By focusing business operations on your customer and stripping away activities which don’t add value, Lean allows you to carefully deploy your scarce resources and leverage them to the maximum possible degree. Seen from the overall perspective of your business, this results in improved sales, larger margins, and more cash flow. It also allows your projects to reach completion dramatically faster, while often making use of fewer resources than you believed possible.
Does that sound like something that would help grow your business? Of course it would; Lean has been used by thousands of companies for just this purpose. Let’s look at ‘Lean thinking’ in a little more detail to see how you can apply it to your projects.
What is Lean?
Lean was pioneered decades ago in Japan by Toyota, who used it as the foundation of their Toyota Production System. Though Lean saw its most rapid embrace in the world of manufacturing, other companies have adopted Lean thinking also: it’s simply a way of re-engineering any kind of business process to reduce or eliminate waste.
The core principle of Lean is that any process, or any part of a process, which doesn’t add value to the final result ought to be eliminated. What is value? In the Lean concept, ‘value’ is anything which customers will pay for. In other words, Lean starts from the most logical starting point — the customer — and works from outside the company in. To ‘Lean’ out a process means re-engineering it for the best possible flow and the minimum possible waste.
When implemented successfully, Lean doesn’t just reduce the overall cost by eliminating non-value-adding activities, it also improves customer satisfaction through improving customer responsiveness. Because it defines ‘value’ and ‘waste’ from the point of view of the customer, Lean increases the alignment of your organisation with the needs and requirements of the customer.
Literally any type of process can benefit from Lean thinking — everything from production to the cafeteria to, of course, project management. As a rule, most companies get the greatest benefit by focusing Lean initiatives on areas which represent the core of the business.
How does Lean work?
The core of Lean thinking is the idea of eliminating waste. Traditional Lean principles have employees do this in so-called Kaizen sessions — Kaizen is the Japanese word for improvement — at which they focus on a single process and remove any and all wasteful aspects. Done right, only the value-producing steps are left.
Process improvement proceeds continually with Lean. Nothing is ever considered to be ‘perfect;’ indeed, the same business process might be the subject of several Kaizen sessions. Everything can always be improved.
Lean also emphasises people, specifically the people who actually do the work of carrying out a given business process. Managers in a Lean company manage visually, by walking around to see what people are doing and talking to them. They will observe a given process closely and then engage with the employees implementing it to see why things are done the way they are.
At the same time, Lean is extremely democratic. All ideas for improvement are taken for consideration, regardless of whether they originate from a junior employee or a senior executive. Respecting the individual is a core element of Lean thinking.
How do you bring Lean into your operations?
Lean training can take a wide variety of forms. In some cases employees can go offsite to attend traditional style courses. In other cases consultants come into your operation to train your people in a way that’s closely tailored to the unique nature of your work (and your budget).
Unlike Six Sigma, there’s generally no ‘belt’ system with Lean. Instead, higher levels of training are meant to help participants apply their knowledge more and more broadly across the company or enterprise.
What are common misconceptions about Lean?
In general, Lean is not a tactic to apply to a specific situation; it’s an overall cultural shift. The most successful Lean implementations are in companies which fully embed it into their corporate culture, so it pervades all activities and all levels of a company. It’s not something a company does; it’s something a company is.
Also, the focus on the customer cannot be underscored enough. The primary principle behind Lean is to focus all decision-making on what adds value from the perspective of the customer — and remove or otherwise mitigate any activities which don’t add value. This emphasis on customer focus is crucial to quickly growing a business, and all activities should be aligned towards the customer. This includes product development, administration, and financing.