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Perspectives and Reflection in Hard Times

I stumbled upon something I wrote 18 years ago, and I thought it was relevant for current times. I wrote it on behalf of an equipment manufacturer who was marketing to manufacturing companies. Manufacturing, in particular, was in deep recession and times were tough. Today, some of your lives are difficult because there is much more to do in this crisis. Some are difficult because of lack of clarity. Some are difficult because your work has shrunk, or disappeared. And some are difficult just because you’re working from home. Whatever your particular challenge, face it head on, and improve yourself and your work. I hope this perspective helps.

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It often happens that hard times inspire people to search for answers to questions that they should have been asking all along. That is a good thing, on balance, but the quest is complicated by the fact that it is almost always undertaken on an individual basis rather than as a company-wide effort.

For example, during a training session it is not uncommon to be approached by several different participants in a group, all of whom are asking essentially the same questions: Where are we? Where do we want to be? How can we get there? These are valid questions that should be asked aloud, not just within a company, but across whole industries and supply chains. Yet, when encouraged to present these questions to the group, the individuals asking them will nearly always decline, either from embarrassment or fear.

This phenomenon is a symptom of one of the root causes of the difficulties in which the global manufacturing industries presently find themselves. The proof of that statement is found within the organizations who stand out because they don’t find themselves sharing those difficulties. Toyota and its major suppliers provide the classic example.

They are doing well not because they have better tools, better people, better products, or deeper bank accounts; they are doing well because every day they wake up and ask “How could we be doing things better?”. This question is asked inside Toyota at all levels from the CEO to the worker on the shop floor. Equally important, it is asked at all levels outside the organization in every conversation between Toyota and its suppliers.

Toyota and its suppliers are not searching for the Holy Grail or an abracadabra-magic solution. They simply are looking at every detail of everything that is done, and how it is done across the enterprise, and asking what could be done differently to deliver more value and/or less waste.

One benefit of this detailed daily search for improvement, is that customers and suppliers tend to become allies in the fight against waste, rather than adversaries in an ongoing economic contest. The result is a win-win situation in which both customers and suppliers develop processes that deliver increased value with less waste. This is the real “magic” of Toyota’s production system, and it all starts with an attitude that says “there is a better way of doing everything, our job is to find it.”

On the other hand, we have the fact that the average lifespan of a Fortune 500 company is about 40 years. Fully one third of the companies on the 500 list in 1970 were gone by the early 80’s. It’s safe to say that none of them believed they were vulnerable, and neither did Sears, Polaroid, Xerox, Montgomery Ward, or Enron, to bring the picture more up to date.

Those companies did not fail because of bad people, lack of information, or causes that were beyond their ability to overcome. They failed because they either stopped asking themselves if the way they were doing things really was the best way, or even worse, they never bothered to ask the question in the first place. From CEO, to manager, to worker they failed to ask each other the question because they were embarrassed, or afraid, or complacent – and now their companies are going or gone.

Examining that question through the lens of Lean Systems Thinking reveals an unbelievable potential for success, as long as the examination is done clearly and cleanly. A Lean Transformation does not start with a list of tools to change the way things are done on the shop floor. It starts with a change in the way everyone in a company thinks about what they do, how they do it, and why it matters. It starts with an open mind, and proceeds from there to permeate and change the whole business from the boardroom to the last link in the supply chain.

That’s not to say the tools are unimportant. Changing a company in a sustainable way does require tools and does require changes to the business systems, but it starts with a fundamental change in thinking.

That kind of change is neither natural nor comfortable, real change never is. It needs to be practiced and reinforced every day. Once that happens, the opportunities that exist in the organization will begin to reveal themselves. Product development practices; plant operating reviews; accounting practices; supply chain architecture – they always have been there, but until someone is willing to stop and look at them and ask how they could be changed for the better, their potential simply remains unrealized.

It all starts with an open mind, which is not always easy to achieve. But the alternative is inevitable corporate extinction, and that provides a powerful incentive.

Even though a Lean Transformation is fundamentally about how people think about what they do, the place to begin one is not at the loft philosophical level, but rather down among the details that daily challenge the organization. Toyota did not create its production system because it was suddenly decided it was the right thing to do. It was created because the company needed a way to build cars to order because cars that were built to customer order were the only things its banks would finance. The answer to that challenge, and the tools developed to implement it, work for Toyota. They probably won’t work for anyone else unless they are modified to fit that company’s specific set of needs. One cannot impose a Lean Transformation from the top down and expect it to take hold. If it doesn’t address today’s most pressing challenges – for that individual business – the people who come to work everyday and deal with those challenges will simply ignore it and go on doing what they have always done.

Companies today face challenges on many fronts. How do we serve and satisfy our customers? How do we integrate and optimize our supply chain? How do we coordinate and align our employees? How do we satisfy our shareholders?

The answers to all of these questions can be found in Lean Systems Thinking – but only if it is approached with an open mind and a relentless dedication to finding a better way of doing everything we do, every day. A Lean Transformation is not something a company does once and then moves on. It is a change that permeates every aspect of a business and continues to do so as long as the business exists. It is not easy, but the alternative is not worth considering.