Blog series: Lean Management in Practice

The Key to Productivity: Lean Management 

Picture. Austin Distel / Unsplash

Lean management isn't just a collection of methods for improving production; it's also beneficial for those in the service business. I've had the pleasure of focusing on instilling a culture of Lean-based development in several organizations, not all of which operate in industrial production. While Lean's roots lie in the automotive industry, specifically the Toyota Production System (TPS), I believe its application extends far beyond.

This blog series is aimed at organizational developers, leaders, and other professionals who haven't fully embraced Lean management yet. Even those who have been implementing Lean for some time may find the sections on surveys and data-driven decision-making interesting.

Lean management isn't done in isolation; it's part of a broader context of organizational development and history. It integrates into existing development trajectories, often requiring the breaking of previously established, proven solutions. To create a new organization that continuously delivers more value to customers, it's often necessary to let go of familiar and seemingly safe practices.

Lean can be an unpredictable source of competitiveness for those who choose to apply its principles, even if it's not yet widely used in your industry. In this blog series, we'll explore the practical application of Lean through simple examples that any professional can bring to their organization.

Blog Series Overview:

• Part 1: Lean Management in Practice
• Part 2: Lean Tools for Identifying Value
• Part 3: Lean Tools for Ensuring Quality
• Part 4: The 8th Waste of Lean - Lost Talent or Knowledge

Picture. Jexo on Unsplash.

Why implement Lean Management

Do you consider customers your company's most valuable asset? Surely, you listen to your customers and conduct surveys, or at the very least, continuously engage with customer-facing teams. You likely aim to adapt your operations to meet customer expectations, ensuring their loyalty and potentially increasing sales. This is the first basis that aligns perfectly with Lean.

Do you strive to perform work in a way that benefits customers, or at least, ensure that most of it adds value—work that customers are willing to pay for? If you notice that customers consistently question a particular part of your service, you're likely willing to change it. This aspect might be referred to using different terminology, such as quality management or process management. However, it aligns perfectly with Lean's core principles.

Now, let's address the most challenging but often essential aspect: cost competitiveness. You probably aim to deliver what customers expect with quality while ensuring that a significant portion of revenue remains. This can be challenging, especially considering the traditional project management perspective of the triple constraint—wherein adjusting quality might require compromises in budget or schedule.

If quality is set high (as customers usually expect), adjustments may need to be made in budget or schedule. But what if you could implement a toolkit that allows maintaining both quality and budget or schedule without compromise? Yes, we're still within the realm of Lean's core principles and desired state, and it's worth seriously considering practical Lean application in your operations.

Before Practice: Clarifying Lean Management Terms

Before delving into practical applications in subsequent blog posts, we must define a few terms. The goal of this blog series is to bridge theory with practice. We can identify five direct impacts of Lean management relevant to this series' focus, which include:

1. Methods of organizing work practices.
2. Particularly, structuring and utilizing knowledge.
3. Technologies supporting knowledge utilization, enhancing customer relationship management.
4. Capacity to manage customer relationships.
5. Achieving higher competitiveness.

From here, we gradually move towards understanding why Lean management is highly applicable, in my opinion, even to non-production functions. Central to this is understanding Lean's principles, which, summarized, include:

• Creating a dynamic, continuously evolving operational model focused on customer value.
• Concentrating as much activity as possible into seamless processes that deliver customer-valued outcomes.
• Emphasizing the importance of data-driven decision-making for creating customer value and optimizing processes.

To finalize, let's highlight a few more terms critical to Lean management, without which it wouldn't be the transformative force it is:

• Value: Determined by what customers value and are willing to pay for.
• Value Stream: The practical execution that generates customer-valued outcomes, often in the form of processes.
• Waste: Any part of the process that doesn't add value.
• Flow: The smooth progression through the value stream, aimed at creating more value for customers.
• Customer-Centricity: Ensuring products or services are ones customers are willing to pay for. Lean generally aims to align processes with customer demand, with "Pull" being a key concept.
• Continuous Improvement: Enhancing the value stream towards an optimal state, ensuring continued value creation in the future.

We've outlined Lean's key principles, vital for understanding the practical applications we'll explore in subsequent posts—taking it even further by providing survey templates for your organization, upon request.

For Lean management, as with any significant management philosophy, getting leadership on board is essential. The transition to Lean management is often referred to as a Lean transformation, a process that approaches Lean as a management philosophy, while recognizing its practical application at the grassroots level—in the practical work and, especially, in streamlining value creation, not in boardrooms. 

Picture. Daria Nepriakhina on Unslash.

Focus point: What is Kaizen, and How Do I Apply It in Daily Operations?

Lean management aims for tangible improvement. A particular term in Lean terminology is Kaizen, referring to incremental improvements. Often, the Lean initiatives described earlier involve small changes that bring you closer to your desired state. Through this blog series, you'll receive practical tools for situations where you can start making gradual improvements:

• Blog 2 - Value Stream Analysis Tool: Identifying the parts of a process that create customer value.
• Blog 3 - Quality Assurance Tool: Translating customer preferences into concrete variables within the process.
• Blog 4 - Skills Identification Tool: Identifying knowledge and skills gaps and underutilized resources.

Implementing Kaizen in practice could become a seamless part of your weekly agenda. I'd bet that within your workplace, there's already an active group of development oriented individuals who continually drive initiatives forward collectively. Most of the organization is likely involved in various change efforts, but you'll recognize a limited number of initial agents in the change process. Sometimes, they're part of the management team, but they can also be e.g. developers or customer-facing staff.

Could you consider gathering this active group weekly to discuss small improvement projects aimed at moving your organization forward? This is likely something you're already doing, though using different terminology. By applying Lean models, you can create a framework for most bringing relevant issues to these weekly meetings. The key is to 1) clearly document defined improvement projects, 2) assign projects explicitly to individuals (shared responsibility isn't ideal as there is no ownership), 3) efficiently and visually track progress on various projects, and 4) focus on specific projects each week, as not everything can progress simultaneously.

Kaizen provides a framework for organizing development efforts. It's just one of many Lean concepts you can start applying with minimal effort. I don't believe there's a single correct way to start using Lean; willingness and practical experimentation are sufficient. If the potential appears promising based on these initial efforts, I encourage considering a comprehensive Lean transformation.

I've witnessed firsthand the impact Lean management can have on everyday work productivity and wholeheartedly recommend exploring its possibilities!

Regards,

Janne Vainikainen, Zeffi, COO, Lean Six Sigma Black Belt

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