The German Mittelstand is fairly well known (although greatly under-appreciated in North America). Even less appreciated is the North American Mittelstand. For those unfamiliar with the term, the Mittelstand – technically German for something like ‘middle class’ or middle estate’ – it refers to the “3.7 million small and medium-sized companies driving Europe’s biggest economy”.

These are the privately owned manufacturing companies that enable Germany to punch well above their demographic weight – the 16th biggest country by population and fifth biggest economy – the third biggest manufacturer after the United States and China. For all practical purposes the Mittelstand carries German and Germany carries Europe – or at least the EU.

There is a powerful American and Canadian Mittelstand too. The difference is that the Germans recognize the power and importance of these small to medium sized manufacturers, while in North America there are viewed as insignificant, unimportant, and derisively sneered at as ‘niche players’ and little guys undeserving of attention or respect.

Said the Harvard Business Review a couple of years ago, “such companies are actually quite rare in much of the Western World and it is much more ‘normal’ to see complex conglomerates”. Really? In fact, there are over a quarter of a million manufacturing companies in the United States and over 90% of them have 100 employees or less.

But that is the way of it. The business press ignores the small and medium sized manufacturers while the academics all but scorn them. I had a professor from Ohio State contact me a year or so ago asking if I knew of any companies actually using Lean Accounting. I spouted off a rather lengthy list of companies he might want to contact that are using it quite effectively. He cut me off asking if I knew of any “real companies” – meaning Fortune 500 Dow Jones sorts of companies. The answer, of course, was no, none of them are into lean at all, which is why they are all in on cheap labor and largely unsuccessful. To him, however, if the biggies weren’t doing something then it didn’t matter.

In a big showdown at NAM a few years back the American Mittelstand squared off against the big guys … and lost. The lobbying of NAM does more to support offshore manufacturing for the publicly traded companies than it does to truly support the small and medium American manufacturers.

The MEP program – which is supposed to be the government’s support for the American Mittelstand – launched a supply chain initiative a few years ago; and then promptly defined the supply chain focus of the small to medium sized manufacturers in the United States as significant only as Tier 2 and Tier 3 suppliers to the big guys. If they weren’t the tails to the big dogs then their supply chains aren’t worthy of government support.

In fact, there is a huge and growing cadre of very lean, very well managed small to medium sized manufacturers in North America that are providing a huge boost to the economies of the USA and Canada, but you have to look pretty hard to find them. Not that hard, though … you can usually see them at the big lean events. Hundreds and thousands of companies that you never heard of.

The power of the North American Mittelstand is actually quite natural. Unlike the big guys, the small to medium sized companies tend to worry about cash flow more than paper profits, which means production flow is much more important to them, which in turn makes lean and its cycle time focus a natural fit. They tend to be longer term thinkers – the next quarter means little to them; and they are more concerned about the strength of the company that the next generation of owners will inherit. They tend to be tied to the community, and don’t see outsourcing their manufacturing work to Ho Chi Minh City as a possibility, nor desirable. All of these things put them at the opposite end of the cultural and managerial scale from the big guys; and they make them much more receptive to lean thinking, and by and large, much, much more successful.

Don’t be fooled by the academics and the press, however. The North American Mittestand is out there and they are the ones to learn from – not the bumbling, stumbling, numbers driven suits who let Wall Street define goodness. You can learn more about how to make money in an afternoon at Aluminum Trailer than you can in a year at Harvard or from a lifetime subscription to the Wall Street Journal.