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Womack Modern Vs Lean Management

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“The Challenge of Lean Management” is a detailed comparison of Modern Management versus Lean Management.

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Womack Modern Vs Lean Management

  1. 1. The Challenge of Lean Management 10 th Lean Manufacturing Conference Wroclaw, Poland James P. Womack, Chairman, Lean Enterprise Institute June 22-23, 2010
  2. 2. What Does Lean Need Now? <ul><li>To think about the type of manage-ment system we need in order to make lean deployment sustainable. </li></ul><ul><li>A good place to start: Comparing modern with lean management. </li></ul><ul><li>(As we do this, please ask yourself what type of management system your organization has and what type it needs for a lean transformation.) </li></ul>
  3. 3. Two Choices for Managers: <ul><li>Modern management </li></ul><ul><li>(The Alfred Sloan School of Management) </li></ul><ul><li>versus </li></ul><ul><li>Lean management </li></ul><ul><li>(The Eiji Toyoda Gemba School of Management) </li></ul><ul><li>Let’s perform a side-by-side comparison of the principles of these schools. </li></ul>
  4. 4. Modern vs. Lean Management <ul><li>Primary focus on vertical functions and departments, as mechanisms of optimization and control. </li></ul><ul><li>Primary focus on horizontal flow of value across organizational units to the customer. </li></ul>
  5. 5. Modern vs. Lean Management <ul><li>Clear grants of managerial authority by leaders of organizational units (vertical delegation). </li></ul><ul><li>Clear grants of managerial responsibility to solve problems (especially cross-functional, horizontal problems) over which managers have no authority, within vertical organizations (including Toyota.) </li></ul>
  6. 6. Modern vs. Lean Management <ul><li>Line managers judged on end-of-the-period results for their span of control, increasingly financial in recent times. </li></ul><ul><li>Line managers judged on the state of their process , with rapid feedback loops with next-level management. </li></ul><ul><li>“ If the process is right the results will be right. Manage by process instead of results.” </li></ul>
  7. 7. Modern vs. Lean Management <ul><li>Planning & direction from top down , with bosses giving answers: </li></ul><ul><li>Leads to compliance focus: “Make your plan or explain the variances.” </li></ul><ul><li>Planning & direction in circular feed-back loops , with bosses asking questions: </li></ul><ul><li>“ What do you think the important issue is? Is there a problem?” </li></ul><ul><li>“ What’s the root cause of the problem?” </li></ul><ul><li>“ What do you think the potential solutions (countermeasures) are?” </li></ul><ul><li>“ What countermeasure do you think we should select?” </li></ul><ul><li>“ Who must do what when where to test this countermeasure?” </li></ul>
  8. 8. Modern vs. Lean Management <ul><li>Conviction from the top that a good plan , once properly implemented, produces the desired results . (Justifying the compliance focus.) </li></ul><ul><li>Conviction that all plans are experiments and can only be evaluated through the scientific method in the form of PDCA, followed by appropriate countermeasures. </li></ul><ul><li>“ Planning is invaluable; plans rapidly become worthless .” </li></ul>
  9. 9. Modern vs. Lean Management <ul><li>Generalist line mangers , rotated frequently with weak process knowledge , supported by deeply knowledgeable technical staffs (including finance.) </li></ul><ul><li>Line mangers on extended assignments, with deep process knowledge , lacking the need for extensive staff support. </li></ul>
  10. 10. Modern vs. Lean Management <ul><li>Managers developed through formal education , often ex-company (e.g., management schools, consulting firms) or sink-or-swim rotations. </li></ul><ul><li>Managers developed through in-company gemba learning through repetitive A3 analysis embedding PDCA, led by mentors throughout their careers. </li></ul>
  11. 11. Modern vs. Lean Management <ul><li>Decisions made far from the point of value creation , by analyzing data. (“Conference room management.”) </li></ul><ul><li>Decisions made at the point of value creation , by converting data into facts (“Go see, ask why, show respect” gemba management.) </li></ul>
  12. 12. Modern vs. Lean Management <ul><li>Problem solving and improvement conducted by staffs , often through programs. </li></ul><ul><li>Problem solving and improvement conducted by line managers , often responsible for cross-function teams, with staffs reserved for unique technical problems. </li></ul>
