Lean Connections

Lean-Trained Executives Fast-Track the Successful Transition to Green  

by Adam Zak

The recent launch of IBM’s “Green Sigma” Corporate Social Responsibility (CSR) consulting service underscores a growing realization that operational excellence principles and practices can offer much in the way of direction to the rapid acceleration toward Green business. More and more business leaders agree that the shift to Green is necessary and, when done well, can be profitable, and that Lean, Lean Six Sigma, and other Continuous Improvement strategies can be applied to integrated management systems as a framework for the shift to Green.  

Lean-trained executives already bring the experience, vision and discipline necessary to fast-track transition and real cultural change for companies driving their own Green revolution. The need for a new breed of executive — frequently called the Chief Sustainability Officer or CSO — who can harmonize the transition to Green, is rising at companies large and small. Most of these firms have some sort of business excellence or continuous improvement initiative already in place but find the CSO’s role expanding and evolving to merge production, risk management, compliance, marketing, and social responsibility to impact the entire enterprise. As reported in recruiting newsletter The Executive Grapevine (March 6, 2008), “Recruiting for high-level jobs is more difficult than filling the gap of technical skills and scientific talent.” Executives with expertise in Lean continuous improvement systems bring hands-on experience gained from a decade or more of development at some of the world’s most successful companies including Toyota, Danaher, United Technologies, Johnson Controls, Whirlpool and others. 

In Consulting Magazine on April 29, 2008, George Pohle, vice president and global leader of the Business Strategy Consulting Practice at IBM, said two-thirds of business executives view sustainability as a growth opportunity as opposed to it being about regulatory compliance or philanthropy. Welcome news, for sure.  

Today, Green Is No More A Fad Then Lean Was A Decade Ago.

Like Lean, Green can embrace the concept that reducing consumption and preventing waste is more efficient and effective than subsequent mitigation. Global Lean leaders have seen first-hand how continuous improvement across the value stream can capture competitive advantage. Lean’s focus on reducing input cost, waste, and risk; promoting line-level innovation and professional development; and building proactive EHS strategy mirror the triple bottom line impact Green seeks to generate. Add marketing and social responsibility to the mix and the result is a Lean + Green management strategy that brings PDCA (Plan, Do, Check, Act) principles that many “Green-only” transition managers often don’t realize they’re missing.

Green Transition Does Not Come With A Playbook As Yet. Lean Does.

Lean systems deliver Green outcomes not simply by replacing legacy factors with lower-carbon or recyclable inputs, but by preventing unnecessary inputs and procedures altogether. Instead of reducing waste, Lean (done right, of course) prevents waste in the first place. Our new generation Green executives will have to look beyond engineering and the supply chain to find creative ways to keep cost from entering the value stream at all. Lean + Green provides an analytical tool that can help reveal unexpected cost exposure.

Lean Unifies Green Transition

Viewed from the bottom up, Lean is the culture driver often overlooked when Green is implemented by trial and error – a unifying program that makes transition consistent across traditional operational silos while maximizing return on the most productive yet expensive  input of all, human resource. Learning from shop floor (Gemba) experience has long been a prized component of Lean-Sigma-operational excellence programs and coincides perfectly with the social responsibility image that made Green desirable in the first place. And in cases where sustainable materials are still cost-prohibitive compared with legacy inputs, simply striving for Green result can deliver value as employees feel they’re contributing to an evolving, improving process and outcome.

Lean systems have long realized the return from an engaged, well-trained, innovative workforce. By coordinating diverse production stages and management systems into a successful, enthusiastic, corporate culture, the vision and discipline of Lean-embracing executives transfer perfectly in Green transition. Lean provides a two-way channel, from the top down and then back up again, that fast tracks transition and reflects the foundational flow underlying Lean systems.          

Next Steps – Next Innovations

So what are the next steps for implementing Green in your service, manufacturing or intellectual product enterprises, and what are the next innovations evolving from Green transitions across industries? The leaders are revisiting the operational excellence initiatives that focused on input and process efficiency before Green became a growing concern.

• Traced back through Toyota’s explosive growth in the 1980s to Henry Ford, the architect of mass production efficiency, Lean systems provide a unified, tested structure for competitive modern innovators
• Society of Manufacturing Engineers (SME) members are synthesizing a formal Lean + Green strategy and that program will transfer beyond manufacturing. “Growing evidence, spurred by case studies, academic research, and government programs, shows that by combining lean and green practices, companies can potentially save millions of dollars a year…” (Oracle Information InDepth 2007).
• More and more keynotes, conference presenters and authors are demonstrating ways Lean + Green can create synergy in every industry cluster.
• A unifying thread is emerging: Starting at the C-suite level with Lean-trained executive talent is critical in getting the most out of Green transition. The new generation of Green leadership will recruit CSOs who can maximize operational excellence with the structure and discipline learned from Lean.

Ultimately engineers, site managers and line level team members will implement Green transition on the shop floor, R&D lab and corporate office, but out-Greening the competition is going to require more. Transition without unifying vision simply transfers waste from carbon byproducts to wasted talent, enterprise, and potential.

Darrell Rigby, head of Bain & Company’s Global Retail Practice advised in Consulting Magazine’s April 29, 2008 edition, “Almost always the answer is to eliminate waste. It’s always a good payback and usually has the best return on investment for firms.”

Take a lesson from the largest consulting firm in the world. If IBM is fielding a venture that specializes in economics of conservation analysis and CSR, and that firm drives Lean operational excellence throughout its own management structure (actually practicing what it preaches), this truly underscores the premise voiced here: Lean is Green, and the two are almost synonymous. Except that one is an outcome and the other is the means to achieving it.