WSJ Blows It On Lean
I was disappointed with a “Managing” column in the Wall Street Journal today, with the headline “It's Not Easy Being Lean.”
It starts with a premise that being “lean” means having few managerial layers between the shopfloor and the CEO.
Steelmaker Nucor Corp. had long prided itself on having just three management layers separating the chief executive from the hourly workers pouring hot metal on the factory floor.
Nucor, as they have grown, has added a layer because it was deemed they could be more effective with that additional VP layer. But they're beating themselves up over it.
Now, to me, “lean” isn't about being thin staffed for the sake of being thin staffed. It's about being effective (for the company over all) and it's about eliminating waste (among other things). The article gives an example about how Nucor's central office was so “lean” that they didn't get intellectual property protection for some innovations that competitors ended up copying.
That's dumb, not lean.
The article reached out to some of the right people for comment on lean. Art Smalley gets it right for the reporter:
“You're going to get at least ten layers at Toyota before you get to the president,” says Art Smalley, a former Toyota engineer and a former steel-industry consultant at McKinsey & Co. “I don't view it as a right or wrong thing,” he says, adding that one formula doesn't work for every company.
Being lean goes beyond the number of management layers, he says. A small business, with just two management layers, can be fat if the managers do unnecessary tasks, or if processes are inefficient or insufficiently automated. A chief executive with too few management layers below is likely to be overwhelmed with people relaying information and seeking guidance.
But even after that explanation, the reporter goes back to examples of how lean mean fewer people, using IBM (of all companies!) as an example of “getting lean”:
Last year, IBM cut more than 14,000 jobs largely in an effort to thin the management ranks at its bureaucratic European operation.
It's frustrating that the WSJ would have such a misguided view of “lean” in this case. At the same time, they so often write about lean concepts that they don't even recognize as lean!