By Kevin Meyer
It's been a while since we've had an edition of "5 Questions" but this is someone many of us already know and the rest of you should. Every lean person knows of the Wiremold lean turnaround story, and Art Byrne was driving it – as CEO. He has gone on to help with lean transformations at over 30 companies.
Art's book, The Lean Turnaround, was recently published and I highly recommend it. Many thoughts – and lessons – from one of the best examples of a lean turnaround as well as more, and more diverse, lean experience than most of us could hope to achieve.
Now on to his answers to the 5 Questions. Meet Art Byrne.
1) Who are you, what organization are you with, and what are your current lean-related activities?
I am currently an Operating Partner at J W Childs Associates, a Boston based Private Equity Fund. Prior to that, I was the CEO of The Wiremold Company from 1991 to 2002. Before that I was a Group Executive for The Danaher Corporation where one of my company Presidents and I were responsible for introducing Danaher to lean. I went to Danaher from The General Electric Company where I had been General Manager of two separate businesses. My current lean activities revolve around driving lean into all of the J W Childs operating companies and promoting my recently released book, The Lean Turnaround, from McGraw-Hill.
2) How, when, and why did you get introduced to lean and what fueled and fuels the passion?
My first introduction to lean [it was called just-in-time back then] was in January of 1982 during my first general managers job at The General Electric Company. We implemented a simple kanban system that took my inventory from 40 days to 3 days. That was nice but the improvements in quality, productivity, customer service, freed up space and the positive response from the workforce had me hooked. I really learned the Toyota approach as a Group Executive at Danaher. We were fortunate to be the first, and for four years, only client of the Shingijutsu Company from Nagoya, Japan. The three founders all had worked directly for Taiichi Ohno, the father of the Toyota Production System, for many years so they taught us how it was done the proper way. During my tenure at Wiremold we were able to quadruple in size, increase operating income by more than 13X and achieve an almost 2,500% increase in enterprise value in a little over 9 years. Getting this type of increase in enterprise value of course gets your attention and fuels the passion but for me the real driver is the ability to grow the skills and capabilities of all your people and give them a chance at personal wealth creation. At Wiremold, for example, the largest shareholder when we sold the Company was the employees through their participation in the 401K plan. As a result they shared in the biggest portion of the wealth that was created.
3) What is the most powerful aspect of lean?
I think that lean is the biggest wealth creator I have ever seen. If you go back over time one thing has always been true; "Productivity = Wealth". This is true of both countries and companies. Using a lean strategy and the lean tools to remove waste and improve your value adding activities generates tremendous productivity and therefore wealth. This is not just wealth in the monetary sense but also the wealth that comes from the personal growth of all your associates. To me, this latter part is much more rewarding.
4) What is the most misunderstood or unrecognized aspect of lean?
I think there a quite a few things that are misunderstood about lean. One of the most tragic is the fact that lean has become most commonly known as "lean manufacturing". This is a problem even for manufacturing companies as it allows them to think of lean as "some manufacturing thing" and thus just delegate it down to the V.P. of Operations. For non manufacturing companies, where the gains from lean are even larger, they just feel it doesn't apply to them at all so they never even try. To me however, the thing that is most misunderstood about lean is the fact that lean is a strategic thing and not just some manufacturing thing. To be successful you have to see lean as your underlying core strategy. Removing waste and improving your value adding activities, in order to deliver more value to your customers, is what lean is all about. It is in fact a time based growth strategy that is especially valuable in slow growth economies like the present on. Unfortunately very few people see this and try to adopt lean for some misguided reason like reducing headcount.
5) What is the biggest opportunity for lean in today's world? How can that be accomplished?
This is a very broad question so there is no simple answer. I suppose that if we could remove the waste from every company and every government agency [extremely hard to do in this latter case] then we would create tremendous growth and wealth for everyone. If we got a little more narrow [i.e. came down from the clouds] then I think that the entire health care system in the US could greatly benefit from a lean transformation. I have done kaizens in hospitals and know first hand what a mess they are despite the fact that they have some very smart and dedicated employees. Unfortunately, our current administration just passed a law that will take health care costs up not down. A second target in my opinion would be the public school system. This would be more difficult due to the politics and unions that have made it such a mess in the first place but it could be done.