Most discussions of Lean leadership focus on what leaders do. The gemba walks, the huddles, the coaching cycles, the strategy deployment, the daily management practices. These are observable behaviors that distinguish Lean leaders from their command-and-control counterparts, and they get substantial attention in the Lean literature for good reason.
Jacob Stoller's argument in this session is that the visible behaviors are downstream of something less visible: a set of foundational beliefs that successful Lean CEOs share. Not techniques. Not personality types. Not even values. Assumptions -- the things leaders take for granted about how their business actually works.
The framing matters because techniques can be copied without changing what produces them. A leader can perform a gemba walk while believing that the only data that really matters is the monthly financial report. The walk happens. The report still drives the decisions. The methodology is theater. The same leader can practice catchball while believing that the people on the receiving end will only perform if pressured. The dialogue happens. The pressure still defines the relationship. Belief shapes behavior in ways that copying behaviors can't undo.
Jacob spent two years interviewing CEOs of organizations that had achieved sustained Lean transformation -- companies like Herman Miller, ThedaCare, Ingersoll Rand, Wiremold, Barry-Wehmiller, Lantech, and others. The book that emerged, The Lean CEO, captures the operational details of their transformations. The webinar distills what these leaders share at the belief layer. The three primary assumptions Jacob identifies aren't theoretical. They're patterns visible across leaders with substantially different personalities, organizations, and improvement journeys.
Jacob Stoller is an author, speaker, and consultant who specializes in communication between technical experts and the broader business community. His book The Lean CEO uses leader narratives to translate Lean methodology for executives who haven't grown up in the Lean tradition. He has produced reports, training materials, and corporate documents for clients including Microsoft, Dell, Staples, Pitney Bowes, and the Conference Board of Canada. He delivers learning events on Lean leadership across Canada and the United States.
This session was hosted by Mark Graban, then VP of Improvement and Innovation Services at KaiNexus.
The session opens with a story that makes the concept concrete. Jacob was flying from Hartford to Toronto on a small Beech 1900D when three things happened simultaneously: the plane started lurching, a horrible metallic crunching sound came from the right exterior, and smoke and flames appeared from the right engine.
The plane stabilized within seconds. The pilots had shut down the right engine. The emergency landing in Albany included the full reception of emergency vehicles on the runway. Once safely on the ground, the pilot came out to talk to the passengers about what had happened.
The interesting detail: the pilot knew much less about the failure than the passengers did. He didn't know about the smoke and flames. He didn't know about the metallic crunching sound. All he knew was that the oil pressure gauge had dropped suddenly. Without hesitation, without diagnostic deliberation, he had shut down the engine.
Jacob's brother-in-law, a flight instructor, explained it later: if you're a pilot, it's an absolute primary assumption that you follow your instruments. Your senses can fool you in all kinds of ways in the air. The instruments are what get you home. The assumption is so deep that it operates without conscious thought. The pilot didn't make a decision about whether to trust the gauge over his other senses. The trust was built in.
That's what a primary assumption looks like. Not a value. Not a belief held with some uncertainty. A working premise so deep that it shapes behavior automatically. The question Jacob's research asks: what primary assumptions do Lean CEOs share that traditional executives don't?
The default primary assumption for most American executives traces back to Alfred Sloan at General Motors in the 1920s and 1930s. Sloan developed what Jacob calls the command-and-control dashboard -- a system of financial reports that allowed executives to manage the business from headquarters without going to the operational sites. Sloan was proud of this. In My Years with General Motors, he describes how the system eliminated the need for executives to be present where the work happened. The reports told them what they needed to know.
The primary assumption underneath this dashboard: financial reports tell the truth about the business. The assumption is what business schools have taught for most of the past century. It's the working premise that most executives don't question because they don't know it's a premise.
The system worked for General Motors through the postwar boom. It started to break down in the 1970s. Fuel prices spiked with the OPEC crisis. Suburban growth stabilized. Japanese competitors -- Toyota, Honda, Nissan -- started showing up on American roads with cars that had less variation, fewer defects, lower waste, and more engaged workers. The financial reports kept showing healthy numbers right up until the moment they didn't.
