LEAN PRIMER
by Craig Larman and Bas Vodde
Version 1.6
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Craig Larman and Bas Vodde are the authors of Scaling Lean & Agile Development. They workas management coaches in organizations adopting lean thinking.
For consulting or more information, please see craiglarman.com and odd-e.com.
Note: Lean thinking and the Toyota Way are large subjects, spanning application to productdevelopment, service, sales, HR, and production, and spanning many functions: management,
design, delivery, and more. We encourage deeper study; see Recommended Readings at the end.

TABLE OF CONTENTS• Introduction 2• Lean Thinking: The Big Picture 3• Background 7• Lean Summary: The Lean Thinking House 8• Lean Goal: Sustainably Deliver Value Fast 9• Lean Foundation: Lean Thinking Manager-Teachers 10• Pillar One: Respect for People 12• Pillar Two: Continuous Improvement 14• 14 Principles 25• Lean Product Development 34

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INTRODUCTION
I have enough money to last me the rest of my life,
unless I buy something.
—Jackie Mason

Lean thinking is a proven system that applies to product development and production,
as evidenced by Toyota and others. And although most often applied to products, it isalso used in service areas—both within Toyota and in domains such as health care1.
The image and metaphor we like to convey a key thinking mistake—and opportunity—is the sport of relay racing.
Consider the relay racers standing around waiting for the baton
from their running colleague. The accountant in the finance department, looking aghast at this terrible underutilization ‘waste’ indicated in some report, would probably mandate a policy goal of “95%utilization of resources” to ensure all the racers are busy and ‘productive.’ Maybe—he suggests—the runners could run three races atthe same time to increase “resource utilization,” or run up a mountain while waiting.
Funny…but this kind of thinking lies behind much of traditional management andprocesses in development and other domains.2 Of course, in contrast, here is a central
idea in lean thinking:Watch the baton, not the runners.

1. For readers working in service domains, note that most lean principles are very general, such as continuous improvement mindset and manager-teachers who are workexperts and act as mentors. Some principles require minor translation, such as longterm great engineers to long-term great hands-on workers, or new product development to new service.
2. See, for example, PRTM [McGrath96, McGrath04] for collections of traditional—and
un-lean—product development ideas.

2

Lean Thinking: The Big Picture

Does your organization measure “productivity” or “efficiency” in terms of how busy
people are, or time spent—watching the runner? Or, in terms of fast delivery of value
to the real customer—watching the baton? What is the value-to-waste ratio in yourwork? And what are the impediments to the flow of value—and how can people feelinspired to continuously strive to improve that flow? Lean thinking addresses this.

LEAN THINKING: THE BIG PICTURE
Lean (or lean thinking) is the English name—popularized by MIT researchers—todescribe the system now known as the Toyota Way inside the company that created
it.3 Toyota is a strong, resilient, company that seems to improve over time:– In 2008 surpassed GM tobecome the largest vehicle
company by sales, while being
much more profitable.

– Market capitalization in May
2007 was over 1.5 times thatof GM, Ford, and DaimlerChrysler combined.

– J.D. Power (etc.) consistently
rate Toyota, Lexus, and Scion
among the top in quality.

– Innovative with social andenvironmental awareness—for
example, creator of the Priusand hybrid technology.

– In 2006 profit was $13.7 USD
billion, while GM and Ford
reported losses.a– Product development at levels
up to twice as fast as somecompetitors.

a. In 2009, after the worldwide financial crisis, GM entered bankruptcy protection. Toyota, while suffering losses along with otherautomotive companies, remains solvent.

This is a sample; Extreme Toyota [OST08] dedicates a chapter comparing their sustainable performance compared to others in their industry. That said, Toyota is far fromperfect and there are unique things to learn from other systems (such as agile methods
in software development) that are not found in lean thinking. We are not suggestingthat Toyota or lean thinking is the only model to learn from, or to simply emulate it.
Nevertheless it is a long-refined meritorious system from a relatively robust and sustainable company.
3. The original name was Respect for Humanity System. Some called it The Thinking
Way. These emphasized a Toyota culture of mentoring people to think through andresolve root causes to problems, to help society, and to humanize work [Fujimoto99,
WJR90].

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The Pillars of Lean Are Not Tools and Waste Reduction

There are some common misconceptions about lean. This primer starts with clearing
these away.
What is the essence and power of lean thinking and Toyota?
When I first began learning about TPS4, I was enamored of the power of [one-pieceflow, kanban, and other lean tools]. But along the way, experienced leaders within
Toyota kept telling me that these tools and techniques were not the key to TPS.
Rather the power behind TPS is a company’s management commitment to continuously invest in its people and promote a culture of continuous
improvement. I nodded like I knew what they were talking about, and continued
to study how to calculate kanban quantities and set up one-piece flow cells. After
studying for almost 20 years and observing the struggles [other] companies have
had applying lean, what these Toyota teachers told me is finally sinking in.
[Liker04] (emphasis added)
Wakamatsu and Kondo, Toyota experts, put it succinctly:
The essence of [the Toyota system] is that each individual employee is given theopportunity to find problems in his own way of working, to solve them and to make
improvements. [Hino06]

Management Tools Are Not a Pillar of Lean

The above quotes underscore a vital point because over the years there have been someostensibly ‘lean’ promoters that reduced lean thinking to a mechanistic superficial
level of management tools such as kanban and queue management. These derivativedescriptions ignore the central message of the Toyota experts who stress that theessence of successful lean thinking is “building people, then building products” and aculture of “challenge the status quo” continuous improvement [Hino06].
Reducing lean thinking to kanban, queue management and other tools is like reducing
a working democracy to voting. Voting is good, but democracy is far more subtle anddifficult. Consider the internal Toyota motto shown in a photo we took when visiting
4. Toyota Production System (TPS) is the precursor to the Toyota Way [Ohno88].

4Lean Thinking: The Big Picture

Toyota in Japan some years ago; it captures the heart of lean, summarizing their focus
on educating people to become skillful systems thinkers:

To simplify lean thinking to tools is to fall into a trap repeated many times before bycompanies superficially and unsuccessfully attempting to adopt what they thought
was lean.
... it was only after American carmakers had exhausted every other explanation for
Toyota’s success—an undervalued yen, a docile workforce, Japanese culture, superior automation—that they were finally able to admit that Toyota’s real advantage was its ability to harness the intellect of ‘ordinary’ employees.
[Hamel06]
Consequently, Lean Six Sigma5 is viewed by Toyota people to represent Six Sigma
tools but not to represent real lean thinking. A former Toyota plant and HR manager
explains:
Lean six sigma is a compilation of tools and training focused on isolated projects
to drive down unit cost… The Toyota approach […] is far broader and far deeper.
The starting point is the Toyota Way philosophy of respect for people and continuous improvement. The principle is developing quality people who continually
improve processes… The responsibility lies, not with black belt specialists, butwith the leadership hierarchy that runs the operation and they are teachers andcoaches. [LH08]
Waste Reduction Is Not a Pillar of Lean

The book Lean Thinking [WJ96] was justifiably popular and introduced some Toyota
ideas to a much wider audience. We recommend it—while observing that it presents a
condensed view of the Toyota system. Lean Thinking draws significantly on researchfrom the 1980s and early 1990s that focused on Toyota’s production system [WJR90],
and was published before Toyota’s own Toyota Way 2001 “Green Book,” that summa5. Lean Six Sigma is an amalgam of tools promoted in the Six Sigma movement[George02].

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5Lean Primer

rized the priority of the broader principles from an insider’s perspective. The subtitle ofLean Thinking is Banish Waste and Create Wealth in Your Organization, and so notsurprisingly, those who have read only that one book often summarize lean as “removing waste.”
Although useful, waste reduction is not a pillar of lean; it is only mentioned several
levels deep within the Toyota Way 2001. Plus, in Lean Thinking, some preeminent leanprinciples such as Go See (that Toyota highlights) are treated in an entertaining but
only anecdotal or secondary style that make it possible to miss the relative importanceof some lean principles within Toyota. Study Lean Thinking, and study more of the
Recommended Readings.

