Painting the Factory Green with Lean Thinking

Last month, a book titled The Green Factory: Creating Lean and Sustainable Manufacturing authored by Andrea Pampanelli, Neil Trivedi, and Pauline Found was published. This book proposes a new model, the Lean and Green Business Model (L&GBM), where the environmental aspect of sustainability is integrated with Lean thinking to create a way of thinking that contributes to and balances the three sustainability dimensions of people, profit, and planet. 

I spoke with Andrea Pampanelli about the book and asked her: "How does combining your Lean business model with a green initiative actually result in environmental benefits and higher profits?" Here is his answer: 

We know that walls, or organizational structure, cannot stop the flow of ideas but it does not mean that they are able to flow through quickly and easily. Lean and green thinking are rooted in differently, have different meanings, and occupy different spaces inside the business world. The environmental benefits and cost savings discussed in the book come from the integration of both by taking the powerful Lean culture already implemented in one organization and using it, not merely for eliminating the seven classic wastes (transportation, inventory, motion, waiting, over-processing, over-production, and defects) but in this case, for increasing the performance of the manufacturing mass and energy flows -- the important supporting flows for production. These two different ways of thinking will meet during the crucial Kaizen events and Lean thinking will dramatically increase environmental benefits and profits. 

What are your thoughts in regarding to combining Lean and green initiatives? Do you have experience
deploying Lean and Green in a manner that resulted in environmental and cost benefits?


Lean Drives Innovation at Goodyear

I often hear the fear from right-brained functions, staff, and executives that Lean kills creativity. In the watershed book titled Lean-Driven Innovation: Powering Product Development at The Goodyear Tire & Rubber Company, author Norbert Majerus proves it doesn’t need to be that way. Norbert’s book describes how Lean expanded innovation capabilities and capacity at Goodyear, and, more important, led to competitive advantages and powerful business results. I asked Norbert, an engineer by trade and Goodyear’s Lean champion, “What are the keys to Goodyear’s success with Lean research and development (R&D), and are they replicable by others in innovation?” Here is his response:

An important first step within Goodyear R&D was that we didn’t view Lean as a way to reduce product development costs. That may sound counter-intuitive to those in manufacturing, where major savings can be gained from Lean and the removal of production wastes, but it doesn’t work that way in R&D. Unlike manufacturing, R&D is a small direct cost to the business and there is only so much to gain from cost-cutting — but R&D casts an enormous shadow over the products and activities of a company. Design decisions can affect the product’s performance (price), cost, manufacturability, complexity, and even distribution. Design processes also assure that the right product is available at the right time. We chose to focus Lean on how R&D designs product, the powerful ways it can increase value for customers, and its impact on the profitability of the value streams. Leveraging that shadow with lean thinking has a return that is an order of magnitude greater than direct cost savings in R&D.

We also recognized that Lean could enhance many of Goodyear’s already existing R&D strengths — knowledge management, advanced computer modeling, people engagement, matrix organizational structure etc. We weren’t looking to apply a whole cloth version of Toyota’s Lean or a Lean template promoted by another company or consultant, but a Lean that could work within Goodyear. That sounds simple, but it required a fundamental commitment that every Lean innovation transformation requires: that is, we took the time and effort to learn, understand, and validate Lean principles that would work in our organization.

When I was selected to get Goodyear’s Lean R&D effort underway, I had little knowledge of Lean. I read everything I could get my hands on and attended Lean conferences and seminars. It was all fairly confusing. Eventually I started to see the science that underpins Lean, which, as an engineer, convinced me of Lean’s potential in product development. (Too often I see individuals trying to apply Lean tools without understanding the principles of how and why it really works.) I began to teach these Lean principles to our R&D experts. I coached and encouraged them to leverage the principles, and they made the changes we needed to be more competitive. We changed our innovation culture from the inside out, and even developed some new Lean principles along the way — Lean R&D principles are the backbone of  Lean-Driven Innovation.

We repeatedly applied these principles and tools to continuously improve safety and quality (already industry-leading at Goodyear), service (e.g., on-time delivery), and efficiency (e.g., innovation cycle time). As R&D improved its ability to serve the business, it also freed resources for more knowledge development (innovation capability) and more product development projects (innovation capacity). And all of this was done without additional investment in R&D.

