What Are the Five Principles of Lean?
Welcome! Today we’ll discuss another simple concept that has become shrouded in jargon, certifications, and incessant layers of complexity – Lean.
Let’s look at a popular definition of Lean.
“Lean means to precisely specify value by specific product, identify the value stream for each product, make value flow without interruptions, let customer pull value from the producer, and pursue perfection.” – Womack & Jones
Simply put, Lean is producing something with common sense. It initially started out as a manufacturing philosophy derived from the Toyota Production System in 1930. As knowledge work became mainstream, Lean became popular among white-collar workers as well.
Lean has become so ingrained in our workflow that it has now become the baseline standard rather than a specialized philosophy.
So what does producing something with common sense actually mean?
Let’s look at the 5 principles of Lean to understand better.
1. Define Value (aka Know What Gets You Paid)
Every business carries a large number of operations on any given day. Not all of them create value for their customers. To identify those redundant tasks, you first have to understand why your customers pay you.
This principle seems quite straightforward. But it’s not easy for organizations to truly understand why their customers pay them, especially if they offer lots of products or services. In such cases talking to your customer-facing teams, running surveys, and organizing customer interviews help a lot.
Let’s say you own a hair salon and the business is booming. But why exactly do customers visit it? Is it because they like the haircut, the ambiance, the friendly staff? Defining value means understanding what makes your customers open their pockets.
2. Map the Value Stream (aka Understand How You Waste Time)
Now that you have “defined the value”, you know what your customers want. Start from there and trace how that actually happens. How does your company provide customers what they want?
This will help you classify all your activities into three categories,
- Important – They are directly responsible for delivering customer value. For example for a SaaS product, this would be coding the tool, selling it to clients, etc.
- Helpful – They don’t directly deliver customer value but support activities that do. For example QA and workshops.
- Useless– They neither deliver customer value nor assist in the process.
To goal of Lean is to eliminate category 3 activities and reduce category 2 activities without compromising on category 1.
Again, like the first principle, this is not as easy as it sounds. For example, how would you categorize a team offsite trip.
3. Create Flow (aka Plan Your Work)
So far you have…
Identified why customers pay you.
Removed useless activities.
What comes next?
You’re right, It’s organizing important activities by creating a plan. Now you can focus fully on things that matter and figure out a way to perform them efficiently. You’re now in the most challenging phase of Lean.
By eliminating useless activities, the opportunities to improve in important areas will become more visible. Think about how you can boost collaboration across different departments to make the entire workflow more seamless. Identify instances where departments are behaving like silos and address them. Team collaboration tools can help you visualize and tweak the entire workflow of your team to make it more efficient.
4. Establish Pull (aka Reduce Work in Progress)
Productivity doesn’t mean doing more things. It means doing the right things better. Your team can’t be productive unless they clearly understand their priorities.
Traditionally organizations struggled to manage their inventory. Being bullish about demand would lead to wastage from overstocking. Being too conservative would lead to missed business opportunities.
Then, inspired by Henry Ford, Toyota introduced Lean manufacturing. One of its defining features is producing just the right quantity for customers.
How is this done?
By training your team to reduce work in progress. By working on only those tasks that would offer value to customers/stakeholders. This can be done by making the entire workflow transparent so that all the team members are aware of its status at every step. By improving communication, teams can avoid expensive stockpile.
One of the most popular frameworks to do this is Kanban – a visual card-based system, designed to reduce work in progress. Your team can use a virtual Kanban board to organize all your tasks and create a Lean workflow.
5. Seek Perfection (aka Don’t Sit Idle Basking in Your Glories)
So you’ve nailed the first 4 principles of Lean? Congratulations! Not everyone makes it this far. You have now removed waste, optimized your workflow, and made your customers happier than ever before.
But it’s not the time to sit on your throne and watch the sunset.
Lean is a mindset and it needs to be ingrained in your culture. As Mark Crawford mentions in his post, Lean’s goal is not perfection (which is unattainable) but its pursuit.
Coach your team in identifying opportunities to reduce waste without affecting the quality of their work. And ensure that this doesn’t end with one project but becomes a philosophy that they live by.
A great example of continuous pursuit of perfection is the sprint retrospective meeting that happens at the end of each sprint in Scrum. Regardless of the results of the sprint, the team talks with each other and looks for opportunities to improve their process.
Personal Observations on Lean
I hope my attempt to demystify Lean has been useful to you. Let me share a few quick thoughts to sum it up.
If you could only take one insight from Lean just remember one thing – Don’t waste time on useless tasks. Just embrace this mantra and see all the functions of your organization with this filter. If anything feels like a waste of time, even if it’s a workshop or an article on Lean itself, ignore it.
Don’t try to go Lean because your peers told you to. Don’t take it up as a vanity project. If you feel that your team is always busy but not productive, that’s a sign to review your process and identify opportunities to go Lean.