This is a response to a recent LinkedIn thread, What do we have to do to have Lean survive a leadership change?. This is part 2 of 2 my response. The first blog post, Is Lean Playing to Win? Part 1 of 2.
If a leadership change occurs, the first challenge is to grow revenue. If Lean has been implemented and you are not the market leader under the operational tagline of faster, better, cheaper – what will Lean do for you? If you were acquired do we see revenue growth coming from operational efficiencies, when there is little demand? If Lean wants to survive Leadership, can our focus be internal?
I am a proponent of Service Dominant Logic thinking, and the fundamental belief is that value is co-created with a customer through the use. Instead of value being seen at the point of transaction, it is at the point of use. When Lean moves to that view, leaders can understand it as a way to build revenue. It is no longer viewed from an operational perspective.
Example: Amazon and Apple with the Kindle and iPad derive value from the product through the customized use of the product. Library books are even now being furnished through them. When a customer receives them, within five minutes they are customizing them to their use. It is through the use of the product that value is derived. Would Amazon make money with the Kindle if the use was not the primary function? It is just not a digital phenomenon; Rolls Royce is doing it with aircraft engines.
The value of Lean must be demonstrated by the use. We can have operational efficiencies, but they must move the needle in the market place. If you look at the last 10 years of Lean books, I can count on my hand the ones that talked about anything besides internal processes. When Lean people talk about sales and marketing they use them as an instrument to balance internal efficiencies and to collect data for use in voice of customer.
If we want Lean to sustain leadership change, it must be in embedded in the strategic framework of the organization. This is accomplished through the Lean practice of Hoshin Kanri. Hoshin Kanri allows us to create our strategic vision. This is the place leadership resides and Lean must learn how to “Play to Win”. For more information on Hoshin Kanri review the Learning Lean Training Module on Hoshin Kanri.
In the book, Playing to Win: How Strategy Really Works, co-Authors A.G. Lafley and Roger Martin discuss strategy and how to make a business grow through the marketplace. My take on the book is that it could have been written from an entirely Lean perspective substituting the “Playing to Win” structure with a Hoshin Kanri approach. The two processes are amazingly similar. In the past, I have referred to Franklin Covey’s, The 4 Disciplines of Execution as Lean Simplified. I believe Playing to Win could be called Hoshin Kanri simplified.
There is another missing ingredient I believe for Lean to sustain leadership change. Again, it is a practice that is outside the organization not internal. Is Lean being taught at the MBA level or even in most universities? Few inspiring college entrepreneurs have not heard of The Lean Startup. However, when I ask the traditional business students in the Kelly School of Business (Indiana University) few knew what Lean was about. It was this "manufacturing thing," they said. Have we done a good job capturing the heart of our future leaders? If Lean wants to survive leadership, should it not be common to find Lean MBAs in the marketplace to replace existing Leaders?
We see the Lean Startup bantered around by such people as Beth Comstock of GE in a recent HBR article. Why don’t we hear about the real (lack of better word) "Lean" in such positive tones versus often times a negative connotation when referencing head count and inventory.
I encourage participating in the thread on LinkedIn, What do we have to do to have Lean survive a leadership change? and add a few of your own thoughts.