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LeanIntent Framework—What It Is

 




Definition

The first step in this journey is to create a concise, overarching definition of lean:

Lean is the rapid creation and delivery of meaningful value in the simplest, most effective manner possible through empowerment and innovation. It is a way of thinking, organizing, operating, and being. — LeanIntent



Conceptual Framework

The "What It Is" model view of LeanIntent is a conceptual framework used to help understand the often misunderstood breadth and depth of lean. This view is organized into four categories which can be viewed by selecting the tabs above.

 

The categories and their topics are:

  1. Lean Principles: Ways of Thinking
    • Thinking Frameworks
    • Value Streams
    • Customer Focus
    • Enterprise-Driven
    • Lean Basics
    • Lean Results

  2. Leadership Intent: Ways of Organizing
    • Players
    • Management Teams
    • Organizational Structure
    • Optimal Arrangement

  3. Tools & Techniques: Ways of Operating
    • Techniques
    • Operating Considerations
    • Management & Oversight

  4. People & Values: Ways of Being
    • Things People Need
    • Things to Look For
    • Things to Succeed
    • Holistic View


Lean Principles: Ways of Thinking

 





 

 



Lean thinking creates more value with less time, less effort, and fewer resources. What executive or manager wouldn’t want that? — Colin O'Neill

 



Thinking Frameworks

There can be no lean transformation without changing the ways in which we think. Several thinking frameworks are relevant to a lean enterprise: lean thinking, systems thinking, critical thinking, and economic thinking. Each of these frameworks are schools of thought in their own right, and are not covered in detail here, but are summarized with links to relevant references.

 

Lean thinking is the overarching frame of reference for the others. This term was originally coined and defined by Womack and Jones in 1996 in their seminal book aptly named Lean Thinking; it largely mirrored the fundamental nature of the Toyota Production System (TPS) in five principles: Value, Value Steams, Flow, Pull, and Perfection. Other definitions1 of lean thinking have emerged since then, most of which include esoteric aspects of lean with a focus on the people doing the work and the corporate culture necessary to sustain a lean enterprise.

Systems thinking emerged from the field of system dynamics in the mid-1950s. The Institute for Systemic Leadership defines systems thinking as "a management discipline that concerns an understanding of a system by examining the linkages and interactions between the components that comprise the entirety of that defined system."2 This school of thought acknowledges the importance of understanding explicit and implicit interrelationships within the entire ecosystem as a prerequisite to significant enterprise decisions. It also allows a company to take a holistic approach to creation and delivery of value to its customers.

Critical thinking is an intellectual discipline for reasoning about issues in a clear, logical manner that results in a judgment outcome. While other definitions of critical thinking exist,3 they all suggest organization of thought, skillful consideration, and clarity in reasoning and judgment.

Understanding the economics of each decision made by an organization is an integral element of lean thinking. Each choice can have a positive, negative, or neutral economic impact on the enterprise; empowering everyone in the organization to make intelligent economic decisions through training and universal understanding of published parameters promotes smart economic behavior.4

A Lean Intelligent Enterprise applies multiple thinking frameworks to gain a holistic view of the enterprise to include values, people, and culture; logical thinking for decision making; and comparative economic analysis as a regular practice.





Value Streams

The concepts of value and value stream are so fundamental to a lean enterprise that almost every lean school of thought believes an organization cannot be lean without them. The often-referenced House of Lean depicts value as the roof and thereby the optimal output of a system. Value streams represent the flow and all value-added activities that create the ultimate value desired by customers of a particular product or service.

Value streams must be managed to be effective, giving birth to a compendium of Value Stream Management practices. The Theory of Constraints drives how a value stream behaves, and is fundamentally concerned with achieving optimal throughput by flowing the correct amount of work to the finite capacity of the organization. The outcomes of this scientific approach are quality products/services, high efficiency and productivity, the least amount of waste and non-value-added activities, and high customer satisfaction.





