How Lean Thinking and Practices Can Help You Prepare for and Rebound from a Crisis

Several perspectives to reflect on as the challenges from the Covid pandemic recede and you turn your attention from survival to growth.

Addressing the Workforce Upheaval

As we now focus on business growth, not mere survival, lean practices can help us address global workforce challenges, such as resignation waves and recruitment issues. Both come with a cost to companies and individuals; changing jobs requires adjustment and training efforts on both sides.

Lean leadership practices help build trust, which contributes to employee engagement and, in turn, strengthens talent retention and recruitment.

First, management’s regular presence on the gemba is a chance to link the task with the mission and offer sincere listening, feedback, and support as needed. This presence is still necessary, even though more of our employees sometimes work from home, which may boost productivity but reduces our chances to build trust and bonds through such interactions. As Akio Toyoda, Toyota’s CEO, recently reminded us, “the gemba is something that no digitization or telework system, no matter how advanced, can ever replace.” 

Lean leadership practices help build trust, which contributes to employee engagement and, in turn, strengthens talent retention and recruitment.

Second, the management of henkaten, or change points, also helps prevent people from being overburdened or hurt. Upcoming changes are monitored in team obeya, whether virtual or physical, to avert unexpected impacts: customers’ new expectations, supply chain shortages, new material or services, new hires, and the like. Since any change is a potential source of rework, stress, delays, and other issues, if it is not anticipated and mitigated, it can increase the risk of resignation. 

Together, being on the gemba and managing change points increase the trust on which employee engagement thrives. As colleagues become friends and our workplace network expands, we are less tempted to leave. 

Other lean management practices are excellent ways to create and strengthen these bonds. Examples include kaizen activities, where people from different teams learn together to see, understand, and act upon problems. Or communities of practice, where members from different workgroups in the same trade, whether in the supply chain or shared services, meet to discuss issues or changes in their job and learn from each other’s experiments. When, in addition, teams share their results with other potentially interested people, which lean management also encourages, it contributes to the flow of ideas, highlighting each individual’s contribution to the overall mission. Such problem-based learning fosters links within an organization and provides meaning to one’s job, enhancing organizations’ ability to retain their best employees.

Another lean practice that supports talent retention is increasing the feeling that people fit the job and agree with the culture. The first step to achieving this goal is during recruitment. In her book Toyota’s Engagement Equation, Tracey Richardson explains how Toyota would test their would-be operators’ listening, problem-solving, teamwork, initiative, and leadership skills. If we want people to blossom in a kaizen culture, we need to hire profiles that will. 

Finally, we must remember what the WWII Training Within Industry – Job Relations program taught us: Every individual is a complex mix of skills, values, and job aspirations, molded by an off-work life with family, sports, or community engagement. Therefore, lean managers must adjust training and job assignments based on regular checks and feedback on the gemba. A development plan designed for each individual is the key to talent retention. Mass production of talent does not work. — Catherine Chabiron

Moving from Survival to Growth

“The only way out is through,” says a leader in the franchising world. Now, companies emerge from the pandemic, dusting themselves off and reflecting on this challenging and liberating period. The Lean Sensei Women discussed how tough times and opportunity go hand-in-hand (see link), but we also believe lean thinking can help organizations move beyond survival to renewed growth. But how? I believe it depends on how you handled the difficult period. 

A newly appointed leader called to chat, saying that “Lean has a bad rap” in his company. His company executed across-the-board cost reductions in response to the pandemic in the name of lean. He is not surprised employees respond with avoidance, self-preservation, and a general disdain for “improvement.” Using “lean” as a cost-reduction strategy is an effective way to break trust. The irony is that when emerging from disruption, you need employees more than ever to help in the recovery. But to deserve their help, leaders must earn and maintain their trust, a complex topic you can read about here.

… if you’ve practiced lean management as a way of helping people see and solve pressing problems, the stage is set for growth.

But, if you’ve practiced lean management as a way of helping people see and solve pressing problems, the stage is set for growth. Another manufacturing executive I talked to said his organization had used lean thinking to step up its capacity for solving problems over the last 18 months. He explains how this work made them growth-ready to capture new markets. For them, the emphasis on cognitive development lit a productive path to mine golden ideas from natural resources — extracting brilliant ideas and improvements from people. And the company’s reward is a progressive containment of costs, better products and service, and returning customers. In their view, their experience demonstrates how lean management is a stable springboard for growth. “If we push for more business without good processes and stable teams,” he states, “we’ll fail spectacularly and lose face. Our customers are fickle and won’t forgive us for biting off more than we can chew.”