The Two Pillars of Lean

What are the pillars of lean? Toyota president Gary Convis:
The Toyota Way can be briefly summarized through the two pillars that support it:Continuous Improvement and Respect for People. Continuous improvement,
often called kaizen, defines Toyota’s basic approach to doing business. Challenge
everything. More important than the actual improvements that individuals contribute, the true value of continuous improvement is in creating an atmosphere ofcontinuous learning and an environment that not only accepts, but actuallyembraces change. Such an environment can only be created where there isrespect for people—hence the second pillar of the Toyota Way. (emphasis added)
And from Toyota CEO Katsuaki Watanabe:
The Toyota Way has two main pillars: continuous improvement and respect forpeople. Respect is necessary to work with people. By “people” we mean employees,
supply partners, and customers. …We don’t mean just the end customer; on theassembly line the person at the next workstation is also your customer. That leads
to teamwork. If you adopt that principle, you’ll also keep analyzing what
you do in order to see if you’re doing things perfectly, so you’re not troubling your customer. That nurtures your ability to identify problems, and if you
closely observe things, it will lead to kaizen—continuous improvement. The rootof the Toyota Way is to be dissatisfied with the status quo; you have to ask
constantly, “Why are we doing this?” (emphasis added)
Respect for people and continuous improvement “challenge everything” “embracechange” mindset, the pillars of lean, are expanded later. If a lean adoption program6

Backgroundignores the importance of these—a cargo cult lean adoption6—then the essential
understanding and conditions for sustainable success with lean will be missing.

BACKGROUND
The English term ‘lean’ was popularized for the Toyota system—by MIT researchers of
Toyota in The Machine That Changed the World [WJR90]—to contrast their lean production with the alternative of mass production. The implication was a dramatic
reduction in work-package or batch size, and no longer competing on economies ofscale but rather competing on the ability to adapt, avoid inventory, and work in verysmall units. The term lean is now also used within Toyota; for example, in their Toyota
Way 2001 internal booklet.
Two of the authors of the The Machine That Changed the World went on to write Lean
Thinking, a popular introduction that summarized five principles.
Relatively broad descriptions of the lean system are The Toyota Way, The Toyota Product Development System, Inside the Mind of Toyota, Extreme Toyota, and Lean Productand Process Development. All are based on long study of Toyota. The Toyota Way[Liker04] text is used by Toyota for education, in addition to their internal Toyota Way
2001. This introduction to lean is similar to these descriptions.

6. A cargo cult in a tribal society performed rituals imitating the behavior of nonnative visitors (often from Europe). By analogy, cargo cult process adoption suggests
ritualism and superficiality. Cargo cult lean adoption implies adopting lean tools
without the transformation to a lean state of mind and behavior by management.

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7Lean Primer

Figure 1.1 the lean-thinking house

Sustainable shortest lead time, best quality and value (to people
and society), most customer delight, lowest cost, high morale, safety
Respect
for People- dont trouble
your customer
- “develop people,
then build products”- no wasteful work
- teams & individuals
evolve their own
practices andimprovements- build partners withstable relationships,
trust, and coachingin lean thinking- develop teams

Product Development- long-term great engineers- mentoring from managerengineer-teacher- cadence- cross-functional- team room + visual mgmt
- entrepreneurial chiefengineer/product mgr- set-based concurrent dev- create more knowledge
14 Principles
long-term, ﬂow, pull, lessvariability & overburden,
Stop & Fix, master norms,
simple visual mgmt, goodtech, leader-teachers fromwithin, develop exceptional
people, help partners belean, Go See, consensus,
reﬂection & kaizen

Continuous
Improvement- Go See- kaizen- spread knowledge- small, relentless- retrospectives- 5 Whys- eyes for waste* variability, overburden, NVA ...
(handoff, WIP,
info scatter,delay, multitasking, defects,
wishful thinking..)- perfection challenge- work toward ﬂow(lower batch size,
Q size, cycle time)

Management applies and teaches lean thinking,and bases decisions on this long-term philosophy

LEAN SUMMARY: THE LEAN THINKING HOUSE
Figure 1.1 summarizes the modern Toyota Way in a “lean thinking house” diagram,because an earlier version of the Toyota system was first summarized within Toyota bya similar house diagram7. This house also defines the major sections of this primer,

7. Fujio Cho, who later become Toyota chairman, sketched the first “Toyota Production
System house” diagram in 1973.

8

Lean Goal: Sustainably Deliver Value Fast

such as Respect for People and Continuous Improvement. The remainder of the primer
follows the major elements of the diagram in the following order:
4. pillar—continuous
improvement

1. goal (roof)
2. foundation
3. pillar—respect forpeople5. 14 principles
6. lean product development

LEAN GOAL: SUSTAINABLY DELIVER VALUE FAST
Sustainable shortest lead time, best quality and value (to people and society), mostcustomer delight, lowest cost, high morale, safety.

Product
Development
14
Principles
Foundation

Continuous
Improvement

Respect for
PeopleGoal

Broadly, the global or system goal of lean thinking is toquickly deliver things of value (to the customer and society) in shorter and shorter cycle times of all processes,
while still achieving highest quality and morale levels—
flow of value to the customer without delay. Toyota strives
to reduce cycle times, but not through cutting corners,
reducing quality, or at an unsustainable or unsafe pace;rather, by relentless continuous improvement, that
requires a company culture of meaningful respect for people in which people feel they have the personal safety tochallenge and change the status quo.

We see echoes of this goal in the words of the creator of the Toyota Production System(TPS), Taiichi Ohno:
All we are doing is looking at the time line, from the moment the customer gives us
an order to the point where we collect the cash. And we are reducing the time line
by reducing the non-value-adding wastes.8 [Ohno88]
So, a focus of lean is on the baton, not the runners—removing the bottlenecks to fasterthroughput of value to customers rather than locally optimizing by trying to maximize
utilization of workers or machines.
8. This allusion to wastes is explored later. ‘Waste’ has an important and specific meaning in lean thinking.

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9Lean Primer

Not only does Toyota (and their Lexus and Scion brands) manufacture vehicles, butalso successfully and efficiently develop new products—lean principles apply to product development. How does Toyota achieve the “global goal” in their two main processes, product development and production?
❑

Development—out-learn the competition, through generating more usefulknowledge and using and remembering it effectively.

❑

Production—out-improve the competition, by a focus on short cycles, small
batches and queues, stopping to find and fix the root cause of problems, relentlessly removing all wastes (waiting, handoff, …).

This primer returns to out-learn and out-improve later on. Of course, these approaches
are not mutually exclusive. Toyota Development improves and Production learns.

LEAN FOUNDATION: LEAN THINKING MANAGER-TEACHERSManagement applies and teaches lean thinking, and bases decisions on this longterm philosophy.

Product
Development
14
Principles
Foundation

Continuous
Improvement

Respect for
PeopleGoal

When we first visited Toyota in Japan, we interviewed
people to learn more about their management culture andeducation system. One of the things we learned is thatmost new employees first go through several months ofeducation before starting other work. During this period
they learn the foundations of lean thinking, they learn tosee ‘waste’ (a subject we will return to), and they dohands-on work in many areas of Toyota. In this way, new
Toyota people…

❑

learn problem solving through hands-on improvement experiments❑

learn to see how lean thinking applies in different domains❑

learn kaizen mindset (continuous improvement)❑

appreciate a core principle in Toyota called Go See and gemba

Go See means people—especially managers—are expected to “go see with their owneyes” rather than sit behind desks or believe that the truth can be learned only from
reports or numbers. It is related to appreciating the importance of gemba—going to thephysical front-line place of value work where the hands-on value workers are.

10

Lean Foundation: Lean Thinking Manager-Teachers

Michikazu Tanaka, a student of Taiichi Ohno, summarized the lessons he learned:
You can’t come up with useful kaizen [improvement] sitting at your desk… We
have too many people these days who don’t understand the workplace… They
think a lot, but they don’t see. I urge you to make a special effort to see what’s happening in the workplace. That’s where the facts are. [SF09]
We also learned that potential executive managers have worked their way up throughyears of hands-on lean thinking practice and mentoring to others. When Eiji Toyoda
was president, he said to the management team, “I want you actively to train your people on how to think for themselves” [Hino06]. Note that this is not simply a message oflet people think for themselves. Rather, the management culture is managers act asteachers of thinking skills. Toyota managers are educated in lean thinking, continuous improvement, root cause analysis, the statistics of variability, and systems thinking—and coach others in these thinking tools.
From this, we came especially to appreciate that for successful adoption of lean, there
are management qualities needed for any meaningful, sustained success—the leadership team cannot “phone in” their lean support. Toyota is one of few companies that
seems to demonstrate these qualities; to summarize [OST08]:❑

Long-term philosophy—many in the company are educated in lean thinking
through courses and mentoring from manager-teachers.

