Lean thinking consists in transforming the way organizations are managed. The Lean principles of continuous improvement, respect for people and a focus on delivering customer value are the key pillars for Lean management.
Practicing Lean management principles requires a change in mindset and way of doing. Lean leaders have to lead by example, ensuring that Lean principles are being applied with the correct goal in mind with only one objective, delivering value to the client.
As Peter Drucker said:
“The essence of management is not techniques and procedures. The essence of management is to make knowledge productive.”
Business agility is ability to use and adapt to the most current information. In a traditional structure, by the time an executive has made a decision and that decision has been communicated, it is usually out of date.
To maintain a sustainably fast pace of innovation, Lean organizations encourage continuous improvement, learning and development throughout the company. They encourage every idea to be heard.
They do not waste time with long feedback times. On the other hand, they develop standardized processes for communication, share technical knowledge and defer commitment to ensure that decisions are being made with the most relevant information.
The role of a Lean leader is being a coach. They align their teams around a common goal. They supply their teams with the needed tools and encourage them to make good and effective decisions which will lead to competitive growth. They provide guidance and leadership as needed and rely on the skills and experience of their team to do what is necessary to achieve the objective.
Continuous Improvement Culture
Lean leaders encourage their teams to follow the scientific method and logic thinking, a mean by which they can practice Kaizen. The role of Lean leaders is to create an environment that involves continuous improvement, by asking guiding questions, supporting teams and celebrating improvements and outcomes.
Practicing Lean management requires leaders to trust in the skills, knowledge, and experience of their employees, which means hiring smart, ambitious team players and giving them the tools they need to be successful. The role of the leader is not to do the work, or to micromanaging, it is to lead teams toward prioritizing the right work, which will result in the most value for the customer. Gemba activities and stopping the line are two techniques Lean management can use to effectively practice continuous improvement.
Lean management involves leadership to attend the gemba, the place where the work is being done, in order to become better leaders. Gemba consists in asking plenty of questions in order to have first-hand information from the owner of the process (production operator) to be able to act accordingly.
Lean leaders go directly to the source. They listen to their employees and learn about the processes. They work to remove anything not adding value from being delivered to the customer and they ask questions to understand the flow.
Quality at first
This practice implies that everyone on the operations process is accountable for delivering a consistently high-quality product by stopping the line and quickly solving the issue.
Stopping the line forces the organization to resolve an issue, learn the root cause and prioritize work to ensure that it does not happen again.
Adding Value to the Customer
It is crucial to understand how value flows through an organization throughout the whole supply chain.
Lean leaders are only focused on eliminating any activity or process that does not add any value to the customer.
“The essence of management is to make knowledge productive.” The purpose of eliminating waste is to be able to maximize the impact of the talented people in an organization.
Understanding WIP is one of the key Lean management tools, because it empowers with the ability to see where their work and analisys is needed most (reducing inventories, automation, skills’ development, etc.).
Limiting WIP is not possible if Visual management is not applied, which is why many organizations employ Kanban as a way to practice Lean.
Process of Lean Transformation
Lean management transformation is a long term and committed work which need to change the culture’s pillars. For many leaders it requires abandoning some principles that have gotten them to where they are.
Making this change allows leaders to build sustainable, healthy companies built on a foundation of respect, learning and continuous improvement.
The role of Leaders within the organization is a critical factor in order to sustain the progress of Lean Thinking.
Lean experts often speak about the concepts of Senpai, Kohai a dSensei, because they think that transferring the Toyota culture within the company only takes place when most experienced Toyota’s Senseis continuously train, coach and guide the employees with least experience.
One of the most important effects of lean is in the area of key performance indicators. The KPIs by which a manufacturing Plant is judged will often be driving behaviour, because the KPIs themselves assume a particular approach to the work being done (they will drive the psychologic factor resulting in a particular culture and “way of doing”). This can be an issue where a truly lean JIT approach is adopted, because these KPIs will no longer reflect performance, as the assumptions on which they are based become invalid. It is a key leadership challenge to manage the impact of this KPI chaos within the organization.
After formulating the guiding principles of its lean manufacturing approach in the Toyota Production System (TPS), Toyota formalized in 2001 the basis of its lean management: the key managerial values and attitudes needed to sustain continuous improvement in the long run. These core management principles are articulated around the twin pillars of Continuous Improvement (relentless elimination of waste) and Respect for People (engagement in long term relationships based on continuous improvement and mutual trust).
Continuous Improvement breaks down into three basic principles:
- Challenge: Having a long term vision of the challenges one needs to face to realize one’s ambition (what we need to learn rather than what we want to do and then having the spirit to face that challenge). To do so, we have to challenge ourselves every day to see if we are achieving our goals.
- Kaizen: Good enough never is, no process can ever be thought perfect, so operations must be improved continuously, striving for innovation and evolution.
- Genchi Genbutsu: Going to the source to see the facts for oneself and make the right decisions, create consensus, and make sure goals are attained at the best possible speed.
Respect For People is less known outside of Toyota, and essentially involves two defining principles:
- Respect: Taking every stakeholders’ problems seriously, and making every effort to build mutual trust. Taking responsibility for other people reaching their objectives.
- Teamwork: This is about developing individuals through team problem-solving. The idea is to develop and engage people through their contribution to team performance. Shop floor teams, the whole site as team, and team Toyota at the outset.