Five Warning Signs That You Could Become An “Enemy of Lean”

It started out with a phone call, “Blake, you have to come work with me at this company. They need Lean so badly, and you are just the guy to do it.”

Unfortunately, I would be asked to compromise a well known pillar of Lean: “Respect for People.” If I had known I would be asked to compromise this pillar, I would not have accepted the offer. Looking back, I can see all the warning signs that were in front of me. 

In Mark Graban’s 2007 blog titled “Lean or ‘L.A.M.E.,’” he opens a great discussion on the topic of companies unfortunately using Lean to drive workforce reductions. An old boss of mine once referred to someone as an “Enemy of Lean.” He was referencing someone with whom we had both worked, that gave Lean a bad name by using the tools of Lean to solely reduce the size of the workforce.

There were five warning signs, that in hindsight were each a direct violation of one of the 14 Management Principles of Jeffery K. Liker’s The Toyota Way. By sharing these warning signs, I hope that I can prevent others from becoming an “Enemy of Lean,” as I unfortunately did. 

#1 - “We have no real metrics, and you will get limited information.”

Though this statement sounds unrealistic or improbable, it happened. Whether it is a systems limitation, a non-analytical culture, or a confidentiality issue, there are organizations out there that just don’t share good information. You probably know the often used phrase of “What gets measured gets done.” Despite it being a tad cliché, most of us likely believe it… for good reason. 

I quickly found myself in an organization that didn’t have great data, didn’t believe in sharing data, and with leadership that felt a need to keep the information close to the vest. Just one of these root causes would be an issue for an effective continuous improvement implementation, but having the whole trio proved to be overwhelming. 

In my first interview, I learned that there were no location level P&Ls, and even a company-wide P&L was not shared beyond the C-suite. Instead of realizing the magnitude of this issue, I chose to believe that I could overcome this limitation eventually by developing my own KPIs with whatever data I could extract. 

In relatively short order, I was able to develop an extremely relevant KPI. I ran it by some Lean counterparts in other businesses, and they agreed it was a great metric.

In previous Lean implementations, developing and regularly sharing the best KPIs in a visibly easy to interpret format was half of the battle. In Lean, we like to call this a form of “visual controls.” The Toyota Way Principle #7 is: “Use visual controls so no problems are hidden.” I recall helping develop a critical productivity KPI at a previous company. I requested that a corporate analyst deliver a report to the inbox of each location manager every single morning. By merely publishing the report, and having already embedded some aspects of a Kaizen culture, the productivity shot up 15% almost instantly. Within 6 months, through-put was up nearly 50% with nearly no new investments. The metrics were that powerful.  

However, in my new journey, I found myself in a culture that was data-phobic. The company had grown for 20 years at an astronomical rate, and nobody had ever seen a bit of data. The organization had a very good intentioned mentality of, “Take care of the client, and everything else will be fine.” One of my favorite stories about the original owner goes like this:

A regional manager, Steve, was having dinner with the owner, David. Steve says to the owner, “David, when are you going to provide me with a P&L so that I can properly manage my business? I literally can’t sleep at night sometimes not knowing if I am in the red or the black.” David takes a sip of his wine, calmly rests his left hand on Steve’s right shoulder, and says, “Steve (long pause), I sleep just fine.”

When I first heard this anecdote, my immediate thought was that the company must be so profitable that there is no concern about waste, thus there must be a tremendous amount of waste if local field management had no idea where the money was going. I was excited… the sky was the limit on improvements, if I could just get the data to the people. 

The problem was that the phobia of data was so embedded in the culture, including the senior leadership, I would fight an uphill battle that I would never overcome. Despite several experts internally and externally agreeing that I had found an extremely relevant KPI, it would never be embraced. Once, when I was making my case in support of the KPI to a seasoned veteran of the company, he stated that it was not valid because there were inherent disadvantages that some locations had that would skew the KPI and make them look less productive. My response, “By your statement, you are actually giving credibility to the KPI. While these inherent disadvantages may or may not be fixable, you are basically admitting that the metric has value.” His response… crickets. 

The lesson here is this. You likely know that for a Lean journey to be successful you need visual controls, which often translates into visible data. However, you need to really assess the situation you are entering to understand if the culture embraces data, or at least, if it is a culture that can be influenced to thrive on good data. If you truly believe you have the power and influence to make the culture embrace it, that is excellent… just be aware that it may not be as easy as you think. 

