FEATURE – An oil executive looks back at his lean journey, sharing reflections, revealing hard truths and reminding us that leadership transformation happens through setbacks.

Words: Béla Kelemen

The best thing that ever happened to me as a leader was discovering Lean. That may sound dramatic, especially coming from someone who spent more than twenty years in senior management at an integrated oil and gas company. I was responsible for five refineries in four countries and leading the optimization of whole downstream operation. Starting in 2016, I then served as Vice President of Business Excellence for the whole MOL Group. By most conventional measures, I was successful. Life was good.

When Lean came, it changed everything. Our journey did not begin with a vision but, as it often does, with a problem.

In 2012, the European downstream industry was in deep trouble. Refineries were unprofitable. The outlook was brutal: up to 30 percent of European refineries were expected to close. We were fighting for survival.

As part of the downstream management team, I helped design what we called the New Downstream Program: a very traditional efficiency improvement initiative with a target of $500 million. Looking back, it was classic industry thinking—cost, utilization, scale. But hidden inside that program was one element called “waste elimination.” That small phrase would later become the doorway to our lean transformation.

At the time, one of our biggest headaches was maintenance. We were spending close to 300 million dollars a year, yet mechanical availability was still not where it needed to be. Every year I found myself in the same discussions with the executive board, trying to justify replacing a few pumps with arguments that were, frankly, ridiculous. I had authority, but not clarity.

Then an old friend re-entered my life.

A A-HA MOMENT AT FRANKFURT AIRPORT

Back in 1984, I played basketball at the Technical University in Budapest. One of my teammates, András, later went to work in the airline industry. When we met again decades later, he invited us to visit Lufthansa Technik. I was interested in seeing the right kind of maintenance in action; he was eager to show me a real lean transformation.

I didn’t even realize it at the time, but that night at Frankfurt Airport I was on my first real gemba walk.

What I saw shocked me. Lufthansa Technik was in the middle of a lean transformation. There were simple improvements everywhere and engaged front-line leaders. Above all, I witnessed a level of enthusiasm on the shop floor that I had rarely seen in heavy industry.

That visit convinced me: if Lean works in aircraft maintenance, it must work in refineries.

To explain it back home, I started to use mathematics. If a six-step process is 90% right at each step, the total effectiveness is only 53%. At 80%, it drops to 26%. At 70%, to barely 12%. What I didn’t know then was that even 90% value-added work is almost impossible. In reality, many of our processes had less than 10%.

THREE HOURS FOR 15 MINUTES OF WORK

My real awakening came when I started walking the shop floor myself.

I shadowed two blue-collar workers for three hours. At the end of those three hours, they had spent only 15 minutes inspecting the V-belts of air coolers. Eight percent value-added work. The rest was walking, searching, waiting.

It was a nightmare, but also a gift. For the first time, I was facing the brutal reality of operations I thought I knew well. I realized how far senior leaders drift when they manage from reports instead of reality.

As I later wrote in the foreword of the Hungarian edition of Michael Ballé’s Lead with Respect, “as leaders rise, they move further away from the truth.” The game is not played in spreadsheets. It happens on the field.

From that moment on, the gemba became non-negotiable for me.

WHEN RESULTS IMPROVE AND URGENCY DISAPPEARS

By 2016, our first lean wave reached its peak. We captured thousands of small improvement ideas, and even top management proudly wore T-shirts saying, “My passion is to eliminate waste.” One refinery saved more than €270,000 a year simply by reducing product purity from 99.85 percent to 99.6 (which is what the downstream unit required).

And then something dangerous happened: performance improved. Even during COVID, results remained strong. EBITDA fluctuated, but overall the business performed well financially. And when results are good, urgency fades and people start asking, “Why change more?”

That is when a lean transformation faces its real test. After the initial climb, organizations usually take one of three paths:

• The first is what I call the Holy Grail: mindsets and behaviors truly change, and improvement becomes self-reinforcing.
• The second is the efficiency treadmill: ups and downs, repeated initiatives, constant effort just to stay in place.
• The third is the slippery slope back to traditional efficiency programs—opportunities exist, but old habits return.

At MOL Group, we have examples of all three. Small units like MOL Lube are on the Holy Grail path. Maintenance, a massive organization with millions of work hours, is on a bumpy treadmill. Other areas slide back unless leadership intervenes.

To address this early on, we created Business Excellence as a central function back in 2016. It was necessary, but not sufficient: lean experts can diagnose and propose countermeasures but recovery depends entirely on the business leaders. If leaders do not change how they think and how they act—if they don’t shift from pleasing bosses to supporting value creation—Lean becomes just another program.

Industry myths don’t help. We still believe that scale guarantees competitiveness, utilization equals efficiency, inventory equals security, and investment equals progress. These beliefs are deeply rooted, and they shape behavior more than any tool ever will. Lean challenges all of them.

LOOKING BACK

After more than fifteen years of practicing Lean at MOL Group, I finally had the opportunity last year to go to Japan on a study trip. It was long overdue. One Japanese proverb stayed with me from that trip: “Fall down seven times, get up eight.” When I look back at my lean journey, that sentence describes it perfectly. I have, indeed, fallen many times—definitely more than seven.

Another concept I truly learned to appreciate in Japan is hansei (self-reflection). Since then, I try to practice it consciously, as a disciplined habit, especially when things do not go as planned.

I believe that the real enemy is not failure, but the lack of reflection. You must understand where you are, understand the gaps, and work on both thinking and doing—together. And never forget that Lean is not a journey for loners, but a team sport. I know now that I am not walking alone.

_THE AUTHOR