Think Leadership Ideas

Leadership and the 8th Muda

As a leader in your organization, do you add muda or subtract it?

Muda is a Japanese term for waste. One of the prime tenants of the Toyota production system, to which much of that company’s outstanding quality and profitability can be attributed, is to reduce muda. The organization is built on constant striving to identify and eliminate anything that does not add value for the final customer. The Toyota processes are now used worldwide, often called LEAN processing.

Seven mudas are traditionally recognized: overproduction, waiting, unnecessary transport, over processing, excess inventory, unnecessary movement, and defects. Jeffrey K. Liker, in his excellent book The Toyota Way, adds an eighth muda – unused employee creativity.

Liker describes the eighth muda as the waste of “losing time, ideas, skills, improvements, and learning opportunities by not engaging or listening to your employees.” Too many organizations suffer from CEOs or owners that inflate the eighth muda, rather than contribute to its elimination.

In the last two weeks alone I’ve heard a handful of unsolicited stories about clueless bosses who seem eager to be eighth muda poster icons. They shut down employee contributions by:

- Blowing up angrily at errors, apologizing, but then doing it again. Bring them bad news, they kill the messenger.
- Arrogant statements of who is in charge – “It’s my way or the highway,” or “In this company, I am god.”

- Ignoring and refusing to discuss looming challenges that keep partners, directors, and other lesser executives awake at night.

- Refusing to let other executives to speak on the company’s behalf, even if they are more polished presenters - but also can’t seem to find time to improve their own basic presentation skills.

- Discounting human concerns, while fixating on a company goal – “I don’t care about anything except making this quarter’s numbers.”

In all fairness, these executives are often passionately optimistic and enthusiastic about their company or idea, incredibly smart and talented individuals with inspiring visions, with plenty of success they can point to at any moment. What is often outside of their awareness is the erosion, if not outright destruction, of relationships that could sustain their success.

Paradoxically, it is those leaders most obsessed about squeezing each penny that leave tons of money on the table, particularly in the form of lost opportunity and employee turnover. When faced with 8th muda bosses, the best and the brightest look for opportunities to go where they are appreciated, places where they not only have economic opportunity but can make a contribution to something larger than themselves.

I hear plenty of stories, too, of great places to work, and of incredible leaders who strive to bring out the best talent of everyone in the company. By whatever name they call it, they are intentional about eliminating the 8th muda, the waste of untapped employee talent. They invest in employee development, pay attention to the human side of their businesses, and correct unintentional disincentives whenever they are discovered. And they eat their competition’s lunches.

Seeking to reduce the muda on the human side is as important and as do-able as reducing muda in manufacturing processes. It does, however, require an effort and an attitude of doing what’s best for long-term value.

Look at your company. Look at yourself. Where are you eliminating muda? Where are you creating muda – and what are you going to do about it?

by Tom Stevens (c)2007
Tom Stevens helps individuals and organizations create brilliant futures and make a difference. To contact him, visit

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