The Reason for Lean’s High Failure Rate: Management
Sadly, 80 percent of Lean initiatives are abandoned within three years of their launch. In addition, only two percent of organizations that venture into Lean get the results they expected.
Let’s put this dilemma in context: Lean is a mindset and a toolset that enables an organization to identify and eliminate waste in every aspect of its work.
So this begs the question, ”What’s wrong with Lean?”
The answer is simple: nothing.
Lean works and it can work EVERY time. I know because I have personally implemented more than 50 such projects myself over the past 30 years. And, I have never seen one fail. The majority of my projects each saved at least $1 million dollars in their first year.
Waste is everywhere in our modern organizations. In manufacturing about 25-30 percent of costs add no value that the customer is willing to pay for (which is the definition of waste). In service organizations, it’s 30-40 percent. In government, it’s even higher. No wonder our economic competitive advantage has dwindled.
If 80 percent of organizations abandon Lean within three years, what are the 20 percent doing that enable their Lean efforts to succeed?
Since Lean fails primarily because of management, we need to wrap our minds around the core issue. The core issue is that most management teams don’t understand Lean. When we don’t understand something it is next to impossible to support it. This lack of understanding of Lean by management allows even the most subtle of things to derail Lean efforts.
Lean will transform your organization ONLY if management understands and applies a Lean mindset and toolset to its particular work. Because “management” is actually a process, management needs to embrace this perspective in order to deeply appreciate and understand Lean.
The other critical role an effective management system plays, is to make clear each and every constraint (or bottleneck) the organization is facing. An effective management system does exactly that. When these constraints are clear, management can apply Lean tools to the areas of the organization where it will quickly yield the greatest value. Lean is all about removing bottlenecks.
Some 20 years ago I began developing the NOW Management System®. It was built on the premise that management is a collection of interconnected processes, which need to be treated as its own system. The management system serves to prioritize, connect, enable and drive the execution of all work. This then ensures that every resource is focused on the organization’s key goals and that every human being has the maximum authority to take action. This mindset is a genuine Lean mindset simply applied to the macro-level process of managing an organization, which is rarely seen as a precursor to successful Lean initiatives at the micro-level.
Management is the “Mother of all processes,” but rarely is it viewed as such. Once management sees its work as a system, and once it applies Lean thinking and tools to its work, supporting the broader application of Lean is simple, effective and powerful.
If you want Lean to succeed in your organization, you have to become a student of Lean in order to be a successful sponsor. In other words, you have to apply Lean to your the process of management first in order to understand how to apply it to others.
John Bernard – Video Blog Post