Lean management-in manufacturing, supply chains, healthcare, services-has lost its way. Telling evidence of lean's dissolution shows up for inventory-intensive organizations in the form of worsening inventory numbers. My research of financial records of more than 1,500 global companies over 15 years shows growing inventories since the turn of the 21st century. Reduction of inventory is a concrete and visual marker of leanness and quicker customer response, while inventory growth is one of the more salient factors that degrades financial health. As to what has gone wrong with lean, the answer is nearly everything: ambiguous terms and concepts, trivializing the essence, botching the basics, going through the motions, analysis paralysis, puffery masking action, abetting organizational silos, discontinuity, and losing interest. This article addresses these in more specific terms with reference to key outcome measures, especially those most customer-relevant.

When employees are empowered to continuously record their employment-related frustrations- doing so on accessible, visually prominent media-process improvement becomes upgraded to operate in a truly continuous mode. Frustrations are a superior target of process improvement in that they get at deep-seated concerns of people who have first-order process awareness and are most directly impacted by process failings. Recording frustrations not only provides a sound basis for pressing on to solutions, but it is also cathartic. The act of recording frustrations prominently on company-sanctioned media provides a positive outlet for the frustrations themselves.

With ultra-short sightlines to its patient-customers, healthcare should pursue lean in its own way rather than follow the often wayward lean practices of manufacturing, a sector in which few people ever see real customers. Because of the distance in manufacturing from end customers, this sector's lean practices usually focus inward on operational efficiency through waste elimination. The nature of healthcare-with customers up close and immediate-calls for elevating its lean efforts toward customer-focused lean effectiveness: flexibly quick response along the multiple flow paths leading to and involving patients. This article illustrates that approach to lean by drawing from a case study in which widely scattered heart attack patients were transported to a central treatment hospital in a system-wide, highly coordinated program of quick response. This article shows that the keys to success-including high rates of saving lives and lean healthcare in general-boil down to just five lean methodologies, each focused on quick response. Lean healthcare, when practiced in this way, becomes deserving of status as a fixture in strategic management of the enterprise.

Quadrant Homes, a subsidiary of Fortune 500 Weyerhaeuser Company's Real Estate Division, had gained renown for its lean-oriented business model. Starting with a major overhaul in 1996, Quadrant built a formidable operating system that effectively served the needs of first-time home buyers in the Puget Sound region of Washington State, on the Northwest coast of the U.S. The operating system, built on a solid employee culture of operational excellence, produced partly customized, build-to-order homes using an "even-flow" process that delivered on Quadrant's value proposition, "More House, Less Money." Between 1996 and 2007, customer referrals more than quadrupled, market share expanded ten-fold, net margin per house had tripled, and the company's revenues and profits had soared. Quadrant's fortunes changed dramatically when the housing bust hit the Seattle area in 2007. Risk-averse, first-time home buyers pulled out of the market or gravitated toward foreclosed or distressed properties at bargain prices. Additionally, the preferences of the market had shifted away from Quadrant's rather bland-looking, boxy houses toward more customization and differentiation. In reading and discussing the case, students are challenged to consider what led Quadrant temporarily down the wrong path, and how it can reinvent its value discipline and supporting operating system in light of new insights about customer preferences and economic factors.