2nd Edition

Leading the Lean Enterprise Transformation

By George Koenigsaecker Copyright 2013
    264 Pages 95 B/W Illustrations
    by Productivity Press

    Updated with new information, illustrations, and leadership tools, Leading the Lean Enterprise Transformation, Second Edition describes how the metrics used by Toyota drive every line item in a financial statement in the right direction. Rather than focus on Lean tools and principles, the new edition of this bestselling reference focuses on what may be the least understood and most critical aspect of a Lean transformation: the building of a Lean culture. In addition to new appendices with background information and insightful stories on Lean leadership and implementation, it includes new information on tactical organization practices, strategy deployment, and Lean culture.

    An inductee to IndustryWeek's Hall of Fame, George Koenigsaecker illustrates successful strategies and valuable lessons learned with case histories of U.S. leaders who have been instrumental in bringing Lean to the forefront. He explains the use of value stream analysis at the leadership level and describes how to structure kaizen events that can improve the value stream. Organized in the chronological sequence that a leader embarking on a Lean journey would experience, the book discusses the methods used by the author during the Hon Company’s successful Lean conversion, which doubled productivity, tripled revenues, and led IndustryWeek to recognize Hon as one of the "World’s 100 Best Managed Firms."

    The book not only introduces powerful leadership tools—including strategy deployment, transformation value stream analysis, and transformation plan of care—but also arms potential change agents with the soft skills needed to define, develop, and communicate their vision. Detailing the steps required to sustain improvements, it supplies time-tested guidance for effective leadership throughout a Lean transformation in any organization.

    My Journey of Lean Learning: Eleven Corporate Transformations
    Deere & Company
    Rockwell International
    Jake Brake (Danaher)
    HON Company

    What Is Lean?
    What Toyota Does
    Two Pillars
    Identifying and Removing Waste
    A Problem-Identifying and Problem-Solving System
    Six Sigma or Lean…or Both?

    Measurement Can Be Easy
    Understanding Financial Measures: Personal Examples
    Toyota’s True North Metrics
    How High Is High?
    The Four True North Metrics In Detail
         Quality Improvement
         Delivery/Lead Time/Flow Improvement
         Cost/Productivity Improvement
         Human Development
    Linking the True North Metrics with Financial Measures

    Value Stream Analysis Provides the Improvement
    Plan—And Kaizen Events Make It Happen
    Taking a Walk to Create an Initial-State VSA
         Initial-State VSA and the True North Metrics
         Helping You See the Waste
    Brainstorming to Create an Ideal-State Value Stream
    Creating a Future-State Value Stream
         Improvement Goals
         Work Plan and Responsibilities
    The Rule of 5×
    A Model Value Stream
    The Power of Weeklong Kaizen Events

    Tactical Organizational Practices
    The n/10 Rule
    Designing Improvement Teams
    Key Event Failure Mode
    The 3 Percent Guideline
         Selecting People for the Full-Time Improvement Team
         Selecting the Leader for the Dedicated Lean Team
         The Watlow 3 Percent Experience
    Administrative Teams
    Other Lean Training

    Strategic Organizational Practices
    Understanding Governance
    Guiding Coalition
         Lean Simulation
         Strategy Deployment
    Lean Year by Year
         Year One
         Year Two
         Year Three
         Year Four

    Building a Lean Culture
    Defining Culture
    The Building Blocks of Lean/Toyota Culture
         Serve the Customer
         Seek What’s Right, Regardless
         Decide Carefully, Implement Quickly
         Candidly Admit Imperfections
         Speak Honestly and with Deep Respect
         Go See and Listen to Learn (Genchi Gembutsu)
         Deliver on Meaningful Challenges
         Be a Mentor and a Role Model
    The Action Plan
         Giving Your Leadership Team Personal Experience
         Daily Improvement
         Challenging Your Team to Build Knowledge

    A Final Thought
    Author’s Note


    A Lean Tutorial
    Building a Sustainable Lean Culture—The Watlow Way
    Watlow’s Enterprise Visual Management System—Mission Control
    The Origin of Simpler’s Transformation ContinuumSM
    Red River Army Depot—Accelerating Lean through Leadership Immersion
    A New Product Design System That Uses Lean Principles
    Autoliv—Empowered to Solve Problems


    George Koenigsaecker is a principal investor in several Lean enterprises. He is a board member of the Shingo Prize (the international award for "Lean enterprises"), the Association of Manufacturing Excellence, the ThedaCare Center for Healthcare Value, Baird Capital Partners, Gefinor Venture Partners, Simpler Consulting, and Watlow Electric Corporation.

    From 1992 until 1999, Koenigsaecker led the Lean conversion of the HON Company, a $1.5-billion office furniture manufacturer. During this period, his efforts led to a tripling of volume and culminated in HON Industries being named by IndustryWeek magazine as one of the "World’s Best Managed Companies."

    Prior to this time, Koenigsaecker was with the Danaher Corporation, where he was president of the Jacobs Vehicle Equipment Company (whose Lean conversion is featured in the book Lean Thinking by Jim Womack and Dan Jones) and group president of the Tool Group, then the largest business unit of Danaher. In addition to leading the Lean conversion of these operations, Koenigsaecker developed and implemented the Danaher Business System, a comprehensive Lean enterprise model.

    In addition, Koenigsaecker has held senior management positions in finance, marketing, and operations with Rockwell International and Deere & Company. He is a graduate of the Harvard Business School.

