What is Lean?
Lean is a business methodology, born of a widespread manufacturing methodology, that’s gaining popularity for its ability to help businesses achieve their goals in a healthier, smarter, more sustainable way. Lean enables organizations to optimize across the value stream for value delivery, improving speed, quality, and organizational health.
Lean originated with the Toyota Production System, which revolutionized the manufacture of physical goods in the 1950s, ‘60s, and beyond. Lean maintains its hold in manufacturing, but has also found new applications in knowledge work, helping businesses eliminate waste, improve processes, and boost innovation.
Of course, the nature of knowledge work differs greatly from that of manufacturing: Namely, the value being created in knowledge work is in the minds of workers, not on the assembly line. This presents a unique set of challenges and opportunities when applying Lean to knowledge work. Businesses from all disciplines of knowledge work find great success with Lean, using it to propel them into a more productive, healthier, more innovative future.
In order to understand how Lean is applied to knowledge work, it’s helpful to understand the history of Lean manufacturing.
A Brief History of Lean
In the 1980s and ‘90s, Western manufacturers struggled to keep up with the efficient Japanese companies, so they had two options: Trim down, or shut down. They began adopting the practices of the Japanese companies, in an effort 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 fewer players in this space. They’re leaner, but fewer and larger, too.
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 whole 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 in order 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, rework, and 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 be suboptimizing the whole, without actually benefitting 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: Identify, Plan, Execute, Review.
Continuous improvement in Lean is similar to the scientific method, in that every decision is viewed as an 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.
Respect for People
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 in order 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.
Keeping up the pace with disruptive competition is a challenge facing all businesses today. Learn more about how Lean can help your team and your organization get ahead by reviewing these excellent resources:
- Download the 2016 Lean Business Report to gain insight into how over 3,000 people across multiple industries are applying Lean across all disciplines of knowledge work.
- Read this blog on Lean principles by LeanKit co-CEO Jon Terry: Welcome to the New Lean.
- Watch this webinar on how to launch a sustainable transformation by using Lean Leadership, Culture, and Tools.
- Learn more about continuous improvement by reading this page.