W. Edwards Deming named the gap that the dashboard didn't show. American factories had variation that didn't appear in monthly financial reports. Waste was rampant in places the reports didn't measure. Employee disengagement was substantial in a way that the reports couldn't capture. Deming's famous estimate: 97% of organizational problems are invisible if you only look at the financial reports.
The Lean CEOs Jacob interviewed almost universally had a burning platform that forced them to look beyond the dashboard. Pat Lancaster at Lantech invented stretch wrapping and ran a profitable monopoly until the patents ran out and global competitors arrived. Pat has a quote Jacob foregrounds: "I don't want to say this too strongly, but I really think that if you drive your ship or fly your airplane based on the two instruments of standard cost and MRP, you will pretty much drive yourself into a waste condition that is almost unimaginable."
The burning platform forced these leaders to ask what the dashboard wasn't showing them. The Lean methodology gave them a different way to see. The three primary assumptions Jacob identifies are what they took away from the journey.
The first primary assumption replaces the financial dashboard with something that traditional executives find harder to manage by: direct visibility into customer value.
The behavioral implication is radical transparency. Leaders spend substantial time in gemba -- the place where the work happens -- rather than reading reports about it. They surface problems rather than hide them. They reorganize the company around value streams rather than functional silos. They develop dashboards built around customer value indicators rather than financial summaries.
Jacob notes that going to gemba was the most consistent behavior across the CEOs he interviewed. The variation in personality, industry, and improvement methodology was substantial, but every successful Lean CEO spent meaningful time where the work happened. The behavior follows from the assumption. If financial reports tell the truth, you don't need to go to the workplace. If customer value is what matters and financial reports show only a fraction of it, going to the workplace is the only way to understand the business.
Carl Wenstrand of VECO captures the operational difficulty. His office is in the plant, with glass walls and no escape from operational reality. He wears an army helmet sometimes as a joke about how hard it is to face problems daily, but the seriousness underneath is real. "This is not for the weak of heart. This is so hard. Every single doggone day Lean will surface all your shortcomings, force you to deal with all the details."
Art Byrne at Wiremold provided one of the most-cited illustrations of what running a business on customer value metrics looks like in practice. Byrne took over as CEO in 1990 with the company at roughly $30 million in value and grew it to $770 million over a decade, partly through organic improvement and partly through acquisitions transformed by Lean methodology. The five metrics he tracked across the entire company:
The metrics were not just for Byrne. The entire management team reported on them every week. The reporting cadence and the visibility distinguished this from the traditional bowling charts and monthly summaries that most organizations use.
In Byrne's first week, a manager asked whether the new metrics meant he still had to write the 25-page monthly management report he'd always produced. Byrne's response: "You can write the report if you like, but I can guarantee you that I won't read it." Mike Lamach at Ingersoll Rand, running this at the 50,000-employee scale, told his value stream managers something similar: "Don't look past the results." The lean numbers were what mattered. The financial overlay added noise.
Jim Lancaster at Lantech provided the operational definition of accountability under this assumption. Lantech had hit a plateau after the initial transformation under Pat Lancaster, Jim's father. Jim tried traditional MBA approaches first -- hiring managers known for enforcing targets, getting tougher on people. None of it worked. Eventually he put on what he calls his steel-toed shoes and spent an entire year on the factory floor, delegating his CEO duties to focus on understanding what the management system actually needed.
The conclusion he reached: "Accountability is not about setting goals and then shaming people who don't hit the goals. Accountability is about making sure that everyone understands what we're trying to do." Jacob asked him what happens when a manager makes a mistake. Without missing a beat, Jim responded: "If a manager makes a mistake, it's because they didn't have the information they needed to make the right decision." The accountability sits with the leader who failed to provide the conditions for success, not with the manager who failed under inadequate conditions.
The second primary assumption is more nuanced. It's not just that continuous improvement matters. It's that the results come indirectly -- through developing people who improve processes that eventually produce financial outcomes.
The chain matters because traditional executives find it counterintuitive. Push a button, shut down an engine. The cause-and-effect is immediate. Lean cause-and-effect is mediated. Leaders develop people. People improve processes. Improved processes reduce waste and variation, which avoids capital costs, reduces headcount needs, generates cash, improves margins, and eventually produces competitive position.
