Knowing When You’re Lean
Recently I have been seeing more and more discussion about Lean Maturity and people asking us how they know they are Lean. Well I honestly feel that there is really no such thing as Lean Maturity or for that Business Maturity, and two Lean is a lifetime journey, and unless your company is intending to be closed for good sometime soon, you had better keep assuming you are nowhere near the end of the journey. Do these two statements sound harsh well yes they do, but in reality they are not. To understand why they arein fact good positions is what we will touch on in the rest of this article.,lean,
Continuous Improvement or Why the Lean Journey Never Ends
Continuous Improvement is one of the fundamental concepts that Lean is based on. Thus today’s great performance becomes next period’s average performance, and the period after that’s poor performance. It is the same reason that most benchmarking attempts fail to deliver sustainable results. It is an unfortunate fact of life that if you give people, a set goal they will try to achieve it, but if that goal is stated in a way that implies it is an ultimate goal, it can than become a crippling disease that blocks further growth. In reality there is only one benchmark that means anything; your current state of performance. Using that as a benchmark, you set an improvement target that will force your company to stretch itself to attain it in the next year. The following year you again take your current state as the new benchmark, and set new goals to stretch your organization again. Does it in the end matter how and if each new goal is actually met, no what matters is that your organization is showing constant small improvements. As long as goals are an achievable stretch overtime, you will find that in most years they are met.
Let us be honest, unless you are actually working to get just a little bit better constantly you are actually not experiencing Continuous Improvement, but in fact are only improving by occasional focussed jumps (Sporadic Improvement). Continuous Improvement is a business’s life long journey and since a business has an unlimited life span it should always be assumed you are somewhere in the middle of the trip.
Maturity Cycles and Stages
We have gotten use to discussing business cycles like the human life cycle (birth, growth, maturity, death), yet the honest reality is that no business and even very few industries really experience a similar life cycle. The true reality is that business should look to and work on remaining in the growth stage forever. After all when you reach maturity you start to see death coming, and instead of focussing on meeting the needs of the market and growing, you spend your time trying to cash in as many of your chips as you can before you die. When you start to focus on milking a business for all it is worth you stop trying to build it into something better, the two mindsets are totally different.
Let’s take a look at an under discussed company DuPont. DuPont started out in the gunpowder industry, and today they are still in that industry. Gunpowder in theory is a mature industry in which little has changed since the advance of smokeless gunpowder, yet DuPont did not follow their industry into maturity; instead the company has constantly innovated and created new products and processes, so that even today the company is in a growth phase. Their constant need and desire for growth has taken them into many fields to name just a few munitions, agricultural products, medical products and drugs, fibres of many types, coatings, paints, and chemicals. Though on certain occasions they have bought other companies to grow, the vast majority of their growth has been in fact from internal innovations. Most of these innovations started by DuPont trying to solve an internal issue to their current business operations, often after they solve their internal issue they find they have developed a new set of skills that can be applied to another industry, or revolutionize a old existing one. Though today they would look like a conglomerate they are in fact a company whose various operations feed off of relationships with each other. If you look throughout their history you will see a constant string of small continuous improvements, occasional huge improvements and steady growth.
Despite being broken up in an anti-trust action DuPont has a company never actually matured, thus they never feel threaten by death. Only when a company comes to think about itself as matured and feels it can no longer grow does the mentality and threat of death start to cause it to fear competition, and the marketplace. DuPont knows that even if certain products decline they will have other new innovative ones to take their place, any true growth company should spend its time focussing on finding innovative products that meet people needs that allow it to make a profit. Competitors are not their threat, complacency is, the only true thing they have to fear is their failure to identify consumer and society needs.
Church and Dwight Co. Inc.
Ever hear on Church and Dwight Co. Inc. (Arm and Hammer baking soda) they are in an industry that hit maturity long ago. Yet the company pours out a steady stream of new products using the sodium bicarbonate, along with introducing additionally uses for their base product baking soda. The result is that they constantly increase their sales of a product almost any chemical company could produce. Their success is based on two factors, a strong relationship with consumers and customers, and constant innovation and improvement; they make something just a little better all the time, while gleaning new ideas from their loyal business base. If you do not let yourself get into the, we have done all we can attitude, it will amaze you just how much more you can do. It use to be that people bought one to two boxes of baking soda a year for baking, today most people by more than that just to keep their frig odour free.
Here are two companies that prove you do not want to get into that maturity milk the cash cow mentality; because when you do you end up giving up on growing and making even more money. Moreover these two companies show us that one of the least discussed ways to Continuously Improve to be Continuously Innovating, innovation is often the easiest way to out compete, your competition. Arm and Hammer has yet to even scratch the surface of all the household uses they know of for their base product. And does anyone really think that DuPont will rollover and quit creating new and innovative products anytime soon.
Firstly a business life does not have a limit imposed on it like we human beings do. Maturity in business is what should be feared, because maturity leads to death, in business our goal should be to keep the organization in perpetual growth phase, to do that may need to constantly improve, but we also need to remember that one part of continuous improvement is constant innovation. Constant innovation means understanding the marketplace’s needs. Since the marketplace is actually made up of average human beings, and organization that maintains strong relationships with everyone will always find new needs to meet, and thus manage to secure their fair share of the market.
Second thing is stop looking for the end of the journey, it really shouldn’t have one. Instead find your pleasure from constantly seeing new things along the way. We need to stop acting like many of our spoiled kids on trips constantly asking are “we there yet?”, when we could be enjoying all there is to see along the way. Stop waiting to celebrate some big final victory, and enjoy all the little ones on the way.
Forget all those two dimensional matrixes, after all when was life two dimensional. Anything you do in life involves so many different factors no theory will every really explain life and how we humans act. Using any artificial gauge or rating system, will derail your organization into complacency faster than a broken rail will derail a locomotive.