Starting a Lean initiative is easy. The difficult part is keeping momentum and measurable success. A typical Lean implementation life cycle starts with excitement about 5S or Kaizen Blitz events. There are two options for the next step: the program dies or continues on to success. For the few that continue on to success, they must overcome a number of key obstacles. Popular “reasons for failure” lists and books fail to cover concerns that will assure success.
Paul C. Nutt’s Why Decisions Fail: Avoiding the Blunders and Traps That Lead to Debacle showed two-thirds of all businesses fail. Many Lean experts report Lean implementation failure rates of more than 50 percent. Success rates are actually closer to five percent when we consider errors in employee selection, training and performance management. To get and keep Lean successes, we need to do a better job on the human capital (HC) side before we implement Lean.
PREVENTING LEAN FAILURES
This list is based on research in best practices and my own 25 years of successful Lean implementation globally. With apologies to David Letterman, this Top Ten List has 12.
1. Engage leaders with a plan. You need a Lean business plan supported by senior leadership. It shows opportunity costs, ROI estimates and a company-specific, risk-adjusted economic argument for the investment. Some consultant will work on contingency fees based on savings and guarantee those savings by cutting staff. Companies need to know what Lean will specifically do for their company, not vague statements like, “20 percent savings are possible.”
2. Current processes aren’t under control. Taichii Ohno – the father of TPS – said there is no improvement without standard work. Most Lean consultants fail to get a reliable baseline before they start tinkering. If they show improvement, companies will never know why it happened or how to keep it.
3. Insufficient understanding of Lean. Senior leaders need to know enough about Lean to be informed consumers and to make sure the potential Lean consultant is capable. Senior management must know which Lean elements self-reinforce and contribute to the goals of the company.
4. Lean isn’t a “project”. Lean too often gets treated as someone’s project and gets dropped when they’re busy. Lean is not a project; it’s an ongoing improvement and a fundamental change in the value delivery system.
5. Poor communications. Failing Lean implementations don’t share information in the company, suffer from poor project management and fail to use visual displays. Clients need relevant descriptions of benefits, risks, changes and necessary commitments. Share information with everyone.
6. Poor measurement. Most consultants can’t measure. Metrics that focus on value creation and costs are mandatory. Traditional cost accounting can cause Lean failures. Lean accounting ties financial measures to the performance of the entire value stream, including closing employee accountability loops. Lean benefits must translate into ROI time and dollar amounts.
7. What’s in it for me? A lack of buy-in from both middle management and employees will threaten Lean. Early participation helps to reduce fear of change and shows people how their work will improve. Lean is contagious, but not if people feel threatened.
8. Sector specialists derail Lean. “Specialists” are a threat since they rush to decisions and see Lean with their biases from other areas. They skip problem solving for true root causes and concentrate on superficial answers. Reducing patient wait times gets answered with “more beds”; cost overruns are answered with “reduce staff” and so on. Launching even a modest Lean initiative without having real Lean skills is not realistic.
9. Poor implementation strategy. Companies need to know what Lean elements will be deployed and when. There must be a plan for Lean growth in the company. Lean cannot be pushed into the background when people put out other fires. Measures and timelines need to be maintained, while integrating possible problem and recovery scenarios.
10. Inappropriate training. Everyone says training is important, but it must fit the company and support the business case. For example, SMED (single minute exchange of die) and kanban training are good for manufacturing, but health care requires different content.
11. No proper continuous improvement methodology. Kaizen Blitzes are short-term, intense and can provide quick improvement results, but they don’t build sustainable success since most implementations don’t connect blitzes into a larger plan.
12. Leaning on one Lean in-house champion. Having an expert is only good if there is a critical mass of people or knowledge to help Lean start and spread. Toyota’s “Train Then Do” model connects training to on-the-job coaching and helps champions to build in-house Lean support teams.
Dr. Timothy Hill is an Industrial and Organizational Psychologist and Certified Lean Six Sigma Black Belt with global expertise in Human Resources/Human Capital. He can be reached at firstname.lastname@example.org.