Profit Is Inevitable

by BILL WADDELL

Most of my study of lean has been an effort to try to understand the driving principles – to get into the minds – of the people who created the core body of knowledge.  They had to have been driven by a different set of priorities and a different way of thinking in order to have taken such radically different approaches.  Today's manufacturing leaders are every bit as intelligent and committed, yet they often fail to see the value of lean.  This tells me they must not hold the same objectives, and they must not be driven by the same principles.  I am convinced that, if a manager can wrap his or her head around the way of thinking that drove Toyota back in the 50's and 60's to do what they did, and Henry Ford back in the 10's and 20's to do what he did, then lean will make sense to them.

My understanding of lean has been profoundly impacted by Art Smalley – the first American to work as a manufacturing manager for Toyota in Japan – telling me that ironically, Toyota's engine plant in West Virginia could not pass a Shingo audit because they do not deploy the lean tools that have dominated the perception of lean among so many of us.

And I have been equally impacted by the long tradition and current high performance of manufacturing in Germany – the world's second leading exporter of manufactured goods. In my work in Germany, I saw enormous success in spite of a similar lack of deployment of many of the lean tools and techniques that define 'leanness' in many people's minds.

The mindset that propeled Ford and Toyota, as well as many German manufacturers, and those modern day American and other western manufacturers who have achieved excellence is embodied in a quote I took from Henry Ford that is on the masthead of my web site:  "Profit is the inevitable conclusion of work well done".

To me that means you don't temper of compromise on the value of the product or the capability of the process based on cost considerations.  You simply focus on making the best product you can in the best way you can, and the cost is what it is; and if the product truly has value then the customers will reward you for it.  But if the product does not hold that maximum value, making it cheaper or with less capable processes is not going to help.

My ranting and railing about accounting and sophisticated academic theories, and against outsourcing to low labor cost countries is motivated primarily by the belief that much of it driven by a misguided attempt to manage or manipulate profit directly, usually at the expense of the product and processes … taking ones eye off of the paramount nature of 'work well done' and a lack of faith that profits from such work are inevitable.

AJ Sweatt, a good friend and an Evolving Excellence reader turned me on to this article from CNN.  It is an interview with a chef and restaurant owner by the name of Thomas Keller, and despite the unlikely source of lean thinking, this guy comes as close to embodying the "profit is the inevitable conslusion of work well done" spirit as you can find anywhere.  As you read it, be prepared to be hit with one profound lesson in lean thinking after another …

"We have a society today, especially in this country, which really kind of confuses me. — when we want to have the very best and pay them the very least for it. Didn't your mother ever tell you — you get what you pay for?"

"It is not my job to negotiate on price. It's my job to demand a high level of quality, and you have to work with somebody to raise that level of quality continuously. So we can have a better product and at the end of the day, pay them what it's worth."

It doesn't matter whether you are selling $250 dinners, or $1 flashlight batteries, it is the degree to which work is well done that determines your success, and no amount of manipulating the money can compensate for a lack of work well done.