  13. 13. Modern vs. Lean Management <ul><li>Standardization (if any) of activities conducted by staffs , often with little gemba interaction and little auditing. </li></ul><ul><li>Standardization of (all) activities conducted by line managers in collaboration with work teams, with frequent auditing by directly observing actual work not just work standards. </li></ul>
  14. 14. Modern vs. Lean Management <ul><li>“ Go fast ” as a general mandate: </li></ul><ul><li>“ Jump to solutions” (with the consequence of going slow through the complete cycle of product & process development, launch & fulfillment.) </li></ul><ul><li>“ Go slow ” as a general mandate: </li></ul><ul><li>“ Start with the problem” and consider many potential counter-measures in parallel (with higher costs & more time at the beginning, followed by lower costs, less time & happier customers at the end.) </li></ul>
  15. 15. Modern vs. Lean Management <ul><li>Strong emphasis on the vertical flow of authority, looking upward toward the CEO. </li></ul><ul><li>Performance usually evaluated at single points. </li></ul><ul><li>Strong emphasis on the horizontal flow of value, looking toward customers. </li></ul><ul><li>Performance evaluated in terms of optimizing the whole process (all of the points). </li></ul><ul><li>Control reconciled with flexibility! </li></ul>
  16. 16. Conclusion from This Comparison <ul><li>Modern management isn’t conducive to creating sustainable lean enterprises. </li></ul><ul><li>We need to transition to lean management (or something better!) through PDCA. </li></ul><ul><li>How can we you do this? </li></ul>
  17. 17. What Is the Value-Creating Work of Management? <ul><li>Gaining agreement across the organization on what’s important for customers and the enterprise (purpose), through strategy deployment (a process). </li></ul><ul><li>Deploying on important strategy deployment initiatives, solving problems (every day), & evaluating proposals from lower levels, with A3 analysis (a process). </li></ul>
  18. 18. What Is The Value-Creating Work of Management? <ul><li>Creating basic stability throughout the organization, by means of standardized work with standardized management (a process). </li></ul><ul><li>Educating the next generation of managers, by enaging direct reports in endless cycles of strategy deployment, A3 analysis, & standardized management (a process!) </li></ul>
  19. 19. Methods of Lean Management <ul><li>To employ at different levels: </li></ul><ul><li>Strategy deployment – to align and engage employees on the few critical issues – the value-creating work of top management in particular. </li></ul><ul><li>Note: The transition from modern to lean management might be an objective identified by strategy deployment! </li></ul>
  20. 20. Strategy Deployment X-Matrix
  21. 21. Methods of Lean Management <ul><li>A3 analysis – to deploy top-level mandates, solve daily problems as they arise, and (very important) evaluate proposals from lower levels of the organization – the value- creating work of mid-level management in particular. </li></ul><ul><li>Never a solo assignment; always done in vertical and horizontal dialogue. (“An excuse to have a constructive conversation about where you are and where you need to go.”) </li></ul>
  22. 23. Methods of Lean Management <ul><li>Standardized management of standardized work with continuous kaizen – to stabilize the organization and permit steady improvement – the value-creating work of front-line management in particular. </li></ul>
  23. 24. Methods of Lean Management <ul><li>Educating the next level of management to create lean managers through continuing dialogue – the value-creating work of every level of management every day! </li></ul><ul><li>Indeed, the most important value-creating work of managers? </li></ul>
  24. 25. In the Absence of Lean Methods <ul><li>The predominant “work” of management is re-work – work- arounds for things gone wrong. </li></ul><ul><li>In other words, most of the “work” of modern managers is actually waste! </li></ul>
  25. 26. An A3 Project for Your Management Team <ul><li>Analyze your organization’s management system. </li></ul><ul><li>Characterize its current condition. </li></ul><ul><li>Determine the ways it hinders lean deployment. (The Gap.) </li></ul>
  26. 27. An A3 Project for Your Management Team <ul><li>Identify the most promising countermeasures. (The Plan.) </li></ul><ul><li>Test these countermeasures. (The Do.) </li></ul><ul><li>Assess the results. (The Check/Reflect.) </li></ul><ul><li>Make changes as necessary. (The Act/Adjust.) </li></ul>
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“The Challenge of Lean Management” is a detailed comparison of Modern Management versus Lean Management.


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