3 principles of Lean Management
Here’s a scenario: Your business is doing well and you think about expanding. Although, a great opportunity, this is also associated with big risk. Sounds a little pessimistic? Sure, but many businesses don’t survive this transition. So should you invest in new competencies or perhaps just focus on your current organizational set-up? This is where Lean comes in.
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What is lean management?
Lean Management is about how we look at things to make continues improvement. It can change the way we think and do business. It is about establishing a culture that delivers true customer value, while it eliminates waste, reduces costs and improves processes and productivity.
When I say, “eliminates waste”, I don’t mean that resources are meant to be cast aside – it is simply about eliminating wasteful steps in a process, finding resources that aren’t creating value in one place, and using them somewhere valuable. For instance, lean management allows us to increase effectiveness and the quality of our processes – we become faster at what we do with a reduced amount of errors. As a result, we free up time and resources that people can use somewhere else, which means lower operating costs.
The same goes for value. Value should always be seen from the customer's point of view. A step in the process can only add value to the extent that it adds value to the customer. And again, a “customer” can also be internal – a new employee might go through a business license process to get specific accesses, which makes him or her the customer.
Lean management vs. traditional management
A lean culture doesn’t come overnight. It requires continues improvement and sometimes even a shift in how leaders think. When compared to traditional management, lean leaders prefer simple over complex processes. They manage by sight (you might already have seen visual boards of team performance or similar) rather than by status reporting, where decisions are made through data only. They support pull systems over push systems (more on that later), while they prefer to reduce non-value added work compared to just speeding up value-added work.
So how do we practice lean management in the organization?
Here are some factors to consider.
Core elements of lean management
1. One-piece flow
Flow aims to make a product or service move quickly and continuously through the system. Focusing on one piece at a time minimizes work-in-progress, while it increases quality and flexibility. Imagine a clean process that has had all of the non-value-adding elements removed. Each remaining step will create value for the customer, but if one coworker is delayed by, for instance, the wait of an email, the whole process is blocked. This harms efficiency. Instead of processing items in batches (for instance uploading several large files to an external server), lean is very much about processing information one at a time. Some wasteful processes include workarounds, inspections or approvals if they are done at the wrong level or simply redundant. Think about your current processes: Where can you break down information and eliminate waste in order to reduce non-value added work?
When we want to make products and services move quickly within the organization, we can use either push or pull. Push is when you hand over work or similar information to the next person in the process before they are ready for it. Pull, on the other hand, is when the last person in the process is ready and “pulls” the work from the other person. It is about getting goods and services through the manufacturing process without overproducing and blocking processes. Pull is all about focusing your efforts on what the customer demands (the customer here being the next person in the process chain), so the key to a pull system is that no one in the up-stream process produces a product or services until the next person is ready for it.
3. Zero defects
Although mistakes happen, a lean organization does not allow for mistakes to occur several times. Regular dialogue with coworkers involved in process blocks will give you a better insight into why things happen and how you can fix them. Remember that a process is not considered to add value if the customer doesn’t care about it, so make sure that it does so. If it doesn’t it can be considered “waste” and might have to be excluded from the process.
I hope you found these principles helping. Remember that lean is about incremental changes. It is better to change 30% of something than 100% of nothing.
If you want to read more about the topic of management, try out How to create a feedback-oriented organization or Disruption. Adding value to an overused buzzword.