❑

Long-term philosophy—virtually all management, including the executive level,
must have a solid understanding of lean principles, have lived them for years,
and teach them to others.

❑

Long-term philosophy—manager-teachers have cultivated systems thinking andprocess-improvement problem-solving thinking skills, and they teach it to others.
The culture is imbued with the mentality and behavior, “Let’s stop and understand the root causes of problems.”

Manager-teachers—the internal motto isGood Thinking, Good Products. How do they
achieve this “good thinking” which forms thefoundation of their success? It is through a culture of mentoring. Managers are expected to behands-on masters of their domain of work (thesaying is, “my manager can do my job better than me”), are expected to understandlean thinking, and are expected to spend time teaching and coaching others. We
learned during an interview in Japan that Toyota HR policies include analysis of how
much time a manager spends teaching. In short, managers are less directors and more

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11Lean Primer

teachers in the principles of lean thinking, “stop and fix right,” and kaizen mentality.
In this way, the Toyota DNA is propagated [LH08].
Atsushi Niimi, Toyota North America president, said that the greatest challenge inteaching the Toyota Way to foreign managers was, “They want to be managers, notteachers.”
In [Liker03], a matrix of management cultures is presented; ideal lean manager-teachers are in the top-left quadrant—bottom-up consensus builders and real team leaders
who are work experts, and who mentor their team members:
expert knowledge of the only general managementworkknowledge
bottom-up

coach/mentor; builder of alearning organization

facilitator

top-down

detailed task masterbureaucrat

The more one learns about lean, the more one appreciates that the foundation is manager-teachers who live and teach it and have long hands-on experience. The foundation
is not tools or waste reduction.
Any executive team that wants to succeed with lean thinking will need to pay attention to this basic lesson—that they cannot “phone in” their support to “do lean.”

PILLAR ONE: RESPECT FOR PEOPLE

Product
Development
14
Principles
Foundation

12

Continuous
Improvement

Respect for
PeopleGoal

Respect for people sounds nebulous, but includes concrete
actions and culture within Toyota. They broadly reflect
respect for and sensitivity to morale, not making people dowasteful work, real teamwork, mentoring to develop skillful people, humanizing the work and environment, safe
and clean environment (inside and outside of Toyota), andphilosophical integrity among the management team.
Figure 1.2 illustrates some implications.

Pillar One: Respect for People

Figure 1.2 respect for people

Dont Trouble Your Customer- your customer is anyone who
consumes your work or decisions“Develop People and Then
Build Products”- managers act as teachers, notdirectors- relentlessly analyze and change tostop troubling them
- dont force people to do wasteful work
- dont give them defects- dont make them wait

- mentor people closely, for years, inengineering and problem solving- teach people to analyze root
causes and make problems visible;
then they discover how to improve- dont impose wishful thinking on them
- dont overload them

Lean “Respectfor People”
Teams & Individuals Evolve
Their Own Practices &Improvements- management challenges
people to change and may
ask what to improve , but…
- workers learn problem solving
and reﬂection skills and then...

Managers“Walk the Talk”
managers understand andact on the goal of“eliminating waste” and“continuous improvement”
in their own actions anddecisions—and
employees see thisDevelop Teams- real, jelled teams of 5-6 people- team-work, not group-work, culture- decide how to improve
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13Lean Primer

PILLAR TWO: CONTINUOUS IMPROVEMENT
Continuous improvement is based on several ideas:❑kaizen❑perfection challenge❑

work toward flow (covered in the 14 Principles)

Product
Development
14
Principles

Continuous
Improvement

Go SeeRespect for
PeopleGoal❑

Foundation

Go See for Yourself (Go See)

Go to the source [the place of real value work—gemba] to find the facts to makecorrect decisions, build consensus, and achieve goals at our best speed. [Toyota01]
Go See is a principle not found in many management cultures. This principle isdescribed as critical and fundamental. In the internal Toyota Way 2001 it is highlighted as the first factor for success in continuous improvement. Go See shows up
repeatedly in Toyota manager quotes, in Toyota culture and habits [LH08], in education on the Toyota Way, and in the research done by Japanese analysts of lean thinking(for example, [OST08]). All that said, it is missing from some derivative ‘lean’ descriptions and so—unfortunately—some are unaware of its vital role.
In a lean-thinking culture, all people, but especially managers—including senior managers—should not spend all their time in separate offices or meeting rooms, receiving
information via reports, computers, management reporting tools, and status meetings.
Rather, to know what is going on and help improve (by eliminating the distortion thatcomes from indirect information), management should frequently go to the place of real
work and see and understand for themselves. This “real front-line place of work”(gemba) does not mean proximity to the building where work happens, nor does itmean going to visit other managers. It implies to be as physically close to the real
front-line work as possible—not sitting in an office nearby, but “breathing the sameair.” ‘Work’ in lean does not primarily mean the overhead or secondary work ofaccounting and so on, but the value-adding work that the customer cares about—engineering, designing a car, producing things, delivering customer service.
An example of Go See is for managers to regularly visit and then sit with hands-on
engineers or service-delivery people while they are working, with the aim of under-

14

Pillar Two: Continuous Improvement

standing problems and opportunities to improve. It is similar to the unfortunately
now-lost HP practice of “management by walking around.”In an interview, Toyota’s chief engineer quoted Taiichi Ohno, who insisted on managers
practicing Go See at gemba:
Don’t look with your eyes, look with your feet… people who only look at the numbers are the worst of all. [Hayashi08]
The Japanese term for Go See, genchi genbutsu, has also been broadly rendered as
implying solve problems at the source instead of behind desks. Go See not only implies
walking to the source to find facts and decide with direct insight; it means—once you
are there—to build consensus for goals and experiments to change. The full implicationof Go See is for people—especially managers—to frequently spend time at the realplace of value work, build relationships of trust with the people there, and help themfix things.
For example, Figure 1.3 shows a picture of Craig’s ‘office’ in Bangalore, Valtech India: alittle desk physically among hands-on teams. He has spent time sitting with the real
workers while they work, and attending their kaizen events. In this way, getting a
direct understanding of what’s working and what’s not—and how to better help.
Figure 1.3 ‘office’—Go See attitudewww.leanprimer.com
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15

Lean Primer

KaizenImprove for improvements’ sake, endlessly.
Kaizen is sometimes translated as simply “continuous improvement” but that confuses it with the broader lean pillar of “continuous improvement” and does not capture
the full flavor. So, we will stick with the Japanese term.9
Kaizen is both a personal mindset and a practice. As a mindset, it suggests “My work is
to do my work and to improve my work” and “continuously improve for its own sake.”
More formally as a practice, kaizen implies:
1. choose and practice techniques the team has agreed to try, until they are wellunderstood—that is, master standardized work
2. experiment until you find a better way
3. repeat forever
Step 1—Choose and practice techniques the team has agreed to try, until they
are well understood (master standardized work). The idea is for a group to firstfind (hopefully) skillful baseline practices and learn to do them well. People learn to do<X> in a standardized way, with plenty of practice, coaching, and good education. Stepone in kaizen implies having patience through the awkward learning phase and notabandoning new techniques quickly. People need a valid baseline to improve against.
And in Deming’s terminology, they need to be able to distinguish between commoncause and special-cause variability.
This step-one point of kaizen is that a person or team cannot accurately see if theyneed to improve or change a practice unless they have first mastered the basics, understood its subtle points, and can do it well. Have you ever seen, “Oh, <X> doesn’t work”
comments that were based on insufficient skill, practice, or education? There is no
point in ‘improving’ or rejecting based on misunderstanding.
In lean thinking, standardized work does not mean conforming to centralized
standards—A gross misunderstanding of lean thinking is the notion that “standardized work” means conformance to centrally-defined standards. This is such a profoundmistake from the lean perspective, yet so easily misunderstood, that this point
deserves special emphasis. Rather, the idea is for a team to master a baseline against
which improvement experiments can be compared. This baseline—the standard—is
9. We avoid Japanese terms unless no English term works.

