Is Lean Equivalent to Optimized?

August 26, 2009

Post filed in Tao of Management - With keywords lean, optimization, Tao of Management

Recently, there is a flurry of news articles and blog posts about Lean and IT. Forrester sent out an invitation for its upcoming Business & Technology Leadership Forum (October 8-9, 2009) entitled "Lean: The New Business Technology Imperative". Glenn Whitfield pondered about "Do Lean or Be Lean?" in Lean & IT and Chris Curran proposed 2 Lean schemes (Quick Fix and Deep Dive) in The Skinny on Lean IT. On my part, I did mention in a previous post that "Going Lean" is one aspect of Optimization and a potentially misleading one. This post will expand on the notion of "Lean" and explain why it is potentially misleading.

LEAN according to the initiated

I purposely put LEAN in capitals to denote a specific business concept developed by Toyota, the Japanese automobile maker. Toyota has given the word "lean" a special meaning though its application of a highly tuned, highly optimized manufacturing system. Its apparent success has spawn a strong following, not only in the manufacturing industry but also in health care, service and IT. LEAN has become over the years a widely accepted best practice in creating quality products and customer value, similar to Six Sigma and the like.

According to the Lean Enterprise Institute, a non-profit organization which "… helps companies transform themselves into lean enterprises, based on the principles of the Toyota Business System", the core idea of LEAN is:

"… to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with less resources.

A lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.

To accomplish this, lean thinking changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.

Eliminating waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. Also, information management becomes much simpler and more accurate."

If you are familiar with the Optimize – Align – Grow cycle described in earlier posts, you would see that LEAN is the closest to Optimization and I have nothing but admiration for LEAN and respect for its true practitionners.

Lean according to the uninitiated

For those who are not familiar with Toyota LEAN Business System, the word "lean" has a different connotation. It would evoke a thrifty, economical, meager mindset according to the Free Dictionary:

lean² (ln)

adj. lean·er, lean·est

1. Not fleshy or fat; thin.

2. Containing little or no fat.

3. a. Not productive or prosperous; meager: lean years.

b. Containing little excess or waste; spare: a lean budget.

c. Thrifty in management; economical: "Company leaders know their industries must be lean to survive" (Christian Science Monitor).

When juxtaposing "Lean" with IT in the business context of an economic recession, it evokes a meager workforce, a pared down budget and a frugal management. A Lean IT in this context doesn’t project an image of a strong fighting force ready to engage and win when the time comes.

The danger of misinterpretation

When a prominent industry analyst such as Forrester proclaims that "Lean" would be the trend for the coming months (Lean: The New Business Technology Imperative), it creates a worrisome situation. Worrisome because Forrester is influential. Worrisome because its stance is misleading. For a more detailed analysis of Forrester’s Lean approach, I like to refer to an excellent article by Glenn Whitfield, entitled "Lean & Forrester’s Business Technology Forum". But to give you a taste of what’s in store, here is the very first sentence from the Forrester invitation flyer:

"Everyone wants to be Lean these days, whether it’s when stepping off a scale in the morning or when reviewing the cost of running a successful business."

Notice that Forrester associates 2 things with Lean: weight (personal) and cost (business). Simply put, Be Lean and Stay Lean means one thing: Cut Cost by Losing (IT) Weight.

Again, if you are familiar with my point of view on Optimization, cost cutting alone doesn’t "cut it".

Conclusion

LEAN is good. LEAN (Toyota) is proven as an Optimization method.

Lean is also misleading. It gives a negative connotation to the current state (fat, bloating) which is not true to the majority of IT organizations and to the end state (meager, thin, thrifty) which is not desirable over the long run.

Blindly proclaiming and following "Go Lean" quick fixes is dangerous. In the name of fat trimming, one may inadvertently cut into the muscles of the organization.

What should we do?

Have a tempered view: trim fat but also reinforce muscles. On diet but also exercise. Focus on the physical appearance but also pay attention to the mental one.

Last but not least, don’t forget to build up your Strength and Stamina. It involves more that just "Stay Lean".