This Fortune 500 CEO says ‘lean manufacturing’—the management philosophy Toyota made famous—is a prerequisite for leveraging AI

• In today’s CEO Daily: Diane Brady speaks with a CEO about his devotion to lean manufacturing.
• The big leadership story: Job-hopping isn’t paying off like it used to.
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Good morning. Nothing screams ‘yesterday’s man’ (or woman) like talking about kaizens and lean manufacturing. The continuous-improvement program made famous by Toyota in the 1950s was embraced by corporate America before many of us got our first job. Today GE Aerospace CEO Larry Culp is an ardent proponent, as are Ford’s Jim Farley and Baxter International chief Andrew Hider, who just concluded his first annual “President’s Kaizen Week.” But maximizing value while minimizing waste through human-led continuous improvement processes can sound quaint. Most manufacturers would rather talk about digital transformation, automation, and AI than poka-yoke, gemba walks and the three Ms of waste (muda, mura, muri!).

Not Tom Polen of BD, otherwise known as Becton, Dickinson and Company, No. 211 on the Fortune 500. The company sells 35 billion devices a year ranging from hypodermic needles to advanced monitoring platforms. Polen talks about lean manufacturing with the same zeal that other CEOs talk about AI. He even shares the same sensei (master teacher) with Culp, Yukio Katahira. Polen became CEO in 2020, launching BD Excellence in 2024 to scale lean practices across the company, going from 50 kaizen projects to 1,500 last year. He argues that lean is a prerequisite for leveraging AI. 

“If you’re not doing lean, do lean first,” he told me. “Get those systems and capabilities and then start applying AI on top of solid processes and systems. I’m 100% convinced that AI with lean is where you get the power.”

He says lean has enabled a cultural shift, too, as the company completed the spinoff of its $10.4 billion-a-year bioscience and diagnostic solutions units earlier this month to focus on its $11.5 billion medical technology business. While BD faces pricing pressure in China and a range of challenges at home, its stock is up 16% this year while the S&P 500 is down. With a streamlined operation and a workforce focused on daily improvements, BD’s lean champion-in-chief feels optimistic. “Leaders’ responsibility is to absorb complexity up and push simplicity down,” Polen said. “You get what you measure, but you get what you celebrate even more than you get what you measure. Every promotion, every plant visit, every town hall is used to celebrate continuous improvement behaviors, not just financial outcomes.”

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

This story was originally featured on Fortune.com