Customer Focus

Because a lean enterprise is value-driven, it is important to remember that only the end customer can truly define value; i.e., what value means to them.6 Surprisingly, what an organization perceives as value is often starkly different than the customer’s definition. Establishing a clear channel by which the voice of the customer can be heard, understood, and acted upon may be the single most beneficial adjustment an enterprise can make to become a true market leader.

To support a customer-focused mindset, a demand-driven, pull system is recommended. Based on a well-understood value definition, the requirements of the customer can be implemented in a more accurate context. Frequent delivery of a minimum viable product keeps customers engaged where they feel like partners in the development of a product or service that meets their needs. Giving customers the opportunity to be part of the solution naturally results in shorter feedback cycles which promote rapid adjustments for better outcomes, faster time-to-market, and less resources consumed.





Enterprise-Driven

To become and remain lean, an enterprise must establish and disseminate a strategy that embodies the lean behavior it desires. This lean strategy creates an environment within which members of the organization are trained and empowered to implement (at their level) the changes necessary to achieve supporting organizational goals. An elastic strategy allows for local interpretation guided by the enterprise vision, within the boundaries of lean principles. Lean enterprises keep planning horizons short so as to react swiftly to ever-shifting market demands without committing resources and energy too far in advance. A rolling-wave roadmap is a simple and effective tool used to continually manage, adjust, and communicate the organization’s direction.

A lean enterprise recognizes that it is a system, and as such should always consider that what it does affects the entire organization, not just a part of it. Adopting this holistic view helps prevent local optimization at the expense of global alignment and effectiveness. Dr. W. Edwards Deming said "A system must be managed; it will not manage itself. Left to themselves, components become selfish, independent profit centers and thus destroy the system. The secret is cooperation between components toward the aim of the organization.” Although challenging, lean organizations must make a concerted effort to identify and correct selfish components.

The behavior of a lean enterprise is similar to that of a lean startup in that leadership understands and nurtures an entrepreneurial culture as the engine of continuous innovation. But even with entrepreneurship there are boundaries, so standards of work and behavior are necessarily developed and trained across the organization. It is impossible for an enterprise to be lean if its members do not behave in a lean manner; therefore, hiring and firing of employees (and vendors as well) should be determined on how well they participate in a team-based, "one-for-all-and-all-for-one" environment.





Lean Basics

Lean thinking is reinforced by a number of key practices which are central to its superior results. Rapid value delivery is enabled by shortening lead times to their logical minimum, but which are sustainable across the organization. Organized around its value streams, a lean enterprise uses a consistent cadence (based on takt time) to regulate its product/service development and delivery flow. However, value steams should be structured as simply as possible, lest the advantages of having value streams are lost through unnecessary complexity and superfluous dependencies.

The use of systematic face-to-face planning events maximizes communication, coordination, and collaboration across disparate organizational units; this approach effectively exploits the variability of market opportunities to leap-frog competition and gain early competitive advantage. Employing timeboxes to plan and develop incremental progress throughout the value stream cycle effectively ensures that products and services are delivered on a predictable schedule, while keeping customers regularly appraised as to when they will receive the outcomes they desire. Synchronization of crucial events across an enterprise enables comprehensive planning, feedback, and learning cycles that result in higher quality products/services and a better fit for purpose.

In lean, inventory is categorized as waste; therefore, just-in-time acquisition of input materials is preferred, and delaying decisions at all levels of the organization to the last responsible moment reduces unnecessary work and resource consumption. Delays between flow activities, and switching contexts (multiplexing) between concurrent activities (both undesirable traits), lead to increased lead times, higher levels of inventory, and lower quality.





Lean Results

In an uncertain, unpredictable world, lean gives us the constructs and tools to reasonably predict outcomes by employing synchronous flow in simply-designed value streams. Use of economic thinking to prioritize an every shifting set of products and services needed to satisfy customer demands leads to a sense of stability, even in chaotic markets. The constructive friction of healthy debate and consideration of various alternatives allows an organization to maturely promote the discovery of innovation and productivity improvement opportunities on a consistent basis.

