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My guest for Episode 188 has been a leading voice in the Lean community for 25 years, Daniel T. Jones, founder and chairman of the Lean Enterprise Academy, based in the UK. Dan collaborated with Jim Womack on the books The Machine That Changed the World, Lean Thinking, and Lean Solutions and published other books through the LEA.
Currently, Dan is helping promote Lean in healthcare and government and is learning about the Lean Startup community by becoming an advisor to the company Elastera. He has also recently joined Twitter as @DanielJonesLean. You can also watch some recently released free videos (via Gemba Academy) of Dan, Jim, and John Shook reflecting on 25 years of Lean and other topics. In this episode, we touch on all of these questions and also take a question via Twitter.
On this episode of Lean Blog Interviews, Mark Graban sits down for an insightful discussion with the esteemed Lean Enterprise Academy founder, Dan Jones. Our conversation navigates the remarkable journey of Lean, from its inception as ‘lean production,' its ongoing influence in numerous sectors, and its potential role in the future. This show note gives listeners a glimpse into Jones's revolutionary vision and rich experiences, inviting you to explore the lean management realm.
Our talk begins with a deep dive into the transformative power of ‘Lean Production' over the last quarter of a century. While the term was coined 25 years ago, its profound impact has spanned across several fields including healthcare and, potentially, government and education. Jones shares personal insights into how lean programs have found a place in every significant globalized manufacturer.
For a link to this episode, refer people to www.leanblog.org/188.
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Episode Summary
From Lean Manufacturing to Lean Startups: A Conversation with Dan Jones
Dan Jones, founder and chairman of the Lean Enterprise Academy, UK, is a renowned figure in the world of lean management. Recognized for his collaboration with Jim Womack on influential books like ‘The Machine that Changed the World,' ‘Lean Thinking,' and ‘Lean Solutions,' Jones has contributed significantly to the understanding and propagation of lean principles. Decades after coining the term ‘lean production,' Jones continues to reflect on its impact and the challenges that lie ahead for the lean community. This article will elaborate on these reflections, as well as Jones' insights on the application of lean principles in various sectors, including healthcare, government, and startups.
Impact and Evolution of Lean Production Over 25 Years
Coined 25 years ago, the term ‘lean production' has significantly influenced sectors ranging from retail and construction to financial services. Today, its impact is increasingly seen in the fields of healthcare, and potentially, government and education. Jones believes that while lean practices have spread broadly, the question remains about its depth and sustainability.
According to Jones, every significant manufacturer in the globalized world has some lean program. While many embrace the traditional approach of implementing lean on their shop floor, some are now witnessing their leaders' deep engagement in problem-solving at the grassroots level. He suggests that the real measure of lean's impact is the significant business results it delivers for the few pioneers that truly understand and implement it, encouraging others to follow suit.
Lean Startup: A New Frontier
In recent years, the Lean Startup movement has been gaining traction, offering a holistic approach for building a startup from scratch. Jones appreciates the energy with which Eric Reese, the father of the Lean Startup movement, has distilled a set of core principles and inspired many, including himself, to start experimenting with them.
He highlights how using the failure and success of these explorations can lead to further learning. This notion of learning from failure is integral to lean thinking and is crucial for the transformation of lean from a newfound wisdom to a fundamentally proven management system.
Lean in Healthcare
With a decade since the introduction of lean principles into healthcare, Jones identifies the sector's common challenges worldwide. He emphasizes that to improve patient flow through a complex set of activities, organizations must visualize healthcare delivery as a value stream. They must understand the system, link improvement initiatives along the journey and diagnose system-wide bottlenecks.
Lean in Government
Jones shares his admiration for the Canadian province of Saskatchewan, where lean principles have been systematically implemented to address citizen needs and improve services. He identifies it as one of the best examples of engaging different stakeholders in reshaping services around lean principles.
However, the biggest challenge for lean in government, according to Jones, is to mobilize and make a difference for citizens at the frontline, moving beyond departmental silos.
