Improving the business of life
Queue the music . . .
The highest quality. The shortest lead time. The lowest cost. We all know these as the three objectives of the Toyota Production System. But whether it’s recognized or not, all organizations at all times face the same three challenges to operational performance: how to improve quality, delivery AND cost. The emphasis on the word “and” in the previous sentence is intentional. Here’s why. [Read more…]
The world, according to Vilfredo Pareto:
At the bottom of the wealth curve, men and women starve and children die young. In the broad middle of the curve all is turmoil and motion: people rising and falling, climbing by talent or luck and falling by alcoholism, tuberculosis and other kinds of unfitness. At the very top sit the elite of the elite, who control wealth and power for a time – until they are unseated through revolution or upheaval by a new aristocratic class. There is no progress in human history. Democracy is a fraud. Human nature is primitive, emotional, unyielding. The smarter, abler, stronger, and shrewder take the lion’s share. The weak starve, lest society become degenerate: One can compare the social body to the human body, which will promptly perish if prevented from eliminating toxins.
Mr. Pareto was many things: an engineer, a sociologist, a political scientist, an economist, a philosopher, a mathematician and an all-around mega-mind. However, an optimist he was not. His scathing observations on the unequal distribution of wealth and power throughout human history would fuel the emergence of the Fascist party, inspiring would-be dictator Benito Mussolini on his rise to power in Italy.
Pareto is perhaps best known in today’s world for his association with the 80-20 Rule. Near the dawn of the 20th century, Pareto developed a mathematical formula based on the observation that, throughout human history, about 20% of the people tended to control 80% of the total wealth. In the late 1940’s, business management consultant Dr. Joseph Juran discovered Pareto’s work and used it to evangelize a strategy for quality improvement based on his observation that 80% of defects tend to come from only 20% the sources. He would name his idea the Pareto Principle.
Today, Pareto Principle, has evolved from a simple quality improvement strategy to a popular and widely-adopted philosophy for the conduct of business and even for life. Pareto thinking dictates that by focusing our efforts on the critical few inputs (the 20%), we maximize the impact of our efforts by generating – or eliminating – the majority of the outputs (the other 80%). Ironically, in stark contrast to its namesake, it’s an idea that has endured because of the optimism it creates, and not because of its effectiveness as a management philosophy.
In the world of continuous improvement, the Pareto Principle is pervasive, as is evidenced by the widespread use of its graphical representation, the Pareto Chart. While it’s certainly appealing to hope for the existence of, in Juran’s words, the “critical few and the trivial many”, it is simply not an effective or desirable strategy for sustainable improvement. Here are three ways in which Pareto thinking may be undermining your improvement efforts:
There’s a little-known corollary to the Pareto Principle, which I have dubbed the Pareto Chart Principle based on my real world observations on how we tend to apply Pareto thinking. Please refer to the figure below.
The Pareto Chart Principle states that, when creating a Pareto Chart to assist in solving a problem, we spend:
And after all of that, the remaining time is what we typically devote to taking action to improve the situation. For your convenience, I have colored the bars in Figure 1: red indicates non-value added work and green indicates value-added work. Please don’t strain yourself looking for the value-added work.
In my experience, it is not uncommon to see organizations take weeks or even months to collect and analyze the data required to construct a meaningful Pareto analysis. Why do we invest so much time? We do it to make sure that we are only working on the critical few inputs – those that are creating 80% of the problems. In other words, we try to save time by wasting time.
But here’s the catch. If the Pareto problem is indeed true, there’s an 80% chance that any problem we address will be caused by the critical few that we seek. Why waste weeks or months performing an analysis that would only tell us what we would be highly likely – 80% to be exact – to discover by taking action at the onset of a problem? And even if we would spend time working on lower priority problems, that time is still value-added and contributes to our learning and the development of our people.
Unless the analysis can be done on the gemba in real-time, ditch the Pareto chart. Save time and add value by maintaining a bias toward action.
As Mr. Shigeo Shingo wrote, when solving problems,
All things, problems and processes included, change with time. Problems do not exist in isolation, waiting to be picked off one-by-one. Problems are connected, interdependent and layered; when we solve one problem we uncover new ones and the effects produce new and different outcomes.
Remember that a Pareto analysis provides only a snapshot in time. For all intents and purposes, it presents a view of the world that no longer exists. And the longer that it has been since the data were captured, the less accurate the image becomes.
Although some processes change faster than others, remember that the only truly accurate view of reality is now. Focus on solving today’s problem, because there is no guarantee that yesterday’s problems will be tomorrow’s problems.