This manufacturing company enjoys basic stability from lean and is poised for growth. They’re now revisiting their business model, scanning untapped market potential and partnerships. They’re also reviewing their products and services to ensure they’re delivering what customers want, so they can supply them with confidence, knowing their teams can resolve inevitable issues. For them, focusing their lean practices on teaching problem-solving during the pandemic set them up for renewed growth.

Back to the leader dealing with broken trust. Though he realizes his company lost ground by misusing lean thinking and practices during the pandemic, he’s turning to lean management to rebuild employee trust while refocusing the business on growth. He’s carefully picking his battles and, on reflection, plans to:

• “Go and see” what employees are struggling with at the gemba
• “Go and see” what customers need help with at their gemba.
• Clarify a new strategic plan.
• Determine the critical capabilities the organization needs to enhance.
• Work closely with leaders to devise a consistent message for the path forward.
• Work with the leaders to help employees work through one important problem at a time.

What stage are you in? A stable, growth-ready starting block or an unstable, trust-starved platform? What next steps should you take? — Rose Heathcote

Tackling the Next Big Issue: Climate Change 

As many people begin to talk about what the world will look like post-Covid, many others are beginning to realize that the next crisis — climate change — is at hand. Worse, they see that the environmental risk is much greater than the pandemic risk; that what not so long ago seemed an ominous future for generations to come is becoming a threat even today.

So is humanity ready to give up consumption?  Probably not. Which way to go then?

Lean practitioners argue that lean management gives us the principles, practices, and tools to slow climate change and address its challenges. They promote growth through precise attention to customers’ needs while ensuring profitability by reducing the waste generated by our misconceptions as much as possible.

Lean thinking is a natively anti-waste approach to business. By making the best use of everyone’s ability to think within the company, lean practices constantly seek to increase the value created (value for customers, but also value for society in the broadest sense) and reduce excess costs.

Meeting the drastic greenhouse gas reduction objectives will require working on applying lean thinking to create adapted local solutions that reduce the waste that contributes to global warming.

Lean thinking requires that we understand the value versus the costs of producing and delivering goods and services — and that we work to reduce any unnecessary inputs. The unessential inputs include the seven wastes typically found in mass production, as identified by Taiichi Ohno, that lean practitioners relentlessly seek to reduce. 

No global solution seems acceptable and possible to implement today. So, meeting the drastic greenhouse gas reduction objectives will require working on applying lean thinking to create adapted local solutions that reduce the waste that contributes to global warming. 

Because lean seeks above all to develop this ingenuity to track down waste, it is possible to believe in achieving sustainable growth that’s respectful of our resources and our environment. — Cécile Roche

Using Downturns to Develop Critical Capabilities

Lean thinking and practice apply no matter what challenges a business faces — whether a downturn or an upturn. So, though the pandemic created disruptions, lean thinkers took advantage of its opportunities.

During a downturn, companies practicing lean management refocuse their efforts toward building capabilities for survival and future growth. For example, let me share what I have learned from Toyota. 

During the last global financial crisis, Toyota experienced server volume reductions. At that time, our executive vice president of Toyota Motor Asia Pacific – Engineering and Manufacturing urged us to focus on three key items: 

1. “Survive by the Toyota Production System (TPS).”
2. Sustain the supply base.
3. Strengthen two-way communication between management and employees.

“Surviving by TPS” during downturns requires businesses to deal with the current crisis but, at the same time, enhance capabilities for future growth. Among other things, their leaders adjust resources to match the fluctuating demand. This action derives from the TPS principle that recognizes human resources as an organization’s most valuable asset; hence, lean leaders avoid laying off regular employees. Instead, surplus labor is assigned to kaizen activities, supporting other functions, participating in projects, and other meaningful work such as obeya/visualization activities, training, and other capability development initiatives. The goal is to use TPS to turn crisis into opportunity by refocusing on efforts to create a muda/waste-reduction culture, strengthen management flexibility, and prepare for future growth.

To sustain its supply base during tough times, Toyota closely monitors and supports them as needed. At the sign of any trouble, suppliers are encouraged to inform Toyota quickly so it can implement appropriate countermeasures in a timely fashion. This partnership approach benefits everyone in the supply chain.

Strengthening two-way communication for Toyota means focusing on openness, sincerity, clear messaging, and always considering the “employee first.” As a result, management makes every effort to help employees understand the current situation and boost their confidence in the company’s future. This practice supports employee retention and morale.

By refocusing your lean journey toward capability development during a downturn, your company will have a strong gemba and supply chain capability, which will meet the new and increased market demand when the upturn comes.

Following TPS/lean thinking and practices, building supply chain capability and fostering a culture of mutual trust and respect through two-way communication are equally critical for survival and meeting future growth challenges. — Lucy Liu 

Doubling Down on Reducing Lead Time

To accelerate the refocusing of your organization from survival to growth, work to actively reduce lead time, then continue reducing lead time, over and over. Reducing lead time means compressing the overall turnaround time from customer order to cash receipt.