Many other things contributed to our Lean R&D initiative and business success, particularly the unwavering support of our Lean initiative by Goodyear leadership, which grew as we showed how the results affected the bottom line. It wasn’t an easy journey, with many challenges — and challengers — met along the way. I write about both the good and the bad moments in Lean-Driven Innovation. In doing so, I hope I can help others avoid some of the problems we encountered and overcome their own Lean R&D challenges as they arise.

Norbert has written a powerful and engaging story about Lean innovation within Goodyear, and their journey and outcomes will surprise you. Clearly, Lean innovation thrives at Goodyear. Let me know what you think of Norbert’s Lean R&D principles, especially if you are in product development and striving to create, sustain, or enhance innovation capability in your organization.


Ideas Transformed the Culture at Baylor Scott & White Health

Last month, an important book titled The Power of Ideas to Transform Healthcare: Engaging Staff by Building Daily Lean Management Systems, authored by Steve Hoeft and Bob Pryor, MD, was published. It details Baylor Scott & White Health’s journey from just one-of-many to one-of-the-best idea generating, staff engaging, Lean Management System building healthcare organizations in the world. I had the chance to speak with Steve about his book, and one of the main questions I asked was: "Why haven’t more healthcare organizations seen successes from choosing Lean as a methodology to transform and improve their culture?" Here is his complete response: 

Let’s start with an even more basic question. If you are a healthcare leader at any level, ask yourself, “Do we have good employees working in our organizations? And, do we think they have ideas for improvement?” If so, how many ideas have your staff brought forward and implemented this week? How about this month? Does anyone even ask them? And, if they did, have leaders helped build quick-feedback systems so they can Check if their ideas worked (Plan, Do, Check, Act)? Next, ask yourself the only Lean question – “Why?” 

From those questions, Dr. Bob Pryor, then CEO of Scott & White Health (before merging as equals with Baylor Health Care System in 2013) and I accelerated our previous project-based continuous improvement journey by teaching all leaders to build systems for daily improvements.

 At last count, we see over 2,000 ideas implemented every week! When we just did improvement “projects,” we didn’t see that many ideas tried out in a year! Our culture is changing. We are building a culture of continuous safety, quality, morale, service, finance, respect, and... everything improvement! You asked a good question. Now that a dozen or more healthcare systems have seen sustainable successes applying the Toyota Production System (TPS) aka Lean principles in healthcare, why haven’t more organizations seen successes?

There are many reasons, but we would say the main reason is still denial. Throughout the history of healthcare, leaders were able to use heuristic rules that reinforced their thinking, which was, “What has worked in the past, will work again now.” Coin in, gumball out. But, as healthcare environments change even faster, what worked in the past will not work in the future. Think of how quickly healthcare finance and reimbursements have already “reformed.” The need to change may not appear bigger (yet) than the pain of changing for some. For many, it will be too late. 

Another important reason is that we have relied way too much on low-level, leader-absent improvement projects by small teams. Maybe consultants have added to this myopic focus because projects are easy chunks to schedule and “sell.” But, consultants leave, improvement teams disband, and the changes often slide right back to where they started. 

There is a better way! And, it can engage more staff, while aligning them around common North Star goals. At Baylor Scott & White Health, we still do great continuous improvement training and projects. But, we also use hoshin kanri to align all staff’s North Star goals (CEO Joel Allison’s Vision 2020), and build Lean Management Systems to bring forward their full brainpower daily and close the gaps! 

Our leaders teach all employees that they wear two hats. They are to do their jobs well (follow their standard work), and they are to improve their jobs every day (make it easier, get rid of waste). We also promise to give them the tools to do this, and that their leaders will help build systems to allow them to try out their ideas. Something changes inside a staff member when they bring forward an idea in a pre-shift huddle, their team tries it out, they see that it worked, and then a leader thanks them. It changes in a very positive way when they see a meaningful measure move toward their goal and get recognized. The staff member goes home that night, gathers his or her family around, and says: “Kids, if I wasn’t working at Baylor Scott & White, that place would be going to heck in a hand basket. I am helping achieve all our goals with my ideas. You should have seen how happy the team was today when my idea worked! I knew it would. I think I’ll bring up another idea next week.” 

Organizations often ask for ideas from staff on teams but few have done so to the extent and with as much success as we have thus far. In the book, Bob and I share our experiences building a wide culture of continuous improvement over the past eight years at Scott & White, now Baylor Scott & White -- including our successes and failures. We weren’t smarter than other health systems. Maybe we were just more desperate, given the challenges we wrote about. 

Our new book offers insight on how to engage staff and garner ideas through projects, goal alignment and creative use of huddles. It also presents ways that your good staff members can try out their ideas without spending time away from their work. It works.

