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Lean principles have proved incredibly effective for future-proofing organizations from wasting resources. Though the philosophy originated in manufacturing, its adaptability has made it essential for any modern business leader looking to eliminate resource waste, improve quality, reduce variations in customer service and increase productivity.
Lean management principles can be applied to many essential parts of a company, including production, supply chain management, customer service and administrative processes — all to meet customer expectations while improving productivity consistently.
Over 70% of lean implementations fail — so what are the critical differentiating factors for those who can succeed? If executed correctly, lean management improves both customer service and employee satisfaction while reducing overall costs via productivity gain continually.
It’s easy for leaders to talk about optimizing processes, but a successful lean systematic approach requires a deep understanding of key customers’ critical needs and a well-integrated yet simple execution plan. Most importantly, it requires an energized community of employees dedicated to continuous improvement with unwavering support from the CEO and the executive team.
These five steps are paramount for business leaders hoping to implement lean principles to deliver consistent results meaningfully.
Related: How to Apply Lean Principles to Your Startup’s Productivity and Time Management
1. Understand your key customers
At the end of the day, business is about people. With all the pressure to innovate in today’s world, it can be all too easy to lose sight of what a company’s true customers actually want and need. Lean principles are centered around the “North Star” of any business: the pain points and opportunities within a company’s target audience.
To eliminate excess and non-value-added activities, one must first identify those that best serve the customer’s needs and listen directly to customers to understand better how these desires are (or are not) being met. This concept is at the heart of the Lean pull system and just-in-time manufacturing, which urge companies to carry out work only when there is a demand for it rather than creating products based on forecasts.
2. Diversify perspectives
Lean principles seek to overcome four core challenges: drag (the resistance from sluggish markets or enterprise-wide misalignment of strategies); inertia (resistance to change, including functional siloes); friction (products or services not in sync with customer expectations); and waste (resulting from outdated KPIs, failure to evolve and disengaged leadership).
Bringing key customer needs into a company can help align company practices, culture and products/services to combat these challenges quickly and effectively. Fresh eyes, especially those with a cross-functional team approach, are crucial for mapping out and augmenting processes within the company that deliver the right products and solutions to customers and can directly combat the static mindset of companies that may otherwise be resistant to necessary change.
Related: 5 Reasons Not to Follow the Lean Startup Process for Your Next Idea
3. Establish metrics for progress and success
Knowing how to measure both progress and success helps businesses implement the lean philosophy as a long-term company strategy rather than just a project. These metrics/KPIs may take various forms — including visual tools or techniques that make information and work progress more visible, as transparency helps cross-functional teams monitor and manage work more effectively and in real-time.
Moreover, all ideals related to progress and success must be fortified by direct engagement and leadership from the C-suite. Leaders must live the mindset expected of their employees; this can be done through a regular cadence of meetings where this commitment to constant adaptation and sustainable growth can be demonstrated and nurtured. High-potential employees are thoughtfully placed in Lean assignments throughout the company. Likewise, training on continuous improvement must be made regularly for all managers and employees, with rewards and compensation tied to the delivery of lean results.
4. Organize collaborative, cross-functional teams to streamline processes
If done right, lean management allows companies to achieve more with less instead of doing more with less. Establishing a smoother, uninterrupted flow of work or materials via the value stream will minimize delays, waste and bottlenecks. To achieve this level of synchronization, siloes must be broken down to make way for a holistic evaluation of all internal operations.
With engaged participation from various functions, the sequence of activities and processes required to deliver the right product or service to the customer can be assessed and solidified. This holistic perspective is crucial for optimizing value streams, sharing best practices, regular checks and adjustments and future-forward planning. Collaboration across functions also allows for a holistic understanding of company obstacles, methodologies and goals so that employees across the business are aligned on a united, go-forward strategy.
Related: 5 Ways Lean Teams Can Work Smarter and Get More Done
5. Foster a culture of continuous improvement and respect
Continuous improvement is not a fad; it is an ongoing and integral element of operations, depending entirely on the business’s human element. While various technologies are helping to modernize, restructure and simplify processes, we must not take for granted the human touch that is embedded into the nature of all work. Lean principles emphasize respecting and valuing individual employee contributions and engagement and building a culture of continuous improvement through human interaction.
By encouraging employees to be involved in decision-making, training and support, leaders lay the foundation for a community of people who are personally connected to the customers and their teams and are personally invested in the company’s future.
Likewise, by fostering a culture of teamwork, empowerment and accountability, leaders can recognize and harness underutilized employee skills for greater success — all of which have been proven to improve retention rates.