A lean enterprise uses the many aspects of lean thinking to adopt sustainable (sticky) cost-effective, nimble behavior—this is how lean helps organizations become more productive, predictable, and profitable.





1 http://www.lean.org/Bookstore/ProductDetails.cfm?SelectedProductId=381
https://en.wikipedia.org/wiki/Lean_thinking
2 http://www.systemicleadershipinstitute.org/systemic-leadership/theories/basic-principles-of-systems-thinking-as-applied-to-management-and-leadership-2/
http://www.thinking.net/Systems_Thinking/OverviewSTarticle.pdf
3 https://en.wikipedia.org/wiki/Critical_thinking
4 http://www.scaledagileframework.com/economic-framework/
Reinertsen, Donald G. 2009. The Principles of Product Development Flow: Second Generation Lean Development. Redondo Beach: Celeritas Publishing.
6 Womack, James P. and Daniel T. Jones. 1996. Lean Thinking: Banish Waste and Create Wealth in Your Corporation. New York: Free Press.

 

 

Leadership Intent: Ways of Organizing

 






 

 



All we are trying to do is reduce the time between the time we receive the order to the time we receive the cash. — Taichi Ohno

 



Players

An interesting thing about becoming lean is how pervasive the changes can be—the massive number of people lean behavior affects. Certainly, lean has a direct effect on an enterprise and myriad roles across all parts of the organization, but the changes brought about by a lean transformation also influence those far beyond company walls. This broader impact should not be understated, because lean behavior leads to an improved world on many levels.

Jack Ma, founder of Alibaba, one of the most successful organizations in the world, puts “Customers first, employees second, and shareholders third.” This is lean thinking at its finest. While most modern companies make critical decisions with their shareholders in mind, a lean enterprise recognizes that by directly engaging its customers as partners, and meeting their needs with respect and quality products/services, corporate profits will take care of themselves. Additionally, when a company embraces the intelligence and creativity of its employees, it attracts better talent and experiences more motivated workers, leading to more success.

When we speak of customers, we should also include distributors and those who bring our products and services to market. By including them in the extended value stream, they become part of the lean dynamic, which carries its own benefits to those who work for or with those organizations. Extending the value stream the other way, towards suppliers and vendors, often encourages (or sometimes forces) them to become lean in order to fully synchronize with their lean customers. Value stream owners within an enterprise shoulder a great responsibility to stretch both ends of their extended value stream to its farthest reaches for everyone’s benefit.

Starting at the top, an organization’s Board of Directors (BoD) serves at the pleasure of its shareholders, but that doesn’t mean all shareholders are only interested in stock prices and annual distributions. Many shareholders and investors today hold a bias toward creating a better world and working (profitably) for the greater good. In addition to effectively running a company, executive leadership also have a responsibility to serve their communities and society at large. Their lean mindset helps them recognize social opportunities that might otherwise have been missed while focusing solely on the company’s bottom line.

Senior managers are responsible for implementing corporate strategies and achieving enterprise goals established by the BoD and executive leadership. When middle managers and intelligent workers are asked to be lean, it is incumbent upon senior management to give them the knowledge and tools needed at their levels to become lean assets for the enterprise.





Management Teams

Small self-organizing, self-managing, empowered teams have been proven to be the most effective organized mechanism to rapidly deliver high quality outcomes. When multiple teams are needed to perform a particular activity for a single outcome, those teams are organized at a meta-level into a "team of lean teams." This motif can be replicated at various levels of abstraction to effectively organize thousands of personnel to a common goal, when needed. A good example is how military units are aggregated into larger and larger forces through fractal patterning.

Many types of management teams can benefit from this powerful structure, including product management, portfolio management, risk management, customer relationship management, supplier relationship management, and supply chain management. Not only has this team approach worked well in lean manufacturing as organized “work cells,” it is being successfully employed in lean intelligent enterprises with demonstrable results. The productivity of more traditional archetype organizational units such as sales, marketing, legal, human resources, and others are also benefiting from the move to small teams.





