The 3 Core Components of a Lean Management System

This is a little diagram I drew for a client recently, to help them to understand the 3 core components of a Lean Management system, what makes a Lean system work, and especially where improvement activities “fit”.

I thought it was almost too obvious, but the intense dialogue we developed around it told me it wasn’t.

Core components Lean management system

Several of our clients have been struggling with applying lean principles to their business, and to transform the way they operate and manage it. This is the case especially when they are not “making products”, but in a services environment or in a project-driven one.

Frankly, most companies started their Lean journey by copying whatever successful companies such as Toyota were doing, without necessarily giving much thought to what was making it work and WHY.

I have come to realize that this is why, when people start on a Lean journey, they tend to focus a lot on tools like 5S and visual management initially, before moving on to methods for problem solving, and to concepts like value stream thinking with pull & flow. Often it is not obvious to them that to truly transform the business, they will have to actually manage it differently. Sure, they will put in place visual boards and daily stand-up meetings, organize some Kaizen events, run a couple of problem solving teams, and they might even have some gemba walks now and then. But how it all links together, and how it ties to managing the business as a whole, only becomes clear after several tough years of doing “lean stuff”, while it was not getting fully engrained in the “way we do things”.

So part of the problem is that what they are doing is not a complete system, and a lot of it is disconnected – i.e. the “arrows” in the picture between the 3 core components of a Lean Management system are missing. Some people limit their improvement efforts to idea boards – a fine initiative by itself – but then they are surprised that this has little connection to the daily recurring issues, and that it has no demonstrable impact on the business. They see it as a “nice to have” that they reward with team dinners or movie tickets, but not as a necessity to move the business forward.

The execution level is often purely “business as usual”, and is not aware of the priorities of the business management level – apart from some seemingly arbitrary business “targets” that are discussed once a month perhaps, with no visibility nor awareness about what has to be done differently to achieve those targets. If the execution level also does not clearly identify and call out its problems, then there is no way for the business to develop a understand of what is holding it back to achieve its goals, and there is nothing to drive improvement on a daily basis.

Finally, the business management level often has no effective way to translate improvement targets and priorities to the other levels. On the one hand, this means the execution level has no way of knowing they are moving in the right direction. The improvement level on the other hand may not have a clear view on where the improvement priorities are and could become purely reactive to the day-to-day problems.

In order to become successful with Lean, and to become truly excellent, organizations need to commit to making the entire system work, and that means dedicating time, effort and resources to each of the 3 core components of a Lean Management system, and to making them work together.

The picture above is obviously a very high-level one, and still does not give a lot of guidance on HOW to do all this. Based on our experience, we have broken it down further into the essential building blocks, to form our “Excellence Model”. Each of the building blocks describes the essential activities, as well as the capabilities that you need or need to develop. Developing capabilities in each of the building blocks all at the same time will be overwhelming, so it is important to first understand where the biggest shortcomings are, before developing a roadmap for the next couple of years.

We will be discussing the elements of the Excellence Model in upcoming blog entries.

Möbius Excellence Model