Perhaps the greatest flaw in Pareto thinking is its tendency to make us short-sighted. All too often, in seeking the critical few, what we are actually looking for are the quick-wins and the low-hanging fruit. We chase the biggest bang for our buck, but we fail to realize that the fruit will eventually be picked clean, and the quick wins won’t always be so quick. This approach to improvement only works in the short-term. To fight clichés with cliché, what happens when the going gets tough? Unfortunately, the tough and the not-so-tough alike all get going. And not in a good way.
What inevitably occurs is the downfall of short-term continuous improvement strategies, and the pattern is very predictable.
Because we fail to develop the requisite skills in our people to address increasingly more complex problems, the initial results generated by quick wins are not sustainable. And in the absence of a long-term management commitment, the pattern continues until the very program itself is questioned and ultimately follows suit.
We often fail to realize that Lean is about the people and the journey more than it is the results. Along the way, it is the concept of True North that provides direction for our actions. Long-term commitment to continuous improvement requires the endless the pursuit of our True North ideals. On the path to True North, all problems must eventually be solved. Do not waste time going around problems to figure out which one to solve first; take the long-term view of addressing each problem as it is encountered, learning from it, and moving on to the next.
Think twice the next time you have the urge to create a Pareto chart to address your problems. Pareto thinking prevents us from taking action by telling us what we would have been likely to discover by taking action in the first place; it keeps us looking backwards, rather than looking to the future and staying ahead of our problems. And it contributes to the short-term thinking that hinders our learning and the development of our people.
Perhaps the greatest condemnation of the Pareto Principle came from Dr. Juran himself. Citing the tendency for organizations to ignore the other 80% of causes, Juran actually changed his terminology from “the vital few and the trivial many” to “the vital few and the useful many”. Indeed the other 80% is useful, as it represents our level of commitment towards improvement. Only when we commit to addressing the whole of our problems over a long time horizon do we truly commit to continuous improvement.
P.S. My very LEANable Wife recently started a blog, asimplyenchantinglife.com where she will be linking to some of the posts that I write here at The KaiZone in order to put her own spin on how they can be applied within the home. Read her take on the Pareto Problem here. And do subscribe to her blog for more great Lean @ Home content.
I’m going to share a secret with you. Growing up, I always dreamed of owning a bookstore. Actually, I still do. Not one of the big-chain behemoths located in a busy shopping mall smack dab in the middle of suburbia. No way! I wanted a small, cozy shop somewhere off the beaten path, where customers could curl up with a good book and a hot cup of coffee. A place that people would go to learn something that inspired them, to have a good conversation with a complete stranger, or just to escape the stress of daily life . . . even if only for a little while. That’s my True North.
Today, I’ve taken the first step in that direction by creating The Lean Book Shop @ TheKaiZone. Although there’s no caffeine and the ambiance leaves much to be desired, I can promise you that the selection cannot be beat!
There are literally hundreds, if not thousands of books out there related to the topics of Lean and continuous improvement. I know because I’ve spent a good majority of my adult life reading most of them. Unfortunately, the vast majority are frankly not very good. There are many self-proclaimed “senseis” out there claiming to have unlocked the secrets to Lean success . In reality, these so-called “experts” are nothing more than Lean consultants with very little proven, real-world success re-packaging outdated and ineffective approaches as the next best thing. As Mark Graban says, that”s L.A.M.E. not Lean.
Good Lean advice can be hard to find. It’s especially daunting for those just starting off on their Lean journey. I’ve seen it many times. One bad source and the path starts off completely in the wrong direction. Instead of pursuing True North, you may find yourself here.
This is where The Lean Book Shop can help. I’ve personally hand-selected what I consider to be the absolute best texts ever written on the subjects of Lean and Continuous Improvement. I’ve personally read every book in the shop and I stand behind each one. You won’t find every Lean and continuous improvement book – for example: this, this or this – just those that I know you can trust to help you on your learning journey.
Speaking of trust, I want to fully disclose that I have partnered with Amazon.com* as part of their affiliate advertising program to bring you The Lean Book Shop. Any link to books referenced on this page, or other pages on TheKaiZone.com, will refer you to Amazon.com, where you get the exact same purchase price as all other amazon.com users do. Please refer to the About Me page for further details.
To celebrate the grand opening of The Lean Book Shop @ TheKaiZone, I’ve put together a top 10 list of the best books ever written on the topics of Lean and continuous improvement. I define “best” in terms of the book’s contribution (the degree to which I feel the book has contributed to current thinking within the Lean world) and relevance (the degree to which I find myself referring back to the text on my own Lean journey).
