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Robert A. Brown

Lean

Lean Thinking 4.0

It’s all about people

Published: Wednesday, June 21, 2017 - 11:03

Lean thinking has taken its rightful place in the effort to improve efficiency in manufacturing. However, it isn’t fulfilling its potential in many areas, most notably with knowledge workers. This is due to a fundamental flaw in how lean is presented and utilized. With a better constructed approach, lean can be of value in nonproduction environments, including improving the efficiency and effectiveness of how people interact—a true boon to every business. For lean thinking, one size does not fit all.

Lean Thinking 1.0

Just after World War II, the Japanese economy was in shambles. With its facilities wrecked from the war, Toyota had to temporarily shut down its automotive production. To stay in business with limited resources and customers, the company had to wring as much as possible from each yen. From the late 1940s into the 1970s Sakichi Toyoda, his son Kiichiro Toyoda, and Taiichi Ohno established the Toyota Production System (TPS) with two principles: intelligent machines that could act like humans (stop when there is a problem) and just in time. These principles were implemented using tools that were developed via trial and error for the most part. This tribal knowledge wasn’t fully codified until the publication of the internal “The Toyota Way” in 2001. We can consider this the first generation of Lean Thinking (1.0) even before lean was conceived.

Lean Thinking 2.0

The second generation of lean thinking was born in the late 1980s when researchers from MIT studied the Toyota Production System (TPS) and coined the phrase “lean thinking” to describe TPS. James Womack and Daniel T. Jones discuss this in their book Lean Thinking (Productivity Press, 2003). From this base, many production companies in the United States began using TPS tools to reduce waste in manufacturing processes. This translation of TPS to American workers initially went fairly smoothly, probably because the assembly environment is based on extensive off-line engineering of the processes that are then fine-tuned on the work floor. However, organizations that focused on quick results, cost savings, and reduced head counts had difficulty sustaining gains.

Lean Thinking 3.0

The third generation of lean began in the 1990s when lean thinking became attractive to organizations outside manufacturing, such as healthcare, food service, and retail. Chihiro Nakao and the Shingijutsu consulting company he leads has been a powerful force in this effort. Much of his method is to do rather than think; to try new ideas in skunk works rather than analyze and create big change activities. Additionally, those who promoted a better understanding of the people in lean—such as John Shook, Jeffery Liker, Norman Bodek, and others—laid a solid foundation for including people in lean changes. Theirs was an emphasis on lean leadership and inclusion of people inefficiencies, most notably in the creation of the eighth waste.

At this point, the people side of lean consisted of the TPS pillar “respect for people,” and the eighth waste of underutilized human potential. Upon examination, respect for people turned out to be support for people only so they could better enhance production processes and was not focused on the actual enhancement of workers. Likewise, the eighth waste had two major limitations: first, only one waste is far too limiting to encompass the whole of human experience and second, the term and concept of “waste” is problematic when dealing with people. With people, a focus on negatives is insulting and demoralizing. A superior approach is to enhance people assets already in place. This was the genesis of Lean Thinking 4.0.

The new generation

Through these generational iterations of TPS, the power and effect that Toyota enjoyed was diluted, until today, most experts agree that successful implementation of lean hovers at around 50 percent or less.

At Toyota in the early days, the combination of an authoritarian culture and the focus on the assembly process supported continuous improvement. The success of this approach appeared to travel well to the United States as long as manufacturing environments were the target. However, even then, adding what worked at Toyota rather than developing lean in-house diluted the power of continuous improvement, and many early successes could not be maintained.

Shifting away from production into other arenas did nothing to improve TPS impact. In fact, it made it worse. Virginia Mason Medical Center in Seattle, for example, called their effort of applying lean the “Virginia Mason Production System.” You can read about this in Charles Kenny’s Transforming Health Care (CRC Press, 2010). This was an odd name for a hospital improvement approach, but documented how poorly thought out the transfer of wisdom from Toyota to anywhere else was in the early 2000s. There is another sign, a potent one, that the evolution of the TPS in lean thinking hit a significant roadblock. A few years ago the Shingo Institute, bestower of the Shingo prize for lean excellence, revisited a few of its winners. Alas, they found a substantial percentage had not kept up their success. These best-of-the-best exemplars became examples of lean not working as advertised.

