One of the criticisms of lean management is that it doesn’t address innovation. Lean practices build systems for delivering high quality services on-time to customers at lower costs. This is achieved through robust processes, daily management, continuous improvement and the development of people. But robust processes can feel like rigidity and continuous improvement can be incremental rather than the big step changes we desire in order to stay ahead of the competition.
I have encountered this criticism most often from people who don’t yet have robust processes providing the stability and room to improve and innovate. These may be startups, R&D labs, designers, or other types of creative worker who chafe at the notion of having to do things a certain way, or even the same way, more than once. Some of them are stuck in bad processes because even the idea of having robust processes feels bad to them.
It is true that TPS-derived Lean methods did not originally address the development of new products, new processes or new business models. Since the 1990s there have been innovations in applying Lean principles to these areas. These include the 3P method of product and process design, the application of visual management and communication principles via the Obeya method, the Business Model Canvas and so forth. It is not that Lean thinking is incompatible with innovation, only that it originated from the need to stabilize and improve supply chains, rather than to disrupt them.
We can’t improve the work, much less innovate and disrupt, unless we first get today’s work done today. This means different things for established businesses than it does to startups. Businesses must serve customers, generate free cash flow and pay the bills. Startups must get the product to market, acquire the first customers, turn a profit or at least secure additional funding. In either case, to get today’s work done today, we need to be clear about a few things.
1) What is today’s work?
2) How much time does that work take?
3) What’s our capacity to get that work done?
Unless we are happy leaving it to chance, or have huge reserves of cash a.k.a. a long runway, we need to understand our processes. Doing this can be difficult and tedious for creative processes with high degrees of inherent ambiguity and variation. But it is the hard work that makes doing the fun, creative work possible long-term.
To borrow the terminology used by our friends at Kaas Tailored, there are three types of work: today, tomorrow, day-after-tomorrow. Meeting day-to-day commitments is the “today” work. Figuring out points 1 – 3 above is not. That is working on tomorrow, namely understanding, stabilizing and improving the day-to-day work. The day-after-tomorrow work is the work of exploring brand new markets, products, technologies, methods etc. and securing the knowledge we will need to engage with them. At Kaas they understand that Lean management systems assign responsibilities, roles and time not only for meeting today’s demands and for continuous improvement. Lean management systems insure a healthy balance of today, tomorrow and day-after-tomorrow work.
The challenge is to figure out what’s the right balance between delivering on the day, making improvements, and working on disruptive innovation. Google has a formula that guides their people to spend 70% of their energy on against day-to-day activities, 20% on continuous improvement, and 10% on disruptive innovation. This is an interesting model, but probably not one to be copied without fully understanding the context of their size, industry, workforce, cash reserves, profit margins and so forth. For most of us there is no easy formula we can copy. Part of day-after-tomorrow work is figuring out this balance.
We can start by being conservative to ensure the day’s work does not suffer, and adjust with experience. A line worker may work 95% on today and 5% on tomorrow. A manager may work 60% on today, 30% on tomorrow and 10% on day-after-tomorrow. A CEO’s work may be 10% today, 30% tomorrow and 60% day-after-tomorrow. The more success we have at tomorrow and day-after-tomorrow work, the fewer fires we will have to put out day-to-day.
A common thread that runs through success across today, tomorrow and day-after-tomorrow work is that they all rely on capable and motivated people. This requires that we hire, educate and develop people with tomorrow and day-after-tomorrow work in mind. These latter two types of work are by definition knowledge work, regardless of industry or job. To work on the future, we must imagine. We must ask people to use their brains. We must feed their minds with useful knowledge, frameworks and possibilities. We must give people opportunities to experiment and learn in practice.
Amazon, one of the most tech-savvy companies in the world, recently announced that they will invest $700 million in the day-after-tomorrow. These funds will go to retrain 10,000 of their US workers by 2025 to prepare them for digital jobs and careers of the future. At worst this will addresses Amazon’s “tomorrow” risk of not being able to recruit enough skilled workers for these jobs. At best, it prepares an army of “day-after-tomorrow” thinkers.
This is a pay-me-now or pay-me-later proposition. We either invest in our people so that we are ready for the future, or we avoid spending now, only to be forced to pay in the future when we find ourselves unprepared for disruption. The latter approach is usually more expensive and less effective. This is something to consider when evaluating the fitness of our Lean management system for the day after tomorrow.