The Future of Lean
Jones predicts two major developments for the future. The Lean Startup gives us the ability to design different business models to grapple with emerging web-based sectors like finance, education, and health. Additionally, Jones emphasizes the need to recast lean principles into a language that appeals to the new generation. This task, he believes, will keep the lean movement alive into the future.
In conclusion, while lean principles have evolved over the past 25 years, its future success continues to hinge on its broader adoption in numerous sectors and its ability to adapt to the needs of younger generations.
Automated Transcript
Mark Graban: Hi, welcome to episode 188 of the podcast for December 18, 2013. My guest today probably requires no introduction to a lot of you in the audience, but he is Dan Jones. He's the founder and chairman of the Lean Enterprise Academy, which is based in the UK. Dan, of course, collaborated with Jim Womack on a number of books, including the Machine that Changed the World, Old Lean thinking, and Lean solutions. And he's, of course, been involved in publishing many other books through the LeA in the podcast today, we're going to be talking about Dan's reflections on 25 years since the term lean production was coined, an effort he was involved in.
Mark Graban: We're going to talk about the progress since then. What are some of the challenges facing the Lean community? And we're also going to touch on topics including Lean in healthcare, Lean in government, and the Lean startup movement. So it's great to have Dan here on the podcast. Finally, you can go to leanblog.org 188 for show notes and links, and you can go to leanpodcast.org for all past episodes.
Mark Graban: Thanks for listening. I always appreciate you taking time out of your busy schedule to listen to the podcast, and I hope you'll come back in 2014 for lots of new episodes. Well, Dan, hi. Thanks so much for being a guest on the podcast.
Dan Jones: Thank you, Mark, good to talk to you again.
Mark Graban: So, as people have been writing about recently, and there's been some stuff featured on the Lean Enterprise Institute website and some video of you and your colleagues talking about this, it's been 25 years now since the term lean production was coined, or at least published. So I was wondering if you could share some of your reflections and thoughts on that passing of 25 years and what comes to mind for you right now in terms of that anniversary?
Dan Jones: Well, I think it was an important step that we probably didn't appreciate how impactful it was going to be. But coining the term lean certainly is something that was necessary to create a name for an understanding of a system that we had begun to understand at that point, but have filled in a lot more details on later. And a lean truly has spread right across sectors, from retail, through construction, through financial services, and now very actively in health and I predict in the future into government and education. So it's spread everywhere. How deep, how sustainable?
Dan Jones: That's a big question.
Mark Graban: How do you try to gauge from where you're sitting and from your travels around the world how deeply lean is spreading? Let's say first off, in manufacturing, has it become a new conventional wisdom for manufacturers? How do you see things these couple of decades later.
Dan Jones: I think everybody, every significant manufacturer surviving in this globalized age has some kind of lean program going. Many of them are traditional programs. I've got people doing lean for me on the shop floor, and that's a very traditional way of approaching lean, and that's very, very widespread. Not so widespread is the deep engagement of senior leaders in actually leading the problem solving capability development on the shop floor. That's happening now as people with lean experience off the shop floor and from line management are now rising to more senior positions.
Dan Jones: And I can think of several where not only top management is now getting it very seriously, but is actually turning into significant business results. And that, in the end, is what determines for me whether lean is making a difference, is whether the few pioneers that really get it are delivering business results and everybody else is ultimately going to have to follow their mean.
Mark Graban: People focus so much, of course, on Toyota. Maybe it's unfair to ask you to name names, but are there some other companies that you would put in that category that are really getting great results, that are transforming their culture? If people looking for companies to read about?
Dan Jones: Well, I think in this country, our manufacturing base was very heavily squeezed by the approach of globalization. One of the companies that is really making very good progress is GKN, and we've featured a number of examples where they have begun to fundamentally rethink their global strategy based upon understanding of lean, moving away from long extended pipelines and supply chains, from all around the world, from focus factories everywhere to designing next generation product and production systems close to customers. So that's one example where it really has reached the strategic level. Another example might be Tesco, who for many years were pioneering rapid replenishment, distribution in retail and growing as a consequence, very fast. But more recently, they've plateaued, and the collective understanding of the lean experiments that we did early on, that's sort of distilled a bit.