16

Pillar Two: Continuous Improvement

created by the team themselves (not by a centralized group) and is ever-evolving. As
Ohno said:
I told everyone that they weren’t earning their pay if they left the standardized
work unchanged for a whole month. The idea was to let people know that they were
responsible for making continual improvements in the work procedures and forincorporating those improvements in the standardized work. [SF09]
Share rather than enforce practices—To reiterate, the standardized work or teamnorms should not be misconstrued to mean a fixed practice to follow “until notified otherwise” or a centralized top-down ‘standard’ from a central process group that is forcedon people—ideas contrary to the lean pillar of continuous improvement. Toyota people
promote yokoten—spread knowledge laterally that may evolve uniquely in different locations, like a graft from a tree. Yokoten means literally to unfold or open out
sideways. Spread knowledge implies a culture that emphasizes horizontal knowledge sharing, but not being forced to conform to central processes pushed top-down.10
Some quotes from Toyota people:
If we try to simply get everyone to the current standard you are missing opportunities to get better. You are not taking into account how times are changing. There
has to be lots of flexibility in allowing creativity along the way… Standards are
not developed and then communicated from headquarters to all the plants. Rigid
standards will only kill kaizen… It is yokoten every time—share best practices.
…We must let individuals from plants decide what they will do to fix their problems and close gaps. We cannot have someone from corporate saying you need to do
X, Y, Z, because this is completely contrary to Toyota problem solving. [LH08]
Communities of practice—something we recommend—are created to spread knowledge laterally.
Steps 2 and 3—Small, incremental, relentless change of anything. Kaizen is an
on-going activity by all people (including managers) to relentlessly and incrementallychange and improve practices, usually in small experiments, though large-scale systemkaizen is also an option. Almost no practice, process, or existing policy is sacred—anything can go. “Challenge everything,” in the words of Toyota President Convis. Also, akaizen culture is not one where only big improvement projects by process experts are
initiated. Rather, each team does it regularly themselves.
Learn process improvement by doing—Kaizen implies, by ceaseless repetition andmentoring, people learn by themselves how to make problems visible, analyze their
10. There are exceptions, such as safety and accounting standards.

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17Lean Primer

root causes, and improve by experimenting. And ‘failure’ of experiments is OK. The
only failure in kaizen is to not continuously experiment.
Kaneyoshi Kusunoki, another student of Taiichi Ohno, and executive vice-president at
Toyota, said about kaizen and management support:
A defining characteristic of the corporate culture at Toyota is that managers don’t
scold you for taking initiative, for taking a chance and screwing up. Rather, they’llscold you for not trying something new, for not taking a chance. Leaders aren’t
there to judge. They’re there to encourage people. That’s what I’ve always tried to
do. Trial and error is what it's all about!
In Kaizen by Masaaki Imai, he shares:
The essence of Kaizen is simple and straightforward: Kaizen means improvement.
Moreover, Kaizen means ongoing improvement involving everyone, including bothmanagers and workers. The kaizen philosophy assumes that our way of life—be it
our working life, our social life, or our home life—deserves to be constantly
improved. [Imai86]
Kaizen reflects the Plan-Do-Check-Act (PDCA) Shewhart improvement cycle (alsoknown as the Deming cycle) [Deming67]. In fact many people within Toyota formallyknow PDCA and sometimes describe what they are doing as “endless PDCA” [LH08].
Kaizen Events

Kaizen most often happens during repeating team kaizen events; a regular and frequent cadence of events is desirable, suchas daily or weekly. Broadly, a kaizen event
includes the steps (1) analyze some current
situation until it is well-understood, and (2)design experiments for improvement.
During this analysis and design, focus on
activities rather sitting around a table andtalking. Try creative activities at whiteboards, on flip charts, and so forth.
Beware dead kaizen events in which people go through the motions, but have burned
out from over-analysis or lack of empowerment and engagement. Avoid taking on too

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Pillar Two: Continuous Improvement

many improvement experiments at once—better to focus on one thing well, than manythings poorly.
Five Whys

Five Whys (usually written 5 Whys) is a simple and widely used tool used in kaizen. It
helps develop problem solving and root cause analysis skills. In response to a problem
or defect, a team considers “why?” at least five times.11 These questions may have multiple and related answers, so some teams create a “5 Whys graph” of branchinganswers (see Figure 1.4), or a more structured fishbone (Ishikawa) diagram.
The important point of 5 Whys is not the technique or the number 5, but that it is partof the “stop and fix” root-cause problem-solving mindset and culture pervasive at Toyota. People are taught to become deep problem solvers; to not live with problems, but tothink things through deeply. There is also a connection between Go See and 5 Whys: It
is easy for people to guess wrong or weak answers unless they see the facts at the realplace of the problem.
Figure 1.4 5 Whys graph—people changing teams too frequently

Value and Waste

What to improve during kaizen? In lean thinking the answer requires an understanding of value and waste.

11. ‘Five’ is not a magic number; it is meant to imply “dig deep.”www.leanprimer.com
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19Lean Primer

Value—The moments of action or thought creating the product that the customer12 iswilling to pay for. In other words, value is defined in the eyes of the external customer.13 Imagine a customer was observing the work in your office. At what moments
would they be willing to reach into their pocket, pull out money, and give it to you?
Waste—All other moments or actions that do not add value but consume resources.
Wastes come from overburdened workers, bottlenecks, waiting, handoff, wishful thinking, and information scatter, among many others.
One kind of analysis in lean thinking is to estimate all waste and value moments “fromconcept to cash.”14 From such a time line one can sum the value time and lead time(concept to cash), and then calculate
value ratio = total-value-time / total-lead-time
We have done many time lines with product development groups and have not seen avalue ratio in a development organization higher than 7 percent. In other words, 93 percent or more of the time in development was waste time.15
Improvement by Banishing Waste—After having defined value and waste, we cometo a noteworthy difference in lean improvement. Other systems focus on refining existing value actions; for example, improving skill in design. A worthy goal no doubt.
However, since there are typically few value-adding moments in the time line—maybe
5 percent—then improving those does not amount to much. But with a mountain of
waste time in the process, there are big opportunities to improve the value ratio by
eliminating waste.
For example, a common waste in product development is the waste of overproduction—
creating solutions or features not really wanted by the customer. It makes little sense
to focus on measuring and improving engineering efficiency by 2 percent if there is a
mountain of unused-feature waste due to poor decisions in product management.
As another example, one of the wastes is waiting or delay—customers do not pay forthat. Have you ever seen the waste of waiting…
12. “Value in the eyes of the customer” posits an idealized customer.
13. There are some quasi-lean descriptions that introduce the idea of internal businessvalue. This is not part of lean thinking, and its application can lead to a distortion of
improvement because things that are waste can be mislabeled as value.
14. This is part of the lean practice value stream mapping [RS99].
15. This is consistent with observation by others, such as [Ward06] who estimates anaverage 5% value ratio in product development.

20

Pillar Two: Continuous Improvement❑

for clarification?

❑

for approval?

❑

for another team to finish their part?

Non-Value-Adding Action Categories—Within Toyota people are educated todevelop “eyes for waste.” As a learning aid, lists of non-value-adding (NVA) actions
have been created. There is not one correct list—the point is not the categories, but tolearn to see and banish waste from the customer perspective. The following productdevelopment NVA action categories are drawn from The Toyota Way, Implementing
Lean Software Development, and Lean Product and Process Development.
Non-Value-Adding Action

Example or Comment

1. Overproduction of solutions or • features or services the customer doesn’t really wantfeatures, or of elements ahead of • large engineering documents, more detailed designs than
the next step; duplication
can be quickly implemented• duplication of data
2. Waiting, delay• …for clarification, documents, approval, components,
other groups to finish something

3. Handoff, conveyance, moving• giving a specification from an analyst to an engineer• giving a component to another group for testing

4. Extra processing (includes• forced conformance to centralized process checklists ofextra processes), relearning, rein- ‘quality’ tasks
vention• recreating something made5. Partially done work, work inprogress (WIP) or design inprogress (DIP)• designs documented but not built

6. Task switching, motion
between tasks; interrupt-based
multitasking• interruption• things built but not integrated or tested• multitasking on 3 projects• partial allocation of a person to many projects

7. Defects, testing and correction • testing and correction at-the-end to find and remove
after creation of the productdefects is not a value action; it may be a temporarily necessary waste

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21

Lean Primer

Non-Value-Adding Action

Example or Comment

8. Under-realizing people’s
potential and varied skill,insight, ideas, suggestions• people only working to single-speciality job title, or …?

9. Knowledge and information
scatter or loss

• information spread across many separate documents

10. Wishful thinking (for example, that plans, estimates, andspecifications are ‘correct’)• “The estimate cannot increase; the effort estimate is what
we want it to be, not what it is now proposed.”• do people have the chance to change what they see iswasteful?