Increasing the speed of delivery one time increases cash flow proportionally. But if you manage to reduce lead time repeatedly, you’ll see your cash flow grow exponentially, increasing your capacity to reinvest in the business. Think about it: If you manage to deliver your current products or services twice as fast, you hold less inventory and increase cash inflows. Plus, delivering faster than your competitors can help you gain market share, even during times of crisis (especially during times of crisis). Isn’t this what happened to Amazon during the pandemic?

There are smart and stupid ways of reducing lead time. The stupid way is to force everyone to speed up without giving them the means to do it sanely, safely, and smartly. This “command and control” type of approach creates unexpected behaviors. Yesterday, for instance, the mail carrier, who must have been pressed for time, left my package at the restaurant across the street without my permission instead of verifying that I was home.

In about two months, the team reduced their big backlog of delayed design projects to near zero, and their lead time decreased by 60%.

The smart way of reducing lead time is to create a work environment where everyone can easily see unexpected issues and address them immediately with support from colleagues and managers. This approach was taken by the UK’s leading residential architectural service, Resi, last summer with one of their most successful designer studios. In about two months, the team reduced their big backlog of delayed design projects to near zero, and their lead time decreased by 60%. The studio achieved these results by creating the conditions and encouraging its team to look at the situation from the angle of lead time. Additionally, engaging everyone in this way, giving them more control over their work, also increased their motivation to find further improvements. The CEO is now actively spreading this approach company-wide to restore growth.  

Usually, a significant challenge to getting everyone in the organization thinking about reducing lead time is getting them interested and engaged in this goal over the long haul — it takes stamina and a strong desire to learn and improve.

With the help of a kanban system (combined with andon, kaizen, and well-trained team leaders and managers), problems that slow us down and prevent us from delivering to customers become visible across the organization. Then teams learn to react fast and resolve them together. 

This resolve to reduce lead time is at the heart of lean, but it is often overshadowed by people’s desire to solve the problems that are just annoying them. Such quick fixes generate some local improvements but are unlikely to significantly impact the business and its growth rate significantly.

Implementing a kanban system right away to measure and reduce lead time will focus people’s attention on resolving the right problems, those with the biggest impact on delivery and quality, which prevent the company from growing. — Sandrine Olivencia

‘Revitalizing’ Our Spirits

The pandemic has changed everything. It’s forced us to change how we engage with each other, lead others, and interact with our world. We’ve lost a lot. We’re tired. We’re burned out. So, how do we start to grow again and kickstart renewal?

A word comes to mind when I think of lean thinking and practice. The term is not used often in the West. Still, it is one that I often heard when I lived in Japan in 2015 and 2016 and on my regular trips back before the pandemic in relationship to what we call “lean” (although they do not use the word “lean” in Japan, as I’ve written about for the Lean Post and Planet Lean). The word is “revitalize.” 

Japanese leaders frequently use the word “revitalize” to describe why they engage their people in continuous improvement and kaizen — to revitalize the human spirit and their company or industry.

revitalize

rē-ˈvī-tə-ˌlīz 

verb

imbue (something) with new life and vitality.

This powerful and energetic word speaks to the essence of fundamental lean concepts and the Toyota Way: connecting with the human spirit and using that connection to drive continuous improvement. 

This connection with the human spirit is why Japanese leaders are so passionate about bringing continuous improvement concepts to their organizations. Lean management is about tapping people’s hearts and minds. It’s about making their work more purposeful. And it’s about finding better ways to serve customers and thus create organizations and companies that thrive despite challenging times. 

Lean management is about tapping people’s hearts and minds. It’s about making their work more purposeful.

Lean management is about tapping people’s hearts and minds. It’s about making their work more purposeful. Toyota created the Toyota Production System as a systematic way to revitalize its people and company as Japan emerged from the destruction of World War II. As I describe in Learning to Lead, Leading to Learn, Japanese companies embraced W. Edwards Deming’s concepts following the war for similar reasons. And many Japanese leaders highlight that they’ve embraced lean principles as a way to recover from more recent economic downturns.

If we need anything in 2022, it’s to imbue our spirits with new life and vitality and renew our passion for discovering new ways to support the development of others. Bringing joy and revitalization to people, in turn, can “revitalize” the global economy.  

So, I ask you: How are you using lean thinking and practice to: 

• reenergize yourself? 
• bring vitality to the people who work around you?
• breathe new life into your organization?

Ultimately, lean is about people. We practice lean because we believe in developing people by tapping into their creativity, making the work more purposeful, and creating new and better value for customers. Revitalization is what we need now. — Katie Anderson