Over on the Leanedge.org website Joel Stanwood Managing Partner at American Industrial asks the following question:
Most management teams who testify to having implemented Lean will describe financial impact in terms of shop floor efficiency improvement – direct labor productivity, overtime reduction, inventory velocity, floor space utilization, etc. Paradoxically, in terms of company economics, the most alluring promise of Lean is to boost sales, delivering ever higher variable contribution margins while delighting customers and winning in the marketplace. Yet the language of Lean to unlock the growth engine of the company rarely enters the sales vernacular, and in general, sales professionals are far less likely to have participated in Kaizen. Why has the Lean movement largely failed to capture the imagination of the sales team?
I have a couple of different thoughts on the matter of this month’s question and why lean fails to inspire so many people including sales teams. Some points are simple matters of history. Others pertain to how the Toyota Production System has been perceived and described in the United States and other countries around the world. I will elaborate on my thoughts below.
For starters I agree with the assertion that “lean” has mostly failed to catch the imagination of sales teams and other parts of most companies. Sure exceptions exist but I am talking about the majority of cases. Normally Lean is viewed as an operational thing and left to people in either manufacturing or supply chains to manage. And that is a problem in the long run if overall corporate improvement is the goal. Sustainable profits, sales growth, customer satisfaction depend upon more than simple factory improvement techniques.
Sadly I think that the name “Lean” is unfortunately part of the problem. As I often joke it is a four letter word and rhymes with “Mean” so how is that ever going to inspire people? I will leave the history of the term to Dan Jones and Jim Womack to explain. It fits in many ways and for the record I use Lean in my company name. However the term also has its pitfalls.
For starters the stereotypical definition of lean always implies less by definition. For example less waste, less space, fewer pieces of inventory, fewer defects, fewer man power hours, less lead-time, etc. and that is all a good thing. However it is a glass half empty view of the world and an operational one in terms of example.
By way of contrast the Toyota of Japan that I know and worked for can also be describe in an opposite and healthy way of “more” or at least glass half full sense. For example we pursued more products, more and newer features, more sales, more customer satisfaction, higher quality, higher levels of process capability, more employees, higher wages, higher productivity, and more individual skill, etc.
Of course one can argue this is all a matter of semantics. If you pursue the “lean is less” path and succeed then you can invest that money in the “more” side of the equation and win as well. However this line of reasoning is a longer argument, a less obvious answer, and one that honestly does not inspire a lot of people. Hence this month’s question I suspect? The “lean is less” path is easily viewed as a never ending reductionist path of waste elimination into a state of emptiness. In order to inspire people there often needs to be a vision of something better and larger than today. Currently the term lean fails to deliver on this dimension. At least without extended dialogue, convincing, and arguing, etc.
Oddly in terms of history I don’t think it was always a rosy path inside of Toyota Motor Corporation either with regards to sales and improvement. The company was split into two halves in 1950 with sales separate from manufacturing. This structure with separate organizations and presidents, etc. existed until the two halves were merged back together in 1982. Taiichi Ohno and Eiji Toyoda were the main drivers of improvement in operations. Kichiro Toyoda recruited Shotaro Kamiya from GM of Japan to lead Toyota’s sales side of the organization and drove improvement there including the customer first efforts and establishment of the dealer network. As legendary as Ohno was in manufacturing Kamiya was equally impressive in the sales organization in Japan. The tactical improvement efforts between the groups from 1950 to 1982 were not coordinated and sales did not “do lean” or even “TPS” or “Kaizen” like manufacturing did.
Even within the operational component of Toyota Motor Corporation I’ll argue endlessly and point out to people that improvement in product development, production engineering, and other areas that Taiichi Ohno never touched are different animals. You won’t find things like value stream maps, standardized work charts, kanban, or other operational tools in those areas. They have their own way of driving improvement and it is as much focused on new products, new processes, new technology, new features, and ultimately customer satisfaction which in turn help drive sales growth and profits. Collaboration, new inventions and new frontiers are remarkable themes as well in these areas.
In a narrow sense I do think the name “lean” is at least part of the problem but certainly not all. Still there is a long way to go in terms of describing what Toyota actually does or at least historically did in Japan between 1950 and today which made it so successful. In manufacturing I think at least 50% of the puzzle (especially the lean is less side) is pretty well understood. At the risk of offending people I have to note that in other areas outside of production that are technical (e.g. product development and production engineering) or non-technical (marketing, sales, accounting, human resources, etc.) I think the level of understanding is closer to 25%. In the end that is my subjective opinion and simply a reflection on the current state of affairs. It may also be at the lack of “inspiration” hinted at in this month’s question.