Time and time again I have seen companies attempt to institute lean methodologies based on how it has been done at another company. I walked into a workshop in 2009, at a multinational product company, where I saw that they were trying to re-engineer all of their products and revamp their portfolio, but had no idea which products were making money. Instead of looking at their products to understand which SKUs provided an ROI and which SKUs had flat or declining revenues, the team began taking lean methodologies and techniques, bringing 20+ folks into a room, and dissecting each product, which resulted in them creating work instead of value. As a note, there is a difference between lean and six sigma; Lean methodologies can, however, leverage six sigma techniques and vice versa.
A key reason for this issue is that when a company begins to embrace the lean and/or six sigma culture, there is such excitement to believe that they will be savings millions of dollars that the basics go out the window. Basic concepts like developing a valid business case, project management and impact to bottom-line performance come to mind. As an example, I worked with a company in 2011 that put together a 3-year lean “strategy”. This strategy included a minimum of 60 total projects, 20 per year, with a fairly lofty financial goal, however without a plan to determine priority of initiatives and how lean would be governed.
So, let’s stop there for a moment. When I think about a lean strategy, the following items come to mind:
- Establishing a Lean Vision – “Higher Quality, Lower Cost, Shorter lead-time, etc.”
- Educating on Lean Knowledge by developing People and Human Capital
- Instituting a Lean System and Continuously Improving
- Creating radical innovations and change through a Lean Culture
The above core “pillars”, supported by a foundation that includes executive involvement and commitment, can help to govern your deployment of lean initiatives. So, naturally, the next step relates to the “how to”. In order to ensure that your organization can support and execute the strategy effectively, they should follow a core set of objectives (based on the 14 principles of Lean from TPS), however these should be carefully applied to each unique environment:
Think “forward looking decision-making”:
- Ensure that decisions will improve upon the status quo and improve value for the customer and or company. This can be used as a foundational element of decision-making and business case vetting to ensure that each initiative aligns with long-term objectives
- Establish a set of guiding principles and sense of purpose to drive forward looking decisions rather than having a myopic view targeting short-term gains. Think about how to move your organization, products and company to the next level while adding to the history, or legacy, that already exists.
Think “do it right the first time”:
- Establish a quality assurance process using methods and techniques that will allow for timely identification of issues. Apply modern methods that do not conflict with your business practices to allow for a more effective quality program. Utilize a “visual system”, which provides real-time alerts to appropriate team members and stakeholders – Ask yourself: “Do we perform a quality review after we complete a set of tasks / processes or have we integrated quality checks throughout our process?”
- Start from the executive levels, create a culture where it is okay to slow down, stop, and resolve issues as they occur. Do not pressure the team into making a suboptimal decision just to hit a timeline. This will create unneeded levels of rework and stress. Communicate and provide “air coverage” to promote a good working environment.
Think “Do we know why we do what we do and how can we improve? – There is always room to improve”:
- Always utilize a fresh set of eyes to review what you are trying to improve. BUT, ensure that that fresh set of eyes understands your business and objectives. If I look at a process that I execute daily or weekly, I am likely to change what I dislike about it. However, a new set of eyes will ask questions and determine what makes sense to improve.
- Remember to ask “why?” Then ask “why” again. And, again. Ask this at least 4-5 times. To move away from status quo you have to dig deep and understand why something needs to be done a certain way or if it can be changed. Remember – There is no limit to improvement, rather only limitations in what you are willing to pursue.
Think “standardization and empowerment”:
- Involve the organization in establishing standard practices. After all, who knows the process better than those executing them daily? Promote creative and radical thinking. Doing this will generate the best ideas and improve what is considered the standard. As turnover occurs, which will happen, new people will bring new ideas and an innovative culture is required to continuously improve on what is considered the standard.
- Ensure that standardized tasks and processes are stable, repeatable and documented. Maintain a level of predictability and mitigate risk by not allowing for a great number of unknowns. Unknowns create variability and variability will in turn create defects and poor quality.
Think “innovative yet reliable”:
- Ensure systems, tools and technologies are in place to help the company and employees. New technologies are changing rapidly. Ensuring that they are reliable is quite important. A company cannot afford to change each time a new enhancement is released, reliability and synchronization to the standardized processes is key.
- Bring new innovative technologies to the table, but ensure they are thoroughly tested and that they do not conflict with business processes. Even with the greatest technologies, if they do not align with how you execute your processes, this will likely lead to a lower quality output.
Think “relentless reflection”:
- Discuss problems, their impact and potential solutions with all parties that are affected. Ensuring that a level of consensus is reached may appear to be time-consuming, but will (1) allow for more ideas and a better solution and (2) ensure that everyone is on the same page and implementation can be timelier.
- Reflect on what “worked” versus what “did not work” after each key milestone. Don’t just document the lessons learned, but really incorporate changes to prevent recurrence of issues or they may devalue future processes, products, services, etc. that are being deployed.
Lean and/or six sigma cannot receive 80% commitment and expect success. I was a Lean and Six Sigma Black Belt; Teaching green belt and black belt courses was incredibly exciting. But, I have seen that without a commitment to the strategy and program successes will be far less than if there was 100% commitment. Having students from all levels in the organization come together with one common goal and to have them leave excited to create change was incredibly rewarding. The key is to ensure that when everyone leaves the room that the communication lines remain open and that lean or six sigma initiatives/events are not viewed as “because we are told to do it” or “let’s just get through this and get back to work”. Maintaining a level of oversight and executing to a thoughtful AND supported lean strategy will ultimately lead to more optimal process, products, services, etc. being provided to end customers.