How Do You Create a Lean Culture?

by Art Byrne

The Author of the best-selling books The Lean Turnaround and The Lean Turnaround Action Guide
and former CEO of The Wiremold Company, who led an aggressive lean conversion that increased
the company’s value by 2,467%, offers in-depth, practical advice on leading a lean transformation.
Lean Enterprise Institute How Do You Create a Lean Culture?

How Do You Create all of them. For example, consider their attitude toward
problems: is the first response to ask “who?” as in who

a Lean Culture? did it? How do they value their employees? Do they give
them the means to do their jobs? Is there a major internal
focus on “make-the-month?” The list could go on forever
and underscores the point that to become lean, everything
Well, let’s start with a simple definition of company culture.
the traditional company does must change. The challenge
Leading management thinkers like Edgar Schein define a
is enormous. You can’t create a lean culture without first
company’s culture as a shared set of values, goals, attitudes,
creating a lean enterprise.
and practices that characterize an organization. A successful
company culture is one that can be bought into from the So, you can’t make this massive shift overnight. Nor can
newest part-time employee to the CEO. this new culture occur from the bottom-up: it must be led
by the owner or CEO. And converting to lean is all about
I’ve always thought of company culture as “the way we do
people. I don’t mean replacing your current employees
things here,” which may be a bit simplistic for some. But
with new ones but helping your current workforce adopt
my point is that, over time, most companies develop some
a dramatically new way of thinking and acting. You have to
form of culture that points the way to how things get done.
help them see the waste and opportunities that have been
A company’s culture might contain elements of strategy in
there all along so that change can start to take root.
the area of company goals, but it is more about the attitudes
and practices that answer the question of “what is it like to So, where to begin?
work here?”
Lead From the Top
Asking “how do you build a lean culture?” assumes you are
changing from a traditionally run “batch” company. This This work starts with the leader, who doesn’t have to start as
transformation is no small matter: A lean company thinks a lean expert but must commit to becoming one. They must
in almost the exact opposite of a traditionally managed have enough familiarity with lean principles to understand
enterprise when it comes to operational approaches and why everyone should make this conversion and what can
underlying attitudes and practices. Traditional companies be expected as a result. The leader must be dedicated to
are built around functional departments that force them this approach, as its success or failure will be determined
to produce in batch mode. In contrast, lean companies are by their actions and involvement going forward over a
built around value streams that allow value to flow at the long time.
beat of customer demand.
You can’t manage the shift to lean or delegate it. The leader
needs to be hands-on, leading the way. You can’t just talk
“A lean company thinks in
the talk. People might comply with orders from a top-down
almost the exact opposite manager, yet mere obedience won’t change the culture.
of a traditionally managed People who choose to follow their leader’s behavior will
enterprise when it comes to take ownership in changing the company and its culture.

operational approaches and

Communicate
underlying attitudes
Next, communicate. Pull your entire team together and
and practices.” explain WHY you want to make the shift to lean, WHAT
Now, if you lined up a sample of 100 traditionally run kind of results you expect, WHEN this will start, and HOW
companies, no two might have the same culture. Even so, you plan to go about it. (Hint: kaizen, kaizen, kaizen.) This
due to their functional organizations and batch production message needs to come straight from the leader — no
approach, you would find similar cultural elements in delegation allowed. Make sure that you also tell your team

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Lean Enterprise Institute How Do You Create a Lean Culture?

what they can personally expect — what’s in it for them. A

change this big will make everyone nervous, so from the
very start, tell your team that there will be no layoffs due
to kaizen activity. This thinking will be a big leap for the
traditional manager who associates cost reduction with
head-count reduction.

