How is lean a strategy?

Lean is a full business strategy. But first, a disclaimer: to explain how lean is a specific business strategy, I need to get into a debate about strategy and I want to make perfectly clear I don’t believe military thinking applies to business. Still, the military have been thinking about strategy more than most, so we can listen to what they have to say – understanding doesn’t mean agreeing.

There is an age-old debate in military strategic thinking about two approaches to strategy.

One is the planning-and-execution approach. We consider we have the information we need to make elaborate plans and then we invest in tightly controlled processes to make sure these plans are executed to the letter. The secret to succeeding with this type of strategy is having 1/ a visionary leader who gets it right in defining goals and plans and 2/ disciplined troops who follow orders impersonally and to the letter without room for personal interpretation. This is what most mainstream business people think of when they think “strategy.”

The second one is the command intent and initiative approach. We consider that plans are necessary and well and good, but no one knows for sure what really happens on the ground and success lies in having a cadre of officers who deeply understand 1/ what the game is, 2/ how it is played and 3/ can interpret orders and instructions according to what they see in the field and can lead people under their command to follow their initiatives.

This is not a new debate. Military thinkers were discussing the pros and cons of both approaches throughout the nineteenth century in the wake of Napoleon’s victories and, thankfully, final defeat. The plan-and-execute approach is quite easy to understand because, since it was spelled out by Max Weber, one of the most brilliant sociologists of all time, it has become the basis for all our organizations: hierarchies, rules, functional chain-of-command, standardized processes and control mechanisms to make sure the orders are well relayed and applied.

The command intent and initiative approach is less known. It was born out of the acknowledgement that, in real life, first you never know exactly what is going on, second people have all different opinions about both what is going on and what they should do about it and thirdly, in context some simple things become incredibly difficult (such as, say, driving when it starts snowing) and some complex things can suddenly get done easily if you get lucky.

As a result, a winning strategy is one that 1/ clarifies the intent, 2/ gives a clear way to understand this intent in the confusion of the field and the fog of war, and 3/ practices certain key moves that will be essential in any contact with the enemy. For instance, in XIXth century terms, with no fast communication, winning a battle is essentially about 1/ overwhelming force, so 2/ you teach officers to move towards the sound of cannons and 3/ you train troops to move fast and reload guns quickly.

It doesn’t mean there is no planning or plans – it means that plans and orders are legitimately interpreted by officers in the field without fear of being reprimanded for it, and that the obsession is with constant training at key skills and search for improvement (Wellington, for instance, was obsessed with the weight of the packs soldiers carried related to the distance they could march, and with inventing more accurate guns that could be reloaded faster.)

Present time illustrations of the command intent and initiative approach to strategy can be found in David Marquet’s fantastic book about his experience as a submarine captain (Turn The Ship Around) and in General McChrystal’s memoir about his experience with insurgency in the middle east, Team of Teams. Both hands-on senior commanders realized that the traditional chain-of-command, even with the latest technological gadgets could never be fast enough to respond to the speed and messiness of modern, digital battlefields. You need officers who know what they’re doing, take initiative and trust each other beyond functional barriers.

In business, the common sense interpretation of strategy has long been that of Goals-Plan-Execute-Control. In a seminal article, Crafting Strategy, Henry Mintzberg showed as far back as 1988 the absurdity of making five years plans when no one could predict what would happen next month, and argued for a “crafting” of strategy by looking at strategy as an inductive, emergent process, whereas planning distorts reality with wishful thinking and political games. But although since the 1990s, classical strategy has fallen into disrepute because of all its visible failures, the common sense approach has remained that strategies fail because leaders make the wrong strategic calculation, not because there is something deeply wrong with our understanding of strategy in the first place.

Lean is fully a command intent and initiative strategy. Toyota pioneered all the essential parts and, evidently, has massively benefited from it. We can see:

1.    Strategic intent: in lean, the game is defined “one time customer, lifelong customer” – in order to never lose a customer you have to be very serious in solving all of their problems (a strategic intent that has since been adopted spectacularly by Jeff Bezos at Amazon), in Toyota’s case, mobility problems, and expanding your range of products of services to still cater to your customers as their own needs change or diversify.

2.   Command intent: improve quality, reduce lead-time. As with “go towards the sound of guns firing,” the simple instruction to improve quality and reduce lead-time can help you orient in any situation. There is no business context in which you can’t get started by solving customer complaints and reducing lead-time from order to making the product or delivering the service.

3.   Autonomous problem solving: lean has a unique set of techniques to visualize processes and abnormalities, so that everyone everywhere all the time can take responsibility for concrete problems and learn to solve them, not so much to solve every possible problem that can occur – but to develop every employees’ ability in solving problems autonomously.

4.   Continuous improvement leading to innovation: this problem solving capability is then harnessed to continuously improve processes through kaizen, and to look for opportunities for breakthrough innovation from the kaizen ideas flowing from the shop floor (as well as using kaizen to familiarize yourself with new technologies).

This is a full business strategy which leads you to explore and face your challenges in a fast changing uncertain environment, to train every person to take initiative and respond more flexibly and smartly to day-to-day problem and to transform your chain-of-command into a chain-of-help to sustain engagement and involvement through teamwork and respect, in order to harness the talents and passion of everyone looking for a better way.

Mental models are terribly sticky – in science, it is said that science only progresses one funeral at a time – and changing one’s mind is never easy. Not surprisingly, many people have chosen to interpret lean in the traditional goals-plans-execution way, as a tool box that helps to execute without even more standards (misinterpreting what “standards” mean in lean) more detailed execution and more controlling management.

To see lean for what the people who have succeeded at lean claim it to be – a full business strategy – one must first question one’s understanding of “strategy” itself.

In a VUCA world, clearly the command intent and initiative approach to strategy is more effective, and this is not a new idea – it has been part of the debate since strategy first started being studied. Yet, this more organic approach to strategy flies in the face of how our organizations are built, with their functional silos, separation between experts and people doing the work, and rigid command and reporting systems, where following processes is more important than responding to customers’ requests.

By highlighting the strategic aspect of lean, the opportunity is not just to succeed with lean, but also to open minds to a completely different approach to an uncertain world, based on learning to recognize challenges, to study one’s own reactions and constantly seek a better way to respond and progress. Lean, see as a full business strategy teaches us to think differently about strategy itself.

To find out more about lean as a full business strategy, and the experience of the CEOs who see it as such The Lean Strategy