Lean is Dead. Long Live Lean!
The Machine That Changed The World
Over thirty years ago, James Womack, Daniel Jones, and Daniel Roos introduced the world to a modern understanding of the concept of Lean Production. This was the result of a 5–year study of the automotive industry that culminated in the book The Machine That Changed the World, which in particular celebrated the Toyota Production System.
With its foundational philosophy of waste elimination, Lean Production built on prior work that stretched all the way back to at least Benjamin Franklin, and spanned the work of such notable thinkers as Frederick Winslow Taylor and Henry Ford.
As a consequence of its widespread adoption over the past 30+ years, there have been significant strides made in the overall balance of value that consumers and businesses have received. Lean Production was – and still is – a profoundly powerful management philosophy for the mass production of uniform goods.
Lean Goes Wide
But then a whole bevy of consultants got involved, with the notion that if the ‘Lean’ philosophy worked so well in the production environment, then by extension it could work just as well in other environments where tasks could be codified and made uniform, and where process flows could be dissected and analyzed for the various types of waste. And so was born the far broader notion of ‘Lean Thinking’ – sometimes known simply as ‘Lean’.
Lean Production, for its part, had been defined as a “customer focused production system based on continuous improvement through constant elimination of non-value-added activity.” As with Lean Production, the whole point of Lean Thinking was the elimination of waste from the process stream. Thus, when applied to other systems, Lean became a war on ‘non-value-added activities’.
In many situations this proved very helpful, as it streamlined people's work and eliminated not only wasted time and effort, but with them, many points of frustration. In this regard, it has been a very useful tool for achieving new levels of efficiency. But as with anything that is over–applied to places and situations where it doesn't fit, there have been situations where it has done more harm than good.
The problem has not been with Lean itself, but rather with organizations embracing Lean Thinking as their only way of thinking. This has led to the misguided notion that Lean could be – and needed to be – applied everywhere across an enterprise – to all of its activities. That, unfortunately, is simply not the case.
Lean is a tool for driving efficiency. But what is needed in many situations is not greater efficiency, but rather greater effectiveness. In particular, those activities that lead to breakthrough innovation are much more about effectiveness than they are about efficiency. And the world has begun to wake up to this fact. Whereas Lean would seek to eliminate ‘non-value-added’ activities, innovation demands that we reconsider our understanding of ‘value’, and with it, which activities add real value and which do not. In many ways, the sorts of discovery and experimentation activities required for innovation are not the sort of activities that lend themselves to traditional ‘Lean’ analysis. As a result, organizations who embrace Lean Thinking as their only way of thinking often fail to recognize the need for these activities, and quite honestly, don't even know how to use them.
So, in as far as Lean's ability to drive long-term growth is concerned… LEAN IS DEAD.
Two Wrong Alleys
To be more specific, the inappropriate use (and thus abuse) of Lean Thinking has lead us down at least two seriously wrong alleys.
The first wrong turn happened when it was believed that streamlining procedural tasks meant we could reassign responsibility for those tasks into an increasingly smaller pool of contributors. Doing this has led to ‘role contamination’ — meaning that individuals – many of whom were key contributors – have had their focus so diluted by the numerous ‘streamlined’ processes that they've ceased being effective at their core function. Examples have included salespersons being tasked to handle all customer service calls, product designers being tasked to handle all manufacturing and quality assurance issues, and so on. Not that role swapping isn't a good practice… it can be a great practice for cross–training, but that's a different matter from ongoing concurrent role responsibility. At any given time, the ability of individuals to have complete focus on select areas of contribution can prove crucial to their teams being able to work together effectively. This is particularly true in the case of those attempting to explore and experiment together for the sake of new innovation. And so, in contrast, not doing this will mean that at times these people aren't as efficient as they might otherwise be, but as a team they are highly effective at finding and developing these new opportunities.
The second wrong turn happened when this relentless pursuit of efficiency took away the ‘room’ people need for exploratory and creative activities — which are absolutely necessary if the organization is to successfully leverage strategic innovation to drive its long-term growth. To succeed at this, organizations have to maintain a certain amount of ‘headroom’ for people to explore new opportunities and a certain amount of ‘elbow room’ for them to experiment with new ideas in order to discover the next big opportunity on the horizon. Indeed, the pursuit of human-centered practices like Design Thinking demand that we are able to test out numerous market and design hypotheses so as to prove or disprove them, and thereby discover ‘the truth’ of a situation. Doing this, by necessity, demands a certain amount of time, space, and resources — none of which lend themselves to ‘lean analysis’. Thus, without due care, traditional Lean Thinking can easily pare back this work to the level that it ceases to be effective. And that occurring is a truly unfortunate outcome.
