A Note on Creating Your Lean Organization

I recently visited with the Vice President of Lean for an $8 billion diversified manufacturer of consumer products. He was extremely interested in my experience with the creation of the Danaher Business System. I had a long line of questions regarding his Lean transformation, which they had begun 3 years earlier. I asked him how his Lean organization was structured at the corporate office as well as within his businesses. He responded “You are looking at it!” He went on to say that the various businesses throughout the world had no Lean resources whatsoever. The good news was that this Lean VP reported to the CEO. The bad news was that he was the only person assigned to a Lean role within his organization. I politely told him that he is not set up to succeed and that we need to address his organizational situation immediately.

I have seen understaffed Lean organizations before, nothing new. I have come to the realization that there is one root cause for this situation, the CEO.

The CEO:

·     Delegates the responsibility to others (in this case the VP of Lean) and expects him to deliver results.

·     Simply does not understand that he needs to or how to staff for a Lean transformation.

·     Feels his organization is “different” and that Lean does not apply to them.

·     Does not understand that a Lean Transformation is a cultural change (not a cost cutting program) which needs to be led from the top.

·     Is preoccupied with other priorities and issues and fails to understand that Lean could, in fact, be the solution to many, if not most of his problems. (Note: I was once told by a CEO of a $7 billion industrial that he did not want to invest in a Lean transformation due to other priorities. When I inquired, he told me that his priorities were to reduce the corporation’s tax rate, implement an ERP system and move into a new corporate office! I was dumbstruck as to the lunacy of this CEO’s “strategic” mindset.)

·     Is content with his results and does not recognize a burning platform to improve his organization for the sake of Employees, Customers and Shareholders.

·     Due to the lack of industry success with a Lean transformation, he does not have faith that investing in Lean resources throughout the organization will yield any tangible benefits. 

·     Feels a need to staff such a position for appearance sake only.

I will address the guidelines for how to select a Lean consultant or coach in the addendum. Many of the attributes listed will apply to the selection of your internal Lean organization. But what is the role of the Lean resources within your company? Primarily, the main role of Lean resources, whether they reside in the corporate office or within your various businesses, is to teach others how to fish (1). While leading the DBS Office at Danaher, I would often get calls from our group and divisional leadership asking for one of my Lean resources for assistance with their Lean transformation. I would first ask how this assignment supports their Strategy Deployment initiatives. If they passed that litmus test, I would ask who will be the target to transfer knowledge and knowhow. Many times, they would respond that they simply needed a project completed and viewed the DBS Office as just another set of resources. I refused to send assistance if I was not convinced that we would be able to “teach others how to fish.”

Many leaders place the responsibility of Lean success solely on their Lean resources rather than their leadership team. This is discussed elsewhere in this book. Lean resources are a staff position, not a line position. A Shepard leans on his “staff” for physical support. Staff positions are viewed as support to line positions who are charged with a delivering results and creating a Lean culture. Lean staff needs to spread the word, teach and coach leaders in order to evolve their culture and yes, achieve their strategic objectives. The analogy I like to use is the Apostles of Jesus Christ. How would Jesus spread the word if not for his disciples?  Even Jesus didn’t do it alone. Lean resources should be viewed in a similar way.

There are many ways to staff a Lean organization which are beyond the scope of this book. The design of such an organization should complement the organization’s culture and needs to be customized. For example, should there be a centralized approach? A decentralized approach? A hybrid? Careful consideration should also be made as to the qualifications of your various Lean resources. You will need strategic thinkers, leadership coaches, technicians who are well versed in the various Lean tools, etc. Not all Lean resources are equal and that’s OK, you don’t want them to be. You will need a diverse set of talents to accomplish your Lean transformation. 

At Danaher, we used the DBS Office to train future leaders in our DBS methodology. Presidents and Vice Presidents, as well as other leaders, came out of their respective roles and worked full time in the DBS Office, anywhere from 6 to 12 months. When they returned to their line or staff role, they led DBS in their line role of their organization with almost a religious fervor. Ultimate career success at Danaher was contingent upon one’s ability to lead and achieve results utilizing the Danaher Business System. The DBS Lean Office played a major role in the evolution of Danaher’s culture. 

Finally, CEOs should not view their Lean organization as a cost. It should be viewed as an investment. This will not happen if the CEO does not adequately benchmark best practices, participate and learn in a hands-on fashion and insist that their “DBS” is non-negotiable.

(1) (Proverb from Chinese philosopher and founder of Taoism Lao Tzu: “If you give a man a fish, you feed him for a day; if you teach a man to fish, you feed him for a lifetime.”)