Lean thinker Paul O’Neill

by Jamie Flinchbaugh on 10-01-09

True lean thinkers in positions of power are hard to come by, but Paul O’Neill may be one of the best examples we have in the US. Former head of Alcoa, former Treasury Secretary under President Bush (for a very short period), and founder of the Pittsburgh Regional Healthcare Initiative to help bring lean to area hospitals.

On Tuesday, he gave a speech to the Pittsburgh chapter of the National Association of Corporate Directors of which I’m a member and proud certified professional director. You can read more about it here and here.

Some of the key points with my thoughts added:

  • Transparency is important “because every organization belongs to everyone in the organization.” – transparency builds trust because people know they will see decisions whether they are the right ones or the wrong ones. If people see some of the wrong ones clearly, as they will happen, then they can trust the transparency.
  • Don’t over manage a company’s earnings. “If you manage the day-to-day of the organization, the earnings should fall out the other end.” – You can manage either the means or the ends. But if you try to manage the ends or the results, you may understand if you have a problem. You might even understand where you have a problem. But to understand why you have a problem, you must understand the process or the means. Bad systems beat good people – manage the system.
  • Boards should adopt a system of “truth and honesty in everything you do.” – Boards must be able to deliver tough news to the organization, whether changes in leadership or shifts in strategy. If you don’t have truth and honesty, you will be unable to get people behind your message and commit to it.