• communication barriers such as walls between people, or
people in multiple locations• “We’re behind schedule, but we’ll make it up later.”

Improving through Removing NVAs—The focus on delivering value through waste
reduction orients a lean organization toward following the baton rather than the runners. Notice that the improvement strategy is subtractive rather than additive. Rather
than (for example), “What can we get the workers to do to increase utilization?”, thequestion is “What can we remove or stop doing?” In our consulting we have found thisto be a mindset change for traditional quality-assurance people in large organizations
who focus on conformance to checklists and adding activities for ‘improvement.’
Temporarily Necessary Waste versus Pure Waste—Not every waste battle can be
won given current capabilities and constraints. For example, it is wickedly hard or virtually impossible to create a product that never had a defect to begin with. Plus there
are many cases where it is cheaper to resolve defects through feedback loops with testat-the-end in small batches and short cycles, especially as modern testing tools andtechniques reduce the cost and cycle time of a test. To be clear: This is not a recommendation to wait and only test at the end of development. However, many short and cheap
cycles of small batches with automated testing may—not always—be the cheapest
solution to the “build quality in” problem. Thus it is sometimes prudent or necessary,
given today’s capabilities, to test and correct after creation of a small item in a very
short cycle—the waste of defects. Even Toyota does this ‘waste’ step, but only in shortcycles with small batch sizes so that defects do not linger, replicate, or pile up.
Because of this, Toyota recognizes two types of waste:
1. temporarily necessary waste… a future battle; for example, testing at the endof a short cycle
2. pure waste… in principle can and should be eliminated now

22Pillar Two: Continuous Improvement

Is Inventory Always Pure Waste?—A common view among those new to lean thinking isthat inventory is pure waste and should always be eliminated. Inventories of physicalthings or of intangible WIP—such as requirement specifications—imply investment
without profit and hidden defects. That’s not good. However, a common practice in lean
improvement is to create level pull, removing variability (one of the sources of waste)
in a downstream process step by inserting a small buffer of high-quality “equally sized”
inventory items before that downstream step.
Figure 1.5 three sources of waste

Variability
varying cycle lengths, varying batch sizes ofwork packages, varying size of one work
package, varying team members or size,
varying delivery times, defects (these
introduce much variability), interruption tohandle hot defects, irregular arrival ofrequests
Resolution?
- leveling the work

Overburden- overtime for arbitrary deadlines- one Product Manager having to know
hundreds of features in detail- often seen with specialist bottlenecks
and over-dependence on superspecialists- cadence; for example, timeboxed 2-weekcyclesResolution?
- develop “eyes to see” queues &bottlenecks and those who are doing
too much- decompose large work packages into manysmaller ones, so that a more consistentamount of work is taken each cycle- take on less work in cycle; descope- spread the work and skill—cross-train

3 Sourcesof
Waste

NVA actions- for example, handoff, waiting, scattered information, partially done work, task switching
Resolution?
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23

Lean Primer

Focus on Variability, Overburden, and NVA Actions—In addition to NVA actions,in the Toyota Way people are taught three sources of waste, illustrated and commented
with resolution ideas in Figure 1.5.16
Toyota people who observe outside attempts to adopt lean note a common mis-education about waste—the mis-education to only focus on eliminating NVA actions[LM06a]. Within Toyota, all three weaknesses are given importance, and in fact variability and overburden are viewed as frequent root causes that give rise to NVA
actions. For example, overburdened workers create more defects.
Perfection ChallengeThis is the third element of continuous improvement in lean.
During a visit to Toyota we invited a retired engineer to dinner in Nagoya. After several rounds of sake, we asked, “What do you miss, no longer working at Toyota?” Hereplied, “No longer discussing perfection with people.”
We sometimes visit an organization to discuss lean adoption and someone objects withessentially the argument, “We’re making good money, and have established processes.
Why should we change?” We do not think you would hear that question in Toyota. They
are far from perfect and we are not suggesting simply copying them, but their culture
is to have a kaizen mindset—to have high expectations and to challenge ourselves,
team members, and partners to levels of skill, mastery, waste reduction, and vision
beyond the status quo.
That’s powerful.
No Final Process

In 2001, Toyota created an internal Toyota Way booklet summarizing the lean principles. On hearing the proposed title, chairman Toyoda suggested renaming the booklet
Toyota Way 2001. Why? To emphasize that there is no final process in Toyota (which
would stifle kaizen), but rather, continuous improvement and change.
The implication of kaizen and spread knowledge laterally is that there is not a final orcorrect ‘defined’ process to follow everywhere that is communicated from a central process group. Kaizen does include learning and mastering working agreements, but they
16. The widely-used Japanese terms are mura (variability), muri (overburden), andmuda (non-value-add actions).

24

14 Principles

travel and evolve by the spread knowledge laterally model. People who have the mindset “let’s define (or buy) the central process, write it down, and then we should focus onconformance to it” will not be comfortable with lean thinking. To quote the Toyota
CEO, “The root of the Toyota Way is to be dissatisfied with the status quo; you have to
ask constantly, “Why are we doing this?” In Toyota and in lean thinking, the idea is torepeat cycles of improvement experiments forever.

14 PRINCIPLES

Product
Development
14
Principles

Continuous
Improvement

Respect for
PeopleGoal

The two pillars, respect for people and continuous improvement, are not the entire picture—literally or figuratively.
There are other potent lean principles that form the overall system of lean, some of which recapitulate elements inthe two pillars.
To quote Fujio Cho, chairman of Toyota:

Foundation

Many good American companies have respect for individuals, and practice kaizen and other [Toyota] tools.
But what is important is having all the elements together as a system. It must bepracticed every day in a very consistent manner. [Liker04]
Part of this broader system is covered in the 14 principles described in the Toyota Way
book that comes out of decades of direct observation and interviews with Toyota people. Table 1.1 summarizes the principles, some of which are further discussed after thetable.
Table 1.1 14 principles

Principle

Comment/Reference

1. Base management decisions on a long-term
philosophy, even at the expense of short-term
financial goals.

see local optimization p. 32

2. Move toward flow; move to ever-smaller batch
sizes and cycle times to deliver value fast &expose weakness.

see p. 27

3. Use pull systems; decide as late as possible. see p. 30

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25Lean Primer

Principle
4. Level the work—reduce variability and overburden to remove unevenness.

Comment/Reference
see also p. 23

5. Build a culture of stopping and fixing prob- not only fix, but apply 5 Whys analysis tolems; teach everyone to methodically study prob- understand the root causes, and really fix
lems.
it; see p. 19
6. Master norms (practices) to enable kaizen and these are changeable working agreements,
employee empowerment.
not rigid organization standards; see p. 16
7. Use simple visual management to reveal
problems and coordinate.

see p. 31

8. Use only well-tested technology that serves
your people and process.
9. Grow leaders from within who thoroughly
understand the work, live the philosophy, andteach it to others.

leaders from within may not be a good idea
if your existing culture is not lean—thepoint is educated lean-thinking leaders; see
p. 10

10. Develop exceptional people and teams who
follow your company’s philosophy.

this reflects the Toyota “build (lean thinking) people, then products” message; it
includes “towering technical competence”

11. Respect your extended network of partners
by challenging them to grow and helping them
improve.

bring partners into lean thinking as well;there is an emphasis on sharing knowledge
and openness

12. Go see for yourself at the real place ofsee p. 14
work to really understand the situation and help.
13. Make decisions slowly by consensus, thoroughly considering options; implement rapidly.

activities such as kaizen events support
this

14. Become and sustain a learning organization
through relentless reflection and kaizen.

see p. 1626

14 Principles

Flow

Flow suggests making value flow without delay to the customer. As a counter example, a customer request waits in a queue waiting to be approved, analyzed, implemented, reworked, or tested. That is not flow. Rather, as value is created—in products,
software, information, decisions, service—it flows immediately to the customer. It isrelated to the follow the baton metaphor and to the goal of faster “concept to cash.”
Flow is a perfection challenge; zero waste in the system and immediate continuous
flowing delivery of value are profound challenges, probably never achieved. The journey is usually moving toward flow.
In the lean ‘house’ diagram (Figure 1.1), flow is included in both the 14 principles andin the key elements of continuous improvement. Why? Because to move toward flow it
is necessary to reduce batch size, cycle time, delay, WIP, and other wastes. And this has
the beneficial side effect of revealing more weaknesses and waste, providing newopportunities for continuous improvement. This is an important but subtle point,
expanded in the next section.
Moving toward flow is associated with applied queueing theory, pull systems, andmore. By understanding these, people can move the system toward flow by smaller
work package sizes, smaller queue sizes, and reduction in variability.
Indirect Benefits of Reducing Batch Size and Cycle TimeWhy work in small batch sizes and with many small cycles? Doesn’t that increase youroverhead because of the transaction cost associated with each cycle? People asking thisquestion may not yet appreciate the advantages of small batches in short cycles:❑

The overall larger release-cycle-time reduction that can come by eradicating
queues and by applying queue management so that many cycles are shorter.