Dan Jones: And so they've plateaued and they're not continuing to make the progress they were. So even though 1015 years of good progress with lean, it still needs sustaining.
Mark Graban: So what do you think needs to be done in the next five years or the next 25 to figure out what really makes Lean become part of a culture in an organization? What really makes things stick? I mean, what work still needs to be done?
Dan Jones: Well, I think we still have some very important experiments to conduct to really understand not only the difference between what Jim and I have called modern management and lean management, but also to understand the transformation path and distill the lessons from the many, many experiments with different ways to approach the transformation process and understand how you begin to actually fundamentally change a management set of behaviors and lead the problem solving and focus the problem solving on delivering results. A lot of lean has been done for Lean'sake rather than focus on a business problem and focus on delivering results both in terms of results for the business, but also in terms of learning and building capabilities to solve tomorrow's problems. So I think that if you think about the experiment that LEI is involved with GE, the importance of that is that it is a real test for how the GE management system ultimately can find inspiration out of lean to fundamentally change what is the archetypal modern management system that most other organizations have been following. So I think it's conducting more experiments because we don't know exactly. We know in theoretically what we think works, but that's not always the same as what actually works.
Dan Jones: And so I think a lot of transformation experiments are underway and we've done little so far to, in a sense, pull the lessons of those together and distill what actually does work and what doesn't work. And one dimension of that, of course, is a question about the role, the traditional role of consultants in awareness raising and spreading the message. They clearly play a very important role, but later on, in terms of building problem solving capability, then you need a much more internally driven coaching style of management that isn't really anything like the traditional do it for me consulting model. So I think our role as lean facilitators and helpers and champions and missionaries is also going to have to change if we're going to help that process of deepening and focusing lean efforts to deliver business results, because that's, in the end, the only thing that will last.
Mark Graban: Yeah, it's interesting you bring up this point. I guess lean has been around long enough and consultants have been trying to help people with it long enough that even though a lot of times we compare lean to traditional approaches to management, lean has been around long enough now that, as you said, there's a quote unquote traditional way of trying to help implement Lean. We can talk about the different styles of consultants. I'd be curious to hear your thoughts. One thing I see not just from companies, from healthcare organizations is that they often don't have the patience, it seems, to want to conduct experiments, that they want the answer, they want the roadmap and the pathway.
Mark Graban: Curious more your thoughts on that?
Dan Jones: Well, absolutely. We all want the answer and we've all been there and we've all made the mistake of jumping to the right solution, the solution we first thought of, rather than going through the process of really understanding the problem and coming up with alternative countermeasures in order to conduct experiments. So we've all been there, and that's a natural tendency, particularly when you want to create proof of concept experiments to demonstrate the validity of lean. But as you get into trying to sustain lean, it's a very different issue there. You're really talking about a line management capability that needs to be learnt through doing.
Dan Jones: And the doing does mean conducting experiments and where we've done multiple experiments in a company, in different sites and different locations using slightly different techniques, that's been extraordinarily insightful and some have worked extremely well and some haven't. In some cases, that's due to personalities getting it or not getting it, but it's also due to the way that PDCA is being used. So I think it's a very interesting and challenging time for lean if we're going to turn lean from simply a new conventional wisdom into actually a fundamentally proven management system.
Mark Graban: Well, and you mentioned GE, so let me use that as an opportunity to transition a little bit to some of the experiments that I heard about very recently that GE was conducting. I was at the Lean Startup conference in San Francisco, and Eric Reese for one, I think kind of follows the similar themes that you and Jim talk about of trying to help create a modern management system, trying to move lean startup beyond being a few isolated message and techniques into this management system. But some of the experiments, GE is a big, large manufacturer, is conducting some experiments using the lean startup methodology in product development realms, even around physical products. And I think that's a really interesting trend. So I'm curious to hear more generally, before we talk about lean and other sectors, some of your thoughts about the lean startup movement.