Mike Lamach at Ingersoll Rand told Jacob that when he explains this chain to financial people, they often respond: "Why are you going through all this trouble? Why don't you just do a big restructuring and get it over with?" The traditional move is to cut costs directly. The Lean move is to develop the capability that makes costs structurally lower over time. The first move produces a one-time gain. The second move produces compounding capability.
Brian Walker at Herman Miller had similar conversations with his board early in the transformation. Board members would ask when the Lean work would be done. Brian's answer: never. They would ask how they would know they were on the right track. Brian couldn't tell them exactly because the team didn't yet know what success would look like. The conversations went in circles for a while.
Eventually Brian invited the board to visit a plant in West Michigan. He flew them in, met them on-site, walked them to a factory door, and announced, "This is the advantage of Lean." He opened the door. The building was empty.
The board members looked at the empty building, mouths open. Brian explained: three years earlier, Herman Miller had bought this building, filled it with equipment, and started producing. Over three years, Lean methodology had moved all the capacity from this building into other existing facilities. Now, when growth required expansion, Herman Miller could do it with no capital costs. The building was waiting.
That, Brian said, was the moment the board understood. The financial benefit wasn't visible in any single quarter's numbers. It was visible in the structural change to the company's cost base, made possible by years of process improvement. The board had been looking for a graph that didn't exist because the benefit was systemic rather than punctual.
The same indirect cause-and-effect creates resistance below the executive level. Jim Lancaster at Lantech describes a specific practice he uses on gemba walks. When he sees a manager whose huddle board is showing all green metrics, he announces it's time for a cookie. He walks to a bakery, buys an oversized chocolate chip cookie, brings it back, shakes the manager's hand, and tells them it's time to raise the targets. The targets raise. The next day, there will be reds again. The team won't be meeting the new targets, and that's exactly the point.
"Reds are not bad. Reds are our friends. If we didn't have problems, we wouldn't have a reason to be here." The cookie ritual is a behavioral signal that improvement is not about hitting targets and stopping. It's about continually raising the bar and using the gaps that emerge as the next round of improvement work. Most middle managers find this hard. The instinct trained into them is to make targets and move on. The Lean management system asks them to make targets, raise the bar, and find the next set of problems.
The continuous improvement assumption also changes how professional roles work. Jacob walks through several examples. HR professionals trained to spend two weeks in their offices designing training programs need to spend time at the gemba helping solve actual problems. Accountants trained to report on what happened six weeks ago need to function as forward-looking financial advisors helping leaders make decisions about upcoming work. IT professionals trained as system builders need to provide real-time information to the field rather than completing distant system implementations.
The deepest version of this professional shift is in healthcare, where physicians are caught between the scientific training they received and the management systems that don't reflect scientific thinking. The watershed moment Jacob describes is John Toussaint at ThedaCare in the early 2000s. ThedaCare faced the same conundrum many healthcare organizations face: financial pressures combined with unacceptable outcomes. A national report had estimated 100,000 deaths per year in American hospitals from preventable medical error. Toussaint had tried traditional healthcare quality improvement methods and found that the gains weren't sustaining.
He looked outside healthcare. Through George Koenigsaecker, he connected with Lean organizations. Eventually Toussaint and his entire management team visited an Ariens snowblower factory in Brillion, Wisconsin. The clinicians walked through the factory and reached the final assembly area, where snowblowers moved along carts being completed with options.
Toussaint's reaction: "When I watch the way these people are working, they're taking better care of these snowblowers than we're taking care of our patients."
Jacob asked Dan Ariens what the doctors had actually seen. Dan's answer: "They weren't looking at the snowblowers. They were looking at the people. What they saw was people supporting each other. They saw the communication. They saw people handing each other tools on trays." The methodology was visible in the human interactions. The interactions came from the management system that the methodology had produced over time.
The lesson Jacob draws: work on the process, not on the outcome. The outcomes follow from the process. Trying to drive outcomes without changing the process produces frustration. The continuous improvement assumption is what makes the process work itself the focus.
The third assumption is the deepest and the most counterintuitive for traditional executives. Lean CEOs operate from the premise that people have a basic human need to do exceptional work -- not just adequate work, not just work that follows instructions, but work that uses their creativity and capability. The job of management is to remove the barriers that prevent people from doing that work.
