Over on the Evolving Excellence blog, Bill Waddell had a recent entry, Cash Is Right On The Money, that once again reminds us that many of today’s Lean process concepts alone, will not make any company into a world class performer without a corporate culture and management performance reward system that supports structural efficiency change. 

The posting references Cash Powell, a mentor of Mr. Waddell, who back in 2005, reflected on the then profitability challenges of General Motors, and how GM booked revenue based on production completion vs. retail sale, and thus finished goods inventory was not considered a measure of overall supply-chain or production efficiency.  Waddell goes on to point out: GM has done as much or more Lean stuff in their factories as anyone, and you all know the results.  Without a fundamental change in accounting, along with the management processes accounting drives such as performance metrics…, no company can be truly lean.”

This posting provided me another reminder that Lean-focused initiatives do not stand as the end-state goal. I’m also amazed in reading so many middle-management job postings that call for intimate knowledge or certification in lean methodologies, but hardly mention change management skills. Few senior management job descriptions call for a basic understanding of Lean methods and their applicability toward facilitating structural change.

An end-state goal is a vision and supporting operating objectives, embraced by the entire organization, seeking a positive change.  Lean methods are one of many tools that can be deployed to support a process.. As elegantly stated by Bill Waddell, no company is going to get long term Toyota-like results without the willingness to change overall thinking, or challenge the current way works gets done. Even Toyota, who is now challenged with suffering its first operating loss in corporate history knows enough to take a pause and re-examine strategic intent.

Bob Ferrari