What do you think of Steve's thoughts on the power of ideas to transform healthcare? I'd particularity like to see comments from healthcare leaders and practitioners who are currently on a Lean or continuous improvement journey.


Lean, Value Stream Mapping, and Process Industries

I spoke with Peter L. King this past week about his new book, Value Stream Mapping for the Process Industries: Creating a Roadmap for Lean Transformation. This book is Peter's the third book on how Lean concepts apply to process operations, so I asked him: "What fuels this interest?" Here is his complete reply:

Actually, it’s much more of a passion than an interest -- a passion created during my 18 years applying Lean concepts to DuPont’s operations. I found it very frustrating that none of the available literature nor any of the courses I took could put Lean in a context that was appropriate to the kinds of processes I was working on, such as synthetic rubber extrusion, sheet goods manufacture, household and automotive paints, bulk chemicals, food and beverages, and carpet manufacture. These processes were quite different from the discrete processes, such as bolting sheet metal together to make refrigerators or automobiles, discussed in the then current books. I wanted to share my experiences with others in similar process industries to help them climb the Lean learning curve much faster than I did.

Value Stream Mapping (VSM), the subject of the latest book, is a very good example. While the format presented in Learning To See is very appropriate to both parts assembly and process operations, it must be expanded and adapted to completely describe the wastes and flow barriers found in process operations. Because the number of material types tends to expand significantly as material moves through a process operation, the VSM must clearly illustrate this diverging product flow. Traditional Lean deals with takt (customer demand) as a time factor, whereas in processes it is much more effective as a rate factor. While the assumption is often that takt is constant throughout the operation, in process manufacturing, however, it often must increase as you move back through the process to accommodate yield losses. And, the fact that key pieces of equipment are often shared across several product families presents a challenge on how to balance the need to clearly and simply illustrate flow with the need to be thorough and complete; bad choices in this area can understate utilization and hide bottlenecks. These are just a few of the issues I faced in creating effective VSMs for DuPont’s processes which are all described in the book.

A well-constructed VSM can be the blueprint that a Lean architect uses to guide a complete Lean transformation, as the examples in the book demonstrate. 

Do you have experience applying value stream mapping to the process industries? What have been the challenges?


What is the Key to Lean's Long-Term Success?

I recently had the opportunity to speak with both Bill Baker and Ken Rolfes about their new book, Lean for the Long Term: Sustainment is a Myth, Transformation is Reality. During our conversation, I asked them: "Why did you write this book? What was unique about your experiences?" Here are their complete separate responses:

William (Bill) Baker: When Ken and I began this book, we found we had been in different industries during the past 40 years, but we had witnessed similar transformations that had started strong with management commitment, but when the low-hanging fruit had been harvested and/or a new executive was hired, the transformation was derailed and lost its momentum. It seemed many times lean was viewed as a “project” executed by a manufacturing manager or continuous improvement leader, but it did not have full-time support by upper management. So we researched organizations that have been on the Lean transformation journey for 30 to35 years to discover their approach to share in Lean for the Long Term: Sustainment is a Myth, Transformation is Reality.

Ken Rolfes: Having been an early adopter of the Toyota Production System methodologies we call "Lean," I have had the opportunity to benefit from Lean strategies in multiple industries and companies. I have seen businesses transform with Lean and then lose it. We wanted to understand why so many Lean initiatives start off strong, plateau, and then recede as well as how can that be prevented. What we found is the Lean transformations that fail to last were not transformations after all. They were high-energy attempts to rally the organization to action, and when the energy is spent, so goes the transformation effort. A Lean transformation is, in reality, a different management system. Lean for the Long Term challenges our organization and management system models.

Business transformation is currently on most CEOs' agenda, and General Electric (GE) is only one example. GE’s announcement in April that it plans to sell off most of its big finance unit, GE Capital, represents one of a number of moves in the transformation of the company under the CEO Jeffrey Immelt. Mr. Immelt described it as a lengthy and often humbling corporate journey recognizing that GE’s real strength lies in industrial engineering rather than financial engineering.

A few years ago, when he was speaking at Stanford Business School about following Jack Welsh after his tenure at GE, he stated “The trick, if you follow someone famous, is that you’ve got to drive change every day without ever pretending anything was ever wrong,” This is the premise of the Lean management system described in Lean for the Long Term. Most are familiar that core idea of Lean is to maximize customer value, but many lean practitioners are hung up in their current business model and structured organizations that are compartmentalized, departmentalized and driven by MBO (management by objective) goals.

