Business Transformation & Operational Excellence Insights

SLIDE DECK: Building the Fit Organization, or; Taking the Toyota Out of Lean

Written by Dan Markovitz | Apr 10, 2017 11:30:00 AM


Over the past 20 years, businesses have learned a great deal about the Toyota Production System. This system has led Toyota to become one of the most successful and admired companies in the world in a comparatively short time. The benefits of applying lean manufacturing principles to any kind of organization are well known by this point: greater profitability, higher quality, lower costs, and improved employee engagement, to name just a few.

And yet, despite the prevalence of business books that analyze and explain how the Toyota Production System works, the number of organizations that have actually achieved a lean transformation, or even maintained a commitment to continuous improvement, is vanishingly small. Most organizations abandon their efforts midstream, or, daunted by the challenges of understanding lean concepts, don’t even attempt to adapt and adopt the lessons from Toyota to their own businesses. 

The reasons for this failure are varied. Management in some companies can’t make the intellectual leap needed to translate a system from auto manufacturing to, say, healthcare or banking. In other firms the jargon—heijunka, kanban, muda, 5S, water spiders, even the very term “lean”—is too high a hurdle for people to overcome, so lean is never seen as anything other than an alien way of thinking and working. Still other firms make operational improvements, but they prove ephemeral, lasting only as long as the leadership team is intact or as long as business results are positive. Performance eventually regresses to the mean, and top management shifts its focus to something else. And of course, many other companies don’t even try to improve operations: people are too busy doing their regular jobs and trying to hit their month-end numbers to even think about adding improvement work to their daily responsibilities.

There’s one other factor that hinders companies from following the path of operational excellence blazed by Toyota: they’re worshipping at the church of Toyota. 

The fit organization

The corporate landscape is littered with the carcasses of failed corporate copies of the Toyota Way. Trying to be like Toyota is a mistake. What leaders need to do instead is learn from Toyota—learn how to convert their flabby organizations into “fit” ones. A fit organization, in my view, is a dynamic, constantly improving, profoundly customer-focused entity that delivers superior performance and results over the long haul. Becoming that kind of organization rests upon:

Making an unshakeable commitment to:
Increasing the value provided by
Doing the right work (things that deliver value to the customer)
In the right way (through standard work)
With continuous monitoring of processes (through visual management systems)
And structured coaching for everyone (using the scientific method)

In Building the Fit Organization, my goal is to teach you how to build—and lead—a “fit” company. I’ve attempted to distill the critical principles from Toyota’s lean playbook and couch these concepts in everyday business language, free from Japanese and English jargon. In fact, I won’t even use the word “lean.” To make the core principles even more understandable, I’ve grounded them in an extended analogy of physical fitness and athletic excellence, something that most people have some experience with. Throughout the book, I draw parallels between the critical principles for business “fitness” and the principles for physical fitness—because the same concepts that make for a fit person make for a fit company.

These ideas may be simple, but they’re not so easy to implement. I know that. But as a business consultant, a former competitive runner, and a coach, I also know that changing the context and the language used to explain an idea can make all the difference. My hope is that by placing these principles in the relatively familiar, jargon-free context of athletic excellence and physical fitness, you’ll be able to grasp the concepts more easily, and be able to explain them in a more compelling manner to your team.

Committing to Improvement

Fit people (and fit companies) don’t get that way by accident. They’re fit on purpose. They mindfully and intentionally pursue a well-defined course of action that makes them stronger, faster, and more agile over the long run. Fit companies love problems because they’re high-leverage opportunities for improvement. They engage in rigorous, scientific thinking at all levels of the organization to analyze and solve problems. They create a blame-free culture by focusing on the systems and processes that aren’t operating at the desired level, rather than on the people who work in those systems. In so doing, they eliminate the fear that shackles employee creativity and liberates them to close the gaps between where they are today and where they want to be tomorrow.

For both the individual and the organization striving for fitness, the problem is the same. There may be a stated goal—lose 15 pounds, improve muscle tone—but there’s often no clearly defined program to reach that fitness goal. Or even if there is a program, it may simply be a fad that promises huge results with minimal effort. More significantly, for the people who abandon their fitness efforts, going to the gym and exercising is something that’s external to the daily flow of their lives. It’s a chore that requires additional time and commitment, not something that’s as fundamental and core to their lives as, say, going to work, or playing with their kids, or even brushing their teeth.

In the same way, most organizations have annual goals—take the top spot in the market, lift employee engagement— but they lack clearly defined improvement programs to reach their goals. As with individuals, there is no end to the number of business fads that promise to get companies to the promised land—emotional intelligence, six sigma, business process reengineering, management by walking around (MBWA), etc. But efforts to achieve those goals are episodic (at best) or sporadic (at worst), because they’re not seen as integral to the organization’s daily operations. They’re made “when we have some free time,” or before the boss asks about them at the quarterly performance review.

Truly fit individuals don’t so much make a generic commitment to exercise as much as they weave exercise and health into the daily fabric of their lives. Similarly, truly fit organizations don’t so much make a commitment to an improvement “program” per se, as build improvement into the way they operate on an ongoing basis, everyday.

 The pursuit of organizational fitness is like the pursuit of physical fitness. There are no secret formulas, no magic potions, no shortcuts. Both kinds of fitness require continual focus and commitment to the hard work of improvement. When you accept your current physical or organizational limitations and weaknesses as opportunities for growth, and see the never-ending journey towards perfection as something inherently worthwhile, you’ve taken the first step to driving out fear and unleashing the power of your employees. 

If you can do that, you’ll be well on your way towards organizational fitness.