❑

The elimination of batch delay, where one part of a solution is unnecessarily
held back because it is moving through the system attached to a larger batch ofother solutions. Eliminating this provides another degree of freedom for the business to ship a smaller product earlier with the highest-priority solutions.

❑

And last but not least, there are indirect benefits due to the “lake and rocks”
effect described next.

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Lean Primer

Indirect Benefits: The Lake and Rocks Metaphor

A metaphor shared in lean education: lake androcks. The depth of the water may represent theinventory level, batch size, or cycle time. When
the water is high (large batch or inventory size,
or long cycle time), many rocks are hidden. Theserocks represent weaknesses. For example, consider an eighteen- month sequential release cyclewith a massive batch transfer; inefficient testing,integration, and poor collaboration are all hidden
below the surface of such a long cycle and such alarge batch. But if we work with that group andask, “Please deliver a small set of solutions that is potentially deliverable in two
weeks, every two weeks,” then suddenly all the ineffective practices become painfully
obvious.
Said another way, the transaction cost (overhead cost) of the old process cycle becomesunacceptable. That pain then becomes a force for improvement, because people cannot
stand re-experiencing it each short cycle, and indeed it may simply be impossible to do
the goals of the cycle with the old inefficient practices.
This dynamic has been central to Toyota’s continual improvement approach.
Tip: Not all ‘rocks’ are big or immediately visible. The lean journey is to start with the
big rocks that are most painfully obvious yet movable, and over time work on smaller
impediments.
The causal loop diagram in Figure 1.6 illustrates this lake and rocks effect in terms ofa system dynamics model.

28

14 Principles

Figure 1.6 indirect and delayed benefits of reducing batch and cycle size

smaller batch size
leads, on average, tosmaller queue size
1

noticeably delayed
positive effect … asbatch size goes down
and the group sees
the inefﬁcient
overhead, they may
improve and thus overtime start to drive theoverhead down

this is a key, and perhaps
counterintuitive, relationshipnot ﬁrst appreciated in leandevelopment and queue
management—to sustainably
work in small batches andshort cycles, there arises
strong pressure to constantly
improve or revolutionize; thisleads to driving downtransaction costs

2batch size
(work package size)

long
term

O
feedback
time

short
term

queue sizetransaction costs(overhead)
O

O

O

cycle timequality

innovation

efﬁciencyOhowever, there is a delay inthis long-term improvement,
and the short-term effect isthe opposite—increasing
overhead as batch size
becomes smallerin the long term, for example,
people cannot standinefﬁcient testing in thiscontext—they will move tosmarter (automated?) test,
but that takes time
this is the “lake and rocks”
effect $$(proﬁt)3
lower cycle time leads to higher proﬁts(often); this is an opposite (O) effectother key, but not immediately appreciated, opposite
reinforcement impacts of reduced feedback time…
- short feedback loops quickly improve quality- after some delay, the increased innovation
opportunities are exploited and can pay offsome product groups are unaware thatshorter cycle time can have a direct
impact on proﬁt, in addition to theindirect beneﬁts shown in this model
5

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429

Lean Primer

Pull Systems

Pull versus push. Consider a process for manufacturing and storing
laptop computers. In a pure pull system17 no laptop is built or stored
in inventory until there is a customer order. Zero inventory18 is agoal, and work is done only in response to a ‘pull’ signal from the customer. That is the key meaning of pull: Build in response to a signal
from the ‘customer,’ and otherwise rest or improve. Pull examples?
Printing just the twenty-book order or preparing just one restaurantdish.
But a pull system goes deeper than that—the ‘customer’ is not just the final customer.
Rather, in a multi-stage process with an upstream team doing partial work before adownstream team, a downstream team is the customer to their upstream team. In apure pull system the upstream team does not create anything unless pulled fromdownstream request.
On the other hand, in a push system, one speculatively
builds and stores laptops in the hope of orders, and then tries
to push them to customers. In a multi-stage process,upstream teams create an inventory of partially done workfor downstream teams. Any kind of speculative inventory—
pizzas, big detailed plans, books, designs for many features
whose value is uncertain—are related to push systems.
Resource management strategies that focus on high utilization of workers—a focus on watch the runners rather than watch the baton—create anenvironment in which people will create a large inventory of things (analysis documents, designs, …) in a push model.
Expose defects—If you only create one thing in response to pull from a ‘customer’
request (in this context, your customer is anyone downstream) and the customer consumes it quickly, any defects in that one thing—created either by accident or design—
are quickly discovered. That can lead to further systemic improvement if people have“stop and fix” mindset. On the other hand, in push systems, defects are hidden in an
unconsumed inventory (of documents, …). For example, pushing a large batch of
design decisions will delay the discovery of misunderstandings or problems, because it
is a long time before they are implemented and evaluated by a customer.
17. Pull is related to a Just-in-Time system—JIT implements pull.
18. In pull systems for development, low or zero inventory means less inventory ofdetailed specifications, plans, untested designs, and so on.

30

14 Principles

Decide as late as possible—In pull systems, you do not decide early, quite the opposite—you “decide as late as possible” and “commit at the last responsible
moment” [Smith07]. In this way, you have the most information to make an informed
decision. You do not waste resources making unnecessary inventory or early decisions
that will have to—or at least should—change in response to discovery.
Small batches can lead to radical improvement—As explored in the “Indirect
Benefits of Reducing Batch Size and Cycle Time” section on page 27.
Thus, in several ways, pull systems support moving towards flow.
Avoid a false dichotomy—To categorically state that pull is good and push is badwould be a false dichotomy. Usually because of hard constraints (for example, thespeed of transportation), some inventory and some push may be useful—a temporarily
necessary waste. Toyota dealerships (outside of Japan) hold some inventory of vehicles
because foreign customers want to see, buy, and leave with a car immediately.
Stop and Fix

Toyota people are coached by manager-teachers to take the time to pause when defects
or problems arise. Rather than creating only a quick fix response (or no response), a
team will hold a kaizen event to grasp the root causes, and then initiate steps toward a
deep solution—one that ideally prevents the defect or weakness from being possible
and thus building quality in.
For example, Toyota is famous for their “stop the line” practice in which anyone canpull a cord when they see a defect, to stop all work on the line. This is step one in a systematic response toward building quality in. Another example: Toyota encourages
human-friendly manufacturing devices that themselves detect a failure, automaticallystop, and alert people to the problem. This was inspired by Sakichi Toyoda who madehis original fortune by designing a weaving loom that automatically detected a failure
and then stopped [Hino06]. This is the lean practice of jidoka.19
Simple Visual Management

Toyota emphasizes simple and BIG visual tools to signal problems, communicate, andcoordinate a pull system. There are big displays on walls, bright and big physical color19. Jidoka is difficult to rename in English; it is sometimes described as “automation
with a human touch.”www.leanprimer.com
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coded cards that people can touch and move, and so forth. Key themes are ease of viewing from a distance, physical tokens (such as cards), color, and simplicity. This is the
opposite of displaying many little or detailed elements of information on small computer displays from software-based systems; however, a computer display that is simply filled with a blob of red color to show a broken build is in the spirit of visual
management.
These information radiators for visual management are applicable to productdevelopment, service delivery, or any domain to make information easily accessible.
A kanban (kan—visual signal, ban—card or board) is used in tosignal a pull event (a replenishment request) in a pull system.
The classic example is a store with something for sale on a shelf,such as one pie. Behind the pie on the shelf is an orange cardlabeled “one pie”—the withdraw kanban (card). When the pie
is eventually taken off the shelf by a customer, the withdraw
kanban is revealed and taken to the bakery to get another pie torefill the shelf. This is possible because there is one finished pie
in inventory in the bakery waiting for this event.
Also at this time, a creation kanban is sent to the baker to starting baking one more
pie. A single pie is pulled onto the shelf by the withdraw kanban, rather than pies
being pushed.
An error display (andon) is a visual aid in Toyota to signal defects in things.
Self-directed work—This is a theme found in effective-team research. Notice thatvisual management supports self-directed work because people can easily see what isgoing on, to coordinate. Also, the work of a kanban card is self-explanatory, such as“one pie” or “change style of webpage.”
Visual Management for Queues in Knowledge Work

Queues of physical things are easy for people to perceive, and to perceive as a problem… My goodness, there’s a gigantic pile of Stuff queuing up over there! Making any
money from the pile? Are there defects in there? Does it need to be combined withother stuff before we can ship it? Do we need—and will we make money with—eachand every item in the pile?
But what about queues in knowledge work?

