What Stops US Companies from Becoming Lean?

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Dan Markovitz provides an article that explores the ability of public US companies to operate as a wholly lean company.

Can public US companies really embrace lean? Well sure, they can deploy lean tools here and there, but the whole socio-technical system that comprises lean? I don’t think so.

Wall Street pressure for quarterly profits competes fiercely with lean principles, both inside and outside the company. Executives who take the long-term view and view employees as appreciating assets worthy of investment, rather than variable costs to be minimized, put their companies at risk of attack from outside “activist shareholders” who demand higher returns. And given how tightly senior executive compensation is tied to the company’s share prices, there’s internal pressure not to put their own wealth at risk by not pumping up the stock price. (Tom Johnson, Doc Hall, and Bob Emiliani have written extensively about this problem.)

 

Areas covered in this article include

  • Stockholder expectations
  • Toyota as an outlier
  • Barriers to becoming lean

 

Read the full article, Can A Public Company Ever Be Lean?, on the Markovitz website.