Lean methodology continues to be popular with businesses due to its focus on reducing waste and improving efficiency in the interest of providing more value to customers. As a philosophical approach, Lean methodology enjoys broad applicability to processes within businesses of any size because of its ability to help organizations achieve business goals in a healthier, smarter, more sustainable way. Lean management enables organizations to optimize across the entire value stream – from shortening the vision to value cycle time, to improving speed and increasing overall quality throughout the production process, to improving the aspects that impact delivery – all in an effort to ultimately add value to customers.
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It’s important to remember that Lean methodology isn’t limited to removing waste and increasing efficiency. A closer examination of the seven Lean principles reveals a focus on continuous improvement, creating organizational knowledge, and respecting Lean team members across all levels of the company.
When implemented effectively, Lean management results in more knowledgeable team members who excel at cross-division collaboration. Making progress against those seven Lean principles forms the basis of a Lean management framework.
As leaders and managers further adopt Lean principles, they inform their thinking and execution. Over time, besides delivering better business outcomes, Lean management also leads to stronger organizational health.
Lean methodology originated with the Toyota Production System, which revolutionized the manufacture of physical goods in the 1950s, ‘60s, and beyond. Lean methodology maintains its hold in manufacturing and continues to expand into new applications that include knowledge work, helping businesses eliminate waste, improve processes, and boost innovation in work that’s not limited to production in manufacturing.
Of course, the nature of knowledge work differs greatly from manufacturing: The value created in knowledge work exists in the minds of workers, not on the assembly line. This presents a unique set of challenges and opportunities when applying Lean methodology to knowledge work. This means businesses from all disciplines of knowledge work can now find greater success with Lean management, using it to propel organizations into a more productive, healthier, more innovative future.
To understand how Lean methodology applies to knowledge work, it’s helpful to first understand the history of Lean manufacturing.
A Brief History of Lean Methodology
In the 1980s and ‘90s, Western manufacturers struggled to keep up with the more efficient Japanese companies, so they had two options: Trim down, or shut down. They began adopting the practices of Japanese companies to improve their speed, productivity, and cost efficiency to remain competitive.
During this time, Lean was boiled down to overly simplistic ideas, generally used to justify relentless cost cutting. Today, the manufacturing industry employs far fewer people than it once did. There are also fewer players in this space; they’re leaner, but larger.
Many variations of Lean methodology were born in the years following, including Total Quality Management, Just-in-Time, Six Sigma, and the Theory of Constraints. Each of these movements incorporated various practices from what the Japanese were doing that differentiated them from their competition, although we can safely say that what they were aiming for is now known as Lean. Many of these popular “Lean” management frameworks were highly prescriptive by nature and required considerable training to adopt fully.
In their books, The Machine that Changed the World and Lean Thinking, Jim Womack and Dan Jones helped us elevate our understanding of Lean, allowing us to move from mimicking Toyota practices to truly understanding the principles that made the Toyota system work. Approaching Lean as a set of guiding principles, rather than a specific set of prescriptive practices, makes implementation easier, more flexible, and more sustainable.
Today, organizations are seeking to transform the way they work by applying Lean principles, specifically: Continuous improvement and respect for people.
The Pillars of Lean: Continuous Improvement and Respect for People
The two pillars of Lean are continuous improvement and respect for people. When used correctly, these guiding principles inform smarter decision making and guide organizations toward becoming healthier, more productive systems.
Continuous improvement is a method for identifying opportunities for streamlining work and reducing waste to improve the speed and quality of value delivery. Working to constantly improve is the best way to reduce waste in any organization. Examples of waste in knowledge work are:
- Wait times between the steps in a process
- Context switching
- Excessive planning
Eliminating these types of waste through continuous improvement allows organizations to work more efficiently, reducing wasted time and effort while improving the speed of value delivery.
Continuous improvement is rooted in a commitment to learning. Traditionally, Lean was synonymous with cutting: Costs, waste, people, etc.
Today’s Lean focuses on adding value, rather than removing waste. Here’s why: By focusing only on value-adding activities, we create systems that produce value, and in doing so remove wasteful practices from our systems. If we focus only on cutting waste, we might sub-optimize the whole, without benefiting the customer.
The word “streamlining” might conjure ideas of layoffs or other painful forms of cost reduction that are detrimental to organizational health. This isn’t how streamlining is operationalized in truly Lean organizations; streamlining in continuous improvement simply refers to the way teams work together to identify ways to improve their value delivery.
This is distinctly different from the traditional, top-down streamlining efforts seen in Lean manufacturing decades ago. Continuous improvement in Lean encourages productive streamlining of processes and practices, not people, to improve the speed of value delivery.
The Continuous Improvement Cycle
Although employed differently in different organizations, this continuous improvement cycle outlines the basic steps in the process of continuous improvement:
Continuous improvement in Lean is similar to the scientific method, in that every decision is viewed as a hypothesis to be tested. Using this method, when faced with a new opportunity, teams work to identify a hypothesis, plan a solution, implement the changes, and then measure the results. The final step – review – is critical to the continuous improvement process. Without a way to measure and reflect upon the impact of our decisions, we cannot continuously improve.