Set the Operational Excellence Goals

Set and communicate the operational excellence goals
that, when achieved, will distinguish your company from Kaizen
your competitors. Explain your answer to the question, Continuous improvement of an entire value
“What are we trying to do here?” These goals will serve as stream or an individual process to create more
guidelines for everyone in the company going forward. And value with less waste.
they need to be aspirational goals, i.e., stretch, and focus on
There are two levels of kaizen (Rother, Mike,
changing your processes, not your results. If you change
and Shook, John. 1999, p. 8. Learning to See.
your processes, the results will improve as you approach
Lean Enterprise Institute, Inc.):
these goals.
1. System or flow kaizen focusing on the
At Wiremold, these were our operational excellence goals: overall value stream. This is kaizen for
• 100% on-time customer service management.
• 50% reduction in defects annually 2. Process kaizen focusing on individual
• 20% productivity gain annually processes. This is kaizen for work teams
• 20x inventory turns and team leaders.
• Visual control and 5S everywhere Value-stream mapping is an excellent tool
These were all stretch targets. For example, when we began, for identifying an entire value stream and
we were at 3x inventory turns — but that was the whole determining where flow and process kaizen are
point. If you want to change the culture, you must change appropriate.
the conversation and how the entire company thinks about from the Lean Lexicon 5th Edition
what it is trying to do. The easiest way to change the way
people think is first to change the way they act, and the organizational changes needed to give yourself a chance to
operational excellence goals serve as the guidelines for the meet these goals. Don’t forget that, to become lean, you
whole company’s actions in the future. are changing from a batch-and-push approach to a flow-
and-pull operation. And this transition means that you
At first, these stretch goals were a big shock to everyone. need to change your physical organizational structure early
But they quickly started to define our new culture of striving on, shifting from functional departments based on the same
to become a lean company. People got on board, and what type of equipment to value stream teams. In our case, we
might have been seen as ridiculous targets in traditionally based our value stream teams on product families and gave
run companies were soon taken for granted as part of “this each value stream leader all the equipment necessary to
is the way we do things here.” build that family, complete from raw material to in the box.

Change the Structure to To make this change, we had to move most of our equipment
Give Lean a Chance close to the product family team leaders, who were
stationed on the shop floor next to their equipment and
But just setting goals and the way forward is not enough.
people. While this was disruptive, it sent a clear message
If you want to change the culture, you have to make the
that things were changing and that we were serious about

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Lean Enterprise Institute How Do You Create a Lean Culture?

achieving the operational excellence goals. In addition, the • Reduce inventory by 70%
reorganization eliminated the previous culture associated • Reduce floor space by 50%
with the functional departments. While this change alone • Reduce defects by 60%
didn’t establish a new lean culture, it did break down the • Reduce travel distance by 90%
barriers needed to get there. Above all, it gave all our • Cut setup time by 90%
employees the means to do their jobs successfully and • Connect the customer to the shop floor
the organizational support to solve problems and
Talk about a culture change. Results like these, week after
eliminate waste.
week, kaizen team after kaizen team, opened everyone’s
eyes to the opportunity before us. It is hard to be part
Establish A Strong
of a team like this and not be excited by the work. The
Kaizen Promotion Office
best ideas for eliminating the waste came from the people
As part of the switch to a value stream organization, we who were doing the work, so we got a lot of buy-in that
created a strong in-house kaizen promotion office whose helped the changes stick. People wanted to be on the next
full-time job was organizing, running, and following up on kaizen team. As you might expect, this was a huge cultural
kaizen activity. These people were all existing employees shift from the prior attitude of “come in, do your assigned
learning from our outside Japanese consultants (all ex- job, and go home.” The reason for this is they were all
Toyota experts) as they went along. Establishing this entirely learning something new every day, using the kaizen tools
new structure was a radical change and was dedicated to to understand how to see and eliminate the waste. Step by
helping our workforce do their jobs better, easier, and safer. step, we created the lean culture.
All by itself, it signaled a big cultural shift. We moved some
of our highest potential employees into the kaizen office, A couple of examples might help you appreciate the change
which you rarely see a traditional company do. in employee attitudes from what they were doing before
lean to how they acted afterward. The first involved a 150-
“You can’t manage the shift to ton punch press that was coil-fed with a large progressive
die. Historically it took 3 hours and 10 minutes to change
lean or delegate it. The leader
this over, and the operators were pretty much on their
needs to be hands-on, leading own with little management support. As a result, they did
the way.” it the same way every time, and there was no pressure to
reduce the time it took as the plant made everything in
We were constantly running kaizen team events, averaging
huge batches.
nearly two per week per facility, which really led to a kaizen,
or lean, culture. Everyone was involved in kaizen, regardless We organized the first kaizen on this press, and after the
of whether they worked in the office or the factory or were first week, the team had cut the setup time to 19 minutes.
hourly or salaried employees. A typical kaizen team was Our prior culture would have said, “Gee, this is great!” and
comprised of eight to 10 people we took from their job stopped there. Instead, we kept going back with additional
to concentrate on improvement activity in a specific area kaizens, and before long, the hourly operators of the press
for a week. The teams were made up equally of hourly and took over with their improvement ideas. They eventually
salaried employees, so everyone was involved. Lean is all reduced the setup time to one minute. When you give an
about “learn by doing,” and the kaizen teams were where operator support and allow them to reduce the work done
the learning took place. The goals for each team were all on a single setup by three hours and nine minutes, the way
stretch, but so were the results. they think will change.

