The Lean Leadership System
Lean is a set of tools that will help you remove waste so you deliver more value to your clients, customers, and constituents. An organization practicing lean is able to do more with less while delivering to its customer’s products and services of the highest value with the lowest total cost.
Lean is fundamentally about improving and controlling processes. Lean recognizes three types of activities or processes: 1) those that add value, 2) those that do not add value but are required, and 3) those that are neither required nor add value. Therefore, the lean enterprise will seek to eliminate all work that is not required to meet the requirements of the customer. In addition, it will seek to minimize the work that is required but does not add value.
Several core values are imbedded within the principles that drive lean thinking. The first value that lean recognizes is obviously the customer. An organization derives its mission and vision from the aspect of the customer. Without the customer, there is no reason to be in existence. Therefore, the first value in the lean enterprise is the customer. All other values, are subordinated to the value of the customer.
- The value of people. One of the distinguishing features of the lean enterprise is the value of people. Work gets done through people and it is by trusting people that lean is implemented. This extends to the team as well. The lean enterprise often utilizes performance improvement teams to improve the delivery of value to the customer.
- The value of learning. The lean enterprise values learning. One of the basic tenants of lean is to train everyone in the tools and principles of lean. But the lean enterprise values go beyond traditional class room training and learning. It aligns the skill sets of the organization with the requirements of the customer to maximize value.
- The value of innovation and adaptability. The lean enterprise is often seen as highly innovative. This is so because the enterprise is always looking for ways to eliminate work that is not required to meet the requirements of the customer. One of the key principles of lean is the development of standard work processes. In an office environment this often means that work is performed the same way no matter who is performing it, because it results in more value for the customer.
- The value of transparency. The lean enterprise places a high degree of trust in its people as well as the free flow of information between management and staff. This mandates a high degree of transparency within the lean enterprise. Information must flow freely within the organization – both vertically as well as horizontally.
- The value of velocity vs. speed. The lean enterprise puts a great deal of emphasis on speed. Speed in improving processes that create customer value, speed at innovation, and speed in executing customer requirements. However, lean also recognizes that direction is just as important as speed. If organizations are innovating fast but lack coherent direction customer value will eventually suffer. Velocity has to do with both speed and direction. Therefore, lean seeks to increase speed with absolute clarity of direction.
Principle 1: Lean is customer centric and focused on delivering maximum value.
Value is determined by the customer. Any activity, event, process, or procedure that does not contribute to the delivery of value to the customer is considered waste. But it is also about learning the customers’ requirements and organizing the firm and its suppliers to deliver value.
Principle 2: Lean understands how the Value Stream creates value for the customer.
Lean recognizes that value is not delivered by a sole government agency, hospital, or social service organization acting in isolation. Lean acknowledges the reality that there is an entire system of suppliers, contractors, subcontractors, staff, managers, supervisors, and stakeholders that are part of a larger value stream. A hospital cannot deliver emergency medical services in the most efficient way unless its contracted doctors, pharmaceutical venders, and even the aid car delivering patients are considered partners in the value stream. Similarly, a government agency delivering social services is just one part of a value stream that is made up IT, suppliers, contractors, and venders.
Principle 3: Lean focuses on flow.
Most of our experience with service providers is stop and go. The actual time we spend with service providers is relatively small compared to the total time in the experience. For example, we make an appointment to see a doctor (and wait), we check in at the clinic and wait 10 minutes, we are escorted into the exam room and wait another 10 minutes, our doctor then sees us for 10 minutes, and then we wait another 10 minutes to see the nurse who will take our blood which takes all of 3 minutes. Total experience = 43 minutes. Total value added time = 13 minutes. Or the total time where a medical service was being provided was only 13 out of 43 minutes.
Working in an office environment, much of the work happens in a traditional batch and queue. We wait until there are a stack of invoices to pay and then process them as a batch. We wait until there is a stack of orders to enter and then process them as a batch. The idea of flow is that the entire organization is set up to work at a constant speed so that services are delivered at a constant speed which matches the requirements of the customer. This is the opposite of batch and queue.
Principle 4: Lean aims for perfection.
Work processes, just like people, will never attain perfection. But it is everyone’s task to aim for it. This means that occasionally there will be the great leap forward that simplifies and improves the work place. Technology has generated significant leaps in office productivity. However, most work place improvements are incremental. It’s realizing that standard contracts will work for 90% of contractual requirements so stop asking the attorney to write a new one for each customer or vender. Its understanding that organizing the office so that staff working on similar processes can easily interact with each other rather than walking down the hall to discover that the person we need to see is out for coffee. Aiming for perfection means that small incremental steps in improvement are just as valid as the big splashy innovative changes. As children we laughed at the fable of the tortoise and the hare. What the tortoise teaches us is that small incremental improvements often result in greater impact in the work place than the large investments of capital that promise to revolutionize the work place, but so often just causes havoc.