What IBM is Doing isn’t Lean At All

I, Cringely . The Pulpit . Lean and Mean | PBS

Alas, we can’t sue IBM Global Services (not IBM manufacturing) for misappropriation of the word “Lean.” This is yet another example of L.A.M.E., “Lean as Misguidedly Executed.” I don’t think it’s even that really, it’s Lean as Not Even Attempted. That doesn’t make an acronym, I don’t care.

The IBM project I am writing about is called LEAN and the first manifestation of LEAN was this week’s 1,300 layoffs at Global Services, which generated almost no press. Thirteen hundred layoffs from a company with more than 350,000 workers is nothing, so the yawning press reaction is not unexpected. But this week’s “job action,” as they refer to it inside IBM management, was as much as anything a rehearsal for what I understand are another 100,000+ layoffs to follow…

LEAN began last week with a 10-city planning meeting for Global Services, which wasn’t, by the way, to decide who gets the boot: those decisions were apparently made weeks ago, though senior managers have been under orders to keep the news from their affected employees.

LEAN is about offshoring and outsourcing at a rate never seen before at IBM. For two years Big Blue has been ramping up its operations in India and China with what I have been told is the ultimate goal of laying off at least one American worker for every overseas hire. The BIG PLAN is to continue until at least half of Global Services, or about 150,000 workers, have been cut from the U.S. division. Last week’s LEAN meetings were quite specifically to find and identify common and repetitive work now being done that could be automated or moved offshore, and to find work Global Services is doing that it should not be doing at all. This latter part is with the idea that once extraneous work is eliminated, it will be easier to move the rest offshore.

Firing a bunch of people is not the Lean methodology, or the Toyota Production System. It’s Friday afternoon, so I’m not going to get too angry about it now. Stuff like this in the media makes all of our jobs harder. When I implement Lean, I’m not laying anybody off. We’re taking freed up people and creating new opportunities for them and their organization. If people leave or retire, we might not replace them, but that’s different than just blasting an organization with mass layoffs. In *my* world, people don’t lose their jobs because of Lean.

I was at a hospital this week, giving a day long management class about how to manage Lean (this included “NO LAYOFFS”), a message that was emphasized strongly. During lunch, an employee told me about how her husband worked at a local IBM site and how what they called “Lean” was driving layoffs. Of course she would be worried about hearing something called “Lean” coming to her hospital. But after hearing me talk for the morning (and hearing her administrators confirm what I was preaching about no layoffs), she said she felt much better. She wished IBM was doing the same sort of “Lean.”

This is so so so so frustrating. It’s what Jim Womack calls “stupid meanness” in my latest Podcast with him (coming this weekend). Stupid Meanness is when you hurt others (lay off en masse) and it ends up hurting yourself (the company). Womack says “Lean is just a word” and you can’t let it bother you if people do bad things in the name of Lean.

I guess, as the saying goes, Lean doesn’t layoff thousands, lousy managers do.

Cringely claims:

“…CEO Sam Palmisano on down were losing touch with reality, bidding contracts too low to make a profit then mismanaging them in an attempt to make a profit anyway, often to the detriment of IBM customers”

Total mismanagement. And the workers/employees suffer. Time for the weekend. I’m lucky to not work for such idiots. I know I’m supposed to be practicing “Respect for People” with executives, but I really find it hard at this moment. Idiots. Seems like “Big Blue” is really Big Blowing it.

If you’re new to the Lean Blog or to Lean in general, please check out the “What is Lean?” post.

Update May 6: Again, this is IBM Global Services, not the rest of IBM.

Update May 7: News Story from North Carolina, unfortunately called “Lean Times”

(Hat tip to commentor on Evolving Excellence)


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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13 Comments on "What IBM is Doing isn’t Lean At All"

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  1. Anonymous says:

    Agreed, but also you have to remember that IBM is so huge that there are various examples of lean implementation along it’s various business units, and this only refers to one in Global Services. I’ve worked on IBM lean implementations in their semiconductor fab plants resulting in millions of dollars in savings and no layoffs – in fact they had to hire afterwards because of the “grow business” stategy we’d based the initiative around in preparation for the released capacity. So – if you want to sue IBM -at least make sure it’s the right business unit!

  2. Mark Graban says:

    True, IBM can do whatever they want, as long as they don’t call it LEAN!

  3. Anonymous says:

    The saying goes:

    LEAN = “layoff every american now”

  4. Anonymous says:

    The work being done in IBM’s semiconductor fabs deserves the name LEAN. They are focusing on the foundational basics, and are doing a better job than most.

    They started with the usual VSM and 5S projects, but have more recently been training in the true core of TPS…PDCA problem solving, TWI (they are probably one of the biggest users of Job Instruction in the country, 500+ people certified last I heard), strategy deployment, etc.

    As the previous poster mentions, there have been no layoffs, and lean seems to have generated new business. They are running at capacity and hiring. From my viewpoint, they are doing a great job, and working very hard at it.

    BTW, I’m no expert on IBM’s employment numbers, but only about half their employees are based in the US, so 150,000 layoffs would be almost the entire US workforce. That by any measure would put the company out of business. Cringely should do some math before publishing such foolish nonsense.

    Also you should note that there are many IBMers that read this blog…your customers in a sense (they referred me to it). While this kind of news makes it hard for all of us to promote lean, think about how hard your harsh words makes it for those within IBM (including many managers) doing the best they can to do the right thing.

  5. Mark Graban says:

    Thanks for the informative comment. I edited my post to try to make it more clear that this IBM Global Services that is misappropriating the name “LEAN.”

