TPS Benchmarking

How Does Lean Thinking Apply to Strategy?

Avatar photo By Jon Miller Published on May 24th, 2007

How does Lean thinking apply to strategy? This was a good question that made me think. One way of answering this question might refer to hoshin kanri (policy deployment) but in fact this is more about policy than strategy. If hoshin kanri is about what and how, strategy is about what and why.
Toyota’s strategy or the “why” they do things as they do, is guided by something called in Japanese “founding intent” which might be the equivalent of “mission, vision, values”. Sakichi Toyoda’s ideas of harmony with society, creativity and craft still seem to guide long-term strategy at Toyota today. The founder of Toyota was an inventor who valued making things, and doing well by doing good for society.
The essence of all strategy, with Lean thinking applied, is to answer the questions:
What is good for society?
Society is a broader definition of “customer”. The conventional wisdom is that businesses that focus on a tight target market succeed and those who pursue the entire available market fail. That’s one way to look at it, but the ideal is to develop technologies in the long term to solve problems of all society. Why have sub-optimization as a strategy?
What is a problem we can solve with our core skills?
If you have the wrong core skills, you may provide a service that does not address the root cause of the problem. Many businesses make money solving problems, but may not be good for society, and that would not be Lean strategy.
How can we make money doing this?
How can we profit by making things better for everyone? You may say that “everyone” can’t win, but if you don’t aim for this ideal, you will be back to asking the first question over and over, as history shows.
How will we answer these questions 10, 20, 50 and 100 years from now?
The longer-term you think, the better ideas you will have. And the shorter-term you make your actions, the better results you will have.
Separately, these questions are not so tough. Taken together, they are very tough.

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Jon Miller

Jon has dedicated his 25+ year career to the field of kaizen, continuous improvement, and lean management. Jon spent the first eighteen years of his life in Japan, then graduated from McGill University with a bachelor’s in linguistics.

  1. John Santomer

    February 18, 2009 - 11:48 pm
    Reply

    Well for one thing, the mindset of the management never sees returns of long term achievements. Everything’s viewed at short term and immediate results. If you will look well in the middle of the time axis, what has been achieved by the “higher” many smaller improvements may look more than the fewer larger achievements. But in the end of the time axis, at some point, the fewer larger achievements (if harnessed, focused and strategically aligned) will at some level be higher than the many smaller achievements.
    To quote from “How Does Lean Thinking Apply to Strategy?”
    The longer-term you think, the better ideas you will have. And the shorter-term you make your actions, the better results you will have.
    To put it plainly : 10 brilliant minds require less time to think of better ideas (bigger /larger improvements) and thus also require less time to achieve better results compared to 1,000 average minds coming up with smaller ideas taking more time to come up with and more time and coordination to put in action.I may be wrong but, this is somewhat reasonable…

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