In an Economic Slowdown, a Tighter Focus on "Lean" Can Boost P&L

Market Wire, September, 2008

Why have so few companies matched Toyota's legendary success with lean production? In a new report, "Getting More from Lean: Seven Success Factors," The Boston Consulting Group (BCG) draws on insights from client work and extensive interviews with leaders of lean initiatives to reveal what successful companies do differently.

According to the report, many companies make the mistake of following a one-size-fits-all approach to lean. But different cultures present different challenges, and any lean program should be tailored accordingly. For instance, in an entrepreneurial culture that rewards individual initiative, employees don't always welcome enterprisewide programs and generic communications. "In this environment, it's better to use a 'cascading' process in which managers tailor lean messaging and metrics to their groups," explains coauthor Amyn Merchant, a senior partner in BCG's New York office. "This increases buy-in and better addresses the specific objectives at different levels of the organization."

The report also points out the need to choose strategic, customer-centered projects. "Vague productivity or cost-cutting targets don't energize the hearts and minds of employees," notes coauthor Hal Sirkin, a senior partner in BCG's Chicago office. "It's important for the people working on lean projects to realize that their efforts -- and the outcome -- matter." Moreover, a customer focus reinforces the message that understanding, satisfying, and retaining customers are top priorities.

Other important factors that contribute to the success of lean programs:

-- Think big, but start small

-- Involve everyone -- from top managers to line workers

-- Assign dedicated, experienced resources

-- Use metrics to drive progress

-- Communicate, communicate, communicate

Although the authors recommend starting with small, strategic projects that are manageable in scope, they urge companies to embrace a larger vision. "Lean programs must be ambitious and far-reaching in order to drive real change," says coauthor Pascal Cotte, a senior partner in BCG's Paris office. "Think about the total value that the initiative can unlock. Only then can companies realize the truly transformational power of lean."

To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at 1 617-850-3783 or gregoire.eric@bcg.com ."

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com .