An ambitious objective over a faulty process scales the inefficiency a company already has

The first thing we establish in this conversation sounds disappointing for both sides. Neither Lean nor OKRs answer the question of what the strategy should be. Mission, vision and direction are created one level above both tools. OKRs make the strategy concrete over shorter periods of time by breaking it down into hypotheses that can be tested within a quarter. Lean is the path by which you get to those objectives, the way of working day to day. The question of whether one cannibalises the other then stops making sense, because we are talking about two different floors of the same building.

It gets more interesting when one of them is missing. A company without work on its processes sets itself ever more ambitious objectives and plans without regard to its real throughput, in other words it scales its own inefficiency. If something doesn't work at the level of one team, extending it to the whole organisation makes things worse, not better. In the other direction you get a result that looks good on paper: a company without a clear strategy optimises its processes, improves the profitability of its activities and doesn't enter the markets it needed to enter. It saves efficiently on the road to nowhere.

The strongest point of contact is, at the same time, completely prosaic. Lean gives objectives realism: knowing its own bottlenecks and throughput, a team can honestly tell the board whether it can deliver the objective within the quarter, instead of negotiating by gut feeling. To know that, you have to map the process from order to delivery, because the waste between departments is greater than within a single team, and without a map you simply don't see it. The episode gives an example of work being handed over between three people, where a process taking 5 working days turned out to be entirely waste, because the material sat unopened along the way. There is also an exercise in which employees wrote down their day minute by minute and decided for themselves that work actually adding value takes up 30 to 40 per cent of the day.

Lean itself, moreover, doesn't start with tools introduced by decree, along the lines of from Monday we do 5S. It starts with checking whether the board, the managers and the people doing the work know at all why this company exists, because nobody will report waste for the sake of a goal they don't know. In this episode we also talk about our own backyard: introducing a new method across the whole organisation at once does real damage, because the company scales something it doesn't yet know how to use. That is why we start with a small pilot and only expand once the effects are visible.