The 21st Century – The Principles of the Lean Business System: #8 Perfection

As you may have read in my previous blogs, Lean is rapidly evolving. It is moving past the traditional tools and one off events stage. People are also challenging whether the original concepts we learned about in the last century are really right. One of these is how far you can take lean, or the frequent question: what is after lean? My response is: doing it properly and across the whole organisation and so create a sustainable Lean Business System.

For those of you not familiar with the series and the idea of the Principles behind the Lean Business System, I will just summarise for you:

I believe it is a more holistic or systems based approach balancing traditional hard methods within multiple processes as well as a range of enabling mechanisms within the strategy deployment, leadership and engagement areas of work. In other words thesecret lies in thinking about Lean less in simple cost reduction terms and more as a way of thinking, behaving and improving, impacting on every aspect of work inside a business. I call this a Lean Business System.

So how do you go about developing this modern lean approach? Those of you that read my previous blogs will know that I believe the starting place is not copying some exemplar such as Toyota who almost certainly is in a different industry, faced with different circumstances and at a different stage of its evolution. What is needed is to start from a simple set of Lean Principles that can be applied to any industry and using this to guide your journey. Having learned from 25 years of application of lean I have defined 8 such principles: the 8Ps of the Lean Business System.

This framework helps companies in any industry, and at any stage of Lean maturity, to reflect on how they are deploying Lean in their business. It helps to take the focus away from point-kaizen activity towards a more contingent approach, a more aligned approach, a more human approach and ultimately, a more sustainable approach. Indeed it is part of a move to Lean becoming a cultural journey towards everyone in the organisation actively working towards a fully aligned ‘tomorrow better than today’ system.

Perfection has been the ‘holy grail’ for Lean businesses since Womack and Jones encapsulated this principle in the mid 1990s. Their 1980/90s automotive research work showed us that there were huge gaps between the best and other companies. The gap was often between Toyota (or its supply chain) and western equivalents.

This benchmarking gave many western companies a wake up call. However, it had two major problems in terms of energising organisations. First, partly because the gaps were so big, many organisations, particularly outside of the automotive sector, found it hard to accept the data. This led to reasons for inaction such as “they have a different culture, “it is a different industry” and “we are different”.

Second, even those who were compelled by the data, lacked a roadmap of how to move forward. As a result many organisations, often guided by external consultants, simply followed the quick fix kaizen blitz route leading in many cases to a poorly sustained short-term Lean initiative.

To counter this piecemeal approach, we believe that organisations should create their own Lean Business System. This requires them to develop a vision of their specific perfection and their own bespoke roadmap on how to move towards it. But how?

Simply put, the process is similar to best practice Value Stream Mapping, except here we are working at the business, rather than the Value Stream or process level. As seen below you start with establishing the Current State for the business. You then envision Perfection, or the Ideal State (or what you think is the best possible position you could possibly reach). You then back off from this to a point that your team believe is feasible in the long term. This Feasible Future State might be 3 to 5 years away.

The next step is then to create a realistic point that can be reached within a sensible engaging timescale (usually around 18 months). This is the Targeted Future State that then requires a Roadmap. Once this Targeted Future State position is achieved, a further Roadmap towards the Ideal State may then be created and deployed.

To help, we have developed the Lean Business Model® which not only provides a framework for an organisation’s particular Lean Business System but also an associated diagnostic tool that helps the organisation to see where they are in a journey and which interventions should be done early and which done later.

To start creating the Lean Business System [1] it is necessary to follow the steps described above for each element of the Lean Business Model®. It is not just about taking each element a bit further in each Roadmap, but about making discriminating choices of what to do at what point in time. Indeed, the more difficult choice is what not to do in the first Roadmap, as trying to do everything at once will lead to delays, frustration and poor sustainability.

The measurement system associated with this is based on the academically proven Five Key Milestones of Continuous Improvement Maturity from “ad-hoc” through to “way of life”. Each of the core elements of the Lean Business Model® is assessed not only from a quantitative viewpoint of – systems and procedures – but also from a qualitative viewpoint of – values and behaviours.

In other words we need to measure not just what you do but also (and more importantly) the way that you do it. This helps to build a learning organisation that not only has the capability to maintain the gains of the improvement but is also self-propelled continuously to improve the continuous improvement process until it becomes a daily habit for everyone.

For further information about this blog series or the accompanying webinar series please contact Dr Donna Samuel, donna.samuel@sapartners.uk the series manager.