Lean Transformation – Part One: The Transformation Equation

June 7, 2012

By Jeff Kopenitz, DVIRC, Director of DVIRC’s Training and Education

The highly regarded and long-successful Toyota Production System often referred to as “Lean”, has been attempted by many industries throughout the world. Those who have realized positive results recognize the need to develop an approach that encompasses both operational and cultural change.

Leaders that value their associates as assets and demonstrate these values as part of their culture achieve stronger performance and financial metrics. Conversely, when leadership undervalues culture the organization is less competitive. The following equation illustrates how leadership value influences business performance:

The way we think + the way we work = the results we achieve*

For many years Lean has been viewed as a set of tools and methods that are used to improve an organization’s performance. This view dismisses the importance of developing a management system that will support and allow the methods and tools to work in a perpetual way.  Developing this system will help develop a culture that allows all employees that work in the business to also work on the business.  This methodology helps create problem solvers within the organization meet or exceed their customers’ expectations.

Organizations that have embarked upon their journey have found that the physical process changes in material and information flows are not difficult to make, and typical short-term results are extremely positive. However, sustaining these gains is found to be extremely difficult. The difficulty is primarily due to an underdeveloped culture and management system that will support these changes. To build a competitive culture that generates, and sustains positive value, organizations need a lean business strategy that devotes approximately 80% of their time and effort focused on the “social / human side” of the organization. The remaining 20% is consumed by the “technical methods and tools” needed.

Lean practitioners have realized that getting the “thinking right” component is extremely difficult. This variable is dependent upon the values and beliefs of the organization. The organization’s values and beliefs will drive the behaviors of the organization. These behaviors will dictate the actions taken, and ultimately yield the desired results.

Over the course of upcoming articles we will examine in greater detail both the technical and social skills required to become a high performance organization, including high performance teaming, change management, conflict resolution, leadership training, pull systems, voice of customer, and value add vs. non-value add activities. The process of transforming an organization although challenging, has proven to be extremely beneficial for hundreds of firms. Whether you have a small enterprise, or large multi-location organization, the return on investment of a lean transformation will exceed all expectations. Your comments, questions, and thoughts are always welcome, and remember, “if we always do, what we always did, we will always get what we always got!”

* “Unleash the Problem-Solving Capabilities of Employees” Detroit Edison, a 
subsidiary of DTE Energy, AME Target, fourth issue 2009