This One Thing Takes Lean to the Next Level
Lean Performance Pyramid: Part 3
If Wall Street loves the results of lean (predictable sales and profit increases), why aren’t they investing heavily in companies that employ lean thinking? And why isn’t there more discussion about it? Part of the reason is because there aren’t many executives who understand systems management and its connection to lean management (or even the difference between lean and six sigma). So when an executive openly admits that he doesn’t really understand six sigma, even though he’s using it, it’s easy for Wall Street to interpret and associate the six sigma/lean management effort as “another program” (and ostensibly a marketing ploy).
It can actually be argued that Wall Street has recognized the lean movement, in the form of Danaher (NYSE: DHR), whose stock has risen consistently since it moved out of the penny stock category in 1996. Danaher’s organic growth is unparalleled in the time span it’s used lean management, both in consistency and in percentage increases. Note that Danaher does not tout the fact they use systems management to outcompete the many industries they have tackled over the years – no marketing ploys here – just excellent performance, consistently delivered on top of a predictable, stable platform.
What’s Danaher’s Secret?
The secret is the the Lean Performance Pyramid. While Danaher calls lean management the Danaher Business System, they have built another foundational block on top of their knowledge of systems management, which is process management or process thinking.
Danaher knows that the key to consistent, predictable sales and profit growth (the very thing Wall Street wants and rewards), is to focus on and fix their processes, with a keen eye on how those processes relate to the whole system. It is this simple act of constantly fixing the process that yields consistent results. Danaher’s customers know that as quality, which is why Danaher is number one in over 60% of the industries they compete in. Think about that – Danaher is outcompeting everyone using lean management as a strategy. Their customers are elated as a result, and Wall Street is elated with that. That’s some real systems knowledge at work.
Why Can’t We Do That?
Actually, you can. The Lean Expert Academy just introduced a brand new product made to overcome the number one issue that has kept most companies from performing like Danaher. As part 2 mentioned, not getting top management support to lead the lean efforts is the number one reason most often given for lackluster results of lean implementations.
But you don’t have to live with that anymore. Before we introduced this workshop, called Lean Passion at the Top, there really wasn’t any product that was aimed specifically at getting top management support for lean thinking. But that’s exactly what Lean Passion at the Top is designed to do, in an easy to follow way. Built around sophisticated simplicity, this training yields the two high beams of elegant change – belief shift and new behaviors. You can click here to check it out.
In part 4 of the Lean Pyramid of Performance, we’ll detail the role of process management as a fundamental pillar some more, while introducing the next building block of lean performance. Sign up below to stay tuned for that.
I am the founder of the Lean Expert Academy and a previous partner in the Lean Leadership Institute with Jeff Liker (The Toyota Way), Paul Akers (2 Second Lean) and Norm Bodek (Productivity Press Founder). We train Lean consultants to implement the exact same methodology and techniques that you can learn here. I will be releasing my first book, Lean 2.0: How to Dominate Your Industry Using Lea(R)n Thinking very soon.
I believe the days of suboptimal results of command & control management models will be replaced within this decade, and you are a driver in that transition. I believe that we are at the tipping point of a new era, an era where everything that has the name “management” attached to it, will be done with Lean thinking and Lean management.
I know for a fact, after years of being deep in the trenches of making change happen, that implementing Lean is not that hard to do. It’s actually quite easy if you follow the right steps, and my course shows you exactly how to achieve that outcome.
My goal and mission is to produce as many excellent Lean thinking leaders as possible – to arm you with the ability to recreate what I and my team of consultants have been doing consistently for many years. If you are serious about seeing Lean spread more quickly, please join me.