#2 – “Don’t use the Lean vernacular, because the culture here won’t allow it.”

I am not a person who believes that you have to throw around a bunch of Japanese terms to be effective at continuous improvement. In fact, I sometimes cringe when I come across people who feel they need to use every bit of Lean jargon possible. It almost comes across as someone only trying to impress. 

While my above statements may seem to be relatively supportive of warning sign number two... quite the contrary. I do not believe one has to use the Lean vernacular to be successful, but I strongly believe that executive leadership has to be willing to forthrightly sponsor Lean.

In one of my first meetings with one executive, he did say, “Do not use the terminology. You will freak these people out.” My thought then was that in time I could win the people over to the concepts of Lean regardless. Alternatively, that executive was correct that it was simply the vernacular that would be an issue. Either way, I thought the concepts would eventually be embraced. 

In another organization that I had worked with years ago, they insisted on not using the term Lean or any of the Lean vernacular. The company had literally written its own version of Lean/Six Sigma, and rebranded it with their own acronyms, catch-phrases, etc. At this company, their Lean implementation turned out to be immensely successful. Lean terminology did creep its way in over time, but, by then, it did not really matter. The concepts and tools were embedded and embraced. 

In my experience, not using the vernacular was fine. It really didn’t matter what I called it, as long as I could successfully teach the philosophies to the people. What I missed this go around was that executive leadership was not simply looking for a change in terminology. What they really meant was either/and:

a. They did not believe in the concepts

b. They did not believe in leadership’s ability to get the organization’s buy-in 

Either way, this implementation was destined to fail. The Toyota Way Principle #14 is: “Become a learning organization through relentless reflection and continuous improvement.” If executives did not believe in continuous improvement principles, they would not be the executive sponsors that the company needed. If they did not believe the people could embrace it, then they would also not be the executive sponsors required. 

Before embarking on a new Lean journey, make absolutely sure that you have strong executive support, and look out for some subtle or not so subtle signs that they aren’t believers.

#3 – “There are people here that you are not allowed to hold to your standards.”

Warning sign number three is one that I heard from people at all levels of the company. Literally from the CEO to the line level employee. It was put as bluntly at times as, “If you cause this person to go, then you will be fired.” Another of my favorites was, “That person over there is responsible for 1% of our group’s annual revenue. Just let them be!” Lastly, “Yes they have a really bad attitude and can’t get along with most people, so they work from home.”

Do not get me wrong. My intention is not to cause an employee of perceived value to leave an organization. I want every valuable employee to work for my company for as long as possible. 

My discussion on this warning sign will be fairly short, but that does not diminish its importance. It could be one of the most critical signs. What this statement really means is, “There are sacred cows in this company, and you will not be allowed to question them.” 

There are sacred cows in almost all successful organizations. I would argue that most extremely successful companies have cultural characteristics that are sacred. Apple insists on creativity and ingenuity. Nordstrom has zero tolerance for anything other than exemplary customer service. Southwest’s entire operating model is dependent on flying only Boeing 737s.

It became apparent quite quickly that in my situation, some people and some concepts were not to be questioned. The scared cows, however, were not core company principles. If you are reading this article, you are likely enough of a leadership thinker that you know how damaging this would be for any change implementation. 

The morale of this story is to watch for signs that indicate that change will not really be embraced. Will they follow The Toyota Way Principle #10 of: “Develop exceptional people and teams who follow your company’s philosophy?” Executives, board members, owners can say until they are exhausted that change is needed and warranted. For that to be true, they have to be willing to part with anyone or anything that is inconsistent with their evolving values. 

Perhaps one way to screen for this cultural resistance to change is to ask this in an interview, “Who is the one person that will fall under my purview that is untouchable?” If the interviewer has a name, you may want to look out.  

#4 – “Operations is the root of most of our negative issues.”

Trust me I get it! As an experienced operator, I am used to getting the finger pointed at operations first. I would say this is the norm for most companies. It is actually the norm for every company with whom I have worked. 

I cannot count the number of times I have been on emergency conference calls in response to a customer failure, only to eventually uncover that the root cause was not a traditional operations function. In one organization, we repeatedly identified the root cause as one salesperson’s inability to write an accurate order. The true root cause could have been lack of proper training or clunky systems. Regardless, it literally took over ten instances for executive leadership to recognize that operations was not the sole issue. 

That said, it might take a pretty sophisticated organization to understand that to properly implement a culture of continuous improvement, you have to be willing to look at the system end to end.  