Respekt für Menschen
Respect for people is the second pillar of Lean. Lean teaches organizations that respecting people is a key strategy for eliminating waste. Lean organizations practice respect for people at every part of the value stream.
Respect for customers: relentless focus on value delivery
Lean organizations respect their customers by limiting waste, with waste defined as anything the customer would not willingly pay for on an itemized bill. This means not wasting the customer’s time on a product, service, or feature that doesn’t serve a customer’s need. It also means that processes are continuously improved to reduce inefficiency. A bad process wastes effort and resources on things that don’t directly benefit the customer.
Lean organizations respect their customers by focusing efforts on improving processes to maximize value delivery.
It also means listening to the voice of the customer: Instead of relying on educated guesses about customer problems, Lean organizations respect customers by engaging in meaningful dialogue about how to improve their products and services to better meet customer needs.
Respect for employees: autonomy, mastery, purpose
Lean organizations respect their employees by empowering them to be problem solvers and decision makers – giving them, in Dan Pink’s words, the autonomy, mastery, and purpose to perform at a high level.
Lean leaders show respect for their employees by providing clear, lightweight, mentoring leadership. This helps employees stay focused on delivering customer value, which in turn helps the business:
- Salespeople aren’t forced to fruitlessly, furiously chase any lead; instead, they invest in specific, targeted leads.
- Marketers don’t waste time on materials that won’t truly help the process or spend money on the wrong leads.
- Customer success teams get a clean, clear handoff with a map of customer goals which they can help achieve in the coming months and years.
Respecting employees in turn helps Lean organizations demonstrate respect for their customers, because it targets the waste that Lean aims to eliminate: the layers of overhead between the customer and the people who are directly making the product for that customer. By removing this overhead, we can produce better products, at a lower cost, in a more sustainable way.
Respect in teams: systems thinking and process focus
Teams practice respect for people by thinking and operating as a system. In many corporate cultures, the word “team” refers to a group of individuals who are working to achieve personal goals, who are willing to put in herculean efforts to advance in their careers. Lean thinkers would argue that these are not teams at all, because they are not optimized as a system to meet objectives that benefit the customer.
If someone is rewarded for being “the hero,” for doing the jobs of three people, that person not only sets an unhealthy, unrealistic standard for the rest of the team, but they also become a bottleneck, slowing the delivery of value to the customer.
Lean teams work to optimize the system by visualizing and distributing work in whatever way delivers value to the customer in the fastest, most sustainable way. They show respect for each other by collaborating and distributing work evenly across the team. They discourage inefficient, unsustainable heroism by limiting Work in Process (WIP) at the team and individual levels. They manage work as a system, rather than as a group of individuals, prioritizing value delivery with every decision they make.
One example of systems thinking: Lean encourages teams to document effective processes, so that anyone on the team can repeat them. This allows the team to move work through faster, teaching new skills to co-workers rather than relying heavily on a few specialized workers.
Lean teams also practice respect for people by staying focused on process: Instead of pointing fingers when a problem arises, Lean teams demonstrate respect by focusing on improving the process. Building quality into the system, by developing and optimizing standard processes, allows the team to move faster and with better work quality.
Lean solutions empower teams to deliver faster by visualizing value streams, optimizing the flow of work and continuously improving their performance. Lean delivery offers the following benefits:
- Optimizing flow by visualizing value streams and reducing dependencies
- Fueling continuous improvement by analyzing performance, identifying trends, and evolving processes
- Leveraging Lean principles to empower teams to innovate, adapt, and deliver value faster
- Delivering larger, more complex outcomes by coordinating workstreams across teams
- Scaling to the portfolio level to balance timing, staffing, and cost for delivery of enterprise-level initiatives
- Driving strategic initiatives with roadmapping and iterative funding of value streams
Lean Methodology and Lean Management Pay Dividends
Lean methodology roots lie in streamlining production processes in the automobile industry, so it makes sense that some practitioners may still tend to see it through the lens of cost-cutting and driving efficiencies.
However, remembering the seven guiding principles of Lean methodology reveals a more holistic picture that orients teams around the concept of continuous improvement. Doing so pays dividends for Lean teams in a number of ways.
Continuous improvement hinges on continued learning. Focusing on it:
- Fosters a collaborative culture across teams before, during, and after work is done to deliver value to customers
- Creates a culture that encourages information sharing at the beginning, during, and especially at the end of a process cycle
- Encourages idea sharing at all levels of an organization, especially as teams spend extended periods of time working together
- Empowers teams to identify opportunities to improve, plan for ways current processes can be improved, execute and implement those changes, and review the effect those changes have on overall work output
Lean management allows team leaders and team members to surface more ways to showcase information sharing, encourage idea sharing, and collaborate across teams. In truly collaborative cultures, eliminating waste and creating effectiveness becomes a natural part of the process, instead of the primary focus.
Best practice sharing across teams and the sharing of new ideas often leads to new levels of efficiency and innovation. Over time, besides driving improved business outcomes, Lean methodology results in better informed and more skilled team members, which gives employees a chance to contribute in more significant ways as they gain more experience.