Lean Enterprise

Preface

Software is eating the world.

Marc Andreesen

In an industrial company, avoid software at your own peril . . . a software company could disintermediate GE someday, and we’re better off being paranoid about that.

Jeff Immelt

You are a fool if you do just as I say. You are a greater fool if you don’t do as I say. You should think for yourself and come up with better ideas than mine.

Taiichi Ohno

In this book we show how to grow organizations which can innovate rapidly in response to changing market conditions, customer needs, and emerging technologies.

Companies live and die on their ability to discover new businesses and create ongoing value for customers. This has always been true, but never more so than in the past few years. Competitive pressure is increasing, fueled by rapid changes in technology and society. As Deloitte’s Shift Index shows, the average life expectancy of a Fortune 500 company has declined from around 75 years half a century ago to less than 15 years today. Professor Richard Foster of Yale University estimates that “by 2020, more than three-quarters of the S&P 500 will be companies that we have not heard of yet.”¹ The long-term survival of any enterprise depends on its ability to understand and harness the cultural and technical forces that continue to accelerate innovation cycles.

First, the Internet and social media have provided consumers with powerful tools to inform the decisions they make. These tools also give smart organizations new ways to ...