7 Essential Principles for a Lean System
In order to maintain a competitive edge, businesses need the agility and focus to sustainably deliver value to their customers. A Lean system can provide businesses with the discipline and focus they need to satisfy their customers’ needs.
Without the structure and guidance of Lean principles, it’s quite difficult to respond and adapt to shifts in the market: Most organizations are inherently chaotic, and operate with little understanding of how value flows through their business units. Agility and focus require the guidance of a disciplined, holistic approach to working that is fundamentally different from the way most organizations are run. Read to learn how the practices, principles, and characteristics of a Lean system can enable organizations with the clarity, visibility, and focus to move with agility and speed.
Lean System: Definition
A Lean system describes a business or business unit that holistically applies Lean principles to the way it plans, prioritizes, manages, and measures work. The goal for any Lean system is to maximize customer value. While Lean thinking can greatly improve the productivity and function of a team or department, Lean implementations that spread across the entire organization have the greatest impact on the customer.
Lean systems use a Lean approach to identify and eliminate waste. They systematically discover and act upon opportunities to improve. These are two of the fundamental concepts of Lean: Eliminate anything that does not add value to the customer, and work systematically and continuously to create more value for the customer.
What is Lean Thinking?
The new Lean is differentiated from other business methodologies in that it doesn’t prescribe a strict, rigid set of rules, tools, processes, or practices. Although transforming into a Lean system involves a great deal of effort, its lightweight, flexible nature makes it easy to scale than more structured, regimented methodologies.
Practicing Lean simply involves relying upon the principles of Lean thinking to make smarter, more informed decisions. We define Lean thinking as the application of the 7 principles below -- each of which work to create a healthier, more sustainable, more productive organizational system.
7 Guiding Principles of a Lean System
Although transforming into a Lean system involves a great deal of effort, Lean’s lightweight, flexible nature makes it easy to scale than more structured, regimented methodologies. Practicing Lean thinking begins with a thorough understanding of these 7 Lean principles:
Visualize, optimize, and manage the entire organizational value stream as one value-generating system. Make decisions that optimize the entire organization’s ability to deliver value to the customer -- not just one team or department.
A Lean system is a learning system -- it grows and develops through analyzing the results of small, incremental experiments. In order to retain the insight and knowledge gained from constant experimentation, Lean systems must provide the infrastructure necessary to properly document and retain value learnings.
Lean systems use this definition of waste: If your customer wouldn’t pay for it, it’s waste. Waste can be anything from context switching, to too much work in process, to time spent manually completing a task that could be automated. Lean thinkers are relentless about eliminating any process, activity, or practice that does not result in more value for the customer.
Lean organizations set themselves up for sustainable growth by building quality into processes and documentation. They automate and standardize any tedious, repeatable process or any process prone to human error, which allows them to error-proof significant portions of their value streams.
In Lean, flow refers to the manner by which work moves through your organizational system. Good flow describes a Lean system with a steady, consistent flow of value delivery, while bad flow describes a system with unpredictable delivery and unsustainable habits.
In a Lean system, organizations and the teams within them define, visualize, and refine their processes to optimize for a consistent flow of value. They actively manage flow by limiting work in process, or WIP. Learn more about managing flow here.
This Lean principle says that Lean systems should function as just-in-time systems, waiting until the last responsible moment to make decisions and deliver work. This is based on the idea that the longer we wait, the greater the chance that our decisions will be well-informed, based on data that reflects the reality of the market.
At its core, all successful Lean systems are rooted in one thing: Respect for people. Lean systems are designed to maximize customer value while minimizing waste, out of respect for the customer. Out of respect for employees, Lean systems encourage environments that allow everyone to do their best work. In Lean systems, team members continuously strive to optimize processes to allow everyone to deliver the most value they can provide.
Benefits of a Lean System
When an organization holistically applies these Lean principles, it is able to function in a healthier, smarter, more sustainable way. This directly results in business value: 92% of Lean practitioners surveyed reported moderate to significant improvements in project success since becoming Lean.
When the organization wins, the people within it win too -- members of Lean systems are not only more productive, but often more fulfilled and less stressed too. Here are the top ten benefits Lean practitioners reported:
1. Manage team/process complexity
2. More efficient business processes
3. Better management of changing priorities
4. Better project visibility at the team level
5. Increased team productivity
6. Reduced lead time
7. Increased team morale
8. Improved visibility to stakeholders
9. Reduced costs
10. Predictable delivery of customer value