A colleague sent a copy of a USA today article to me earlier today. The article talked about a successful implementation of Lean strategies citing a company that makes bedding as the centerpiece example.
I was glad to see this. I’m a big believer in Lean and I think it has proven itself repeatedly as a great overall framework for improving performance of business and manufacturing organizations.
The article took a somewhat disturbing turn however. The justification for the lean implementation and the result of the lean implementation was not at all what I expected.
I thought, perhaps naively, that people understood that Lean is not an expense reduction strategy but rather a growth strategy. Yet, throughout, the article there were examples of one lean technique or another being used to leverage a requisite reduction in the size of the workforce associated with the new technique.
Ultimately, the entire lean implementation came down to a survival strategy, aimed at a reduction in workforce size and other expense reduction measures. Nowhere was there an example of turning those “saved dollars” into expanding market reach.
The strategy was put in place as a response to low cost competition and a recessive economy. The goal was survival.
My response to this is Congratulations you survived . . . big deal.
Sadly stories like this vilify the very solutions that could save millions of jobs and keep companies strong if their CEOs didn’t rely on double-speak of “lean” as another word for showing valued employees the door, or worse yet spinning Draconian budget cuts for the media. I would ask these media pundits to consider some broader questions before jumping on the “Lean layoff” bandwagon:
- Where are the mentions of how lean saved jobs at General Electric, or how lean is helping small manufacturers hold their own against global competitors who only know how to complete on price and availability?
- Where is the story of how lean concepts ensure that quality is the primary focus in the global pharmaceutical market to assure that medications for a cold or flu can be trusted?
- Or how lean is helping hospitals to save lives by having the right medical care, the right medications and the right equipment on-hand to save a persons’ life? Isn’t that the best ROI there is?
I would also ask these questions:
- Where is the other half of the equation? Where is the growth plan?
- Where is the aggressive marketing into the markets dominated by their low cost competitors?
- Where are the new sales jobs to sell the less expensive- higher quality product into these new markets?
- Where is the increased accuracy and speed of response to customers’ needs?
- What about being customer driven and learning to execute more effectively because of lean strategies?
None of these great contributions of lean is mentioned. That’s because CEOs are using lean as the politically correct buzzword for layoffs. But the journalists are at fault too – they need to research what lean really is and call these CEOs on it. In effect they are practicing good old fashioned cost cutting, not lean. Lean would be about saving jobs, not losing them.
After reading the article and the comments following the article, it is abundantly clear to me that we have done a dismal job of getting the Lean message out. Many of these comments are incredibly vitriolic in nature and perhaps justifiably so.
If Lean is misused as a way to squeeze a few more cycles per hour out of the average worker and then followed up with paring away the “excess capacity” to save on expenses, you are playing an end game with only one outcome . . . failure. The emphasis must be on growth. The goal must be increased sales, higher quality, increased accuracy and greater speed. The strategy must cite expansion as the only sure way to ultimate success.
Throughout all of this must be the focus on increasing the value you deliver to your customer.
I understand the need to survive a tough business cycle and I accept that there are times when “right sizing”, lay-offs or other cost reduction steps must be taken. However, to celebrate “survival” as the victory of Lean is a pyrrhic victory, a victory that comes with a responsibility to do better in the future.