Lean Management Is Illegitimate. Or Is It?

The methodology still waits for acceptance in traditional management models

Published: Tuesday, September 20, 2016 - 15:03

To this day, lean management has yet to enter the mainstream in business. It remains solidly on the fringe, despite great efforts by many people over many decades.

You almost never hear of lean management in the business press unless the article is written by an insider such as James P. Womack or John Toussaint. Kaizen is rarely mentioned in The Wall Street Journal or Financial Times. You hear about just-in-time only when disaster strikes, when an earthquake in Japan or flood in Thailand disrupts production that has been carefully synchronized with demand. Improved relationships between employer and employee, or between buyer and seller, are not newsworthy.

What are we to make of this? Management, as it has been long understood and practiced by businesspeople, is accepted and considered legitimate, particularly as informed by classical economics. Traditional management methods remain the standard of practice, despite numerous obvious faults and shortcomings. In contrast, lean management is the illegitimate bastard child of management practice, fathered by mechanical engineers. What on earth do mechanical engineers know about business?

Think about what mechanical engineers do. They like to understand how systems and sub-systems work. When they look at the practice of management, they see many technical weaknesses. They also see many weaknesses with respect to human relations and job performance. Importantly, engineers are far less influenced by the five aspects of classical economics that inform the practice of management, likely because engineers lack businesspeoples’ backgrounds and biases. Engineers see classical economics as impractical, something that creates many more problems in the system than it solves.

From those observations, engineers set out to design new systems of management—a new standard—that worked better than standard management practice—better for employees and customers, which also benefited investors, suppliers, and communities. The initial designs did indeed work better, but they weren’t good enough. So engineers set out to continuously improve the design of their progressive management system. This happened over generations of engineers, in different companies, and in different parts of the world.

The impetus for engineers to develop something better than the standard practice of management was the observation that there were many abnormal conditions that businesspeople didn’t notice, or did notice but accepted as the normal condition. Where a businessperson proudly saw a functioning system that made money (their standard for success), the engineer saw a rickety system prone to failures large and small, and that resulted in great financial and nonfinancial costs. This was not something to be proud of.

Engineers saw work stoppages, bad employee relations, low productivity, excess inventories, poor quality, long lead-times, and unhappy customers as clear signs of abnormal conditions. The system design was bad, and it therefore didn’t work right. Failure was not intermittent; it was a daily and hourly occurrence. Surely one could do better.

The money that businesses earned, and which was satisfactory to businesspeople, was unsatisfactory to engineers because the system operated well below its earning potential. Engineers imagined a new standard, one that would result in much greater financial success without the usual tradeoffs that plague businesspeoples’ thinking. They imagined a larger pie that everyone could share in, thereby replacing the fixed-size pie that everyone fought over for a larger share. It was a dream that could be turned into reality with some hard work.

Mechanical engineers became the physicians of business, seeking to improve its health and well-being for the benefit of all, long into the future. But for that to happen, businesspeople would have to learn new things and develop new habits of mind. They would have to think differently to create a new understanding of what were normal and abnormal conditions.

Yet there was, and continues to be, great resistance. Management practice is entrenched through years of practice, informed by classical economics, and businesspeople today are at the peak of their influence in business, politics, and society.

The credo of the physicians of business is “Do no harm.” Why? Because doing harm to employees or other stakeholders is a defect in the management system that causes it to fail—and fail often. Abnormalities occur when harm is done. Hence, the importance of redefining the “normal” condition.

For example, batch-and-queue processing is an abnormal condition, while flow is a normal condition. Management-labor discord is an abnormal condition, while management-labor harmony is the normal condition. Flat or declining pay for higher productivity is an abnormal condition, while higher pay for higher productivity (sharing the wealth created) is the normal condition. Squeezing suppliers for lower prices is an abnormal condition, while joint problem-solving is the normal condition. Politicized decision-making is an abnormal condition, while fact-based decision-making is the normal condition. Zero-sum (win-lose) outcomes are abnormal conditions, while nonzero-sum (win-win) outcomes are the normal condition.

Curiously, businesspeople greatly prefer an error-prone management system with unpredictable outcomes to one that functions with much higher reliability and that has more predictable outcomes. Why is that? One reason is that the former requires no training and is easier on the businesspeople, while the latter requires far more training and attention to detail. An error-prone management system requires much less skill among its leaders than a high-reliability management system. However, the training and attention to detail are not found in business degrees such as the MBA. Higher education still prefers to teach students an error-prone management system with unpredictable outcomes. To this day, training for high reliability and predictable outcomes still comes on the job, and is passed on to others by engineers or those who have learned to think like an engineer.

It will be some time before business and society accepts lean management as legitimate and as representing the normal condition. In the meantime, lean will continue to be the illegitimate bastard child of a management practice fathered by mechanical engineers. Nevertheless, we know that the engineer’s lean management system is actually legitimate—the standard to strive for—while the traditional management system is illegitimate and a ridiculously low standard.

The physicians of business will never accept abnormal conditions as normal conditions. Someday, neither will society.

© Bob Emiliani. First published May 11, 2016, on Bob Emiliani’s Innovative Lean Leadership blog.

About The Author

Bob Emiliani

Professor M.L. “Bob” Emiliani is an engineer, researcher, author, historian of progressive management, educational reformer, and executive trainer. A long-time Toyota Production System (TPS)/lean practitioner he was the first to focus on lean leadership as an area of scholarly study. Prior to joining academia, he worked in industry for 15 years in engineering (R&D, new product development) and operations, including implementing TPS (manufacturing and supply chain). Emiliani is the author or co-author of 19 books, 48 peer-reviewed papers, and 540+ blog posts on lean leadership, management, organizational development, supply chain, materials engineering, and more. Emiliani has bachelor’s and master’s degrees and a Ph.D. in engineering.