When I heard “Operations is the root of most of our negative issues as a company,” I puffed up my chest and thought this would be my chance to fix an entire company! I did know that I could draw on my series of previous successes and failures. I knew that I would need the support of my leaders, my peers, and my subordinates. I have been around long enough to understand that rarely is the root of all problems in a company singularly focused. I also knew that it is absolutely possible to lead an organization to such substantial operational improvements, that other weaknesses get exposed.

Unfortunately, I wanted to believe that operations was truly the biggest issue. Because, if I could substantially improve operations, and if nothing else outside my direct influence needed repair, then I could fix a company! What I could have done is insisted that others look inside their glass houses as I looked inside of mine. Principle #11: “Respect your extended network of partners… by challenging them and helping them improve.” Instead, I took it upon myself to carry the burden of an entire organization, and accept that “Operations is the root of most of our issues.”

#5 – “Ultimately, your objective is to find cost savings.”

Well, this statement does not sound too awful. Isn’t it one of the points of a Lean implementation to eliminate wastes, improve efficiency, and ultimately save costs? Not necessarily an immediate cost savings if you believe in Principle #1: “Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.”

Warning sign number five leads me to where I ultimately had to compromise “Respect for People.” Perhaps I have been lucky with just great bosses, great executive sponsorship, great peers, great teams, or simply, in the right place at the right time. In my previous attempts at a Lean implementation, the results were increased through-put, better quality, people development, and ultimately, it allowed for my organizations to address markets that they were unable to address before. Basically, it facilitated long-term growth. 

This time, things were different. This is in no way an attempt at laying blame or suggesting some people don’t have the best intentions. However, this time the objective was mainly to cut cost quickly. Period. 

Before the end of my first month, an executive asked me, “How many heads is this improvement going to allow us to cut?” Instead of dramatically changing my plan to implement Lean, I chose to mostly ignore this pretty important flag. If I could help facilitate the needed improvements, growth would quickly come; or worst case, natural attrition without backfilling people would provide the savings sought. 

I repeatedly told my team, “Lean is not about headcount reduction, it is about growing your people!” I insisted that if they stayed with me on this journey, the prize would eventually be personal growth, professional growth, top line revenue growth, and increased profitability. This concept had worked in previous jobs in industries that were shrinking. Surely, it would work in a growing industry. 

What I grossly underestimated was executive leadership’s urgency to reduce costs. This was not a two, three, or five year plan for me. The latest owners bought the company before my arrival, and were not satisfied with their investment performance. I came to discover that I really had less than 12 months to show the savings expected. A savings that had never been quantified to me or my team. Nonetheless, if we did not find said savings, ownership was going to do it their way. 

Literally at my 11 month mark, the meeting happened. Time was out. I had 30 days to find a way to reduce my headcount by 15%, while not allowing service to suffer. There would be no investment in new tools, new training, new technology. Just the good old, “Figure it out!”

I had two choices:

1. Execute the directive. Allow service to likely suffer and morale to fizzle. Perhaps, most importantly, my credibility regarding what Lean meant to me would be diminished. Become an “Enemy of Lean.”

2. Refuse to execute the directive. Find alternative solutions to save money. Beg for more time. Perhaps be terminated. 

As it turns out, my fate would be the same regardless of what choice I made. The difference would only be whether I would compromise a pillar of Lean or not, and the impression of Lean that I left behind.

When I wrote this article, I comfortably dealt with an internal struggle. 

? Am I being too hard on myself? 

? Am I going to be perceived as deflecting blame?  

? Am I striking a fair balance between the two?

However, that struggle is not the point of this article. We all have to be introspective enough to look at our past decisions, and decide what, if anything, we could have done better. Mature leaders have the humility to learn from their successes and their mistakes. My singular hope though is this:

By sharing just a snippet of my experiences, regardless of how it may be perceived, I can keep at least one person from becoming another “Enemy of Lean.”

?Blake A. Watermeier is an experienced field leader and advisor with operational excellence experience since 1995. He has been involved in several change management initiatives with large and medium sized companies. He currently specializes in assisting organizations with process improvements and transforming cultures to true continuous improvement. He holds a Bachelors in Business Administration from Emory University’s Goizueta School of Business, a Masters in Business Administration from the Terry College of Business at the University of Georgia, and a Lean/Six Sigma Yellow Belt from the University of Texas at Dallas. 

www.dhirubhai.net/in/blakewatermeier