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Monday, October 7, 2019

Top Five Reasons Most Companies Fail at Lean Implementation

Lean has been around since the late eighties/ early nineties, but despite the enormous popularity of Lean, the track record for successful implementation of the methodology is spotty at best. Companies still make mistakes when implementing Lean.

These mistakes are generally due to simple misunderstandings of the Lean principles, but when something goes wrong, you will not reap the full benefits, and incorrect use of Lean can actually make a situation worse rather than better.

I believe when Lean principles are properly understood and applied, the upside for productivity improvements is nearly infinite. I have personally witnessed numerous Lean thinking initiatives that have improved productivity by large amounts (like 40-60%) in short periods of time with minimal expenditures.  The Lean track record is well documented by numerous authors.

In my experience these are five main reasons why Lean implementation fails:

1.      Lack of understanding
Senior leaders often develop the misperception that Lean is a series of projects to make randomized improvements. The organization often becomes obsessed with the application of the tools with no aim. They only focus on improving when they have the time or when they absolutely must. Lean should be adopted as a management system, as opposed to a project, and should be tied to business goals. If employees can’t put these two together, leaders risk creating resistance and lack of buy in.

2.      Lack of direction and vision
Lean must first start by deploying a crystal-clear vision all the way down to the entire organization of the company. All employees of the company must clearly understand the company vision and direction and must also understand all KPIs (Key Performance Indicators) and measurements used.

3.      Too many initiatives
I have observed many companies that pursue excessive amounts of initiatives, concurrently. They fail to recognize that the organization can only take so much change. When leaders don’t provide the necessary focus to each initiative, they sacrifice their credibility with their employees. Cynicism is created, and employees begin to see each effort as a fad that they just need to endure until the next one comes along.

4.      Lack of resources
Most of the companies mistakenly consider that Lean is a matter of a few, select experts. This is not the case. All resources of a company must be involved in improving the operations and administration of a company because there are more improvement ideas in the brains of all employees of a company than in the brains of a few experts.

5.      Resistance of change
Lean is in its purest sense a change management initiative, for it involves changing from a current state to a better state. Just as all change attracts resistance, Lean improvements also attract resistance to change, which may manifest as employees ignoring new processes, disagreeing with the benefits, making stringent criticisms, and more. Success depends on how effectively the leadership rises to the occasion and manages resistance to change.

One of the biggest mistakes you can make in initiating major company changes is to expect that everyone’s reaction will be even remotely like yours. Never minimize an employee's response to even the most simple change. Keep your employees informed.  Communicate as much as you know about what is happening as a result of the change.  One of the major reasons people resist change is fear of the unknown.  If you communicate with employees and keep them informed, you put this fear to rest.

Lean implementation is not simple or easy. However, results show that, when done properly, Lean lives up to its promises. Lean and its elements work. All of the failure modes presented here can be avoided or overcome.

If you want Lean to succeed in your organization, management has to become a student of Lean in order to be a successful sponsor. In other words, you have to apply Lean to your management process first in order to understand how to apply it to others.

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