The problem is that the TPS, in fact, does not travel well, and any sustainable improvement effort must fit the organization’s culture. Other factors that limit success include the name “lean” which conjures images of working harder with fewer resources, the idea that lean is a method of reducing the workforce, and that lean is a tool that can be applied to reduce costs. Few companies implement lean with the full awareness that lean is a cultural change, meaning the necessary and comprehensive inclusion of people, not the application of a set of improvement tools.

Lean Thinking 4.0

Lean Thinking 4.0 has a balanced focus on process improvement and people development, one that enhances lean as a culture change rather than an improvement tool. Lean Thinking 1.0 through 3.0 is learned from the outside in while Lean 4.0 is developed from the inside out and is an attitude, something to apply anywhere and anytime. Lean 4.0 doesn’t begin with a process to improve, but with a person to win over. And welcome to Lean 4.0 where Katie from Toledo with a degree in sociology is as likely to be your lean sensei as Katsu from Tokyo with his degree in engineering.

The critical improvements in Lean Thinking 4.0 are:

• Initial focus is on the individual worker rather than an improvement system
• Improvement efforts include people interactions

It emphasizes balanced lean, eliminating waste, and enhancing people assets. In Lean 4.0, seven people assets are equal to the seven classic process wastes; both are important, both are addressed. The seven people assets were initially identified from the many lists made by organizational development experts as to why organizational change did not work as well as expected. Reasons included inadequate leadership, confusion, resistance to change, politics, poor IT support, etc. These were culled and combined to form the present seven people assets. Just as Ohno said that when the seven wastes were eliminated there would still be more to contend with, these seven assets only begin to describe the many people areas that can be improved.

Wastes

Assets

1. Transportation

1. Teamwork

2. Inventory

2. Leadership

3. Movement

3. Communication

4. Waiting

4. Problem solving

5. Over-production

5. Engagement

6. Over-processing

6. Rewards

7. Defects

7. Knowledge

Establishing a Lean 4.0 culture from the inside out begins with employees discussing and then accepting the philosophy that if something can be improved, let’s improve it… and everything can be improved, including how we interact with each other. Nothing is done until this attitude is established with at least a core group of workers and leaders, which will become a critical mass. Laggards are left behind until they decide to catch up.

These employees will work from a set of four principles:

• Process improvement (the classic lean approach)
• People enhancement (beginning with the seven people assets)
• People first, process second (processes will improve just as well if not better)
• Prefer in-house solutions (home grown solutions feel better and stick better) 

In practice, Lean 4.0 follows this general process:

Members of a team meet to identify an interesting and important gap within established value streams or one reflective of the company vision and mission—a gap between where they are now and where they would like to be. This can be anything from cycle time to how problems are solved.

First, identify a gap. From there, they:

• Develop a mini-vision which defines a compelling task 
• Design and run experiments to determine what and how to change
• Implement improvements 
• Share results both good and bad 
• Monitor progress 

How this is done depends on the organization. Lean 4.0 is not a system to be applied but a system to be grown. Enable people to apply lean tools and concepts to their interactions. Grow from a few good ideas within work teams until the entire organization is humming with enthusiasm and effectiveness.

For example. Chihiro Nakao has said, “Every process should have a tool.” He meant, of course, production processes. However, think of people interactions as a process—teamwork, for example—and apply a tool. In Lean 4.0, a work group assembles and creates a vision of a high-functioning team. They then find a team building tool, for instance Rudy Williams’ Four Part Teaming Model as discussed in my book Transparent Management (Robert Brown, 2011). People like it and use it. They then share the results, and the new standard process team building tool is monitored for six months. As this is being done, the new team’s style of problem solving is evaluated to see if a second gap can be identified and closed with another standard people-interaction tool. Ponder the wonder of a group of ten people working on a problem, using a tool that enables them to achieve perfect a handoff of exactly the right idea at exactly the right time. Oh the joy! That is the promise of Lean Thinking 4.0.

Once employees value improving processes and people interactions, they decide what opportunities to work on, define desired outcomes, try-storm and broadcast results. Lean thinking fitted to the people who use it for both process improvement and people development.

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About The Author

Robert A. Brown’s picture

Robert A. Brown

Robert Brown is president of Collective Wisdom, Inc., providing workshops and consulting on the people side of organizational development. Brown is an author, speaker, and trainer, presenting at venues worldwide. He’s authored many articles and nineteen books including The People Side of Lean Thinking (2013), The HST Model for Change (2017), The Dark Matter and Dark Energy of Lean Thinking (2014), and Mistake-Proofing Leadership (2010) with Rudy Williams.