Typical Results of a One-Week Kaizen: A bigger challenge, and perhaps a better example, involved
• Cut lead times by 90% the tool room. We had a 60-person tool room that allowed
• Reduce staffing from 10 to 5 us to build our own punch press dies and that we saw as a

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Lean Enterprise Institute How Do You Create a Lean Culture?

competitive advantage. At that time, most companies like We publicized these values throughout the company,
ours eliminated their tool rooms and outsourced the work printed them on our stationary, and made sure that
to lower their overhead. As a result, we had a talented group everyone understood these simple commitments.
of toolmakers who were a little hard to deal with, as they
We focused first on our people. Moving to lean requires
saw themselves as being above the rest of our workforce
teamwork, and we wanted everyone to feel that they
and were pretty set in their ways. They made great tools,
were an equal part of the team. Everyone got training in
but it took almost three months to make a five-station
the lean principles. We put everyone on a kaizen team as
progressive die. They participated in nearly every one of
soon as possible and asked many of them to lead or co-
our kaizen teams but were reluctant to do kaizen in the
lead these teams. We encouraged everyone to speak up
tool room.
about problems or issues. We started recognizing people
Eventually, we persuaded them with the challenge to make for their contributions, not their job titles. The best ideas
a progressive die in less than a month. Lots of bitching for removing the waste invariably come from those doing
and complaining took place initially, but ultimately, they the work, so management supported and encouraged this
did one in 28 days. Man, were they excited! Many of their behavior. We agreed that one of management’s biggest
friends outside the company were also toolmakers at other responsibilities was developing and broadening our people’s
local companies, so, of course, they bragged about it. When skill sets.
their friends said, “No way can you do that,” they just said,
Kaizen and kaizen teams were another major focus because
“You’re wrong. That’s the way we do things at Wiremold.”
learning-by-doing was a key link between our people and
After that, there was no stopping them; they just wanted to
our ability to deliver value to our customers. We knew, for
keep reducing the time.
example, that we couldn’t be the company we wanted to be
with our usual four- to six-week lead times. But after many
Understand What is Important kaizens and the contributions of all our people, we reduced
When starting, we tried to look at things as simply as lead times to one to two days while taking inventory
possible. For example, we knew that all companies are turns from 3x to 18x. These improvements alone created
nothing more than (1) a group of people and (2) a bunch of enormous value for our customers.
processes (3) trying to deliver value to a set of customers.
Logic told us that, to be successful, we needed to concentrate Of course, everything we did was focused on our
on improving our processes, not on our results. customers. How could we deliver more value to them? We
did the traditional things like shortening our lead times,
“... to be successful, we needed lowering our costs, improving our quality, and being more
responsive. But we also implemented other initiatives when
to concentrate on improving
we saw opportunities to help our customers. For example,
our processes, not our results.” we initiated weekly delivery routes at set times for our
distributors. We changed our sales terms to smooth out
So early on, we established a set of core values that we could
their ordering patterns and asked them to carry 75% less of
use to guide everyone forward. We never thought that just
our inventory to free up cash and space for them. We also
writing down our core values would magically change
got our customers involved up front on all our new product
peoples’ behavior or result in a change in our culture.
designs. We would say, “We designed it with our ears” by
We had to live the values to show all our associates that we
listening to what the customer wants.
were serious.