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14 Principles

Invisible queues—In many knowledge-work domains (and some service domains)there are also queues, but because they are invisible (usually, as bits on a computerdisk) they are not seen as queues or keenly felt as problems. A business person who has
invested ten million euros to create a gigantic pile of partially done Stuff sitting on thefloor can see it and will feel the pain and urgency to get it moving. But knowledge
workers people do not really see and feel the pain of their queues.
Yet, they are there. Queues of wasteful WIP or design-in-process (DIP)—information,
documents, and bits on a disk. Invisible queues. People in Toyota learn “eyes for
waste.” They learn to see things as waste that they had not considered, such as inventory—queues of stuff. Similarly, knowledge workers need a lesson in “eyes for queues”
so that they can start to perceive what is going on, and develop a sense of urgency
about reducing queue sizes.
Figure 1.7 lean visual management creates physical tokens, such as task cards on a task board and paper charts
on a wall, so that invisible queues can become tangible—really seen and felt

Physical tokens to see queues—To develop “eyes for queues” in any domain (service, engineering, …) and a sense of urgent attention to the queues and WIP, apply
visual management with physical tokens, such as cards on a wall. Why physical? Putting these tasks into today’s computers defeats the purpose because these queues need
to be easily and noticeably visible at all times, and they need to be big. Storage intoday’s computers (for example, in a spreadsheet list) makes them small, and notalways visible. And humans—with countless eons of evolutionary instinct working
with concrete things—need to see and feel tangible queues20.

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Lean Primer

Visual management to see and limit WIP—
One of the lean wastes is WIP; as with queues,
this is hard to perceive in knowledge or service
work because it is often intangible work withrelated artifacts hidden inside computers (suchas documents). Experiment with a wall arealabelled “WIP” and place work-cards in thatarea. People or groups can establish policies tolimit the WIP, such as, “no more than 2 items ofWIP.” The visualization aids the policy.

LEAN PRODUCT DEVELOPMENT
The two pillars and 14 principles are core to lean thinking.
However, there are other principles and practices to outlearn the competition, specific to lean product development.

Product
Development
14
Principles
Foundation

Continuous
Improvement

Respect for
PeopleGoal

Toyota people execute two key processes well, (1) productdevelopment and (2) production. University of Michigan
researchers did a three-year study of Toyota and North
American companies product development effectiveness[LM06b]. Results? …

For example, the average die21 design-to-complete duration was five months for Toyota
engineers and twelve months for the competition. All this, while maintaining the lowest development-to-sales ratio of any major automotive company in the world, due tothe effectiveness of their development practices.
How do they do it? What is a focus of lean product development? Answer:“Outlearn the competition” 22
20. Physical tokens are a critical aspect of lean visual management that is not always
appreciated. Some people create software systems for “visual management” andmiss the purpose of the visceral, tangible dynamic of using physical tokens. Someday, displays will be wall size and one will move computer objects with physical gestures, stimulating this visceral response; that technology will then negate this point.
21. A die is a template for stamping or molding metal or plastic parts.
22. Coined by Toyota product development researcher Dr. Allen Ward.

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Lean Product Development

When Toyota developed the hybrid Prius, what did they create?
❑

the design of the car (and implementation of embedded software); in development
they have a knowledge value stream to create a profitable production value
stream❑knowledge or information—about customers, alternatives, …

Lean product development (LPD) focuses on creating more useful knowledge and learning better than the competition.
Also, leveraging that knowledge and not wasting the fruits of the effort by forgetting
what has been learned. Figure 1.8 and Figure 1.9 illustrate some of the lean practices
to outlearn the competition in LPD; follow-up sections elaborate a few items.

More-Valuable, Lower-Cost Learning

Not all new knowledge or information is valuable; the ideal is to create economicallyuseful new information [Reinertsen97]. This is challenging because it is a discovery
process—you win some, you lose some.
A general lean strategy, based on a simple insight from information theory, is toincrease the value of information created and lower the cost of creating knowledge.
Higher-value information—Several ideas help. For example:❑

Focus on uncertain things—Choose to implement and test unclear or risky things
early. The value of the feedback is high precisely because the outcomes are lesspredictable—predictable things do not teach us much.

❑

Focus on early testing and feedback—Information has a real cost of delay, which is
one reason why testing only once at the end of a long sequential cycle—motivatedby the misguided local optimization of believing that it will lower testing costs—isalmost always unskillful. It can be very costly to discover during stress performance testing, after 18 months of development, that a key architectural decision
was flawed. In lean development, short cycles with early feedback loops are critical; by implementing less predictable things early and in short cycles that include
testing, the cost of delay is reduced.23

23. Note that reducing the cost of delay of information in product development almost
always requires building and testing something.

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Lean Primer

Lower-cost information—The “Indirect Benefits of Reducing Batch Size and Cycle
Time” section on page 27 examines how adopting lean principles ends up reducing theoverhead cost of processes. In fact, one can broadly look at these methods as succeeding by lowering the cost of change—competing on agility or flexibility. And that
includes lowering the cost of learning. For example:❑

Focus on large-scale test automation—to learn about defects and behavior. The
cost of frequently re-executing automated tests is usually insignificant in comparison to the valuable early feedback.

❑

Focus on frequent or continuous integration—to learn about defects and lack ofsynchronization. And by integrating frequently in small batches, teams will drive
down the average overhead cost by the “lake and rocks” effect.

❑

Focus on mentoring from experts and spreading knowledge—to reduce the cost ofrediscovery.
Cadence

Working in regular rhythms or cadence is a lean principle, both in production anddevelopment [Ward06]. A steady heart beat. In lean production, it is called takt time.24
In development, it is called cadence. Cadence is a powerful principle in lean productdevelopment, so the subject is examined in some detail…
There is something basic and very human about cadence: People appreciate or wantrhythms in their lives and work—and appreciate or want rituals within these rhythms[Kerth01]. Most of us work in a cadence of seven-day weeks. There is the Tuesdaymorning weekly meeting ritual. And so on. Simply, cadence at work improves predictability, planning, and coordinating. At a deeper level, it reflects the rhythms by which
we live our lives.

24. takt—rhythmic beat (German)

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Figure 1.8 how to outlearn the competition

Value of Info
- focus on uncertain
things- focus on lowering thecost of delayed info
Learn from Feedback- “challenge everything”
process culture

New Knowledge- intensive customer
investigation- systematic, repeating
reﬂection and improvement- concurrent set-based
development
Lean ProductDevelopment—“Outlearn theCompetition”

Reuse Knowledge- long mentoring frommanager-teachers
who are also masterengineers

Data-Driven- experiment, collect data,
adapt based on data—
including management- avoid wishful thinking
and speculation of plans
and speciﬁcations

Cost of Info- test (etc.) automation- integrate frequently- ...

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All rights reserved- record experiments inbrief, standard format- teach and require
people to use therecords37

Lean Primer

Figure 1.9 LPD practices

Develop Long-Lasting Engineers
with Highest Skill andCraftsmanship- work as hands-on engineers foryears; not encouraged toenter management early- mentored closely in engineeringand deep problem-solving skills

Managers Who Are Master
Engineers and Teachers- a key role of manager isteacher- “at Toyota, your boss canalways do your job better
than you”

Set-Based Concurrent Engineering- generate many alternative designs in parallel

Cadence- with shortregularly-timed
cycles, with small
batches of work

Lean ProductDevelopment—“Outlearn theCompetition”

Cross-Functional and
Product Mindset- people and teams
emphasize crossfunctional integration- focus on productsuccess overdepartmental orfunctional (e.g., test,
design) goals- apprenticeship model

Team Roomwith Visual Management- chief engineer and others meet
and work face-to-face in a largecommon room, not separateofﬁces; cross-functional members- visual management: display
engineering/ project data on walls- see pictures in this chapter

38

Entrepreneurial Hands-on Chief- engineer responsible for technical andbusiness success- an up-to-date great engineer withentrepreneurial spirit is given not
only technical control, but project
and business control- rather than a marketing or othernon-engineering specialist

Lean Product Development

Cadence and Timeboxing

One popular approach to improve cadence is timeboxing, a fixed—and usuallyshort—cycle time of development work (such as a two-week timebox). Teams are
expected to deliver or demonstrate something at the end of the fixed duration—ideallysomething small and well-done rather than large and partially done. The duration
may not change, but the scope of work can vary to fit the timebox. Timeboxing is not apanacea for all knowledge-work problems, but it has advantages:❑

Timeboxing enforces cadence.