    George Koenigsaecker was inducted into IndustryWeek's 2010 Manufacturing Hall of Fame for his years of experience leading successful Lean management transformations across a multitude of organizations.

    Praise for the Bestselling First Edition:

    Any senior executive serious about leading a Lean transformation should start here. Koenigsaecker captures well the essence of sustained Lean success, not just the feel-good kaizen event.
    —Larry Culp, president and CEO, Danaher Corporation

    Koenigsaecker has spent more time transforming more organizations into Lean enterprises than any other CEO. In this brief volume, he summarizes his 30 years of experimentation by describing Lean, showing how to measure it, explaining the role of value stream analysis and kaizen, and providing a tactical and a strategic action plan for Lean transformation.
    —Jim Womack, chairman and founder, Lean Enterprise Institute

    This truly worked for us, and continues to make our Air Force better. The message comes with great stories and legendary examples to make Leading the Lean Enterprise Transformation readable for all."
    —Michael W. Wynne, 21st Secretary, United States Air Force

    Koenigsaecker has been one of the most important mentors for me on our Lean journey. His willingness to share his knowledge and experience with the ThedaCare team has been invaluable.
    —John Toussaint, CEO, ThedaCare Center for Healthcare Value

    Koenigsaecker’s long and extensive study and application of Lean at the strategic and tactical levels make him a foremost authority on the topic. He has a unique and valuable grasp of the tools, process and change dynamics at implementing organizational Lean transformation.
    Stan Askren, chairman, president, and CEO, HNI Corporation

    Few, if any, American executives can match the variety and depth of experience with Lean transformations of George Koenigsaecker. So it comes as welcome news that George has written a book telling what he has learned and how he learned it. Leading the Lean Enterprise Transformation is simple, useful, packed with information, concise, to-the-point, and easily accessible. It will be a great source for companies looking to begin or advance their Lean initiative or managers at any level wishing to deepen their personal learning.
    John Shook, founder, The TWI Network

    George Koenigsaecker’s story is an inspirational one. In this book, he captures succinctly over 20 years of wisdom about how to lead Lean transformation. This should be compulsory reading for anyone with a genuine interest in the topic.
    David Fillingham, chairman and CEO, Royal Bolton Hospital NHS Foundation Trust

    George Koenigsaecker hits a grand slam with Leading the Lean Enterprise Transformation, and the operative word is ‘leading!’ A respected practitioner and sensei in the art and science of Lean, George drives home the point that Lean is as natural in the touchy labor arena as it is in the intellectual labor arena — and leadership is the key to success in both. George further adds value with his focus on Lean in the context of (public and private sector) corporate governance. This is definitely a ‘must read!’
    A.B. Morrill III, Major General, USAF, Vice Director, Defense Logistics Agency

    Finally, a hands-on, real-world book written by someone who has actually led several Lean transformations. My only concern is that my competitors get their hands on this book.
    Peter Desloge, chairman and CEO, Watlow Corporation

    Koenigsaecker has been my sensei for over seven years. The lessons he has worked to impart are all contained right here . . . a must-read for anyone serious about Lean process improvement.
    Donald J. Wetekam, group vice president, AAR Corporation, Lieutenant General (retired) USAF

    George Koenigsaecker has written a wise book that goes beyond an explanation of the tools of Lean to provide keen insights — derived from his three decades of experience on the ground as a Lean leader — into how executives can deploy Lean principals to build a true learning organization capable of continuous performance improvement.
    Alan Aviles, president, New York City Health and Hospitals Corporation

    George makes a complex subject simple, a great 'how-to' guide for leaders on Lean process improvement based on years of practical experience. This book is a winner for leaders who want to embrace the Lean journey and put their organizations on the path to excellence.
    Major General Dave Gillett

    I’m glad George finally wrote this book! His practical, experience based understanding of Lean and its implications for leaders of companies is much needed and enormously helpful. George has the credentials to say it like he experienced it, from the same vantage point as thousands of executives and senior managers all over the world. This volume provides a simple and personal description of how to resolve the many management dilemma and leadership paradoxes every leader must wrestle with in embedding into their cultures the cost saving and value creating principles and tools of Lean.
    Robert Miller, executive director, The Shingo Prize for Operational Excellence

    It is always best to learn Lean and the leadership lessons of Lean from someone who lives, eats and breathes Lean systems. Very few individuals in North America have the level of experience leading change as George Koenigsaecker. This is a great book for anyone beginning their Lean journey, but an even better book for those CEOs and COOs who have demonstrated a passion for developing a Lean enterprise and must know how to continue the journey of continuous improvement for a life time. Continuous Improvement never ends, but passion in the enterprise can wane — How does a leader keep driving the enterprise? This book can help.
    Dan Ariens, president and CEO, The Ariens Company

    Effectively organized into a chronological lesson plan for leaders, this book provides valuable guidelines for any organization embarking on the Lean journey. Drawing on his successful experience, George Koenigsaecker takes Lean thinking beyond the tools and principles, offering practical advice and confidence-building techniques for improving performance at every level of operation. Through the lens of his own transformational journey, he provides readers with a step-by-step primer for building a culture of continuous improvement and offers interesting anecdotes to support his philosophy that a Lean culture will always supersede Lean tools.
    Mike Ward, president, Autoliv Americas