What is so Different About a Lean Company?

This is a question that comes up when people first are introduced to Lean and the question is often phrased as “What is Lean?” Because that is a much more involved question (Lean is many things), sometimes it’s easier to simply point out the differences between a traditionally managed company and a Lean company.

It’s really pretty simple. It’s their approach to problems. Every business function exists because of problems that have been identified, either internally or as a result of the thoughts of external people (consultants, philosophers, management gurus and their ilk). Accounting functions exist to address the problem of relating business activities to business performance and tax filing. The operations function exists to address the problem of getting products made. Product development exists to address the problem of turning ideas into products. The sales function deals with the problem of getting customers to buy those products and so on.

Traditional companies approach to problems is to manage them. This is not a slight to managers as it applies to everyone in the company, front line to CEO. But there’s a reason they’re known as managers. Everyone is hired to do a particular job and the focus is on doing that job as well as your training and experience and education permits. When the problems are difficult or someone does not appear to have the skills to manage a problem, he or she is often sent outside to take a course on better management, or is replaced by someone who already has those skills. Front line workers are judged on the output of their work process. Middle managers are judged on the performance of their departments. CEOs and executives are judged on the performance of the company as a whole. Its been that way for a long time and companies spend a lot of energy standardizing the functional roles so that new problem managers can step into them without a lot of fuss. In this way, good people manage to get through the day and somehow manage to get product out the door.

The Lean approach is different. It’s focus is on solving problems, not managing them. So, every activity in a Lean company is based on supplying the tools and encouragement to find problems and form solution to them, such that they don’t recur. This is why so much attention in Lean is spent on problem solving tools – A3, root cause analysis, 5 Why, etc. When the focus is on problem solving, versus problem management, everything changes all the time. As problems are eliminated, Lean “managers” find that they have fewer problems to manage and their focus becomes instead finding new problems and solutions and helping the people in the Lean company do the same. This is why so much effort is spent to develop the thinking abilities, and problem solving skills of every individual in the organization. People are judged very differently in a lean company. They are not typically judged on the performance of their department or their system. Rather the quality of the system is judged by how well people perform. So, if people are turning in lackluster performance, we look at the system under which they work and try to improve that system.

To create Lean companies, there has to be a certain shift of perspective in the way we approach people. We have to believe in the innate abilities of people not just to perform a task, but also to think about what its value is, why its important, and that the task can always be made better.  We have to believe that people come to our companies with the ability and desire to think, to lead, to care, and to contribute. With that belief in hand, we can be more concerned with development of those abilities. Coming to that belief is no trivial task. We are surrounded by those who’ve been trained in the more traditional view of companies and people. We have been brought up to say “if you can’t do it, I’ll find someone who can” rather than say “if you are struggling, we’ll find the problem and face it together.”

Lean companies are learning organizations. People in a Lean company learn by doing and in fixing one problem they become better equipped to solve the next. In a traditional company, problems are generally accepted as intractable facts of the work. If possible, they’re to be avoided, delayed, or if those tactics don’t work, discussed. Its not that people are lazy, uninvolved, or incapable. It’s merely that there is no support mechanism to change the nature or standard of the work. By adding that supportive drive to learn, improve, and solve problems, Lean companies manage to perform spectacularly. The commitment to solving problems has the effect of engaging employees at every level as work becomes more meaningful. It’s not just about “doing your job.” It’s about making something better.

Tracy and Ernie Richardson have much to say about what this looks like at Toyota and other companies in their book The Toyota Engagement Equation

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