❑

Development work is often fuzzy unbounded (or weakly bounded) work. When theteam knows that the timebox ends on March 15, it bounds the fuzzy work andincreases focus. So, timeboxing limits scope creep, limits gold-plating, andincreases focus.

❑

Timeboxing reduces analysis paralysis.

❑

Suppose you are in university and have an assignment due on Monday. When do
you start? For many, the answer is, “Close to Monday.” This is called Student Syndrome [Goldratt97] and timeboxing is a counterbalance.

❑

If teams must deliver something well done in exactly two weeks, the waste andineffectiveness in current ways of working become painfully clear. Timeboxing
creates a change-force to improve—the “lake and rocks” improvement effect.

❑

Timeboxing simplifies scheduling.

❑

Humans are probably more sensitive to time variation than to scope variation—“It was late” is remembered more strongly than, “It had less than I wanted.”
Timeboxing reduces the erosion of confidence that happens people say, yet again,“… maybe in one more week it will all be done.”Re-use Information or Knowledge

In addition to the long-term shift toward a culture of mentoring by master engineers
and manager-teachers to re-use information, a simple sharing tool can help. In ourcoaching we have seen a pattern that the most ‘sticky’ or successful tool is a wiki. Simplicity and a “Web 2.0”-centric hypertext model seems to win out over older documentcentric tools.

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39Lean Primer

Team Room with Visual Management

Lean product development encourages ateam room (or “big room”—big enough fora team) without internal partitions orwalls, where a cross-functional team works
and meets, and the entrepreneurial chiefengineer sits. Walls are covered with large
physical displays of project and engineering
information, to support visual management. The team room is in contrast to people working in separate offices or cubicles
with communication barriers such as partitions between the team members. For a
more detailed discussion, see the “Visual Management for Queues in Knowledge Work”
section on page 32.
Entrepreneurial Chief Engineer with Business Control

There are two key domains in product creation: marketing and technical. In most product organizations that we visit, the leadership for these domains in split. For example,
a product management group that is responsible for the business goals and feature
selection, whose members are not master engineers. Toyota does things differently.
They combine marketing and technical leadership in one great entrepreneurial chiefengineer with “towering technical excellence” who is also attuned to and responsible
for the business success of the new product, and who understands the market.25
Set-Based Concurrent Engineering

Have you seen development as follows?
1. pick or prototype one solution or design (one user interface, one architecture, …)
2. evolve it
3. deliver
25. We have seen successful products with product managers who are not master engineers—though they do need to be great product managers with detailed knowledgeof the market, product, and existing customers.

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Lean Product Development

Set-based concurrent engineering is also called
set-based design, and is different. For example,
rather than one engineer or team creating one cooling system design, several alternatives may be
explored at Toyota in parallel by different teams—
and so too for other components. These sets of alternatives are explored and combined, and graduallyfiltered in cycles, converging on a solution fromwhat was at first a large set of alternatives, then asmaller set, and so on. They outlearn the competition by increasing alternatives and combinations.
A step in this direction is to explore at least two alternative for non-trivial design elements during design workshops. For example, rather than all gathering around one
wall of whiteboards and doing one design as one team, split into two groups and work
at two giant whiteboards at opposite ends of the team room. Every 30 minutes or so
visit each other’s wall designs and “show and tell”—collecting ideas.
Can Lean Production Lessons Help Development?

New product development (NPD) or research and development is not predictable repetitive production (manufacturing), and the assumption they are similar is one cause of
the misuse of early-1900s manufacturing “economies of scale” management practices
in development; for example, sequential development and big batch transfers of specifications.
Yet, some of the principles and ideas applied in lean production— including shortcycles, small batches, stop-and-fix, visual management, and queueing theory—are successfully applied in lean product development. Why? Modern lean production is different, the small batches, queues, and cycle times in part reflect queueing theory insight(among other sources of insight)—a discipline that was created for the variable behavior in networks that is much more like product development than traditional manufacturing.
An irony in some product organizations is that the manufacturing engineers have revolutionized and adopted lean production, moving away from “economies of scale”
toward flow and flexibility in small batches without waste. But these lessons—which
fit well to NPD—remain unused by development management, who continue to apply
practices found in older economies-of-scale manufacturing management.

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Lean Primer

All that said, a caution: NPD is not manufacturing, and analogies between these twodomains are fragile. Unlike production, NPD is (and must be) filled with discovery,change, and uncertainty. Some variability is both normal and desirable in new productdevelopment; otherwise, nothing new is done. Therefore, lean thinking includes uniquepractices for NPD.

CONCLUSION
As you investigate lean thinking, it is easy to see that it is a broad system that spans
all groups and functions of the enterprise, including product development, sales, production, service, and HR. Lean applies to the enterprise.
Lean thinking is much more than tools such as visual management or queue management, or merely elimination of waste. As can been seen at Toyota, it is an enterprisesystem resting on the foundation of manager-teachers in lean thinking, with the pillars of respect for people and continuous improvement. Its successful introduction willtake years and requires widespread education and coaching. To re-quote Fujio Cho,chairman of Toyota:
Many good American companies have respect for individuals, and practice kaizen
and other [lean] tools. But what is important is having all the elements together asa system. It must be practiced every day in a very consistent manner…

ABOUT THE AUTHORS
Craig Larman works as a management consultant
focusing on large-scale projects, lean thinking, andmental models. He served as the lean development
coach at Xerox for several years.

Bas Vodde has a background in large embeddedsystems product creation, and leading the adoptionof agile and lean principles and practices at Nokia
Networks. He also works as a management coach,consultant, and as a development coach.

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Lean Product Development

RECOMMENDED READINGS❑

Dr. Jeffrey Liker’s The Toyota Way is a thorough cogent summary from a
researcher who has spent decades studying Toyota and their principles and practices.

❑

Inside the Mind of Toyota by Professor Satoshi Hino. Hino spent many years
working in product development, followed by an academic career. Hino has “spent
more than 20 years researching the subject of this book.” This is a data-driven
book that looks at the evolution and principles of the original lean thinking management system.

❑

Extreme Toyota by Osono, Shimizu, and Takeuchi is a well-researched analysis of
the Toyota Way values, contradictions, and culture, based on six years of researchand 220 interviews. It includes an in-depth analysis of Toyota’s strong businessperformance.

❑

Lean Product and Process Development by Allen Ward and The Toyota ProductDevelopment System by Liker and Morgan are useful for insights into development from a lean perspective.

❑

The Birth of Lean, edited by Shimokawa and Fujimoto, conveys a clear sense of
the mindset, principles, culture, and personalities behind lean thinking.

❑Toyota Culture by Liker and Michael Hoseus. Hoseus has worked both as a plant
manager and HR manager at Toyota, bringing an insider’s in-depth understanding to this book on the heart of what makes a lean enterprise work.

❑

Lean Thinking by Drs. Womack and Jones is an entertaining and well-writtensummary of some lean principles by authors who know their subject well. As cautioned earlier, it presents an anecdotal and condensed view that may give thecasual reader the wrong impression that the essential key of lean is waste reduction rather than a culture of manager-teachers who understand lean thinking
and help build the pillars of respect for people and continuous improvement with
Go See and other behaviors.

❑

The Machine That Changed the World: The Story of Lean Production by Womack,
Jones, and Roos was based on a five-year study at MIT into lean and the Toyota
system.

❑Workplace Management by Taichii Ohno is a short book by the creator of the Toyota Production System. It was out-of-print but has been recently re-translated by
Jon Miller and is now available. The book does not talk much about TPS but it
contains a series of short chapters that show well how Taichii Ohno thought
about management and lean systems.

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43Lean Primer

BIBLIOGRAPHY
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