Note that the list simply represents my own personal opinions and preferences. Your list will likely be different and I encourage you to share it with The KaiZone Community in the comments section below!
Drum roll, please! Without further ado, I present to you the top 10 Lean books of all time:
Amazon.com Link
Kaizen. Culture. Adaptiveness. Words that are not easy to define in tangible terms, and even more difficult to achieve or impact in the real-world. However, Creating a Kaizen Culture takes these concepts out of the nebulous world and provides practical, tangible guidance for changing the most important pieces of the Lean organization . . . the people.
Amazon.com Link
With the publication of his book Kaizen in 1986, Masaaki Imai brought the Japanese philosophy of continuous improvement to light. In the sequel, Gemba Kaizen, Mr. Imai enlightens the world to another core Lean concept: the gemba. By combining a focus on incremental, small improvements with a thorough understanding of “the real place”, the book has contributed significantly to the mindset of the present-day Lean thinker. As a bonus, the text includes several case studies from real-world application of the gemba kaizen approach.
Amazon.com Link
Very few people on the planet can claim the level of real-world Lean success that Art Byrne can. Perhaps, no other book provides such a deep dive into the strategic nature of Lean or the role of senior leaders in driving change. Certainly, none that can back up the theory and discussion with such dramatic and concrete results as Mr. Byrne and his time spent as CEO of Wiremold. This book is a must-read for any executive looking to create and sustain a successful Lean organization.
Amazon.com Link
What sets dynamic organizations apart from their competition? From the same author that wrote the seminal article Decoding the DNA of the Toyota Production System, Steven Spear goes beyond the tangible and the technical to uncover the underlying capabilities of high-velocity organizations. Through direct observation of successful organizations such as Toyota, Alcoa and the United States Nuclear Navy, Spear identifies the four critical factors that fuel the continuous improvement of today’s complex systems: system design, problem solving, knowledge sharing and people development.
Amazon.com Link
An view of the historical rise of Toyota manufacturing through the eyes of its primary contributor: Mr. Taiichi Ohno. Outlining the important social and economic forces that drove the creation of what we now dub the Toyota Production System, the book focuses primarily on the history and the thinking from which the system evolved. That the book does not provide a deep dive in to the technical aspects of the system is irrelevant, as it subtly teaches a much greater lesson to present day Lean thinkers: Lean organizations can learn – and profit – much more from Toyota by focusing on the thinking that created the system than they can by copying the system itself.
Amazon.com Link
The book that coined the term “Lean” based on the outcomes of more than 5 years of study of the Japanese automobile industry by MIT. Womack, Jones and Roos thoroughly document the whole of the Toyota Production System, pinpoint the advantages of Lean manufacturing over the prevailing mass-production system used in the western world at the time, and correctly predicted the rise of Lean manufacturing principles, not just in automobile manufacturing, but in any value-creating endeavor.
Amazon.com Link
Amazon.com Link
Prior to the publication of the Toyota Way, the vast majority of the Lean literature focused on describing the tangible, technical aspects of the Toyota Production System. Without understanding the accompanying business philosophies and management principles, most organizations that attempted to mimic Toyota failed to generate the same – if any – level of results. In The Toyota Way, Dr. Liker shifted the focus away from superficial tools and techniques of the production system and onto the 14 key principles that define the Toyota 
Amazon.com Link
Amazon.com Link
This may not be the best book with which to start your Lean journey, but it is certainly the direction you should head in which to finish. Only those who have struggled to find Lean success will fully appreciate the power of the kata methodology. Of all the texts on Lean and continuous improvement, Toyota Kata achieves what no other book before it has fully accomplished: translating Lean into a set of simple, practical routines, organized around improvement and coaching, that can be readily and effectively practiced at all levels of an organization. Rother cuts down many long-standing fallacies about the practice of Lean, such as the misunderstanding of common Lean “tools” and the misconception of waste elimination. In doing so, Mr. Rother places the focus right where it should be: on the development every person in the organization through a habit of problem solving and the achievement of continuous improvement.
Use the graphic below to share the Top 10 Lean Books of All Time with friends and colleagues!
There you have it! The Top 10 Lean books of all time, as determined by The KaiZone. Disagree? Then let us know! Please use the comments section below to share your own personal top 10!
And don’t forget to check out The Lean Book Shop @ TheKaiZone for all of your Lean, continuous improvement and self improvement needs!
* Disclosure: TheKaiZone.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.