The assumption goes against decades of management theory that treats people as costs to be minimized, performance as something to be enforced through metrics and incentives, and engagement as a soft topic separate from operational excellence. The Lean CEOs Jacob interviewed reject this framing. They operate as if people genuinely want to contribute, and as if management's job is to create the conditions for the contribution rather than to compensate for its absence.
Deming put it directly: "All anyone asks for is a chance to work with pride." Bob Chapman at Barry-Wehmiller built an entire management approach around this premise -- what Barry-Wehmiller calls people-centric leadership. Chapman came to Lean partly through the desire to create more humane working conditions. The combination of Lean methodology and people-centric leadership emerged when Barry-Wehmiller acquired a company where Jerry Solomon was leading the Lean transformation. The two approaches turned out to be deeply compatible.
The moment Jacob foregrounds in Chapman's journey came during a pilot project report-out. The first presentation, by a consultant, walked through the typical Lean metrics -- lead times, inventory reduction, cycle time improvements. Chapman was visibly upset. The presentation had nothing to do with people-centric management, in his view. It was all numbers.
A second presentation the next morning was different. The presenters were actual employees who had been involved in the work, brought in on short notice. They began with the same kinds of numbers. Chapman interrupted the first presenter, Steve, with a question: "How has this changed your life?"
The room went silent. After a pause, Steve answered: "My wife is talking to me more."
Chapman stammered out: "Help me, Steve, what do you mean?"
Steve told what Chapman describes as one of the most profound stories he's ever heard in business. The story Jacob recounts in the session, paraphrased: "Mr. Chapman, you know how it is. You go to work in the morning, you punch your clock, they tell you what to do but don't give you everything you need to do it. You spend the day figuring out how to get things done. You get ten things right and nobody says a word. You get one thing wrong and they're on top of you, chewing you out, complaining about your salary, complaining about your benefits. At the end of the day I wasn't feeling too good about myself. I was wearing that feeling home and it was affecting my marriage. But now with this new program, I'm contributing to something. People ask for my opinion. They listen to me. When I ask questions, I get answers. I get to see the results of the work we've done. At the end of the day when I go home, I'm feeling much better about myself. I'm nicer to my wife. She's talking to me."
Chapman turned to Jerry Solomon and said: "Jerry, we have a new metric for the reduction of the divorce rate in America."
The story illustrates the assumption Jacob is making. Steve didn't need higher pay or different benefits to come home happier. He needed work that had meaning. He needed his contribution to be sought, his questions to be answered, the results of his work to be visible. The Lean methodology, done well, produces those conditions. The conditions are what allow the basic human need to do exceptional work to actually be met.
The organizational implication Jacob makes explicit through John Toussaint at ThedaCare. Jacob asked Toussaint why a hospital needs so many problem-solvers. Toussaint's answer: medication errors are one of the deadliest problems in hospitals, and they don't come from one or two causes a manager can identify in a report. They come from many sources -- the labeling on bottles, the way bottles are arranged on trays, the way bottles are stored, written procedures, communications, IT systems, supply chain. The only way to fix the problem is to have an army of problem-solvers trained to find issues, test solutions, and prevent recurrence.
The army of problem-solvers requires the third primary assumption. If people are costs to be managed and constrained, the army doesn't exist. The methodology only has the small number of specialists allowed to do improvement work. If people are problem-solvers to be developed, the army can scale to the size of the organization. Every employee becomes a contributor to improvement work. That scale is what produced the safety, quality, and operational gains ThedaCare became known for.
The Gallup engagement data Jacob references in passing makes the broader case. The engagement numbers across American workplaces are consistently low. Roughly 70-85% of employees, depending on which year and which study, report not feeling wanted or needed by their employers. The disengagement isn't a workforce problem. It's a management system problem. The Lean CEOs Jacob interviewed treat it that way and design their management systems to produce the opposite condition.
The three assumptions together produce a management system that looks different from the inside than the outside. From outside, you see the gemba walks, the huddles, the kaizen events, the visual management, the strategy deployment. From inside, you see leaders operating from a different working premise about what their business actually is.
The premise produces the methodology, not the other way around. An organization that adopts the methodology without the assumptions produces theater. An organization that develops the assumptions, even before fully developing the methodology, eventually produces both.