The structure and isolation from the customer will not work in the unprecedented trends in sheer number, speed, and intensity of today’s business transformation activity. The need for business transformation may be caused by external changes in the market such as an organization’s products or services being out of date, changing income streams, new regulations, and/or competition becoming more intense. Organizations need the flexibly and responsiveness required to drive business model transformation which a Lean management system is designed to deliver.

To accomplish this, management must change the focus from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers. The Lean management system described in Lean for the Long Term describes that system and gives examples how it applies in every business and every process and the line of sight management process required from the front-line operations to the board of directors. The application of the principles described in our book can make any business more effective and profitable. At the end, this can benefit all of us – owners, managers, employees, and communities. 

So many companies have experienced the Lean initiative "plateau" -- the beginning of the initiative is strong but it soon loses direction and energy. In your experience, what is the cause of this situation? Do you agree with Bill and Ken's perspectives?


The Need for "Safety Culture" in Radiation Oncology

I recently had the opportunity to speak with both Lawrence Marks and Lukasz Mazur, who are the authors of a very important new book titled Engineering Patient Safety in Radiation Oncology: University of North Carolina’s Pursuit for High Reliability and Value Creation. During our conversation, I asked them: "Why did you write this book? What was unique about your experiences?" Here are their complete separate responses:

Lawrence Marks: I studied engineering before medical school. I have always been struck by the differences between engineering and medicine; particularly in the way that the workplace in organized, how work in done, and how each address safety concerns. In the engineering setting, it is often acknowledged that people’s actions, and hence safety, are impacted by things such as leadership, workplace/workflow design, and the organization’s safety culture. This lesson has not been widely learned within medicine. As medicine in general, and radiation oncology in particular, have become more complex, it is becoming increasingly important to consider these “upstream” factors.

For the most part, radiation therapy is very safe. Nevertheless, there are recognized risks. Further, the interactive complexity of modern practice makes it challenging predict where problems will occur. Presently, much of the emphasis on making radiation therapy safer is in the realm of technical solutions: medical physics, computer software, etc. These initiatives are necessary and will certainly help to address the safety issues. This approach alone, however, will not bring us to the level of reliability we strive to achieve.

We can and should do better, and the way to do that is to apply lessons from engineering/industry. We must consider the leadership/administrative component, the workplace and workflow component, as well as the people component, to minimize errors. We must use Lean improvement principles to motivate and enable all colleagues to be actively involved in assessing and improving their own systems -- This will increase safety mindfulness and help to create a “safety culture.” It is only through this multipronged approach that we can become the highly reliable organization that our patients deserve. And this is the focus of this book. We provide an honest and heart-felt summary of our journey in applying this approach in our radiation oncology clinic. We hope that readers will become motivated to apply similar strategies in their own clinics. While we did this work in the context of radiation oncology, the lessons described are applicable in any area of medicine.

Lukasz Mazur: Most quality and safety improvement programs in healthcare delivery industry are currently structured to: transform leaders into effective change agents, design efficient and ‘waste-free’ workplaces, and develop people into creative problem solvers. This is perhaps one of the key reasons why continuous quality improvement (CQI) programs based on Lean or Six-Sigma philosophies become so popular and are now being implemented throughout the healthcare delivery landscape. Despite many positive reports in the academic literature, books, and press, however, it is still difficult to determine whether the transformation of colleagues to innovative problem solvers has indeed occurred in the healthcare organizations utilizing CQI programs. One of the reasons for this shortcoming is lack of valid and detailed implementation – the basis for transformation to safety mindfulness. 

This book’s purpose is to fill this shortcoming and provide ample examples of our hard work at transforming our leaders, enhancing our workplaces, and supporting people in their journey towards safety mindfulness. We have an important message to send—that the patient safety and quality concerns within radiation therapy (RT) field are not merely a technical issue, but rather a more global cultural issue grounded in attitude and behaviors. We emphasize a need for leaders to create and nurture a culture that promotes a transformation from quick fixing, conforming, and expediting behaviors to enhancing and initiating behaviors. Leaders must acknowledge that they are responsible for modeling and developing these desired improvement behaviors in colleagues by developing infrastructures that promote these values and, as needed, use their authority to enforce these values as well. 

The broad application of the principles described in our book to healthcare can make healthcare delivery more efficient and safer. At the end, this can benefit all of us – providers, patients, and families. 