Dan Jones: Well, I'm very encouraged by the Lean startup movement. I think Eric's done a tremendous job in distilling a set of core principles that articulate a holistic approach to building a startup from scratch. And I commend him for that. And I like the energy with which he's done it, and it's inspired me to get involved in a startup, in fact, also with Eric, a startup called Elastra in the UK, which is my experiment to actually see how this lean startup thing works. And it's not all as easy as you think, and there are a lot of hurdles to overcome.
Dan Jones: Nevertheless, the commitment to experiment and rapid experimentation, and the commitment to essentially a PDCA cycle in developing that and testing that in rapid increments. I think that's extremely powerful, but I have to say that's not the only way. If you look more broadly at the lean IT movement. We've had a series of lean IT conferences in Paris over the last three years, and we had Toyota from Europe, their IT director, making some very interesting comments about the fact that they use actually different methods. They use traditional waterfall, they use agile, they use scrum, they use startup in different places, they use different methods and for different types of problems.
Dan Jones: They're different types of product development situations. And I think that's very interesting that they're not saying this is the new answer. We got to apply this to everything. This is another approach that in many circumstances is very insightful, but isn't something that uniformly works for everything.
Mark Graban: Well, it seems like a familiar theme when you say this is more complicated in practice than it is in theory. It seems like there'll be some good learnings that come out of this experiment with the startup. And real briefly, what type of company can you talk? Just people might be curious what Elastro is.
Dan Jones: Elastro is basically an online selling system for midsize retailers who are using the Magento platform and who are getting into online selling, but with either a very creaky system of their own. This is basically a service as a solutioN, and it's offering mid sized retailers a solution, if you like, to the problem of running an online selling system. And we have a minimum viable product, and there's several sites already using it. So it's getting over that threshold of the initial funding. We know the technology works, and we know that there's a demand out there, but getting beyond the point where the retailers have confidence that Elastra is going to survive at the same time as the investors want to see a portfolio of customers before they'll invest.
Dan Jones: We're at that point, and that's a very typical startup point. But the name is Elastera. E-L-A-S-T-E-R-A. If anybody wants to check us, you.
Mark Graban: Know, good to hear you're getting involved in some new areas. You've gotten signed up on Twitter recently. Maybe a bit of an experiment meant at Daniel Jones Lean. We're happy to see you there. I did throw out there, and you may have seen, I asked people if they had some questions for you, and on this question of product development and different approaches to that, there was a question that came in from Lori.
Mark Graban: She was wondering your thoughts on why Toyota's product development system gets so little attention in North America. If you agree with that statement or why you think that might be?
Dan Jones: Well, it's not just in North America that product development has not really caught the imagination. And I've concluded that basically it's because there are actually not an awful lot of organizations that have very large product development activities going on. And so the crowd that you're appealing to is actually quite small, or it used to be. More recently I think we've seen a lot of those organizations do make real progress in terms of rethinking the way they develop not only products but also software. And I think the convergence of experience there and the convergence of that with the lean startup movement is beginning to make this a topic that a lot more people are interested in.
Dan Jones: But it is a central part of Lean is how do you apply lean in a project environment, either with a fairly known outcome or in the startup case completely unknown outcome? You don't even know where the customers want the product or service that you're designing. So I think there's a coalescence, if you like, of the software crowd, the product development crowd, and the startup crowd that is going to make a lot of progress and interest a lot of people in the next few years.
Mark Graban: So let's shift directions a little bit and talk about something you've been involved in much longer, and that's the lean healthcare space in terms of what you've done to help promote lean health care and publishing books and being involved in the NHS. And I know, visiting here in North America, what are your thoughts about where lean healthcare stands? It's been maybe ten years since some organizations really got serious and people started talking about lean healthcare more broadly. Where do you think things stand today in terms of the successes we've seen and some of the challenges that lay ahead?
Dan Jones: Well, I think it's been quite remarkable really what's happened over the last ten years. As you say, it's not just North America and the UK, it's Australia, it's right across Europe, it's Brazil, it's Turkey, it's China, it's everywhere. And I think what's striking is how all organizations, whether public or private organizations, face basically the same kind of issues when they're talking about improving the flow of patients through a complex set of activities. So the issues are very common and there's a lot of now good examples, particularly in North America. There's a lot of experiments that failed that we can learn a great deal from.
