Whilst 70-90% of all Lean Transformations fail (depending upon which study you read) it isn't really a gamble but a choice, as the reason that they fail is that the Leadership of the organisation effectively choose to ignore the Critical Success Factors (CSFs) for a successful transformation.
As I wrote in one of my earlier posts, "The Meaning of Lean (the Universe and Everything)", LEAN may be thought of as an Acronym for Leadership, Excellence, Analysis and No (saying No) and needs to be part of an integral, People centric, Business Strategy.
Doing this requires a complete transformation of thinking in the Leadership of the Business and only when this is achieved will the results be sustained over a period of many years. There are no 'half-measures' or out-sourcing to consultants as a surrogate for this; only a clear, focussed vision and years of hard, disciplined work.
Art Byrne in his book, the Lean Turnaround, explained that Lean Thinking is not a Project or Initiative but a way of running your Business and, as he states:
"Using Lean to turn your company around has a very simple focus. You want to improve all your processes so that you vastly improve the way value is added in your company. Doing so will increase both your market share and your enterprise value. This can occur only if you understand that Lean has to be your strategy - the foundational core of everything you do - if you are to be successful. Lean is not a 'Manufacturing thing.' ..."
In support of this take a look at figure 1, which is the Stock performance of Toyota over 20 years (1995-2015), compared with that of Honda, GM and Ford. What you will see is that both Toyota and Honda have significantly outperformed both GM and Ford, with Honda arguably having turned Master, having learned a lot of what it has applied from Toyota.
Figure 1: Toyota Motor Corporation Stock performance over 20 Years
Both GM and Ford have had access to the Lean Business Systems of Toyota and Honda for many years and have benefited from employing many of their best engineers, Lean Gurus and utilising Consultants with the 'Toyota Pedigree'. They have even shared Manufacturing sites with them and have rubbed shoulders at the level of the top leadership. Nevertheless, they have been unable to truly embed Lean as the enabler of their strategy and have instead utilised it as a cost reduction / efficiency approach.
However, a few Companies have been able to truly embrace Lean Thinking as their Business Strategy and one of those is the Danaher Corporation, whose Stock performance over the last 20 Years plus has been nothing short of phenomenal (see figure 2).
Figure 2: Danaher Corporation Stock performance over 20 Years
This 'Better than Buffet' stock performance has been achieved through the disciplined adherence to the Danaher Business System (DBS) and is even more remarkable given that Danaher are an acquisitive corporation and therefore have had to integrate multiple businesses and new Leaders into their way of working.
So, if you really want to deliver exceptional results for your Customers, Employees and Society, place a bet on Lean Thinking as your Business Strategy and choose to win. As Art Byrne said: "Don't just do Lean; Be Lean".
Follow Philip on Twitter: @LeanMaster1
"I aim to promote the global sharing of best practices in the application of Lean Thinking."