The value of going lean is easy to quantify: in forensically examining a firm experiencing problems, lean experts can identify what is going wrong and suggest solutions for the workforce to put in place.
But what if it is a new company, that doesn’t yet need a solution?
At a recent summit from the Lean Enterprise Academy, Jim Womack summed it up: “Is it possible for an organisation to start up lean from day one, or must an organisation grow until it becomes inefficient, and only then learn from its mistakes?”
This challenge helps us re-examine the lean principles we use every day and realise their value as independent tactics, transferrable to a number of situations.
We might think the simple answer is to learn from other people’s mistakes, but current thinking is lean is situational – we can transfer the skills, but we need to tailor our approach for each organisation and each unique set of circumstances.
The question of where lean fits into a business strategy mirrors various conversations I’ve had recently with friends and colleagues who are business owners and entrepreneurs.
We’ve all made many mistakes over the years and most of us would like to think we wouldn’t repeat them. But how do you get it right until you’ve had the experience of trying it and getting it wrong?
The challenge is to create a business that is right first time – and having done that to keep it on track so it never needs major work. Of course, there will always be improvements to be made because the manufacturing landscape changes so often, but an appreciation of lean strategies can be a solid foundation to build on.
This is an interesting approach many practitioners and their potential clients miss out on. Let’s get the message across that lean is not only a repair option, it can also be one of the first things on the list when a new business is being planned.
We don’t have all the answers and maybe we can’t get everything perfectly right from day one, but surely there’s more than enough experience and accumulated knowledge out there now to at least aim for more right than wrong, most of the time.
This is what we should be aiming for. Because the short answer is yes- it is possible to start lean and stay lean. Here’s how:
It is important to keep it simple and stay organised. This can be achieved by adopting lean 5S principles, which is a system to reduce waste and optimise productivity through maintaining an orderly workplace and using visual cues.
This includes making sure anyone can find anything quickly and easily. Keep things simple and visual – can people easily see at a glance what’s OK and what isn’t?
Focus on the following main three business areas:
- Sales: getting the work in and engaging with the customer
- Operations: getting the work done and delivering
- Finance: managing the cash, funding the growth
Employees should be made aware of how they fit into the company structure and what their contribution needs to be to make the business run smoothly, effectively and efficiently.
To achieve this:
- Write down each role and give it a name or a description
- Write down the main purpose of the role and exactly how its provides value to the customer
- Outline what a good job looks like – the best way, tricks of the trade, and pitfalls to avoid.
Draw up a grid with the roles along one side and people’s names along the other. For each job show with an R who is responsible, with a D who deputises, and with an A who assists so employees know at a glance what their duties are.
Regular communication is key. Each week talk about what’s going well, what’s not going well and what ideas you have to make things better.
By consensus, pick one improvement idea that is easiest to implement, has the highest impact and is affordable. Agree who will make it happen, and when, and get on with it.
Hire slowly, fire quickly. Be clear about values, expectations, do’s and don’ts. With new staff, have a one-to-one review for 15 minutes each day, then one hour per week, then one hour per month.
Make a conscious decision to retain or part company at the end of the first day, the first week, the first month. If it isn’t working in the first month, it probably never will. Let people take risks, make mistakes and fail, but expect them to learn and not to repeat their mistakes.
Do the absolute minimum required to add value for the customer – everything else is waste. Keep it simple, keep it electronic, and automate it.
Store data in one place, share it and organise it so anyone can easily find what they need.
Seriously consider scalable, cloud-based “pay as you go” systems. Use non-proprietary open systems where you can.
Similarly, do the absolute minimum you need to do with a new product or process to see if it works. This is what Silicon Valley entrepreneur Eric Ries calls the minimum viable prototype.
Experiment quickly, fail early, learn as you go and keep on learning.
The key to lean is the improvement cycle PDCA. In a start-up the most important thing is to get along the learning curve as quickly as you can.
Therefore, you need to cycle through these stages as quickly as you can. You’ll need some sort of plan to start with, but also be prepared to be flexible. This is because reality is likely to be different from your original plan, so you have to learn as you go.
Have a tight control on costs by keeping fixed overheads to a minimum, outsourcing non-core tasks, paying as you go and avoiding long-term tie-ins.
Continually question the reasoning behind any action plan. Always ask yourself if something adds value for our customer, does it make us more profitable, and does it make things easier for us?
Manage the cash every day, without fail. This can be done by using a simple spreadsheet.
The lean process is all about keeping it simple, focusing on what matters, learning what works and having the courage to ditch what doesn’t.