Dan Jones: But my reading of where we're at is that we've, I think, got to the understanding that we need to build a problem solving base. I think got to the point of understanding we need to focus efforts at the top using Hoshin. But where people struggle is linking the improvement activities together along the patient journey and diagnosing the system as a system, rather than a set of activities and learning where in the system you can have the biggest impact. And in healthcare, in most cases, that's at the back end of the system, where things get gummed out, patients stay too long, and the whole discharge process is actually the bottleneck that's causing the queues right throughout the rest of the system. So I've focused my efforts on trying to understand how to link those pieces together along the value stream and create consciousness that there is a value stream, make it visible, link the improvement efforts, link capacity with demand and so on, because I saw that as being the next step that organizations would need after having grasped the improvement nettle and just got involved and started doing Kaizen events and so on.
Mark Graban: So I'm curious to hear more. You talked about trying to think about learnings from things that didn't go well or things that failed. What are some of your key lessons learned that you would share with other organizations in terms of things to try to avoid lessons from others who may have struggled well?
Dan Jones: We've got a lot of critical lessons here in the UK, because we've been trying to manage the entire country, the healthcare system for the entire country, as one organization called the NHS, and that has proven over time to be impossible to do, it's just too large. And so what you get is headquarters issuing initiative after initiative, and instruction after instruction, down the chain to the front line. And the front line is completely overloaded with initiatives and spend most of their time away from the shop floor, away from the patient flow, answering these demands from headquarters. So we've got what we call a black hole of swallowing up what management time we've got. And that dysfunction in the NHS is now causing us to begin to break the NHS up, introduce a market, a commissioning side that buys care for patients, and turning the providers loose to become self managed organizations.
Dan Jones: And of course, most of them are floundering because they've never had to do that before. So we've got tons and tons of what not to do experiments in the UK to learn from, and we're going through a very tough time where things are getting worse. And a lot of experts that I talk to agree that things are going to continue to get worse for a while, until they get better, until we build a management capability in hospitals that is able to run provider organizations so profitably. So NHS is full of those experiments. But I think there are plenty of experiments elsewhere where people have tried different approaches to Lean and some of it's worked and some of it has not delivered results.
Dan Jones: And I think we can learn a great deal from those experiments.
Mark Graban: Well, thanks. And let's talk a little bit about some of what might be some newer experiments with the application of Lean thinking in government. I'm more familiar of some things that are to be done here in the US at city levels and state levels. There's, I think, a lot of Lean, or Lean Six Sigma projects that happen at the federal government here in the US. I'm curious what you're seeing and what you've been talking about in terms of the potential or what's actually happening with Lean in government.
Dan Jones: Well, the most inspiring thing I've seen recently on that score was in trying to find a Canadian example for my talk at AMe in Toronto. And I've visited Saskatchewan and discovered healthcare system for a million people, which is really quite small population. Inspired by Virginia Mason, the hospital CEO, now become the top civil servant, the deputy minister for Health, spreading a Hoshin process right across the province, and now being promoted to Minister of Education and Minister of Lean across Government, would you believe? And so, in justice, in social services and economic development, Lean and Hoshin and frontline experiments are proceeding apace at really quite an extraordinary level. I was really inspired by two things.
Dan Jones: One, in the Premier's office, actually standing in front of a Hoshin for the whole of Saskatchewan government, not focused on individual departments, but focused on critical citizen groups that need help. And then the whole Hoshin was geared to understanding the contribution that different ministries were going to make into achieving these objectives. And that's at the top level was very impressive. First thing I've ever seen that. But what was equally impressive was down at the city level, setting up crisis teams that brought together people from justice, from health, from education, from social services, and several other departments on, I think, a daily or twice daily basis to actually deal in real time with issues that come up with critical groups in society.