    I’m sure the IBM manufacturing folks realize the difference between “L.A.M.E.” (Lean As Misguidedly Executed) and real Lean. I’m sure they aren’t thin skinned enough to take my harsh words as being aimed in their direction.

    I *do* think the IBM GS folks are deserving of the harsh words and I stand behind them. If the IBM GS folks were calling their effort “re-engineering” or “Global Services 2010” or something, I wouldn’t be as bothered by it. I’d feel for the employees, but I probably wouldn’t be posting about it here. It’s the use of “LEAN” that makes it harder for all of us, not just for the IBM manufacturing folks who ARE doing a good job with lean, it sounds.

    Thanks for reading and, more importantly, thanks for contributing. I hope you and other IBM-ers come back to help show others what real Lean is all about.

    Mark

  6. Anonymous says:

    Anonymous IBM guy — don’t be mad at Mark, you should be mad that the Global Services people are giving IBM a bad name in the lean world. Is that Mark’s fault? Think about the root cause. If you’re going to say this little blog (no offense to you, Mark) is going to makei it harder for you to implemenet lean, then come on. If you’re doing lean the right way, you know the “harsh” comments aren’t aimed at you. Lighten up.

  7. Anonymous says:

    Read the comments on the Cringely site. This one makes it sound like it’s bad consultants calling this a “Toyota” lean effort, yet it’s all driven around headcount.

    ————–

    First let me state, I work IBM LEAN everyday and have for the past 9 months. We were part of the “inovators” at IBM and were on the line when the implementors out of Chicago hired by IBM for $6 million to come in and make LEAN work at our account. I lived it, breathed it so I know what I am talking about, I was there for the executive briefings with the fudged up numbers from the consultants and told what to say and when to say it, I was there when we pleaded with the consultants to give us the babsis for the numbers they were spouting, I was there when we told them it cannot work in a service organization as it is layed out, I heard the Toyota speach, I made a simple suggestion that we “don’t make cars, we provide a service” and was branded the rebel. As others have stated this is not true Lean, this is a bastardized, Frankensteined version of something that works that was brought in and molded to fit the ideas and perceptions the consultants wanted the IBM heirarchy to see and hear. No substantiations or metrics to prove the numbers were ever brought out and if we asked for them we were ignored. And yet it continues because the people that signed the contract and the checks to their “friends” at the consulting firm, can never be proven wrong or made to look bad and those 2nd and 3rd line managers that did found themselves on other accounts or out the door.
    As for the layoffs it is 100% true, I am in the middle of it now and have been for a month, daily calls from the bean counters, “give me 20 people we can release”, “no give me 30”, now it’s all contractors, you provide support but do not work in a billable job you are gone, now or in the very near future. Regulars will be next on the block, 2nd line and 3rd lines already have been told they are gone, length of server, who cares, your gone, 1 performers who cares your gone, the knowledge booted out the door is just phenomenal.

  8. Anonymous says:

    Hello Mark,

    I was the one who left the original comment about the Cringely article. I also agree with you, what they are calling this (“lean”) is the worst part. It ruins all the progress people have made in bringing lean to forefront. It just drives home, what I’ve come to believe about US business. That it’s determined to drive itself into the ground until there’s no turning back. We just don’t care about the long term in our thinking, in this country.

    Daniel

  9. JB says:

    I am saddened about IBM GS equating Lean with layoffs.

    After nearly 12 years of helping companies implement Lean I have never been part of a Lean = Layoffs maneuver.

    In fact, I always ask senior management to commit to a “Never Punish For Lean” policy before every new engagement. If I couldn’t get this agreement, I wouldn’t work with them.

    “Natural attrition” will almost always take care of head-count issues if you give it a chance. Your employees deserve this patience; they helped improve the company after all.

    Lean, however, should actually help your company “grow” which is more likely to result in more hiring rather than laying anyone off, (even with substantial process & organizational improvements.)

    On another note: IBM, Dell, or any other company for that matter, who thinks we want to talk to a “customer service” person who calls himself “Fred” who speaks with such a strong Indian accent that we can barely understand him or her, is sadly mistaken!

    American businesses need to be committed to America and US tax policies need to support manufacturing in America.

    The quest for “The Almighty Dollar” must be tempered by decency, loyalty, and integrity. I, perhaps naively, think even shareholders would agree to these transcendent values.

    All the Best,

    Bill

  10. Anonymous says:

    7/31/2007 – “The latest in a string of layoffs the industry titan has made in recent months, IBM Corp. cut some 450 jobs at its United States chip manufacturing facilities on Monday.”

    Quoted from: http://www.edn.com/article/CA6464507.html

    So IBM manufacturing does it right, eh?

  11. Mark Graban says:

    It’s hard to say if the layoffs are the result of Lean. The article does say:

    “…the company maintains that this week’s job cuts were not the result of off-shoring, but rather of positions that were made “redundant” when IBM merged the technology and manufacturing parts of its chip manufacturing operations.”

    IBM has announced plans to expand in India. It’s a tough call when it comes to “redundancies.” If the place was really so inefficient as to have duplication of efforts, you might not have any choice but to reduce headcount. It’s a shame, though, that other roles are available for the “redundant” headcount, or that IBM can’t grow their way out of the mess.

    Hopefully the layoffs would be a one-time thing… but companies like IBM seem to get into the never-ending cycle of layoffs.

    The question is — do the ongoing continuous improvement Lean efforts lead to layoffs? They shouldn’t. Are these layoffs associated with Lean internally at IBM?

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