There are two elements to this principle.
Structure, operate and improve your activities, connections and flows. If we learn the language of activities, connections and flows, we will see things differently as we walk through the office, the warehouse, the factory, or any organization. This is the language of the lean organization just as credits and debits are the language of accounting. We must learn to talk about activities, connections and flows, think in terms of them, and act on them. Utilizing the four rules while designing, operating and improving activities, connections and pathways is where the bulk of the work of lean transformation should be focused. This will be the makeup of your overall business system. You should be using the same principles when making design decisions as you do when making improvement decisions. Your activities must be structured to the minutest level of detail. Your relationships must be connected as binary customer / supplier links. All goods, materials and information must flow through simple and specific pathways.10 Thinking in these terms will help you focus on the right structure of the organization.
Understanding current reality requires deep observation. Many improvement efforts start with a team vision or a blank sheet of paper, but if you were dropped in the middle of the desert and asked to get to New York City, could you do it? Of course not, because you don’t know where you are. A deep skill and commitment to understanding current reality is crucial in what makes lean systems transformation different. Current reality does not just mean using measurements; it means direct observation of the activities, connections and flows of the organization. That understanding of the current condition applies to broad company issues such as culture, but also applies to very detailed problems such as why a certain tool isn’t working or how to drive waste out of a process. Far too many companies rely on abstractions of reality to tell them where opportunities lie, such as measurement systems or stories. That is not sufficient. Direct observation of activities, connections and pathways is required to understand current reality. Furthermore, that observation requires a framework to digest and expose opportunities. The four rules are such a framework. Without using a framework to observe, our conclusions will often be vague and incomplete. The use of a framework provides the discipline of being thorough in understanding a current condition, and it also provides the opportunity to be specific about what needs to change. This principle requires a great deal of practice to master.