Dan Jones: That often 5% of the population accounts for most of the hospital admissions or most of the brushes with justice, most of the problems at school and so on, but actually is able to mobilize and synchronize the support from different agencies to address a critical need in a community. And I've seen some of those experiments also in the UK, and I think it's not leaning government is partly yes, about transaction processing and better service delivery and so on. But I think the really interesting part is where we get right to the front line to the citizens and we understand how we can organize to bring those services together to address critical needs of critical groups in society and change lives. And indeed, that local council in the UK, in Sullyhill, which has about the same population as Saskatchewan, is doing just that. They're talking about changing lives and changing the health of communities by focused efforts around initiatives and citizen groups.
Dan Jones: And that's an interesting thing for me because the challenge there is to move out of our functional pyramids and our departmental silos to actually mobilize and make a difference to citizens right down the front line. So I think that's where Lean is going to actually provide a lot of inspiration, is where it actually makes a difference in local, you know, right up in major government departments, which we've had a lot of those experiments in the UK as well. I've been involved in some central government. Yeah, it's fine. It's interesting and necessary.
Dan Jones: But actually the fun bit is down right next to the citizens.
Mark Graban: Well, and you mentioned Saskatchewan. And for people who are frequent listeners to the podcast, Dan Florizone, who Dan mentioned here, was my guest in podcast 180. And I've met Dan and I'm glad that you also ran across him because I've been really impressed with very impressive approach. And a lot of it is drawn on his reading and studying of the work of Dr. Deming, in addition to.
Mark Graban: I think there's obviously a lineage from what Dr. Deming taught Toyota. So I like it when he's also referencing his management views.
Dan Jones: Well, I think also go and see, they've got some very good videos of the three P exercises that Dan Florizone organized to redesign their hospitals in Saskatchewan. Three hospitals in Saskatchewan. They're some of the best videos about how to engage patients and staff and patients in redesigning the facilities around Lean that I've seen. So I brought Dan Florezone on stage with me in Toronto and it had a big impact. Had a big impact.
Dan Jones: People came up, manufacturing people largely came up and said, oh my goodness, thank goodness there's hope in government. And I had exactly the same reaction two weeks later at our summit in the UK when Sollyhole made a similar kind of talk. My goodness, the Toyota guys thought this was fantastic. We're going to know. So where there's energy like that, there's going to be.
Mark Graban: Yeah, yeah, I agree. And that's great. And I'll link to the article you wrote for the Lean Enterprise Institute on the Lean Post, and I'll make sure there's links to Dan's videos and links to other things that we talked about. If listeners want to go to leanpodcast.org and find the page for this episode and let people dig deeper, I'll of course link to Dan and the Lean Enterprise Academy. And as we wrap up, Dan, maybe if you've got any kind of just final random thoughts that are on your mind, or if you want to talk about what you're looking forward to in 2014, maybe use that as a way of wrapping up.
Dan Jones: Okay, there are two big challenges. One is I think Lean Startup gives us a handle to think about designing completely different business models, particularly as the web changes industries like financial services and education and health. We're going to fundamentally move away from the relics of mass production, and we're going to need a lot of experiments to design different ways of delivering those services in completely new ways. So I think that's really exciting. Building new business models and lean startup gives us the impetus to do that.
Dan Jones: And my final comment is that I think as an old practitioner of Lean, the challenge for the Lean movement, who've been largely talking to themselves, has been that we're all growing older and we need to actually recast Lean in a different language and the language that will appeal to the younger generation that are just coming into their working lives and are not really wanting to learn a complete system or buy into a philosophy. They want to know what works and what can make a difference to their lives. And so I think another experiment, which I'm definitely going to be involved in, particularly with Michael Ballet, is exploring how we can reach that much, much younger generation so that we can ignite the lean flames in that generation and keep the movement going on into the future.
Mark Graban: Well, it sounds like some exciting things ahead, and I appreciate you taking time to chat here on the podcast, and I hope we can do it again sometime in the future.
Dan Jones: Well, it's really good to talk to you again, Mark. Thank you very much indeed.
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[…] to the podcast after his first appearance in Episode #188 is Daniel T. Jones, founder and chairman of the UK-based Lean Enterprise Academy. You can find him […]