Kaizen versus Lean and the key building blocks

1. Introduction

Before I share some of the most frequently used techniques that have helped me deliver multiple successful transformation programs for companies like Toyota, Danone, Marks & Spencer's, Coty, and other leading UK retailers over the past nine years, it's important to differentiate between Kaizen and Lean.

Rather than relying solely on theory from external literature, I bring first-hand, practical knowledge that can be applied in real corporate environments. The aim is to create a simple guide that explains how various terms, techniques, and methodologies intersect and function in practice.

The most wasteful approach is to use 'fancy' tools without truly understanding their intended purpose. As I often say:

"All tools and methodologies should work for you, not the other way around."

In practice, you don’t need to use every available tool. Instead, selecting those that suit your organisation’s objectives is the key - this, however, comes with experience. Additionally, there isn’t a single way to apply Kaizen or use Lean tools. The key is understanding what each tool is designed to achieve and then selectively use them to reach your goals.

It’s disappointing to see how terms like Kaizen, Lean, Continuous Improvement, Six Sigma, and Toyota Production System are often used interchangeably in literature. This can make it nearly impossible for newcomers to clearly understand what each concept entails. Even reputable companies often refer to Kaizen and Lean as "something about efficiency and cost savings." While this isn’t entirely wrong, it’s crucial to establish clear distinctions.

Section 2 concludes with a graph that visually connects the dots between these concepts.

Section 3 breaks down Kaizen into its five key components, explaining each one.

The second part of this brochure, to be released in October 2024, will focus on specific Lean tools and techniques that support all five Kaizen components explained in Section 2. These are foundational elements for any Kaizen-driven organisation.

Please keep in mind that this is not about formal definitions, as no unified ones exist. The goal is to bring you closer to understanding and applying what I believe are the most practical and effective tools, based on my own experience.

2. Kaizen vs. Lean

2.1 Kaizen

Think of Kaizen as a culture. Culture rooted in respect, involvement, that is welcoming and where significant amount of everyone's energy is directed towards challenging status quo and striving for positive change. Masaaki Imai's Institute, who is known to be a pioneer and a leader in spreading Kaizen philosophy refers to it as an essential pillar of an organisation’s long-term competitive strategy.

When discussing Kaizen, I prefer to use terms like philosophy, culture, environment, approach, or even the art of corporate formation. It's an umbrella concept under which Lean practices align with Kaizen’s vision, but Lean is more focused on the 'how'- offering tools and frameworks that support the efficiency aspect of Kaizen.

Kaizen dates back to the 1940s when Toyota and other automotive manufacturers started applying its principles in production and quality assurance. Since then, it has expanded into other industries, but its broader adoption has been slower than expected. Even today, stereotypes persist that Kaizen is only relevant to production processes, and even senior stakeholders show little willingness to explore its broader potential. This isn’t surprising, as there may not be enough advocates actively promoting the full range of benefits that Kaizen offers.

I firmly believe:

"Kaizen is not a fancy addition to explore - it's at the heart of the long-term strategy and formation of any organisation in any industry. It’s the lungs that determine how your company and its people live and breathe."

2.2. Lean

Lean cannot be separated from Kaizen - it supports and enables Kaizen to a great extent. Lean relates to efficiency-focused developments that help create a "Kaizen culture", a culture of continuous improvement. While Kaizen focuses on creating a productive, joyful, and energized environment for people, Lean provides the tools to sustain that environment. One cannot function without the other. Kaizen is the surrounding infrastructure and moral fabric of an organisation, which must be cultivated to enable Lean to succeed. Without a true Kaizen culture of continuous improvement, Lean tools and initiatives won’t have lasting impact.

3. Enabling Kaizen

Now that we've established Kaizen as a broader approach encompassing corporate strategy, values, and continuous improvement, let's explore the tools and techniques that can help create a Kaizen culture. It’s important to remember that using these tools does not automatically make an organisation Kaizen- or Lean-driven. Likewise, building a Kaizen or Lean organisation doesn't require ticking every box, there are other practical ways to achieve similar results. Ultimately, what matters most are the approach and the true motives of the leaders.

3.1. Five Key Kaizen principles

The principles outlined below provide a strategic framework for creating the right environment or culture for continuous improvement, often referred to as a Kaizen-driven organisation. Once this foundation is established, we will explore the Lean tools currently utilized by organisations that truly embrace the Kaizen philosophy. Our focus will be on the tools and practices that, based on my nine years of experience managing transformation programs and leading Kaizen projects at Toyota, have proven to be the most effective.

