Lean Thinking..and more from Drucker

One more great re-release of the summer (see entry below) is Lean Thinking: Banish Waste and Create Wealth in Your Organization (Free Press) by James P. Womack and Daniel T. Jones. Originally published in 1997, this ambitious book, just reissued with new material, may be the most comprehensive managerial primer of the past decade. Where other business books tend to focus on one strategic or operational insight, Lean Thinking offers a more holistic approach. The authors show how leading companies align themselves completely around the customer’s perception of value, creating robust organizations with extraordinary productivity, few defects, and the capacity to change rapidly.

This book matters today more than ever. A decade ago, much of the managerial thinking focused on manufacturing matters. How could our flailing dinosaurs regain American competitiveness by catching up to Japanese companies that took quality ideas (some developed by in this country) to a new level? People really cared about the inventory turn at Ford or the ability of Motorola to practice Six Sigma. Yet when high-profile companies began waves of layoffs in the name of Reengineering, the authenticity of managerial theories took a hit that lingers today. Moreover, the Real Time inanity of the Internet Economy skewed everyone’s perspective, and the irritating grind of getting things done took a big back seat to Big Ideas and Venture Capital.

Even today, such excellent books as Execution: The Discipline of Getting Things Done by Larry Bossidy and Ram Charan and Who Says Elephants Can't Dance? Inside IBM's History Turnaround by Lou Gerstner focus more on the sexy topic of how top executives effect change and get people involved in the right strategies. Lean Thinking goes into far greater granularity on the organizational practices necessary to compete on a sustained basis. It is well written albeit slow-going. But key. If you want more information on the topic, the authors run a company (they call it a non-profit education and research organization) sharing these ideas with the public.

By the way, these two authors were part of the team that wrote The Machine That Changed The World: The Story of Lean Production. I include this title on any top ten business books in both quality and relevance. Brilliantly researched and written, this book gives a wonderful history of leading manufacturing practices, showing how folks such as Henry Ford and Toyota’s Taiichi Ohno continually pushed the bar in organizational effectiveness. Today the book remains as important as ever; and I can’t recommend it highly enough.

Finally, a post-script to yesterday’s post. Because I really like The Effective Executive, here is a favorite passage, from page 23, that goes like so:

"Effectiveness, in other words, is a habit: that is, a complex of practices. And practices can always be learned. Practices are simple, deceptively so; even a seven-year-old has no difficulty in understanding a practice. But practices are always exceedingly hard to do well. They have to be acquired, as we all learn the multiplication table; that is, repeated ad nauseam until "6X6=36" has become unthinking, conditioned reflex, and firmly ingrained habit. Practices one learns by practicing and practicing again….

There are essentially five such practices—five such habits of the mind that have to be acquired to be an effective executive:
1. Effective executives know where their time goes. They work systematically at managing the little of their time that can be brought under their control.
2. Effective executives focus on outward contribution. They gear their efforts to results rather than to work. They start out with the question, "what results are to be expected of me?" rather than with the work to be done, let alone with its techniques and tools.
3. Effective executives build on strengths—their own strengths, the strengths of their superiors, colleagues, and subordinates; and on the strengths in the situation, that is, on what they can do. They do not build on weakness. They do not start out with the things they cannot do.
4. Effective executives concentrate on the few major areas where superior performance will produce outstanding results. They force themselves to set priorities and stay with their priority decisions. They know that they have no choice but to do first things first—and second things not at all. The alternative is to get nothing done.
5. Effective executives, finally, make effective decisions. They know that this is, above all, a matter of system—of the right steps in the right sequence. They now that an effective decision is always a judgement based on "dissenting opinions" rather than on "consensus on the facts." And they know that to make many decisions fast means to make the wrong decisions. What is needed are few, but fundamental, decisions. What is needed is the right strategy rather than razzle-dazzle tactics.