Beyond Lean

Why sound CI programs may fail to deliver on their ambitions is because they are considered a certain type of change management program. According to such a program human resources are meant not only to be in service of assets often at a relatively low scale of the value adding ladder but also to become subject to a culture of regulation focusing on assets, i.e., capital, technology and, indirectly, the intangibles. The general perception of how improvement programs should be structured and conducted is that they should make their impact on assets and asset utilisation. The fact that most CI programs are likewise evaluated as though they were just a bigger finite change program, with technology and process, maybe system metrics invoked, is an indication of the instrumentalisation of CI itself. Operational change programs are prone to engender not only silos but also rigid, die-hard cultures at asset level, incapable of self-reflection and cooperation. Operational change management fails in both ways as a CI platform. Western Lean has always been under the spell of change programs and while so it is not capable of supporting either customer orientation or CI.

In a CI organisation the CI culture underlies any purposeful activity of the organisation and all activities revert to it as if to their ultimate goal. The ultimate capability of continuous improvement is a form of existence for such a company which will necessarily be organised around people and will be a human system. The company practice will build on “people and kaizen first” as on fundamental assumptions. The most telltale sign of the uniqueness of Toyota to the extent of its commitment to these assumptions is the inability of the world to distill the Toyota Production System (TPS) into Lean. TPS is a “people thing” and we just do not let Lean form into one. Can we really say though that it is all a failure of Western executives, or is it perhaps something entirely different, maybe rational calculation on their part, i.e., to take distance from a full Lean-CI conversion? Let me make this tentative suggestion at this point that maybe TPS, after all, is not worth the effort.

Without a functioning CI culture continuous improvement just does not happen. Other than that of Toyota all the rest of the transformation philosophies are structurally ill-devised, inflicted with a people management mentality that cannot by definition anchor CI in the pervasive cultural fact of the organisation. A few lessons stand out. (1) The meagre reproducibility of kaizen companies pushed (rather than led) by powerful managers to better and better results can remind us that outside their original context some solutions may not work just as conveniently. The allure of Lean must be limited for most CEO’s if they hear only about the disruption that it creates and the hard work that it demands from the whole organisation. Indeed, it is doubtful whether Lean has been configured in the right way at all to be able to serve improvement purposes in the Western context. (2) In semi-controlled Lean cultures walking a slightly different path the main carrier of the critical phase, i.e., a leadership-mentored evolution of systemic CI capabilities where leadership meets system and tech/process-level CI practice, is simply not on top of the agenda. (3) In other instances centred on technology leadership we detect at best a fragmented CI capability. Rational calculation however does speak against a dazzling commitment to systemic Lean anyway.

Long term thinking precedes short term goals at Toyota, and this stability of the core principles, different from a standard Western firm’s recurring revisions of its “fundamentals” as only possible, not only creates the aura of stability and reliability but also conserves the essence of continuous improvement, i.e., continuity, on the basis of unshakable principles. Western improvement programs are technical, while TPS is fundamentally social. We provide training for doing’s sake, and conceptualize training materials to be conducive to more efficient job fulfilment. Still, the practice of TPS could damage its own DNA as far the people flow goes, telltale of a system failure. The Toyota spell is evaporating now due to unavoidable system glitches at Toyota. But the biggest benefit of all this is the recovery from a dream that derouted the CI activities elsewhere when awake. What is probably the greatest, unassailable significance for industrial learning in the Toyota practice is the company’s understanding of its own DNA as an intertwined value creating structure of the people and the product flows.

It is, in short, not a particular organisational practice that needs to be reconstructed and reproduced but its underlying purpose and/or its philosophy, i.e., operational excellence through continuous improvement and the respect of people in the case of the Toyota Way, to find the direction to the True North. The culture of the traditional Japanese agrarian society, of self-reliance, of collectivism, of kaizen etc. is the totalistic construct which provides the context for both understanding and action and without which much of the social practice including the corporate practice of Toyota loses both its bite and its true meaning. The comparable moral code of the Western way of life used to be what we may call the individual self-actualisation in attaining human excellence, going back to the ancient Greeks, equal to maximum value creation at any point of time, in a business environment.

You have to build on a prior culture to be able to excel, luckily representing a moral code (the character of a company) and presenting us with the generative principles of transformation. Such a company culture is the most stable if creative of a practice that infers core company goals from individual purposes. The Western concept of individuality can help us avoid these pitfalls of groupthink and agression if properly structured and implemented in the business environment. While a closed and forceful system of conditioning will always be subject to the perceptions of reality at the peaks of an organisation and as such a sure way to suboptimal organisational behaviour I offer a different logic to establish a system of improvement that would finally lead us to the production of improvement as the chief productive capacity of a learning or CI organisation. In this logic leadership brings out the endogenous, underlying culture of a given nation, region, or people, identifies the moral code (of excellence) in it, transforms the moral code in a structured manner, by means of the natural need to self-actualise, into the active people principles of an organisation (e.g., respect of people and kaizen/perfection), and finally develops a practice of applying these principles to the product value chain to lock the CI culture in value creation.

A coherent theory of continuous improvement must entail a viable practice. So, what does such a theory look like in view of what has been said until now?