Jim Womack: Lean's Origins in an Economic Crisis

From Jim Womack of the Lean Enterprise Institute in his latest email letter about lean's roots in the Japanese financial crisis of 1950:

A few [Toyota] line managers had some very simple ideas and an extreme sense of urgency: Minimize lead time from order to delivery (to free up scarce cash.) Remove waste from every step in every process (to reduce costs and enhance quality.) Take action now (because there wasn’t much time.) But what they also had – and this was critical – was a tight scientific discipline. While they did act quickly, they also took the necessary time to document the current state, to state their hypothesis very clearly, to conduct a rigorous experiment, to measure the results, and to reflect on what they had actually achieved, sharing their findings widely....Toyota's remarkable act of creation – based on a scientific process of systematic discovery – was conducted by line managers as the most important part of their daily work. And – here’s the really inspiring part – they did most of their research in midst of a fierce battle for survival.

President Obama's Chief of Staff, Rahm Emanuel, recently said, "A crisis should never go to waste."

What he meant - and what Toyota learned - is that crises have the potential to drive momentum for change. It's easy to stay with the status quo when business is booming. It's admittedly easier to freeze expenses, cut budgets and lay off staff when profit margins erode than it is to develop innovative ways to preserve and even grow the firm's human capital and stay true to the rigors of the scientific method.

Yet Toyota's example shows that is the path to sustainable competitive advantage and even greatness.