By Jean Cunningham, President, Jean Cunningham Consulting

Creating a Lean environment is not about less despite the name “Lean”. It is really about doing “more” of what your customers value which will lead to improved outcomes.

Let’s consider the word “lean” as applied to the physical body. Fat is the excess of the body’s storage of calories not expended for purpose. Over time, too much fat taxes the body making it difficult to perform the required functions of the body. A human body does need some fat stores for times of need or crisis because we cannot continually ingest food every moment even though the body does use calories every moment of every day. And, of course, the more weight one carries, the more calories are needed to sustain the body. “Skinny” or “scrawny” in today’s lingo implies lack of capability to achieve the functions the body requires perhaps because of a lack of muscles and power to do value add work or to “invest” in the future. And, in today’s fitness culture, “Lean” implies a body that is fit for purpose and able to sustain performance with the power needed for challenging situations. If you’re lean, you’re ready for action without burden.

I think we can apply those same terms to our businesses. “Fat” means the storage of excess time, cost, and inventory weighing down the organization’s ability to react. “Scrawny” means to be so close to the edge that the business cycle creates serious risks to performance and sustainability. That is probably coupled with the inability or unwillingness to invest for the future or to experiment with new practices.

“Lean” describes an organization that is focused on creating customer value, developing the talent of the organization (the muscles) and constantly changing-for improvement-the routines to create growth and power.

To get the lean physical body, it requires focus on routines related to eating as well as to exercise. It requires knowledge and experimentation. These both require a constancy of practice and focus. No two bodies are exactly alike, but they’re all similar in many ways with common requirements. If the lean body requires routines, knowledge, fuel, exercise, experimentation and constancy, let’s think about what parallels might exist in your company.

Routines:

* What are the routines in your company? Do they align with Lean concepts?

* What is a routine that has “…just always been there?” Consider identifying sacred cows that take time and effort but don’t achieve improved outcomes. They are easily identified by the response “We have always done it that way.” in answer to the “Why?” question!

* Do all employees understand the routines?

* Some routines often seen in Lean companies include:

  • Daily or weekly continuous improvement and communication huddles
  • PDCA of local process metrics
  • Time for improvement built into the work cycle
  • Celebration
  • Kaizen events
  • Strategic deployment planning
  • Knowledge:

* Do employees know the purpose of your company from information at their initial onboarding?

* Do leaders and employees know what the purpose of their work is in addition to how to do their job?

* Is gaining broad knowledge valued within the work team and between work teams?

* Do team members go outside the company to gain new insights?

* Ways that Lean companies often broaden their Lean knowledge:

  • Read books. There is a lot of quality Lean literature.
  • Visit other team huddles and work areas.
  • Attend conferences and webinars.Take advantage of skill development opportunities in constrained capability areas.
  • Build and maintain an employee skills matrix for cross-training, addressing temporary work surges, and deploying employee rotations.
  • Engage expert coaches or consultants especially for unique situations and learning.

Fuel:

* Fuel is the development of the organization’s employees.

* Fuel is quality inputs in materials, machinery, and tools.

* Fuel is trust between management and employees.

* Fuel is everyone understanding customer needs of their work.

* Fuel is stability in people and processes.

* What does the company do to constantly improve and supply fuel to the organization?

* Ways that Lean companies gain fuel:

  • Applying 5S thinking in every process and place.
  • Moving people (including leaders) from process to process and from team to team to build strength and depth of capability. (This area is very underutilized.)
  • Promising employment in the face of productivity gains.
  • Employees and leaders working side-by-side solving problems.
  • Visiting customers.
  • Minimizing the variable workforce (temps).
  • Believing that every employee has genius, and creating an environment to utilize that genius during the work day.

Exercise:

* Using the tools and skills to address business problems and develop strategy.

* Preparing to do quality work at first pass by having setup reduction in both the office and operations and defining standard work.

* Piloting change.

* Discussing improvement and communicating successes.

* Celebrating efforts that have led to learning.

* Ways exercise is demonstrated in Lean companies:

  • Using problem solving methodologies rather than shooting from the hip!
  • Improvement work is seen as “real work”.
  • Making metrics and targets visual and used in the workplace.
  • Offering presentations after kaizen events to share experience and build engagement.
  • Providing opportunities to volunteer for improvement and strategy activities.
  • Creating and updating standard work by the people doing the work.
  • Utilizing leadership standard work.

Experimentation:

* Improvement work is seen as real work. You know you don’t have it when you hear, “We are too busy to work on that improvement.” (This is a huge gap for many leaders. And it is on the shoulders of leaders to change it.)

* Flexibility in the organization to try new methods without having to initially change all related policies, procedures, and approvals.

* Willing to encourage the adept and motivated employees to go ahead to lead the way for others. (One of my favorite quotes is from Nelson Mandela, “A leader is like a shepherd. He stays behind the flock, letting the most nimble go out ahead, whereupon the others follow, not realizing that all along they are being directed from behind.”)

* PDCA is seen as a learning activity, not as a way to get it done one “right” way!

* Solution storming at least 5 options as a means to encourage out-of-the-box ideas before narrowing options.

* Lean ways to experiment:

  • Focusing on small daily improvements.
  • Holding cross-functional kaizen events.
  • Practicing PDCA so that it becomes routine.
  • Learning from others on how they do the work.
  • Trying new, promising approaches to see if the outcome is better.
  • Do new ways manually before asking for IT solutions. (Changing the “system” first POV is hard to overcome, but starting with manual performance will provide more detail and questions and ultimately result in a better outcome.)

Constancy:

* Constantly pursuing perfection through iterations.

* Improvement work is seen as real work.

* Routines are actually routine and not just a good idea for when you have time.

* Lean is the way the organization works; not an initiative separate from other work.

* Lean ways to identify constancy:

  • All employees are expected to focus and contribute to improvement.
  • Information about progress is at point and time of use; not stuck in an end of month report.
  • Deviations in outcomes are studied before selecting the next shiney bright object to pursue.
  • Company-wide strategy deployment uses Lean thinking and Lean tools.
  • Performing better than last year…every year.

Is your company fat? Scrawny? Or, working on becoming Lean? If you are Lean, you are always working on it.

Jean Cunningham is President of Jean Cunningham Consulting and former CFO of two manufacturing companies. She is co-author of Real Numbers: Management Accounting in a Lean Organization, as well as other books.

Side note: NWIRC will host a Lean Accounting course with instructor, Jean Cunningham, on October 24th in Erie. Deadline to register is this Friday (Oct 20) and there are only a few seats left. See more information here.