One Ring to Rule them All

The Elves created 19 Rings of Power. Sauron, evil wizard and malevolent eye, created the One Ring to rule them all.

W Edwards Deming, Taiichi Ono and Toyota created the One Ring that rules every management theory in the business world. It is called Lean. It rules not by power or by intent, but because it is business 101, rigorously applied.

Lean combines the foundational elements of running a business into a system: making and implementing effective decisions; working effectively as a team (even if the team is hundreds of thousands of people); learning rapidly and effectively as an organisation; delivering individual action with company wide awareness; and more. There are many Lean techniques in each of these areas, and the techniques on their own deliver value, but the thing that makes the One Ring for business is its cohesion as a system.

Toyota has proven the effectiveness of Lean. Many others have agreed with Toyota by adopting it. It is spreading across the world, even to lonely Perth. Bankwest is implementing Lean in the form of Agile and Process Excellence, Western Power is seeking coaches and leaders with Lean experience and BAE Systems is looking to continue their Lean journey through the appointment of a Lean practitioner. Both BHP and Rio Tinto have teams working on Lean projects.

Lean delivers.

There is a version of Lean called Lean Six Sigma. It was invented in the United States, fusing statistical control techniques developed by Motorola to manage Integrated Chip manufacture (Six Sigma – tolerating 3.4 defects per million) with Lean techniques for achieving high quality. Lean Six Sigma focuses on designing and implementing change using a method that goes by the acronym DMAIC (pronounced demay-ick) – Define the problem, Measure the existing operation, Analyse the data gathered and use this understanding to Improve the process and implement the changes then Control the improvements against the measurement systems built during Measure. It is a powerful way of making change, emphasising understanding the problem using measures, then designing and testing a solution before making sure that the changes deliver as expected.

Lean Six Sigma is popular. All the organisations mentioned above are using it, and with good reason. It is effective, and can prove it is effective because of its emphasis on measures. But it suffers from a weakness.

It allows the organisation to do Lean without embracing it. And not embracing Lean is to leave the majority of its benefits on the table.

Toyota published the Toyota Way in 2001. They spent two years building it, then deliberately called it The Toyota Way 2001 because they didn’t believe that it was complete. It was just the current version. They also wrestled with publishing it, arguing that the Toyota Way is a state of mind and organisational culture, constantly evolving, not reducible to writing. Their debates on publishing the Toyota Way confirm that Lean is a system, and not a collection of methods or tools.

Lean Six Sigma is not to blame for allowing organisations to avoid embracing Lean as a system. Our collective thinking about business success is the culprit, and the epicentre of failure is executive leadership, flowing down the management layers.

What is preventing us from embracing the One Ring is a combination from the following:

Seeing the collection as powerful is difficult. Business is complex and we each get to focus on our narrow slice, building tunnel vision. I have often heard managers ask “What is the one thing that needs to be done to make a difference?” Experience has shown that they want a small “one thing” because anything bigger won’t get done. Lean is not small. It is simple, but it is not small, and its effectiveness can only be seen in the context of the complexity of business. Oliver Wendell Holmes Jr said “I would not give a fig for simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity”. Lean is the simplicity on the other side of complexity for business.

Adopting Lean is a challenge. It delivers immediate benefits, but takes years to embed and to see the radical performance it can deliver. Our modern environment has short term drivers (to the cost of us all) and it is difficult to sustain a plan over years, to hold true to a long term vision. Lean is optimistically a five year implementation and realistically ten, according to John Shook in “Gemba Walks”.

Unlike the One Ring, Lean does not gather power to one person. It distributes it, giving authority (in right measure) to everyone in the company. Only exceptional leaders can do that, and our organisations don’t choose the exceptional, they choose to propagate the norm. Lean does not appeal to people who like command and control, who fit the current mindset and are therefore promoted.

It is not flash or sexy, like “The One Minute Manager”. Common sense has never been accused of being that. When I explained to a group interested in building a Lean consultancy that it takes years to become proficient they rapidly lost interest. Hard work at the coal face is what makes Lean work. A quick sale and easy money it is not.

The halo effect. I have been told of a consultant that refuses engagements unless the business is in deep trouble. “We are making money therefore our methods are great” is a powerful force for not making change. This applies at both the personal and corporate level. There is always a better way, but there isn’t always motivation to pursue it. W Edwards Deming accuses the USA of this fallacy. For the 15 years after WW2 it seemed that US industry could do no wrong, and they believed that it was their management practices that delivered this. It is far more likely that the source of their competitive advantage was the utter destruction of the manufacturing capability of every other advanced nation.

Those that are tasked with implementing Lean focus on one or two techniques. Lean consultants that have joined us at the Lean Perth Meetup talk about the challenges of getting just one or two techniques implemented. All my reading about organisations doing Lean, including Toyota, shows that people learn Lean from a few techniques up, rather than from an overall understanding down. The understanding of the whole seems to emerge after years of immersion, instead of being front and centre from day one. Taking your organisation Lean would be easier with an understanding of Lean as system as the centre of the change. People would have the answer to the most the critical question for all change to succeed: “Why?” and there would be unity in the answer.

There is much talk of improving Australia’s productivity. We are wrestling with how we are to compete with China, now and when our mineral mountains are depleted. Much of the talk mentions Lean, or talks about its core concepts without using the label. The challenge is to move from reading and talking about it to doing it.

Seeing Lean as the One Ring to rule them all and understanding the transformation potential that it offers is a good first step to take.

Spend time with people who see Lean as the One Ring. Lean Perth Meetup (www.meetup.com/lean-Perth), Lean Enterprise Australia (www.lean.org.au) and the Association for Manufacturing Excellence (www.ame.org.au) have such people. And I can personally recommend Nick Jenkins at www.hansei.com.au, as he taught me.

Choose to start your quest.