Jacob ends the substantive content of the webinar with three questions for the audience: Is customer value, seen through gemba, your primary dashboard? Are you on a continuous improvement journey that never ends? Are your people empowered to do exceptional work?
The questions are the point. The behaviors follow from the answers.
The session is methodology and leadership focused rather than platform focused, but the assumptions Jacob describes shape what platform infrastructure should actually do for an organization.
If customer value is the primary dashboard, the platform's role is making customer-value-relevant data visible across the organization rather than holding the financial summaries that drive traditional management. Run charts of operational metrics, project status connected to customer outcomes, and lateral visibility across departments all serve this assumption.
If continuous improvement of people and processes toward an ideal state drives results, the platform supports the ongoing nature of the work. Improvement projects don't close when they hit a target -- the target advances. The platform holds the iterative work durably enough that the targets that moved last quarter remain visible alongside the targets that are moving this quarter.
If people have a basic human need to do exceptional work, the platform's role is removing the barriers that prevent that work. Ideas get acknowledged within hours rather than weeks. Status is visible so the person who submitted an idea can see what happened to it. Impact gets tracked and shared so contributions register as real rather than as bureaucratic noise. Lateral spread connects practitioners in one part of the organization to peers facing similar problems.
The deeper point: platform infrastructure is downstream of the assumptions just as the methodology is. An organization that operates from the traditional assumptions can install the platform and use it primarily for command-and-control management. An organization that operates from the Lean assumptions uses the same platform to support entirely different management practices. The assumptions shape the use.
What are the three primary assumptions of successful Lean CEOs?
First, customer value (seen through gemba) is the primary dashboard for managing the business, not financial reports. Second, continuous improvement of people and processes toward an ideal state drives sustainable results, with results coming indirectly through capability development rather than directly through cost cutting. Third, people have a basic human need to do exceptional work, and the job of management is to remove the barriers that prevent them from doing it. The three assumptions are not techniques. They are working premises so deep that they shape behavior automatically, the way a pilot's assumption that instruments tell the truth shapes how the pilot responds to a sudden gauge reading.
Why aren't financial reports enough?
Because they capture only a fraction of what matters. W. Edwards Deming's estimate was that 97% of organizational problems are invisible to financial reports alone. Variation, waste, employee disengagement, quality issues, and customer dissatisfaction don't show up reliably in the numbers until they're severe enough to affect results downstream. Pat Lancaster of Lantech put it bluntly: running a company on standard cost and MRP "will pretty much drive yourself into a waste condition that is almost unimaginable." Lean CEOs treat financial reports as outcomes to be explained rather than as steering mechanisms.
What is gemba and why does it matter?
Gemba is a Japanese term meaning "the actual place" -- the place where the work happens. For a manufacturer, it's the factory floor. For a hospital, it's the patient floor, the OR, the lab. For an office, it's where people process orders, handle claims, or write code. Lean CEOs spend substantial time at the gemba because direct observation produces information that reports can't. The behavior was the most consistent pattern across the CEOs Jacob interviewed, despite substantial variation in their personalities, industries, and improvement approaches.
How is accountability different in a Lean organization?
Jim Lancaster at Lantech captures the shift: "Accountability is not about setting goals and then shaming people who don't hit the goals. Accountability is about making sure that everyone understands what we're trying to do." When a manager makes a mistake under this view, the question is what information or conditions were missing that prevented success, not why the manager failed. The accountability sits at the leadership layer that didn't provide adequate conditions, not at the operational layer that worked under inadequate conditions. The shift removes the fear that prevents honest problem identification while raising the standard for what leadership actually owes the organization.
Why are "reds" friends?
Because problems are the raw material of improvement. Jim Lancaster's cookie ritual at Lantech makes the point: when a team is making all their targets, the targets are too low. The cookie is a signal to raise the bar, which produces new reds. The reds are the next round of problems to solve. Organizations that pursue green metrics as the goal stop improving. Organizations that treat reds as opportunities for learning compound their gains over time. The mindset shift is hard for middle managers trained to make targets and move on, but it's the discipline that produces sustained improvement.
Why don't financial people see why Lean produces results?
