In defense of lean

Note: This article was translated with the permission of the MIT Sloan School of Management, and its original version can be found at this link.

Ask what the term “lean management” means, and you may see someone go pale. “Layoffs, cost cutting, downsizing”, they may answer.

But that is not what this system – based on the lean manufacturing practices pioneered in the 1970s by Toyota – is about, according to lean experts John Shook, chairman and CEO of the Lean Enterprise Institute, and Jamie Bonini, vice president of the Toyota Production System Support Center. They recently spoke to MIT Sloan adjunct professor Zeynep Ton's class to elaborate on the subject.

“[Lean management] reflects on how we think about and do our work, both at a large scale, involving the entire company, and individually, focusing on every human being involved in the system”, said Shook, the first American hired by Toyota, in the 1970s, to help spread the Toyota Production System [TPS] around the world.

He said the term “lean”, as the TPS approach is known today, arose from research into how the system could spread beyond the company and overcome the common misconception that it only worked in Japanese companies. The Toyota Production System and lean aim to reduce all forms of waste in a process to maximize profit and value for the customer.

And lean practices don't work only in manufacturing.

“They can apply to administrative areas, office work, software development, all of it”, said Bonini.

“At the highest level, I think the biggest misconception is that people only think about the technical side of the system”, Shook added. “It is a totally holistic, social and technical system. That means embracing everyone, every human being who is in it, from the board, the CEO, the owner, all the way to the front line”.

Context matters

Bonini said lean management must also be implemented in the unique context of the organization trying to adopt it, not as a one-size-fits-all approach, and that most of the learning comes from the process of implementing lean.

“TPS is a bit tricky, because we know, when we work with organizations, that it won't make sense… until there has been some experiential learning”, said Bonini. “So that companies experience lean in their context and so that we work with them side by side”.

Shook said one of the biggest problems associated with the system is companies that try to directly copy other companies' solutions for implementing the Toyota Production System / lean and use them in their own operations – which may be very different.

“You expect it to work the same way in a different context. Context is extremely important”, said Shook. “If you start copying solutions, you'll struggle”.

Develop managers, not organizations

Shook and Bonini also focus on developing managers, who can spread and scale the system to their own departments very quickly, instead of trying to overhaul an entire organization all at once, as many try to do. This reduces the total time needed to implement lean across the company.

“If you can develop the manager, the leader, in the basics of TPS, those people can reach the whole company”, said Bonini. “That way, you won't have the problem of having [to train] 75,000 people in a company. Your problem is training just 30 or 40 managers, and that is a solvable problem”.

Often, Shook, Bonini and their team will work with an organization to identify a crucial part of the business to use as a model for implementing lean. They will implement lean in that area first and then use the experience gained to scale the system to the rest of the company, Bonini said.

Understand lean as a new way of thinking

Shook said lean / TPS is more accurately categorized as a way of thinking, rather than just a technical system for running an organization.

“Lean will go wherever you are willing to go”, he said. “It can go as far as you want. If you want to reduce it to a merely mechanical level to make some operational improvements, that's fine. It will meet that need. If you want to see it as a holistic, all-encompassing culture and philosophy and as a new way of working, it will take on that role, and there will be no limits to the learning it brings”.