Management Perspectives

Many companies turn to lean1 thinking and practices in hopes of achieving breakthroughs in efficiency, profitability, and customer satisfaction. Too many, however, fail in their attempts. What began with a bang ends in a whimper, leaving executives and business owners feeling frustrated and disappointed.

Moreover, such failures dissuade others from even considering lean in their own companies. If you are one of them, we have good news. With the right preparation, you can avoid the most common mistakes and stack the deck in your favour.

To begin, work with your leadership team or closest advisers to ask five critical questions:

1. Is lean right for us, right now?

While lean can certainly help a company, it is not right for every business, every time. For instance, if your business is losing ground due to outdated or second-rate products, start with improving your product line first. Or if market demand is declining - as it may be now, for example, amidst the current COVID-19 pandemic - think about a diversification or marketing initiative instead.

By contrast, lean might be a great fit if your business is having significant issues with efficiency or effectiveness - customer demand exceeding capacity, lead times lagging behind the competition, or costs exceeding what the market will bear.

Takeaway: Fit and timing are essential to lean success.

2. Are we up to adhering to lean’s core conditions?

Lean can work with almost any leadership style and work culture if—and it is a big ‘if’—two core conditions are unfailingly met: 1) leaders maintain consistency, with no wavering or walking back and 2) leaders walk their talk with steady and frequent follow-up.

Takeaway: Lean requires a commitment to consistency and support.

3. Are we willing to align our business practices with lean principles?

Like it or not, many of your company’s existing business practices—incentives, metrics, SOPs, and the likes—stand a very good chance of colliding with lean principles. For instance, a lean goal like minimising work in process inventory can conflict with standard cost accounting, or the ways that sales commissions or performance bonuses are structured can be at odds with crucial lean behaviours. The key is to be flexible and reconcile what is currently in place with lean principles, not vice-versa. Otherwise, lean will lose every time.

Takeaway: Lean requires incentives that are consistent with lean principles.

4. Are our expectations about lean and our company’s maturity in sync?

A lean initiative cannot, and will not, go the distance without managing expectations, especially with respect to speed and success versus your company’s overall maturity. For example, if your business is more accustomed to putting out fires than operating smoothly and functionally, be sure to adjust your objectives and time lines with room to spare—thereby allowing for any fits and starts—and fully communicate them with everyone involved. This way, you can head off any angst or uncertainty at the pass.

Takeaway: Be realistic about your company’s maturity and manage people’s expectations about lean accordingly.

5. Which approach to lean would be most compatible with our company?

There is no one-size-fits-all when it comes to lean. To be successful, it is incumbent to adopt a lean approach compatible with your business. Each approach—and there are many—offers differing levels of complexity and versatility, making researching and understanding those differences imperative. Besides traditional lean2, you will find everything from Six Sigma, which emphasizes the use of statistical techniques, to Paul Akers’ 2 Second Lean3.

Takeaway: Do your homework and find a lean approach that fits your company.

Ready? There is more to lean than asking these five questions, but by addressing them first and fully, you can avoid the most common mistakes in implementing lean.