By Bob Emiliani
This article is from the Superfactory Archives, an archive of content from the Superfactory website that existed from 1997 to 2012.
Every Lean advocate is very enthusiastic about their work. But individual enthusiasm without extensive, high-level coordinated group activities to promote Lean management in policy circles will relegate Lean to a niche practice. We can do better than that.
What’s in a name?
In October 2007, the Lean Enterprise Institute held a celebration in Cambridge, Massachusetts, to commemorate its 10th anniversary. Jim Womack spoke at the beginning of the event and offered a wonderful retrospective of LEI’s beginnings, accomplishments, and future direction, which was to move beyond Lean tools and start to focus on Lean management (finally!). He also shared his regrets over the name “Lean,” saying that it was not a good name in hindsight but it is the name we have and should make the best of it. To me, he sounded nearly apologetic.
While Jim’s honesty was admirable, he should not have expressed any regret over the name “Lean.” Why? The long-view of history tells us that no matter what you call progressive management, executives will resist it or misinterpret and misapply it. John Krafcik could have instead named Lean “Free Money, Free Love” and people would still find reasons to ignore or disparage it. This is not a simple name or branding problem; the challenge runs much deeper than that, as I shall soon explain.
For over 100 years, different names have been given to new management systems and methods. These include: Scientific Management, Total Quality Management, Reengineering, etc. Their common intent is to introduce progressive management practices to businesses and organizations. They seek to move executives away from wasteful conventional management principles and practices to new ones, which, if understood and practiced correctly, would do less harm and lead to greater prosperity for all key stakeholders.
But, as history has shown us time and time again, most managers resist efforts to adopt new business principles and reform long-established practices, or they misunderstand and incorrectly practice them. The Hollywood film titled “The Matrix” offers an interesting analogy [1]. The human character Neo (Thomas Anderson, played by Keanu Reeves) and his colleagues embark on a mission to improve the human condition. They represent a threat to the software in the machine-based system, which responds by unleashing agents (computer programs) and sentinels (machines) to disrupt or destroy Neo’s mission.
Progressive management, or Neo-management (new management) [2], and the people that introduce it, are often similarly perceived as threats. To address these threats, some executives (agents) and mid-level managers (sentinels) will disrupt or destroy their mission to improve the human condition in business. As in the movie, agents and sentinels appear in overwhelming numbers to preserve their system. The people who respond to the threat of Neo-management are not bad people. They are simply defending what they know to be true; that which in their minds is settled.
In law there is a principle called “stare decisis,” which means to stand by a decision or precedent. It is referred to informally as “settled law.” Stare decisis obligates the legal community to accept the decision of a higher court in legal proceedings in lower courts deciding similar cases. Settled law is a practical principle, for without it no legal decision would ever be final and every decision would always be up for review. Precedent would have no meaning or value and the legal system would be unproductive. Settled law imparts predictability to the legal system and provides a stable basis for thought, analysis, and progress.
The same concept applies in business: I call it “settled business.” There are economic, social, and political precedents that for practical purposes – meaning for day-to-day business in the real world – are settled. Importantly, advocates of any system of progressive management have consistently failed to appreciate the extent to which, in the minds of most executives, business is settled.
Settled business with respect to economic precedents includes: economic order quantities, economies of scale, standard cost accounting, supply-driven production (similar to supply-side economics), low wages means low costs, unit price savings results in lower costs, economic man, efficient markets, free and unfettered markets, deregulation, etc.
Settled business with respect to social precedents includes: zero-sum thinking (e.g. little or no sharing), people are the problem, blame people for errors, organizational politics, little need for fairness, there is a shortage of management talent, etc.
Settled business with respect to political precedents includes: short-term thinking, what gets measured gets managed, business is complex, the imperative for growth, pay for performance, environmental responsibility adds cost, and the purpose of business is to make money or to maximize shareholder value.
These precedents can fit within more than one category at a time.
Acceptance for each one of these precedents is very high among influential people such as senior managers, academics, business journalists, political leaders, economists, and investors, to name a few. They know these to be true, they will strenuously defend them, and they will marginalize or remove those who dissent. They see these as binding precedents; binding principally as a result of their training in school and on-the-job work experience; binding as a result of pre-existing company policies, procedures, and metrics; binding as a result of enterprise software systems and machinery; and binding as a result of people’s expectations (such as investor’s expectations). There are no issues here that need to be re-visited or corrected. Further, what would be gained personally or professionally, late in one’s career, by revisiting these precedents?
Every person who has advocated some form of progressive management has asked the management in power to question different aspects of settled business; to overturn established business precedence. They are asking executives to willingly re-examine dozens of ideas, principles, practices, tools, methods, and metrics. The vast majority view doing this as costly and time consuming, and simply unnecessary. Executives are unwilling to revisit that which they think they have gotten right and which they see working well-enough every day.
What advocates of progressive management have long recognized is that unlike the law, these precedents are non-binding – even though executives and other stakeholders may see them as binding (in part due the inaccurate perception of high switching costs). Since most, if not all of the precedents related to conventional management are non-binding, they can indeed be changed.
However, the past and current approaches that advocates of progressive management have taken to ask executives to overturn established business precedence have obviously been inadequate. The barriers to correcting precedent are much more formidable than the weak, scattershot strategies and tactics employed by the Lean community thus far, and which are easily blunted by anti-Lean actors using elementary forms of illogical thinking such as: red herrings, abusing tradition or expertise, avoiding the force of reason, making false assumptions, creating false dilemmas, expediency, proof before consideration, and ad hominem attacks – often in combination with one another.
We must recognize that what we have been doing is pretty much the same as what advocates of progressive management did in the 10 decades before Lean as we know it today came along (circa 1975). In essence, we have committed to climbing the highest mountain, but are doing so dressed in Hawaiian shirts, shorts, flip-flops, and with some zinc oxide on our noses. Our desire for broad-based adoption of Lean management greatly outstrips our level of preparedness. How then can we realistically expect to be successful?
We must prepare anew for the incredible mountain ahead of us. I propose a fundamental re-thinking of the Lean community’s “go to market” strategies and tactics – especially in light of Toyota’s recent stumble [3], which only strengthens the positions of the legions of managers who support “settled business.”
It seems, at a minimum, that we must work together much more closely, better utilize available resources, and strive to have an impact on policy at the national level. This means that we must spend more time together planning so that execution is more focused and, ultimately, more successful, and so that our Lean stories inspire others and instill confidence.
It also means that we need to get influential economists, from the left, middle, and right, to deeply understand flow [4] because that is who top executives listen to.
Notes
[1] The first two Matrix movies appropriately featured songs from the band Rage Against the Machine, whose purpose is to raise awareness of social, economic, and political injustice. In the context of this article, the injustice is zero-sum conventional management practices. Progressive, non-zero-sum Lean management represents a more just management system.
[2] Many people have heard of the famous Japanese consulting firm Shingijutsu Co., Ltd. Their name, “Shingijutsu,” means “new technology,” in reference to the new management technology that Toyota’s production system represents.
[3] Toyota Motor Corporation suffered a severe mismatch between supply and demand in all of its largest markets starting in mid-2008 through mid-2009. This indicates that instead of building to dealer and end-use customer demand, Toyota was instead producing according to a plan. This is just one of many inconsistencies with both the “Continuous Improvement” and “Respect for People” principles in the “Toyota Way 2001” document (“The Toyota Way 2001,” Toyota Motor Corporation, internal document, Toyota City, Japan, April 2001).
[4] See “Toyota’s British Influence,”