Organizational Structure

Lean organizations have abandoned traditional company structures in favor of lean, streamlined profit centers. Instead of business functions, value streams are the principal organizational schema. Value streams, which underpin all product and service delivery outcomes, contain or have direct access to all necessary business support functions. Business units themselves contain as many value streams as needed, depending on the products or services in play. However, the inherent "economies of scale" benefits of business functions are not lost—instead, they become centers of excellence (CoEs ) within which employees who perform those function are dotted-lined to the CoE to ensure coordination across business units. CoEs develop, disseminate, and audit the application of standards and ensure training and professional development is undertaken as appropriate for each employee.

Lean companies still use a top-down approach for guiding the organization via strategic themes and goals. Dunbar’s Number, the upper limit of an individual’s ability to naturally form and maintain social structures, is used to moderate the size of each business unit or value stream within a business unit.

The number of resources (human and otherwise) dedicated to a value stream is demand-driven. To succeed, this method requires rapid re-distribution of resources among value streams as needs fluctuate. Thus, the rate of customer and market “pull” determines the capacity of each value stream to meet that demand. Because each value stream’s capacity limits its production potential, a “flow to capacity” approach controls the amount of work in process for a value stream, thus optimizing the output of that production component. Value streams operate more effectively when they have the correct equipment and properly configured facilities.





Optimal Arrangement

Given a well-organized, cross-functional, fully resourced value stream, its degree of efficiency and productivity are largely dependent on the multiple lean concepts that directly affect how work flows through the system to create value. Batch size, queue length, synchronization of activities, critical paths, bottlenecks, cycle time, number and types of handoffs, information flow, alignment, dependencies, and unwanted duplication of effort all must be considered and addressed to achieve ideal throughput. Each of these techniques merits consideration as value streams are formed and operated.

 

 

Tools & Techniques: Ways of Operating

 







 

 



Simplify, simplify. — Henry David Thoreau

 



Techniques

Lean employs a plethora of techniques used to elevate product and service development & delivery to new heights. This rich set of tools has largely been borrowed and adapted from various business disciplines over the last century. Each of the following lean tools and techniques brings a further refinement to planning, executing, and problem-solving at the value stream level:




Operating Considerations

The operational performance of a value stream depends largely on how well it is managed. Middle managers are responsible for establishing system behaviors that lead to optimal throughput, low inventory, and the best use of allocated resources. Some of these activities include:

Value streams may be organized and operated differently depending on the state of a product's lifecycle. When products or services are first conceived, a “greenfield” value stream might be created, whereas existing products and services are often managed in “brownfield” environments. An organization’s product taxonomy influences which environment is preferred. The effective management of resources and technologies facilitates improvements and deprecates wasteful behavior. Coaching value streams on the application of lean principles while identifying undesirable conduct is often worth the cost and effort, at least until a value stream is running smoothly.





Management & Oversight

Lean systems need management and oversight; they do not govern themselves. Senior management is tasked with ensuring value stream operations support enterprise drivers. This approach requires baselining, benchmarking, measurements & metrics, controls, and overall governance of how the costs incurred by a value stream in the development and delivery of products and services are bringing the expected returns on investment.

A lean management system does all of this, and more. First, lean considers quality as endemic to each activity in a value stream—only then can we confidently state that quality is built-in, not added-on. The Toyota Production System (TPS) is a classic example of "built-in"—the true nature of total quality management. Also part of a lean management system are traditional operational and planning techniques with a lean essence, including advance planning & scheduling, budgeting and accounting, enterprise resource planning, change management, and material requirements planning. The result of “leaning” these practices is a set of best practices that better support a lean intelligent enterprise.

 

 

People & Values: Ways of Being

 









 

 



Establishing new habits requires extinguishing the current competing ones. — David Mann

 



Things People Need

People are the engine of a lean intelligent enterprise—they do the work, and are our greatest asset. In his seminal book Drive, Dan Pink reveals three elements that motivate intelligent workers in the Information Age: autonomy, mastery, and purpose. These elements form the basis for understanding and managing the “people” aspects of our organizations. Essentially, traditional incentives (high rewards equal better performance) don’t work for today’s technologically advanced workers—rather, “performance of a task provides its own intrinsic rewards.”7 This fascinating, provocative topic is based on an entire field of motivational and behavioral psychology and cannot be covered adequately here. But having insight into the nature of intelligent workers makes the lean transformation easier.