The following five core principles characterize an organisation with Kaizen at its core: Know Your Customer, Be Transparent, Let It Flow, Go to Gemba, and by far the most important, Empower People.

3.1.1. Empower People

By far, the People principle - 'Empower People' stands out as it's simply impossible to have a Kaizen organisation where everyone, everywhere enthusiastically improves things every day without people who aren't empowered, involved, appropriately trained and motivated.

Toyota is exemplary in this respect, where employees are thanked and congratulated for their efforts in identifying areas for improvement. This recognition can range from small, everyday appreciations to formal awards. There is immense, often underestimated, power in appreciation. When people feel their efforts are recognized and valued, they are more motivated to contribute. People need to feel part of a team, part of something bigger, and that their voices matter.

3.1.2. Know your customer

Being demand-driven is essential for preventing failures and avoiding the creation of non-value-adding projects or products that stem from internal assumptions about market needs. By identifying what your customers truly require and starting from that point, you can focus your time and energy on projects and improvements that are more likely to close gaps and meet their needs.

Adopting a pull approach—driven by customer needs—can help dismantle cross-departmental barriers and align differing ambitions across the organisation. In my experience, many companies tend to default to a 'push' approach in their internal governance and task execution. This mindset is often fuelled by a desire to demonstrate productivity and achieve short-term operational success, frequently at the expense of considering the broader impact on the supply chain or the end customer.

Investing the time to plan and implement small, incremental steps toward long-term sustainability can be challenging. Management must learn to distinguish between actions that yield short-term, surface-level improvements and those that deliver meaningful, lasting positive impacts.

3.1.3. Be Transparent

Transparency is often discussed in terms of performance tracking and key performance indicators (KPIs). These must be accessible to everyone in the organisation and should follow the SMART framework (Specific, Measurable, Achievable, Relevant, and Time-bound).

However, I would extend this principle to encompass the transparency of business processes, projects, and structures. Visualization is a powerful tool not just for KPIs but also for mapping value streams, processes, and stakeholder relationships.

The illustration below clearly demonstrates the difference, offering a visual confirmation that resonates with human perception. For a simple guide on how to build a Value Chain Map for any process within an organisation, I would refer to https://www.dhirubhai.net/pulse/dont-mistake-movement-achievement-you-adding-real-value-safonovs/ .

3.1.4. Let it flow

Letting it flow means eliminating any obstructions and obstacles to enable smoother and swifter communication and flow of products and services through the chain. This principle requires all employees to be engaged in challenging and rethinking how things are done and actively involved in driving improvements. This reliance on the initial People principle we've covered above is essential. Kaizen starts with the leadership that can create the right internal culture where all the other principles, tools and methodologies get accepted, used and accustomed to.

3.1.5. Go to Gemba

Going to Gemba means seeing how things are done and talking to people who are directly involved in building, producing, and running the processes (Illustration 5 relates to one of my warehouse visits in 2022). This closely links with the Know Your Customer principle; no process improvement solution can be initiated and delivered without deeply understanding what the real issues are, as only those directly involved in doing/producing know the answers. While they may not always provide a clear answer on what is not working or what is holding back better output, listening and learning from them can help identify pain points. I'll continue to emphasize process mapping, as this exercise, when done properly, requires attention to most principles, including 'Go to Gemba,' which is an essential element.

4. Conclusions

In this article, I hope to have provided clarity on the major differences between widely used terms, including Kaizen, Lean, and Continuous Improvements. The illustration at the end of Section 2 serves as a visual reminder of the relationships between these terms and what they represent.

We need to dispel the misconception that Kaizen is a complex, esoteric concept limited to certain industries or that it requires extensive resources, making it suitable only for large corporations. In reality, Kaizen is a practical and accessible approach that can benefit organisations of all sizes and across various sectors, from manufacturing to service providers, including banks. I believe that the principles of Kaizen should be integrated into every team, organisation, and enterprise.

As an advocate of Kaizen, I want to emphasize to professionals and senior stakeholders that this is a business area that simply cannot be ignored. Organisations with a Kaizen mindset will undoubtedly have a competitive edge, and often at very low or even no cost.

The second part of the brochure will follow in October 2024, focusing on specific Lean tools - some of which are listed in Illustration 1, and linking them back to the five principles explained above.