I have seen hundreds of companies attempt to transform their business through the application of Lean philosophies and methodologies. Most of these businesses had initial success but eventually “flatlined” in their operating and financial metrics. The reasons for this are many, however, this article focuses on the primary root cause of false starts and failed transformations.
What is the Lean Trilogy?
The Lean Trilogy characterizes the equilibrium that needs to exist between three primary stakeholders: the Employee, the Customer, and the Shareholder. If the requirements of these three groups are not met, the Lean Transformation will fail.
I recently spoke with a rather large financial institution that started a transformation quite a few years ago. They were speaking with me to gain my perspective regarding their path forward after a rather failed attempt to cut costs. Their primary focus for doing a Lean Transformation was to take cost out of the business thereby improving profitability. As I listened to them describe their situation, they used the word “cost” over a dozen times as the primary objective. Never once did they mention the customer or their employees. The person I spoke with reported to the CFO, which further reinforces the fact that they have a cost mindset to satisfy shareholders, and rarely considered their customers and employees.