What are your thoughts on the application of lessons learned from Lean initiatives in engineering and industry to radiation oncology clinics?


Will Independent Contractors, Free Agents, and Freelancers Dominate the Marketplace?

There is a valuable new book out on the market titled Free Agent: The Independent Professional's Roadmap to Self-Employment Success, and it addresses the seismic shift occurring with employer/employee relationships. Katy Tynan authored the book, and she believes that success in the changing marketplace -- independent contractors now represent more than 20% of the workforce, and that number is expected to reach nearly 50% within the next 10 years -- requires a pragmatic action plan.

I spoke with Katy recently, and asked her: "Why are people choosing to work independently rather than looking for a job with benefits?" Here is her response:

It is true that being an employee comes (usually) with access to benefits and safety nets, such as unemployment insurance. For many working professionals, however, a full-time job comes with drawbacks too. Despite numerous high-profile efforts by companies to implement workplace flexibility programs, most businesses still require the average employee to adhere to a strict schedule, and to travel to the office regularly rather than working from home or wherever they are most productive.

In fact, employee satisfaction numbers are at an all-time low, dipping below 50% in a recent survey by The Conference Board. Moreover, research experts at Gallup report that less than 30% of U.S. workers report being actively engaged with their work, leaving over 70% of the employees in the workforce to simply go through the motions and collect a paycheck. 

It is no surprise if people find work so uninspiring that many are looking for alternatives. Elance, a freelance industry job board, found in its survey of freelancers that 70% were happier on their own than when they were working as employees, and 80% said they were more productive. An increasing number of professionals are choosing to opt out of working for an employer, both for the enjoyment of the work and the flexibility that freelancing offers. 

Do you see this shift in your industry? What are the benefits and drawbacks? I'd surely like to hear from those who have made the transition from salaried employee to full-time independent contractor.


Combining Statistical Design and Statistical Control -- Can it Work?

Kieron Dey recently published a book titled Competitive Innovation and Improvement: Statistical Design and Control, which explains how to combine two widely known statistical methods — statistical design and statistical control — in a manner that can solve any business, government, or research problem quickly with sustained results.I spoke with Kieron last month and asked him: "Why did you decide to write this book and what makes it unique?" Here is is his complete answer:

I first got the idea about separating tiny signals from large amounts of noise from time spent in radar design, and I wondered why similar was not much used in industry to solve problems. Where statistical design was used, it tended to be on a small scale and not much in processes involving lots of people.

The idea to combine statistical design and control came from a book on survey sampling. This fusion was controversial for years among professionals, and for no reason. Everything used is in the literature.

“Intent-to-treat" is also used throughout (which means, roughly, allowing an element of laissez-faire to get real world results, not forced ones that don't hold longer term).

Simultaneous design (where more than one design runs at once, overlaid) was added in 2012. The simultaneous designs have been important in cross-channel optimization in retail and in complex healthcare improvements. This was the last addition as the theory was tricky and it finally fell in place in 2011. It found that what had seemed weaknesses (where interactions across designs might be a problem) in fact hid a large strength, which is in Chapter 8 with real cases. The method had to be simplified so that users could apply easily.

Finally, the scientific method is used throughout (which folds nicely into comparative effectiveness research, DMAIC or PDCA, etc.), and the book explains what (and how simple) this is. The scientific method allows the same method to be used for existing and new processes: hence the “improvement and innovation” in the title. Innovation becomes less elusive in this way – it can be designed rather than waiting for inspiration. In addition, getting back to pure, simple science means using right-brain (creativity) as well as left (analytic) so more people can contribute in a valuable manner for the enterprise (which can be business, industry, research or government).

There is no mathematical notation so that anyone can read and use these well-established methods. Scientists and researchers will find Chapter 8 challenging on scientific method and randomization, so there's something for everyone. Mathematics is used a lot behind the scenes of the book but the real world is used more: to understand how businesses work and make them work better. 

There are about 20 exercises peppered through the book, for the reader to accelerate what would be learned in field experience and get started on real business competitive problems. 

Surprisingly, it turns out to be a management tool, not one technical people alone can accomplish; it’s not top down though and the book explains why. 

If anyone has read Kieron Dey's book, please feel free to post your comments here.


Meeting Customer Needs is Not Enough

Lance B. Coleman recently published a book titled The Customer-Driven Organization: Employing the Kano Model, and I spoke with him about its content. My main question was: “Why is meeting customer needs no longer enough?” Here is his full response:

In an expanding global economy having international competition, meeting customer needs is simply not enough. Meeting customer needs leads to customer satisfaction but does not lead to customer loyalty, which is what keeps companies in business.