An Incorrect Presupposition
The underlying problem here stems from the fact that Lean Thinking presupposes the organization has already come upon the most effective process or state, and it picks up from there, trying to make that process or state more efficient by eliminating waste from it. But, by definition, discovery and experimentation will never start out as ‘most effective’… we simply cannot already have the most effective answer to the question of ‘what's next’ before we start — because inherently we don't yet know ‘what's next’. If we did, then we wouldn't need discovery and experimentation.
And so, consequently, discovery and experimentation are inherently ‘inefficient’ processes. Yet when viewed from a long–term perspective, they are highly effective ones.
Stated otherwise, Lean Thinking micro–defines ‘value’ with a very narrow point of view (doing things right) — whereas strategic innovation, by contrast, macro–defines ‘value’ with a far broader point of view (doing the right things). The former has a tendency to drive short–term thinking while the latter tends to drive bigger picture and longer term thinking. It's a microscope versus a telescope situation. The search for long–term growth opportunities is a task that demands a telescope, not a microscope. Here, effectiveness is immeasurably more valuable than efficiency could ever be, and thus trying to apply traditional Lean Thinking is a misplaced effort; the toll it takes on long–term effectiveness costs the organization substantially more than it could ever gain it in short–term efficiency.
Accepting this fact will prevent organizations from taking either of the wrong turns mentioned above.
Organizations who understand this… who are focused on their long–term resilience and who are striving to use strategic innovation as the means to that end understand that the sort of work they need to do here is not the place to apply ‘Lean Thinking’ – at least not as it is traditionally understood. These organizations take particular care to provide the headroom and the elbow room their teams need – together with the venues to support these – and to guard against the sorts of role contamination that will dilute the level of focus needed.
Lean Is Reborn
We said earlier that “Lean is dead”, and yet… another strange thing has been happening over the past decade — as we shall see.
It starts with the fact that, while more and more organizations have come to recognize the need for good strategic innovation work, in most cases their approach to it has been very slow and bloated — especially where they have been having to work around (and protect) established brands.
Plus… the old-school model of Research & Development has historically been a very capital-inefficient one — because it tended to charge ahead with developing new technologies and capabilities based on untested assumptions & hypotheses around market acceptance and adoption — without ever really testing those assumptions & hypotheses prior to sinking major funds into the R&D efforts. Fortunately, organizations have now come to realize that a far more capital-efficient approach will enable them to secure far more wins over the long run.
This is where ‘Lean’ has been reborn into something very new and different — the Lean Startup Model.
The Lean Startup Model is a paradigm for rapid discovery and experimentation first introduced by Eric Ries exactly twenty years after Womack, Jones, and Roos introduced the world to Lean Production. In Ries' model, the focus is on agile learning rather than efficiency per se, and so the emphasis is on methods for pursuing rapid learning and adaptation… developing and launching the so-called Minimum Viable Product, or MVP, and then rapidly iterating that to arrive at a far more robust offering — one capable of truly scaling. Or to reframe it in the language of traditional Lean Thinking, ‘efficiency’ means something very different for entrepreneurial efforts… it means how we can take waste out of the learning and adaptation process so as to learn and adapt faster and far more cost effectively — long before we've sunk any more capital into the effort than we have to. This ends up making us much more agile and resource-efficient than we ever could be otherwise.
So, in a way, one can say that ‘agile’ is the new ‘efficient’!
This tends to result in a far more (overall) time- and capital-efficient process, thereby maximizing our ROI on new innovation investments. In other words, it is this rapid, early discovery & experimentation process that in this case makes our pursuit of new innovation ‘lean’.
Lessons From The Lean Startup
While the Lean Startup / MVP Method is not necessarily suited to every situation, particularly inside of established organizations, there are several important lessons that can be learned from it about agility — lessons that can be applied inside of every organization.
In this sense, business organizations must pivot their understanding and application of Lean Thinking. They must put the process of ‘Lean Thinking’ to good use for finding new means of learning and adapting more efficiently — so that they can respond to new opportunities more quickly… and thereby be agile.
And so… maybe there is new life yet for all the Lean Consultants out there.
LONG LIVE LEAN.
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