my widget might be 5% better or after a couple years, maybe even 10 to 15% better, but will the market pay me for those improvements?

    Methinks not. By way of analogy, if a street curb is 7 inches high, I can pick my foot up 7.1 inches, I’m fine clearing the curb. Most people pick their foot up about 10 inches to clear the curb, so the improved value of picking my foot up 10.5 or 11 inches doesn’t make a difference. The original 10 inches is more than good enough.

    That’s where my question about realizing the value of lean comes from. Do companies struggle with lean? I think they do. It’s a great idea and it has many side benefits, however the increased value is difficult to articulate or quantify. The other option, eliminating waste, requires approaches most people are not comfortable with. So as great an idea as lean is, maybe it’s become like the flap on men’s underwear. A great idea that’s not used.

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