From Lean to Lasting: Making Operational Improvements Stick
By focusing on the project management side of lean and Six Sigma initiatives, leading global companies gain substantial, scalable, and sustainable advantages.
October 2015 | by David Delaney
For companies seeking large-scale operational improvements, all roads lead to Toyota. Each year, thousands of executives tour its facilities to learn how lean production—the operational and organizational innovations the automaker pioneered—might help their own companies. During the past 20 years, lean has become, along with Six Sigma, one of two kinds of prominent performance-improvement programs adopted by global manufacturing and, more recently, service companies. Recently, organizations as diverse as steelmakers, insurance companies, and public-sector agencies have benefited from “leaning” their operations with Toyota’s approach: eliminating waste, variability, and inflexibility.
Yet in our experience, organizations overlook up to half of the potential savings when they implement or expand operational-improvement programs inspired by lean, Six Sigma, or both. Some companies set their sights too low; others falter by implementing lean and other performance-enhancing tools without recognizing how existing performance-management systems or employee mind-sets might undermine them. Still others underestimate the level of senior-management involvement required; for example, they delegate responsibility for change programs to their lean experts or Six Sigma black belts—practitioners who are technically skilled but often lack the authority, capabilities, or numbers to make change stick.
The broader challenge underlying such problems is integrating the better-known “hard” operational tools and approaches—such as just-in-time production—with the “soft” side, including the development of leaders who can help teams to continuously identify and make efficiency improvements, link and align the boardroom with the shop floor, and build the technical and interpersonal skills that make efficiency benefits real. Mastering lean’s softer side is difficult because it forces all employees to commit themselves to new ways of thinking and working. Toyota remains the exemplar: while many companies can replicate its lean technology, success on the softer side often eludes them.
To get the most from large operational-improvement programs, top companies look beyond the technical aspects of lean and embrace the high-performance side. Complementing the development of technical skills with a focus on the organizational capabilities that make efficiency benefits real can help companies to achieve more substantial, sustainable, and scalable results. Against a backdrop of growing economic uncertainty, their success can be a source of inspiration and enlightenment for industrial and service companies and for public- and social-sector organizations looking to extract greater value from these efforts.