The Essential Rule of High-Performance Process Improvement

I get frequently the question why lean methods do not work. From a high-performance process improvement (HPPI) perspective the answer is rather straight forward, but let’s ponder the question a little bit.

It’s easy to just put e.g. “lean flaws” in Google to have an educated view on the topic. However, if you analyze the findings, then it may strike you that most answers boil down to the fact that the companies or persons adapting the lean principles, or more correctly philosophy, have not been able to grasp that the fundamental part is to change the culture so that the whole organization supports the lean philosophy.

Such a synthesis underlines the fundamental flaw of lean, i.e. not even the lean criticism detects that the lean philosophy is inadequate in today’s business world. The synthesis is in itself productivity-oriented, as is the case with the whole lean approach. From an improvement point of view, this means that one needs to implement the lean principles correctly. To continue the logic, wouldn’t it then be best to adapt the lean principles to fix this conceptual issue?

The answers is no. Using methods or principles aiming at productivity issues, won’t address issues related to effectiveness. This is easily verified via the process improvement yield (PIY). Adapting improvement concepts or methods with a low PIY output to an improvement process producing already a low PIY level will not have any larger impact on anything, besides producing lost opportunities, time and money. Toyota runs its improvement work with an estimated 15% PIY level, whereas the score for the average company is 0-3%. It is thus fair to assume, that the lean philosophy won’t provide for any company a higher score than Toyota’s. It took tens of years to achieve that level, using concepts that are already 50-90 year old. Still, many companies try to go he same path today, conquering at best the wrong mountain.

However, a low PIY output is only the other side of the coin. To really score in terms of process improvement, the methods should also deal properly with the 4/40 rule. It states that a person cannot devote in the long run more time than 4% of the working time to process improvement activities, as also the normal work tasks have to be performed. This time, about 10 working days a year, include all improvement activities such as the process analysis and synthesis, the (improvement) education and training, the actual implementation and follow-up.

The other part of the 4/40 rule states that not until 40% of the staff understand in practice the improvement philosophy, approaches and tools, large gains can be realized. Bearing in mind that every individual has his or her individual profile that is formed based on, among other issues, the personal history, (un)learning pace, and motivation and current stress level, it is clear that it is very hard to gain the right momentum. It is not sufficient to just take part in an education or training session, as each individual needs no master well-enough the required improvement substance in practice.

So, the proper answer why lean initiatives cannot be successful, is that the related lean methods produce at best a low PIY, and the methods applied cannot deal properly with the 4/40 rule. The real, and most expensive, flaw of the lean philosophy is that it may be impossible for quite a large amount of companies to change the lean biased mind-set to really understand how to run the improvement activities from a total perspective. After all, even a 15% PIY level is very low considering the time and money spent. Besides, it may diminish rapidly. After all, adapting 50-90 year old concepts and methods to business problems of today and tomorrow is in itself symptomatic.

A high PIY level, and a continuous compliance with the 4/40 rule, is the essential rule of HPPI.

 

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