DailyKaizen

This last Friday we had the great opportunity to host Orry Fiume for a full day workshop focused on “Management Accounting for a Lean Business.”  For those of you that don’t know Orry, he is the former CFO of the Wiremold company, and one of the best known authorities on Lean Accounting.  Orry was part of a team that transformed the Wiremold company during the 1990s, which has been written about extensively in several books including Lean Thinking and Better Thinking, Better Results.  We asked Orry to come out and visit us after his new book Real Numbers was discovered and widely distributed within our organization and is being used especially by our Finance and Measurement teams to challenge how they think about their work. 

During the session we learned a lot about how to transform the purpose as well as processes of the Finance and Accounting functions to support an organization’s Lean strategy.  Orry did a great job of translating stories from the manufacturing industry into healthcare examples.  Overall, the timing could not have been better.  The CFO and the Finance teams are engaged and looking to take a leadership position in the transformational efforts and the tools and the thinking they learned should be put to good use.

While it was valuable to learn about the tools and methods of Lean accounting I found even greater value in the messages about leadership that Orry brought to the workshop. The primary message that Orry reinforced throughout the day was that in order to transform a company you must first transform the people working in the company, one person at a time.  This is not a challenge that can be overcome with a new method or tool.  It is a challenge that can only be overcome by leadership.   At the end of the day I wrote out in my notebook the key leadership messages that I took away from the day and are shared below: 

• Leadership from all functions and most importantly at the highest levels must “plunge” into the Lean strategy and learn by doing.   
• Lean improvement cannot be delegated, it takes active leadership, starting with the top.
• Leaders must create tangible change.  They need to actively participate in kaizen that physically changes the work environment, the value streams and the work of associates. 
• Associates will watch your feet more then your mouth, leadership behavior is worth more then a million words.
• There will be lots of leaps of faith that each leader will need to overcome and staff will be watching them closely to understand how committed they really are. 
• There will always be some that will actively seek to block the Lean strategy and they need to be asked to find work somewhere else.  It is business and not a democracy.  People should be given many opportunities to learn and change, but at some point supporting the strategy in not optional.
• Leaders must understand the difference between mistakes and failure.  A mistake is something someone knows how to do and does incorrectly.  A failure is when someone tries something new and is unsuccessful.  There should be no excuse for mistakes and lots of forgiveness for failure.

In conclusion, Lean Accounting provides us with a set of tools and methods that when applied will support an organizations Lean Strategy.  Yet, like all tools they are only effective when they are guided by the right leadership. 

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