10th Lean Manufacturing Conference Wroclaw, Poland

June 22-23, 2010

The Challenge of Lean Management

James P. Womack, Chairman, Lean Enterprise Institute

What Does Lean Need Now?

To think about the type of management system we need in order to make lean deployment sustainable. A good place to start: Comparing modern with lean management. (As we do this, please ask yourself what type of management system your organization has and what type it needs for a lean transformation.)
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Two Choices for Managers:

Modern management
(The Alfred Sloan School of Management)
versus

Lean management
(The Eiji Toyoda Gemba School of Management)

Lets perform a side-by-side comparison of the principles of these schools.

Modern vs. Lean Management

Primary focus on vertical functions and departments, as mechanisms of optimization and control. Primary focus on horizontal flow of value across organizational units to the customer.

Modern vs. Lean Management

Clear grants of managerial authority by leaders of organizational units (vertical delegation). Clear grants of managerial responsibility to solve problems (especially crossfunctional, horizontal problems) over which managers have no authority, within vertical organizations (including Toyota.)

Modern vs. Lean Management

Line managers judged on end-of-theperiod results for their span of control, increasingly financial in recent times. Line managers judged on the state of their process, with rapid feedback loops with next-level management.
If the process is right the results will be right. Manage by process instead of results.

Modern vs. Lean Management

Planning & direction from top down, with bosses giving answers:
Leads to compliance focus: Make your plan or explain the variances.

Planning & direction in circular feedback loops, with bosses asking questions:
What do you think the important issue is? Is there a problem? Whats the root cause of the problem?

What do you think the potential solutions (countermeasures) are?

What countermeasure do you think we should select? Who must do what when where to test this countermeasure?
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Modern vs. Lean Management

Conviction from the top that a good plan, once properly implemented, produces the desired results. (Justifying the compliance focus.) Conviction that all plans are experiments and can only be evaluated through the scientific method in the form of PDCA, followed by appropriate countermeasures. Planning is invaluable; plans rapidly become worthless.
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Modern vs. Lean Management

Generalist line mangers, rotated frequently with weak process knowledge, supported by deeply knowledgeable technical staffs (including finance.) Line mangers on extended assignments, with deep process knowledge, lacking the need for extensive staff support.
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Modern vs. Lean Management

Managers developed through formal education, often ex-company (e.g., management schools, consulting firms) or sink-or-swim rotations. Managers developed through incompany gemba learning through repetitive A3 analysis embedding PDCA, led by mentors throughout their careers.

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Modern vs. Lean Management

Decisions made far from the point of value creation, by analyzing data. (Conference room management.) Decisions made at the point of value creation, by converting data into facts (Go see, ask why, show respect gemba management.)

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Modern vs. Lean Management

Problem solving and improvement conducted by staffs, often through programs. Problem solving and improvement conducted by line managers, often responsible for cross-function teams, with staffs reserved for unique technical problems.

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Modern vs. Lean Management

Standardization (if any) of activities conducted by staffs, often with little gemba interaction and little auditing. Standardization of (all) activities conducted by line managers in collaboration with work teams, with frequent auditing by directly observing actual work not just work standards.

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Modern vs. Lean Management

Go fast as a general mandate:
Jump to solutions (with the consequence of going slow through the complete cycle of product & process development, launch & fulfillment.)

Go slow as a general mandate:

Start with the problem and consider many potential counter-measures in parallel (with higher costs & more time at the beginning, followed by lower costs, less time & happier customers at the end.)
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Modern vs. Lean Management

Strong emphasis on the vertical flow of authority, looking upward toward the CEO.
Performance usually evaluated at single points.

Strong emphasis on the horizontal flow of value, looking toward customers.

Performance evaluated in terms of optimizing the whole process (all of the points).

Control reconciled with flexibility!

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Conclusion from This Comparison

Modern management isnt conducive to creating sustainable lean enterprises. We need to transition to lean management (or something better!) through PDCA. How can we you do this?

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What Is the Value-Creating Work of Management?

Gaining agreement across the organization on whats important for customers and the enterprise (purpose), through strategy deployment (a process). Deploying on important strategy deployment initiatives, solving problems (every day), & evaluating proposals from lower levels, with A3 analysis (a process).
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What Is The Value-Creating Work of Management?

Creating basic stability throughout the organization, by means of standardized work with standardized management (a process). Educating the next generation of managers, by enaging direct reports in endless cycles of strategy deployment, A3 analysis, & standardized management (a process!)
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Methods of Lean Management

To employ at different levels: Strategy deployment to align and engage employees on the few critical issues the value-creating work of top management in particular. Note: The transition from modern to lean management might be an objective identified by strategy deployment!

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Strategy Deployment X-Matrix

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Methods of Lean Management

A3 analysis to deploy top-level mandates, solve daily problems as they arise, and (very important) evaluate proposals from lower levels of the organization the valuecreating work of mid-level management in particular. Never a solo assignment; always done in vertical and horizontal dialogue. (An excuse to have a constructive conversation about where you are and where you need to go.)
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Methods of Lean Management

Standardized management of standardized work with continuous kaizen to stabilize the organization and permit steady improvement the value-creating work of front-line management in particular.

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Methods of Lean Management

Educating the next level of management to create lean managers through continuing dialogue the valuecreating work of every level of management every day! Indeed, the most important valuecreating work of managers?

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In the Absence of Lean Methods

The predominant work of management is re-work workarounds for things gone wrong. In other words, most of the work of modern managers is actually waste!

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An A3 Project for Your Management Team

Analyze your organizations management system. Characterize its current condition.

Determine the ways it hinders lean deployment. (The Gap.)

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An A3 Project for Your Management Team

Identify the most promising countermeasures. (The Plan.) Test these countermeasures. (The Do.)

Assess the results. (The Check/Reflect.)

Make changes as necessary. (The Act/Adjust.)

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