We’re Not Making Chicken Here

by BILL WADDELL

The post I wrote the other day referencing the 'Lean Community' sparked an interesting debate and a number of good comments.  To paraphrase the central question in the debate, a couple of folks asked, "Why should I share my lean knowledge with the rest of the world – especially my competitors?"  They are essentially asking why they shouldn't protect their company's lean knowledge and insights like KFC protects their secret "blend of 11 herbs and spices".  After all, the Colonel didn't participate in a 'community of chicken cookers', freely sharing his proprietary knowledge.

The answer is that managing as a true lean enterprise and making chicken are two entirely different propositions.  In theory, if I knew the recipe, could buy the same quality ingredients, and buy the same sort of cooking hardware as the colonel I could exactly reproduce his recipe.  Same with the secret formula for Coke.  That is not even remotely the case with lean.

One of the most powerful insights I ever read regarding manufacturing management came from the book, Dynamic Manufacturing, written by a couple of Harvard guys and a Stanford guy a little over twenty years ago.  One of their central ideas was that the business can be viewed as a combination of structure and infrastructure.  Structure is the physical, tangible part – machines, buildings, material handling and computers.  Infrastructure is the soft part that is hard to see – systems, measurements, how numbers are put together and how decisions get made – in other words, management.  It includes things like the organizational structure, accounting and measurement systems, supply chain management processes, capital investment decision criteria and quality management.

They had a great insight in pointing out that no company succeeds in the long haul on the basis of structure.  By definition it is physical, and can be made or bought by anyone.  You are not going to outperform the competition with anything you buy like a machine or a new computer.  If it is that good, they can and eventually will buy one just like yours.

The key to success lies in the infrastructure of the business – how you manage it.  And even if you use similar logic, the management will be a reflection of the collective wisdom, knowledge, experience and values of the management team.  It will be as unique as fingerprints.  No two companies will have the same infrastructure because it is all wrapped up in the people running things, and how they think.  It is formed by the culture of the company.

In the end, business is a battle of infrastructures, and the company with the superior infrastructure – the best management and culture – wins.  What we saw in the last third of a century was Toyota bringing a vastly superior management infrastructure and culture to the automotive industry, and General Motors trying to overcome it with structural things – $30 billion+ in robots and automation to be specific.  But GM did not overhaul their infrastructure.  They still managed the business in the same way.  And the theory espoused in Dynamic Manufacturing proved to be true.  Toyota's superior infrastructure prevailed.

So you can imitate your competitor's kanbans, factory layout and machines all day long – or they can copy your's – and it will not affect the outcome much.  You are going to prevail by managing better.   And you cannot duplicate your competitor's infrastructure – nor they your's – no matter how much either of you try because you are a different business, with a different culture, staffed and run by different people with different knowledge, experience and values.

You can study Toyota all day long but you will never be Toyota.  Your management has to find its own way; apply the underlying principles of lean in the manner that works best for you.  So Boeing and Wahl Clipper can go to the Lean Accounting Summit and share as freely as they wish without worrying too much that their competitors are going to duplicate their management processes.  Airbus and Andis – those company's two biggest competitors – are entirely different and will end up running their businesses in a different way, reflective of what they know and they believe.

You don't have to share anything with the rest of the manufacturing world if you don't want to.  But there is little risk from having the competition find out your secret blend of herbs and spices.  They can't  do anything with it that will hurt you much.  But participating in this and other lean forums, and the process of sharing and taking at the lean conferences, is a way for everyone's knowledge of lean to advance.  By learning what other company's have done in one nuance of lean or another, you can gain some insights into how your company might handle that aspect of the business.  You can't copy anything verbatim, however, because the environment in which you operate is never the same.

And, of course, all of this is why any lean expert – consultant – who is out pushing a one size fits all – here is the Toyota secret blend of 11 herbs and spices – cookbook approach to lean will not possibly help you much.  It is also why I spend all of my time working in management infrastructures.  I know the key to my client's success is in devising accounting processes, organizational structures and performance metrics that are driven by lean principles, but reflect their unique culture and circumstances, is the key to their success, rather than rote imitation of some other company.

Maybe a better analogy than Kentucky Fried Chicken is Tiger Woods.  You can read his books and take golf lessons from him all day long, but you will not be as good as he is.  The key to his success is in the intangibles – not his choice of clubs or his technique.