Integrating Lean Management Into Your Business: Q&A with Mason Walker

Although it originated in Japan as a manufacturing practice for Toyota, lean management has permeated nearly all industries in companies across the globe. The practice is all about continuous improvement by analyzing and refining processes to eliminate inefficiencies. But the philosophy has another foundational pillar that is just as important as constantly improving: respect for people.

Mason Walker, the co-owner and CEO of East Fork Cultivars, an Oregon craft cannabis and hemp company, began integrating lean practices into his business nearly three years ago. Walker will be discussing how lean management tactics improved his business, as well as how they can be applied to your own cannabis or hemp operation, at the Cannabis Conference 2020. Here, he delves deep into what lean management is, how he uses it in his business and how he’s made it all about people.

Hemp Grower: Can you start off by telling me a little bit about how East Fork Cultivars has adopted lean management practices?

Mason Walker: Back in 2017, we were just starting to make the leap from being somewhat of a garden-scale farm to a commercial-scale farm. We started working with a lean consultant and just putting in place some of the basic daily management tools that are part of the lean philosophy, like project management tools and shared language around continuous improvement and organization. 

We started to use the “Five S” approach to organization and the hierarchical meetings that lean utilizes, which is mostly focused around a daily huddle that's very structured. We started to roll out all these tools at our farm, and it was incredible to see the small, scrappy farm able to really systematize the things that we weren't excited to do and we knew weren't adding value, like transplanting clones or trimming flower—those kinds of things that are very repetitive. We basically figured out how to do them really efficiently so we could focus on the things we enjoy more.

To me, lean is really a philosophy around continual improvement, first and foremost. It's the view that small, consistent, integrative change can add up to much better systems. In practical use, both in daily management but also in higher level philosophy, our organization is all about openness to change, to questioning the way we do things, and to providing what we call psychological safety, which is an assurance that if people screw up, we don't blame them. We blame the system, and we use a screwup as an opportunity to reevaluate the system and improve it. That's how we have adopted lean. We're in our third year of learning lean, and it's still a pretty core part of our operational identity. 

HG: Can you give me a specific example of where you’ve implemented lean management and how it's changed your operations?

MW: 2016 was our first year as a commercial cannabis farm. In that fall and winter, we thought we would be able to sell our entire crop primarily as trimmed cannabis flower. We're kind of unique in that we've been participating in an adult-use recreational market for five years now, but we're entirely focused on low-THC (tetrahydrocannabinol) cannabis. So, in 2016, we grew in our first commercial cannabis crop, and we speculatively trimmed it all. We started to go out into market with that trimmed flower, but at the time, CBD (cannabidiol) was barely in people's lexicon. We had put all of this labor and time and energy into trimming—we're talking probably $100,000 for labor into making this value-added product that there wasn't yet a market for. 

When we brought in the lean consultants that year, one of the first and most famous components of lean is the concept of “just in time,” or JIT. That is basically the view that it's really inefficient to build up a bunch of inventory speculatively before there's a demand for it or it's sold. Even if it's going to be sold eventually, you could have put those resources toward something else until they were needed. 

So, going forward now with all of our value-added products, we kind of make them to order. We shoot for four weeks of active inventory of all our different products, and if we get an order, of course we replace that inventory. But that was kind of the biggest learning point for us. 

RELATED: East Fork Cultivars Sets Itself Apart From the Oregon Marketplace

HG: Would you recommend a consultant for anyone looking to implement these strategies?

MW: I think it's a great way to start. We spent very little money on our consultant, and he came out and did a full-day session with our team. I think we paid him maybe $800 a day or something like that. We ended up working with him several more times for single-day seminars, so all in all, the cost to us was maybe $5,000. But I can tell you, I credit that man for saving us way, way more than we paid him for consulting and reorganizing the way that we think. So, yeah, I highly recommend working with consultants. Outside of that, there's lots of books, but for me, I'm much more of a hands-on learner. I think I read a lot, but I learn best from seeing and action.

HG: How do you use lean management to create that feeling of psychological safety among employees?

MW: It's really important, particularly for the leadership in the organization, to buy in to any sort of culture and philosophy. So, in our executive team, we all agreed to buy in fully and lean into distributed decision-making, knowing that it would result in mistakes and inefficiency in the short term but empowerment in the medium and long term. And, you know, it was painful. One of our colleagues one time ruined $8,000 worth of seed—he germinated them incorrectly. And because we had been so dedicated to fostering that psychological safety, we had to not be like, you really screwed up here. We said [to that employee], “let’s make sure that there’s a system in place that’s failproof, so the next time someone germinates the seed, it doesn’t get destroyed. Since you’re an expert in the space, why don’t you take the lead on writing that [standard operating procedure]?” There has to be some sort of top-down buy-in for it to work, just like any sort of method of organization or culture efforts.

HG: Where are some areas of operations that farmers might consider beginning to implement these practices?

MW: Farming is ripe for lean application because there's so many repetitive tasks. For instance, we grow about 30,000 plants from seed per year, and we have to germinate all of those and move them into different-sized pots and then move them out into our fields. And if you do something 30,000 times, you really have an incentive to do it very efficiently, so what we've done is time trials. That's a big part of lean, where you do a test and you come up with an AB test—let's do it this way [for an hour], and then let's change something and do it another way [for an hour to see which works better]. And that's an essential tool for applying lean to find some basic process efficiency and continual improvement. 

We have a lean program manager. Primarily what he does is design AB testing for all of our processes and then goes and works with each team—our cultivation team or our material handling team or even our sales team—and helps them design a test on how to improve a process with test A versus B and then adopt the best outcome and move forward with that as our new standard operating procedure.

HG: What do you hope attendees will bring back to their business from your session at Cannabis Conference 2020?

MW: I hope people will take away that all the processes that go into the cannabis industry behind the scenes are incredibly complex and nuanced, but at the end of the day, they're all manufacturing processes, and there's a lot we can learn from existing established industries. While it's a relatively new commercial crop that has a very unique history with prohibition and all the baggage that comes with that, at the end of the day, it's farming. We don't have to recreate the wheel, and there are a lot of established best practices that we can learn from. I've personally become a lean evangelist because I enjoy the process of seeing continual improvement—it's fun, you get little rewards when you improve something—but it's also done a lot for culture. 

I think that's another thing I hope people come away with. It's not just a nuts and bolts tool; it can be powerful for shifting the culture as well. It is a strong set of shared values that has improved our small family farm’s organizational culture, particularly around what I mentioned earlier, which is psychological safety: the feeling that it's OK to screw up and that a screwup is really an opportunity to improve the system. It’s kind of freeing for people because I think a lot of people work in a bit of fear of screwing up, and that's pretty demoralizing.

Editor’s Note: This interview has been edited for style, length and clarity.