Why lean? Did you wake up this morning refreshed and ready to attack the day because you sleep so well on your mattress stuffed with $1,000 bills? Struggle to find something in your closet due to all the boxes of cash? When you got downstairs for that morning cup of Java, did your assistant sneak in to your house early to have it made for you along with three eggs just the way you like them? When you arrived at the office did you find a note on your desk that said “Go golfing today boss, we got this.” And while relaxing on the beach sipping your Pina colada you thought to yourself, I think I want to go lean?
Was your kick start a lot like mine? In short, smashing your head against your desk Thursday night after only getting half the work done in twice the time you estimated, wondering how you will make payroll tomorrow, screaming “THERE HAS TO BE A BETTER WAY!”
Crisis to change
I truly hope everyone reading this was not in the position I was in when I discovered lean. However, I’m confident we all can at least relate to that kind of stress. Here at Quantum Lean we have the pleasure of working with amazing people all over North America and we have noticed the psychological effect a crisis can have on a lean transformation. Asking people to learn and execute things that are counter intuitive normally gets met with some resistance, but when you’re at the end of your rope, people tend to be much more willing to try new things. In a nut shell, nothing seems to evoke change like a crisis.
Although this can be great news for struggling companies that discover lean, is this really the optimal time to embrace change? Wouldn’t it be much easier to start this process while the business was still doing well? While you have a few bucks in the bank for training?
Whether you do it yourself for hire some help doesn’t matter, but it needs to be done, and preferable before a crisis. The trick is creating that mental crisis before it becomes reality. In doing this, you actually push it farther and farther away from becoming reality. See, I told you this stuff is counterintuitive. Doesn’t that seem like doing work that’s unnecessary? Trust me, it's critical.
How can we go about creating that mentality that keeps us pushing for more? If you know me, you know I love simple solutions. For this situation it's as easy as one sentence, “The work we have today, may not be here tomorrow.” If you make this your mantra, it will start to force all the right behavior. Imagine if all the work you have today suddenly got cut in half by tomorrow, what would you be scrambling to do? You most defiantly would wish you didn’t have so much inventory, you would have to cut your payroll costs, your overhead in relation to sales would be off the chart, so you would wish you had a smaller building, and wouldn’t it be nice to have a few bucks in the bank to get you through the slow period?
It doesn’t take much to tip the scales, a major customer switching suppliers, suddenly buying overseas or in Mexico. Maybe some hot shot kid right out of college decides to start a business just like yours, and his parents are rich and can bankroll all the latest and greatest machines and technology. Or the scariest scenario, maybe your competitors are thinking lean, and you just don’t know it yet.
Lean and success
Lynn and I are both working with a furniture manufacturer that could really use some crisis mentality. They are absolutely wonderful people, and they have built an amazing company. They know that lean could help the business but are hesitant when it comes to some of the concepts. They have an extremely fast turnover and have never missed a ship day. This is phenomenal by any standard.
But the tradeoff for them is inventory, and lots of it. They operate out of a Walmart size building, so space is no constraint and therefore inventory isn’t necessary getting in the way. Our job is to figure out how to change their viewpoint from, “We need inventory to satisfy quick turn around,” to something along the lines of, “We need to reduce inventory to expose our problems and produce faster.” This is no small task when the business was built on the ideal that inventory is helping them. Here is the catch: They are quite successful. So if it ain’t broke, don’t fix it!
Could it be better?
If you operate in your organization without continuously pushing the envelope on cost reduction, then you really don’t know how much you're leaving on the table. Some people are content when generating net profit. Because whatever they are doing is working to a degree, but could it be better? (That was a trick question; it can always be better!)
My challenge is to all those companies that are doing well, ask yourself how can you do what you're doing in less space, with less inventory, all while making everyone’s job easier. If there is ever a decline in business, you will have to do all of these things in a real hurry, scrambling to teach your people the art of subtraction, to do more with less. Imagine for a moment you are choking, would you prefer your friends start to learn the Heimlich maneuver then? Or would it be best they were already trained and ready for such a situation?
My parting words this month to everyone are: create a mental crisis before it becomes a real one.
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