In lean organizations, most people are cross-trained to provide greater flexibility in response to rapidly changing customer and market demands. Thus, the hiring of staff necessitates new methods. Many lean enterprises hire for cultural fit, team dynamics, and a person’s desire to learn and adapt. While it’s still important for each worker to have specific skills that add value to the organization, it is also important that each person gain additional competencies (called T-skills) outside their specific field. We call these people generalizing specialists or specializing generalists.

Lastly, lean organizations make allowances for mistakes—it is how humans learn best. While it’s okay to make a mistake, it’s not acceptable to continue making the same mistakes over again. These are learning opportunities, and if the reason(s) behind why the mistake was made (e.g., miscommunication, incorrect data, improper training, lack of oversight) are known, the root cause can be determined and corrected, resulting in improved operations.





Things to Look For

There are several key positive traits lean employees should possess. These include:

  • Commitment to the organization and its purpose (communicated by strategic themes and goals)
  • Flexibility and adaptability to do a job that is not in their deep skill set for the benefit of the value stream and the enterprise at large
  • Responsive to the changing needs of the organization and market demands
  • Predilection to being efficient in their work and expecting the same from others in the enterprise
  • The ability to perform at a high level and motivate others by example

Beware that lean transformation efforts are often resisted by certain personnel. Some will intentionally slow down or block a lean journey (called soldiering). Others will regress to old behaviors thinking that lean is just a fad, and management will give up on it after a while. These behaviors should be addressed immediately so as not to spread far and negatively impact organizational morale.





Things to Succeed

Lean enterprise management, both senior and middle managers, are responsible for creating a healthy, sustainable environment within which their intelligent workers can not only succeed, but excel. Textbooks, magazines, and websites are rife with case studies and empirical evidence that culture and environment, after the quality of its people, is the most important contributing factor to lean enterprise success. There are four aspects that create an optimal environment for intelligent workers: empowerment, transparency, accountability, and collaboration.

  • Enabling lean personnel (including adequate training) makes each team a lean corporate asset, which promotes initiative at the individual and team levels.
  • Visibility of work in continuous flow results in transparency which leads to trust (both up and down the organization) and respect for individuals. Visible information radiators in all parts of an enterprise encourage managers to “go to the gemba”—the place where work occurs to see for themselves what is happening in their organization rather than relying on non-contextual data or second-hand innuendo.
  • With empowerment comes responsibility and accountability. No one in a lean enterprise should say “that’s not my job” or “that’s not my fault.” While we hold intelligent workers accountable, we also respect the autonomy given to them so when mistakes or missed targets occur, it’s more important to find the root cause and correct the situation rather than blame or humiliate them. Managers who act in this way are true servant leaders.
  • Collaboration requires communication and visibility (as discussed above). As conflicts in the enterprise arise, lean provides various methods for effectively resolving issues and promoting cooperation among dissenting parties. When managed correctly, conflict can make an organization stronger because workers know that their opinions matter and they will be afforded consideration and respect in that regard.



Holistic View

Peter Drucker once proclaimed that “culture eats strategy for breakfast.” To change the culture of an enterprise requires a significant investment and the courage to stay the course. Lean leadership (or LEANERSHIP™) must demonstrate through actions, not just words, what it means to be a lean intelligent enterprise.

 

Leaders must maintain a holistic view of the lean transformation itself and how it will ultimately result in a stronger, more creative, more efficient, more cooperative, and more profitable organization. The enterprise must exhibit discipline and be willing to continually learn (a learning organization). The organization should train and trust its talented intelligent workers to make good decisions at the lowest levels, for the betterment of the company, its employees, its shareholders, and society at large.





1 Pink, Daniel H. 2009. Drive. New York: Riverhead Books.
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