Wiremold Core Values Clarify the Behavior You Expect

• People
Setting clear, stretch, operational excellence goals indicated
• Customers
to everyone what we were trying to do. Our statement of
• Kaizen

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Lean Enterprise Institute How Do You Create a Lean Culture?

core values showed how we would achieve the goals and So we changed the way we ran the company. We deployed
how management would behave. But what did we expect forward-looking operational excellence goals down to the
from our associates when they came to work every day? To team leaders, and they reported on the progress they were
address this, we again tried to keep things simple and easy making to my senior staff and me once per week. They
to understand. Our code of conduct did both. each had ten minutes to tell us their progress on the five
goals and what improvements (kaizen) they were planning
Wiremold Code of Conduct
for the next week. Management was there not to criticize
• Respect others
but to support the teams. Because we had all our senior
• Tell the truth
leaders there, we could make very quick decisions. We still
• Be fair
closed the books every month, and we got it to where it
• Try new ideas
took only three days, looking only at the numbers.
• Ask why
• Keep your promises As most of our associates were on one of these value-
stream teams, the bulk of our employees always focused
Do your share
on reaching the operational excellence goals. We had
Once again, we went overboard, sharing this set of values everyone looking forward, focused on our processes, not
with everyone. We posted this everywhere, communicated our results, which changed how people thought about
it constantly, and even gave everyone a small, laminated their daily work. They no longer just came to work to do
card that they could carry in their wallet. Like everything the same old job day after day. They were all part of the
else we did, we didn’t expect that just writing this down “what kaizen do you plan to run next week” section of the
would change our culture. It was simply another important weekly management review. They knew their ideas would
piece in the “how do we do things here” transition. The be listened to and implemented. With everyone focused on
list incorporated traditional values of most companies but the next improvement idea, “the way we do things here”
blended in some of our newer lean values like respecting really changed for the better. Not only were we converting
others, trying new ideas, and asking why. to lean, but we were building a lean culture changing the
way we did business.
Like anything else, saying something is one thing: how
management behaves to back it up determines how people We did other things like initiating a suggestion program
act. In this case, one of management’s obligations was to and an annual employee survey. Still, the primary drivers in
remove the bad actors who couldn’t conform. They all got creating a lean culture resulted from the structural change
second or third chances as we didn’t want to lose anyone. from functional to value stream, the operational excellence
Of course, the fact that we had a union made it take a little targets, the core values statement, the simple code of
longer but, in every case, the reaction from our associates conduct, the weekly reviews on progress on our operational
closest to someone we had to let go was, “Gee, what took excellence targets, and the constant learning through our
you so long?” kaizen efforts.

We learned through this entire process that kaizen cultures

Tie It All Together
are hard to beat. For Wiremold, over just under 10 years,
To become a company with a lean culture, we needed we more than quadrupled sales, gained 13 points of gross
everyone looking forward to achieving our operational margin, took inventory turns from 3x to 18x, improved
excellence goals. The traditional batch company with a EBITDA from 6% to 21%, and increased enterprise value
“make the month” culture is always looking backward at just under 2,500%. n
something that already has happened. What’s the point of
that? You can’t do anything about something that already
has happened.

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