Why do most firms fail in their lean transformations? Because they have not understood the power of lean leadership, says Professor Jeffrey Liker. I spent the last two days together with the Norwegian aluminum producer Hydro ASA, listening to and learning from Liker. Here is a brief reflection on the essentials of lean leadership.

It would not be wrong to name Liker a world-leading guru on lean production. He has authored and coauthored several best-selling books on lean, all with a particular emphasis on how Toyota operates. Liker explains that his reason for writing the seminal book The Toyota Way back in 2004 was a worrying development he observed in industry: What was originally a philosophy at Toyota had in other firms been translated into large bureaucratic organizations that “administered programs of tools for implementing lean”. The growing numbers of failed lean implementations were characterized by “cookie-cutting approaches of copying from the copiers of Toyota”. He felt it was about time to go back to the roots, and study and describe what Toyota really does…

Lean leadership is what most firms get wrong

Let us start with this very common definition of lean among many firms: “Lean is the continuous elimination of wasteful processes”. However, even if elimination of waste is part of lean, lean is not elimination of waste (only). Unfortunately, this is a usual misinterpretation of the Toyota Production System (TPS). Forget about “waste walks” and “problem lists”. At the best, this approach leads to a scattered improvement approach that does not add up to competitive advantage. Liker argues that companies need to go back to a more systematic and scientific approach to improvement, which cannot be done without leadership.

Most lean programs fail. And most lean programs fail due to leadership mistakes, or, more precisely, the absence of lean leadership. Lean leadership is fundamentally different from “conventional leadership” according to Liker. Leadership in Toyota is just as systematic as its famous just-in-time production system (see Why my mother drives a Toyota). Leaders are teachers in Toyota. Their responsibility reaches beyond “getting the job done.” It includes the continuous development of themselves (!) and the subordinate through coaching and reflection cycles. From shop-floor to top-floor in Toyota there is a chain of learners and teachers. This sort of institutional leadership training is rare in other organizations. Admittedly it develops leaders slow and painstakingly. But in the long run, is there any other way?

“Lean leadership is about creating habits for improvements that 
become so habitual that you do not think of doing it.” 
Jeff Liker, Hydro AMBS Conference, Gardermoen, March 2015

Lean leadership encourages learning at Gemba

The central question in any improvement is: what is the problem? Unfortunately, people have a tendency to jump to conclusions, according to Liker. We assume we know, but most often we do not. In order to answer the question properly, we must evacuate our meeting rooms, and go and see at Gemba. Gemba is the place of value creation, usually the shop-floor. The leader’s role is not to solve problems, but to coach subordinates in how to solve problems.

The lean leader challenges people to think, triggering a reflection process, by asking questions like: (1) What is the target condition? (2) What is the actual condition now? (3) What are the obstacles that prevent you from reaching the target condition? (4) What is the next step and what do you expect will happen? And (5) When can we go and see what we have learned from taking that step? (see Mike Rother, 2010, Toyota Kata). The central framework for problem solving at Gemba in Toyota is Deming’s plan-do-check-act model (PDCA).

“Lean leadership is about investing in the people and 
turning every employee into a scientist.” 
Jeff Liker, Hydro AMBS Conference, Gardermoen, March 2015

Lean leadership involves everyone, every day, by Hoshin Kanri and kaizen

Liker emphasizes two central elements of the Toyota Way: Continuous improvement and respect for people. These two are interdependent; respect for people involves a deep belief that everyone can and will help the business continuously improve. The leadership process is known as Hoshin Kanri: Setting the vision, turning it into measureable and obtainable objectives from shop-floor to top-floor, and start moving in the direction of the vision through daily kaizen (improvement of the standard).

It is of essential importance to have a vision of the ideal situation. Without a vision we don’t know in which direction to improve. The vision may be difficult to reach and we may not know how to get there, but it should lead us in direction of perfection. The best way to move towards the ideal situation is to take many small steps and learn if we’re on the right path (PDCA), rather than taking big steps into the uncertainty. That is continuous improvement – powered by lean leadership.

“So there it is: if it is a recipe for Toyota’s success, 
it is a deep time-consuming, and expensive investment 
in developing everyone in the organization, 
and truly believing that your employees 
are your most precious resource” 
Liker & Convis, 2011, The Toyota Way to Lean Leadership, p.16

Further reading on lean leadership

Of course, summarizing Liker and Convis’ book The Toyota Way to Lean Leadership in one blog post does by no means serve it justice. For the details, here is a list of recent books on lean leadership that are highly recommended:

• Liker, J. K. 2004. The Toyota way: 14 management principles from the world’s greatest manufacturer, New York, McGraw-Hill.
• Liker, J. K. & Hoseus, M. 2008. Toyota culture: the heart and soul of the Toyota way, New York, McGraw-Hill.
• Ballé, M. & Ballé, F. 2009. The Lean Manager: A Novel of Lean Transformation, Lean Enterprises Inst Inc.
• Rother, M. 2010. Toyota KATA: managing people for continuous improvement and superior results, New York, McGraw-Hill Professional.
• Liker, J. & Convis, G. L. 2011. The Toyota Way to lean leadership: Achieving and sustaining excellence through leadership development, McGraw-Hill.
• Ballé, M. & Ballé, F. 2014. Lead With Respect: A Novel of Lean Practice, Lean Enterprises Inst Inc.
• Liker, J. K. & Trachilis, G. 2014. Developing Lean Leaders at All Levels: A Practical Guide, Lean Leadership Institute Publications.

Ps! Thanks to Hydro Aluminium Primary Metal for hosting the workshop with Liker at the 2015 Aluminium Metal Business System conference at Gardermoen, March 24.-25.