10 compelling reasons why NO organization should ignore Lean in today’s business world
Lean traditionally has been defined as a methodology of reducing Waste, practicing continuous improvement or Kaizen, and adopting pull-system and Just-In-Time.
This definition, while to some significance is logical, is NOT comprehensive anymore! Lean has evolved. It has become bigger in scope and practice than its founding principles of Toyota Production System.
Today, Lean is not confined to its well-known five principles of: Defining Value, Mapping the Value Stream, Creating Flow, Implementing Pull and Pursuing Perfection. Lean has become a model of organizational excellence which goes beyond the operational process or the factory production floor. It has become an essential practice which drives the entire organization and its people towards excellence, growth, and culture-driven qualities.
When organizations do not realize this transformative evolution of Lean and harness its power, a lot is missed out. Eventually, Lean becomes a fading practice, or some specific set of tools used by a select group of people in the organization-usually only the supervisors and operators.
Today’s business world, which is VUCA in nature, which is volatile, uncertain, complex, and ambiguous, needs a stronger systemic Lean approach which covers the whole organization in its value chain and People structure. So, expanding and transforming from the Five traditional principles of Lean, here are 10 principles of Lean which are holistic in nature. These principles have also become the 10 compelling reasons why no serious organization, should ignore embracing and practicing Lean, or fail to expand its Lean horizons:
1. Customer Centricity and value creation
Lean places a strong emphasis on understanding and delivering value to customers. In a VUCA world, customer needs and expectations can change rapidly. Lean principles, such as customer-centricity, organizational value stream management, and continuous customer feedback, enable organizations to stay attuned to customer requirements and deliver products and services that meet their evolving needs.
2. Increasing Profitability
Lean aims to improve efficiency in the whole supply chain and all areas of the organization, which can lead to cost reduction and financial stability. In a world where economic volatility and uncertainties prevail, organizations need to optimize their resources and minimize costs to maintain financial health and sustainability.
3. Agility & Adaptability
Lean emphasizes flexibility, responsiveness, and continuous improvement. In the current day business world, where conditions change rapidly and unpredictably, organizations must be agile and adaptable to survive and thrive. Lean enables organizations to quickly adjust processes, products, and strategies in response to market shifts or customer demands.
4. Data Driven Decision Making
Lean emphasizes the importance of data and metrics in decision-making processes. In today’s world where accurate and timely information is essential, organizations need to rely on data-driven insights rather than assumptions or guesswork. Lean principles such as visual management, performance measurement, and data analysis enable organizations to make informed decisions based on reliable data, improving accuracy, and reducing risks.
5. Constraint Busting
A critical approach in Lean where improvement, optimization and focus is on the Constraint of the entire system is essential to drive growth and success. Achieving business and organizational goals is restrained by inherent and appearing constraints. Lean aims to continually identify this wherever in the layer of the organization it resides and aims to remove the constraint. This is a dynamic yet focused approach to move towards the goals and vision.
6. Innovation
Beyond process improvement, Lean aims to innovate on product, process and operations using methodologies such as Kaikaku (Breakthrough Innovation) and Kakushin (Disruptive Innovation). This allows the organization to always remain relevant and attractive to meet customer needs and drives competitive advantage in all areas of the business. Another dimension of Innovation is the use of technology and automation where it is needed and not merely where it is desired.
7. Green Lean Supporting & Enhancing ESG (Environmental, Social & Governance) practices
Embracing Green-Lean approaches, Green Waste Reduction and energy resource efficiency, are direct contributions to the improvement of an organization’s ESG scores and rating. Lean’s stakeholder inclusion approach ensures being sensitive to the needs of all and in creating a circular economy. Lean principles emphasize transparency, visual management, and standardization. By implementing these practices, organizations can enhance their governance practices and promote ethical behavior, ensuring compliance with regulations, minimizing risks, and building trust among stakeholders.
8. Strategy & Alignment
The organization’s vision, mission, values, and goals are made purposeful and owned by all stakeholders through the Lean Hoshin Kanri process. It is a process which is both customer-centric and internal stakeholder-centric. It creates involvement by all stakeholders in the creation of strategy and ensures accountability. Most of all the Lean strategy model is pivotable to suit the changing needs of the stakeholders.
9. Responsible Leadership
Lean creates accountability, responsibility, Involvement and Sponsorship of Leaders through its Leader-Standard-Work Model and Coaching Model. It creates systemic structures and practices which ensure leadership participation and support in all aspects of the organization’s growth, particularly ensuring the practice of its core values.
10. People Engagement and Culture Driven
Eventually Lean is all about creating full participation, engagement, and growth of its people at all levels. It creates a framework for participation in improvement, driving strategy-achievement and inspired work environment. Lean has at its bottom line, the most important line-RESPECT FOR PEOPLE
Driving the organizations People, business growth and sustainable success requires the use of many methods and approaches which has now become part of Lean. The tools do not define Lean, but its principles and what it aims to achieve does. And these 10 principles are proven to be effective by the organizations who had been serious enough to take Lean to the next level.
