Chapter 12. Does Rapid Growth Put the Brakes on Lean?
The business of business is building long-term wealth. Growth alone can be the driver. Growth coupled with intensive lean-based process improvement is a surer route, for two reasons: (1) Lean throws off free cash flow for acquisition-based growth. (2) Lean improves customer response, thereby enabling organic growth with existing and new customers. Pressing the growth accelerator too hard, though, can seriously strain best-practice capabilities. As they say about long punts in American football, it's outkicking your coverage.
FOUR COMPANIES IN TWO PAIRS: TOYOTA/HARLEY AND DANAHER/ILLINOIS TOOL
Four companies serve to illustrate: Toyota, Danaher, Harley-Davidson, and Illinois Tool Works (ITW). All four are notable for their lean prowess and have been pressing the pedal for growth—Toyota and Harley organically, Danaher and ITW largely though acquisitions (see the box). Long-term growth for each of the four companies is 5 percent or more per year, which is rare among the 1,200-plus companies in the global database. All four have enjoyed strong long-term gains in earnings and cash flow.
One more company, Graco, Inc., one of the world's eminent lean manufacturers, winds up the chapter. Three years of acquisitions have not been easy even for Graco to digest and "lean out."
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