Delighted customers, however, are loyal customers. The Kano Model developed by Noriaki Kano describes delightful performance as that which surprises and excites the customer in addition to meeting their basic needs. To “delight” a customer, an organization or individual must become aware of not just what is asked for but rather what is needed. They have to look to the future as inspiration for innovation today.

Quotes from two of our greatest innovators born almost 100 years apart would tend to agree.  Steve Jobs is known to have often said: "A lot of times, people don't know what they want until you show it to them." Henry Ford is reported to have said: “If I had asked my customers what they wanted, they would have said 'a faster horse.'”

Providing delightful service is more than just a nice thing to do, it is an imperative for business/professional survival both for the organization and for the individual. What I have tried to share with readers of my book, The Customer-Driven Organization: Employing the Kano Model, was threefold  -- why a philosophical paradigm shift is required to provide truly delightful service, how to practically apply the concepts espoused by the Kano model, and finally, why one should care to do so.


What Can Lean Do for the Banking Industry?

The banking industry comprises many accounting, regulatory, process, and management challenges, and because its customer-satisfaction and efficiency rates are ripe for improvement, many feel Lean improvement initiatives can transform these financial institutions. A book published just this month titled Lean for Banks: Improving Quality, Productivity, and Morale in Financial Offices, authored by Bohdan Oppenheim and Marek Felbur,shows how Lean and Six Sigma can significantly improve the efficiency of bank operations.

During a recent conversation with Bohdan Oppenheim, I asked him: "Why should financial organizations choose Lean as a methodology to transform and improve their culture and results?" Here is his complete response: 

Few traditional banks are aware that they have vast reserves of productivity. Typically in such banks, both managers and staff work extremely hard, often overtime. Their intuition tells them that there is no reserves left in the system, and that the system is "as Lean as it can be." The knee-jerk reaction is to blame this frantic pace on an excessive amount of work and a lack of employees. The solution appears to hire more employees, but this often has the opposite effect. With more people hired, the system becomes even more difficult to manage, more convoluted, and less efficient.

Fortunately, an excellent solution exists: Lean Thinking. In Lean, employees transition from fighting crises to increasing both customer satisfaction and bank competitiveness. Work becomes more predictable, stable, and pleasant. It soon becomes truly shocking to both management and staff how much work can be accomplished in the same amount of time and with the same resources, simultaneously improving productivity, quality, cost, work morale, and customer satisfaction.

The effects of Lean can be dramatic: up to doubled productivity in the entire system; process times cut by 50-90%; the number of errors reduced by 50-90%; development time for new bank products reduced by half; approval time cut by 90%; modest capital investments (only training); dramatically better human relations at all levels; and, most importantly, vastly better customer satisfaction and company competitiveness.

When faced with stiff competition, traditional companies brutally cut costs, usually by massive layoffs, head-count reductions, and by overworking the remaining employees and suppliers. Without addressing underlying systemic problems, these cuts simply eliminate needed resources and therefore slow down the operations. This causes more frantic work pace, loss of quality, and decreasing customer satisfaction. When this happens, additional customers and profits are lost, resulting in even more cuts and more layoffs. This spiral of failure can easily lead to collapse.

In contrast, Lean focuses on recovering productivity reserves by waste elimination. This in turn leads to lower costs, higher quality, and increased customer satisfaction. Lower operating costs enable banks to keep the employees on the payroll because they will be needed as customer satisfaction attracts more business. During the Lean deployment period, the employees can address those improvements for which there was never enough time, contributing to better productivity and quality. So, the success spiral occurs without layoffs.

One of the most pervasive myths in banking industry is that higher quality requires higher costs. This may be true in the superficial sense of marble floors in front offices, but is totally wrong in terms of the cost of operations. Lean demonstrates that a high quality of operations is actually the least expensive. In Lean, we avoid the high costs of mistakes, errors, defects, rework, delays, frustrations, and subsequent crises, and focus instead on making operations better and better.

The bank industry seems to be one of the last Lean frontiers, delayed no doubt due to the severe 2007-2011 crisis and subsequent massive layoffs in the industry. However, pioneering banks, listed in the book, are rapidly implementing Lean. 

Do you agree with Bohdan's assessment? In which area do you feel Lean can acutely improve financial institutions and the banking industry?