Why 0% of Lean Transformations Fail

 

You read that right. 0%. None. Nil. Nada.

If you’re reading this, then you’ve probably also read other articles, blogs and claims about how 50%, 75% or even 90% of all Lean transformations fail. The authors of these diatribes will then go on about all the reasons why (disengaged management, too much lingo, yada yada yada…). If you’re really lucky, you’ll stumble across one that a consultant wrote, in which case you’ll find that he/she will give you just enough insight into their unique solution to this issue to make you want to contact them to learn more about how they, and they alone, can save you from a most certain demise.

Welp – I’m calling bullshit.

For years I read these same articles, and for a long time I mimicked their claims in my own speech. We’ve all witnessed the effects that unsupportive leadership, an over-reliance on tools and a half-assed approach can have on Lean initiatives. In my 20+ years on shop floors, I’d seen plenty of mistakes made. So yeah – I could buy that somewhere around 80% of transformations fail.
But then I began to wonder; where did this notion come from? Where was the data to support such claims? So I went looking, and was amazed at what I didn’t find. Most of this “data” is anecdotal. There are any number of articles that claim some high percentage of Lean failure, and after chasing them down their respective rabbit holes, many end in statements like this one from a consultant: “…these numbers are also consistent with what I see in industry, somewhere around 70% failure rate.” Okay – so maybe this high failure rate was this guy’s experience… but based upon how many inputs? What industry? And what is his knowledge base/frame of reference? I kept on looking, and only found a lot of similar language like that. Most included a statement like “according to industry experts”… ugh.
I’ve included some referenced sources at the end of this article for your reading pleasure, but I’ll save you some time: you can trace this whole movement back to two distinct sources: a 2007 census done by Industry Week and the MPI Group (a research company out of Cleveland), and an interview comment made by Robert Miller, Executive Director of the Shingo Prize in 2010. In an effort to understand where all of this came from, I dove into each of these.

The IW/MPI census included just 433 anonymous respondents, which I think is pretty low for a country-wide survey. I did look at the MPI Group’s website to see if I could find the survey and all of its inputs & outputs, but they wanted $395 to gain access to it, so I passed. This survey is often cited by the “Lean failure” movement, and the piece most often referred to is this “only 2% of companies achieved their anticipated result” idea. Again – context here is critical, and something we don’t get when this data set is simply referenced and not explicitly presented. From what I can find, that’s a pretty myopic view of the survey results. As a matter of fact, Industry Week itself published some of the results, and it says that only 12.8% of companies surveyed made “no progress” towards their goals. So what’s up with the remaining 85.2%? They’re somewhere in the middle, I guess. That doesn’t say “failure” to me – it says they aren’t yet where they want to be, and that’s not bad. It’s continual improvement after all!
So now for Robert Miller’s comment. He made it while doing an interview on Radio Lean, which is seemingly defunct now. I looked for the recording, but their “The Vault” page is broken. Anyway, here’s the referenced quote: “About 3 years ago we felt we needed deep reflection. After 19 or 20 years we went back and did a significant study of the organizations that had received the Shingo Prize to determine which ones had sustained the level of excellence that they demonstrated at the time they were evaluated and which ones had not…We were quite surprised, even disappointed that a large percentage of those organizations that had been recognized had not been able to keep up and not been able to move forward and in fact lost ground … We studied those companies and found that a very large percentage of those we had evaluated were experts at implementing tools of lean but had not deeply embedded them into their culture.”

So first off, I didn’t read a percentage in there anywhere. And to be fair, 20 years ago I could do lots of things I can’t do anymore. Let’s be honest here – the places that go for the Shingo Prize no doubt cram for the test. It’s like every ISO audit I’ve ever done or been on – we always make sure we put our best foot forward when the auditor shows up. I’m sure this is no different. Attaining Shingo Prize level Lean is no small (or cheap) feat, so rest assured that every person in the place is going to make sure that they aren’t the ones that cause the company to fail. Once the audit is over, everyone relaxes a little, I’m not saying it’s right; I’m saying it happens. I also wouldn’t categorize that as a “failure”, either.

As I alluded to on my Gemba Academy podcast last year– I’m not a member of this massive Lean transformation failure sect. By definition, you’re never truly done with Lean. You can always remove more waste, engage with people more, deliver more value… and quite frankly that’s the point. Lean is about striving to be better and learning about what that takes to achieve “better” together. The struggle is part of the journey.
There are things we must do to give Lean its best chance at success; that’s absolutely true. But let’s stop making these broad brush claims about Lean failures being rampant, because they don’t help anyone. Let’s instead analyze what it takes to continue our journeys, and how we can help each other keep moving forward.

References and related articles:
https://www.lean.org/Search/Documents/352.pdf
Rick Pay, “Everybody’s Jumping on the Lean Bandwagon, But Many Are Being Taken for a Ride”, Industry Week, 01-Mar-2008.
Robert Miller, “Bob Miller Interview with Mike Wall,” Radio Lean, Jul-2010. http://www.radiolean.com/the_vault.php (Fair warning – the link doesn’t work!)
http://www.industryweek.com/companies-amp-executives/census-us-manufacturers-lean-green-and-low-cost
Photo credit: “Failure” by Nick Youngson

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