Because the cause-and-effect is indirect. The traditional move is to cut costs directly through restructuring or layoffs. The Lean move is to develop capability that makes costs structurally lower over time. The first produces a one-time gain visible in a single quarter. The second produces compounding improvement visible across years. Mike Lamach at Ingersoll Rand notes that financial people often ask, "Why are you going through all this trouble? Why don't you just do a big restructuring?" The answer is that restructuring produces fool's gold -- short-term savings without sustained capability. But the answer is hard to make visible until the cumulative effect of years of process improvement shows up in margins, market position, and structural cost advantages.
What was the watershed moment in Lean healthcare?
John Toussaint at ThedaCare visiting an Ariens snowblower factory in the early 2000s. ThedaCare faced the conundrum of financial pressures combined with unacceptable patient outcomes -- preventable medical errors causing tens of thousands of deaths nationally each year. Traditional healthcare quality improvement methods weren't sustaining gains. Toussaint and his management team visited Ariens, walked through the factory, and reached the assembly area. Toussaint's reaction: "When I watch the way these people are working, they're taking better care of these snowblowers than we're taking care of our patients." Dan Ariens later explained what the doctors had actually seen: not the snowblowers but the people -- the communication, the support, the way workers handed each other tools on trays. The methodology was visible in human interactions, which became the model for what ThedaCare built next.
What does "people have a basic human need to do exceptional work" mean operationally?
It means designing the management system around the premise that employees genuinely want to contribute meaningfully, rather than around the premise that they need to be pressured or incentivized into performance. The operational implications are substantial. Ideas get acknowledged and acted on rather than disappearing into committees. Problems get treated as opportunities to learn rather than occasions for blame. Frontline workers are developed as problem-solvers rather than managed as costs. The Barry-Wehmiller story Jacob tells about Steve -- the worker whose wife was talking to him again because he finally felt his contribution mattered -- is the human form of the assumption. People come home happier when their work has meaning. The organizations that produce that meaning get the benefit of an army of problem-solvers rather than the constraint of a small number of specialists.
Why does ThedaCare need an "army of problem-solvers"?
Because the problems healthcare needs to solve don't have single causes that a manager can find in a report. John Toussaint walked Jacob through the example of medication errors: the causes include labeling on bottles, arrangement of bottles on trays, storage room organization, written procedures, communications, IT systems, supply chain, and many other contributors. Fixing the problem requires identifying and addressing many of these contributors in parallel, which only happens at scale if everyone in the organization is empowered and trained to find problems, test solutions, and prevent recurrence. The army of problem-solvers requires the third primary assumption. Without it, improvement work is restricted to specialists, which means it doesn't scale to the size of the actual problem.
Are these assumptions different in healthcare versus manufacturing?
Jacob's interview-based research suggests no. The three primary assumptions appear consistently across industries -- manufacturing (Wiremold, Lantech, Ingersoll Rand, Herman Miller), healthcare (ThedaCare), distribution, services, and others. The specific operational implementation varies. The underlying assumptions don't. The Ariens snowblower factory visit by ThedaCare physicians captures the cross-industry pattern: the methodology that produces results in manufacturing produces results in healthcare too, because both depend on the same human and organizational dynamics.
What about Lean CEOs as a generational shift?
Jacob notes that younger leaders entering the workforce often see things differently. Mike Lamach at Ingersoll Rand learned Lean as a young engineer in the Toyota supply chain. Leaders exposed to Lean methodology early in their careers tend to internalize the underlying assumptions in ways that mid-career converts often struggle to. The implication is that the population of Lean CEOs is likely to grow over time as the leaders developed in Lean traditions reach executive positions. The expansion isn't automatic, but the conditions favor it.
Can a skeptical CEO be convinced by reading The Lean CEO?
Jacob hopes so but doesn't claim certainty. The book uses CEO narratives to translate Lean methodology into language that traditional executives can engage with. The stories make the abstract assumptions concrete in a way that conceptual explanation doesn't. The book has been recommended to skeptical CEOs by Lean advocates inside their organizations, and several of the leaders Jacob interviewed have used the book this way themselves. Whether the book convinces depends partly on what the CEO already understands and partly on whether the burning platform their organization faces is severe enough to make them open to a substantially different way of operating.
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