APPLYING LEAN PRINCIPLES TO MANAGEMENT

Applying lean principles to management, rather than just operations, can help large organizations reimagine how they work and unlock value through continuous improvement. A lean organization is committed to its customers and works to minimize waste by focusing all its resources on producing the best possible value for customers. Investments are carefully considered and only made when it is clear that a long-term financial advantage exists in doing so. Fluff is cut away until all that is left are departments and employees who directly affect the finished product.

Any organization can be made lean as long its mission remains in clear focus. A lean organizational structure is designed to create more customer value using fewer resources than a traditional organizational one. The goal for all members of an organization that utilizes a lean structure is to constantly find ways to improve the processes of the organization and to make it more efficient. Questions that challenge how well large, modern organizations work are almost as old as management itself. But if it seems that questions are coming up more often, or more forcefully, there are good reasons.

Sense of urgency

The first is a rising sense of urgency, with large organizations recognizing that the pressures they face are unlikely to abate much in the short term, regardless of location or sector. In mature markets, slower growth, lingering debt burdens, and aging workforces are the chief concerns; in fast-growing countries, rapid expansion and urbanization are outpacing the ability of local infrastructure and talent pools. Everywhere, mismatches between worker skills and available jobs are growing, even as unemployment reaches new highs, especially among the young, while those managers and workers who do find employment, report high stress and low engagement. To respond to these forces, organizations need new capacity and energy, but instead, they find both are in short supply, having been absorbed by internal complexity.

While the specific issues may differ, the broader themes are the same. Large organizations realize they must reimagine how they work so that their scale once again becomes an asset rather than a liability. And they must do so from within, because external conditions—the rising economic tides that formerly lifted so many boats, regardless of how well or badly they were rowed—are not likely to make a lasting return any time soon.The second reason for questions is, if anything, even more important. Leaders know that some organizations are transforming themselves, finding new value, while becoming more resilient, effective, and efficient in ways that keep reinforcing themselves over time.

These organizations, both in heavy industry and in service sectors as diverse as banking, telecommunications, and government, attain a state that is as valuable as it is rare: continuous improvement. Their performance increases both in the immediate term and over the long run, as the techniques people learn form a new culture centered on finding ways to do things better.However, leaders also know that imitating an admired organization’s best practices is hardly a reliable way of attaining its success. It takes more than a borrowed checklist. What is it that makes these exceptional organizations so exceptional—and keeps them that way?

Good management

Large organizations, especially, those that renew themselves all seek to execute four essential management disciplines exceptionally well. Every organization already follows these disciplines in one form or another. Accordingly, they are not a formula; they do not represent the whole universe of “good management.”

But when leaders design systems that enforce these disciplines effectively—and when they ensure they’re followed every day, at every level of the organization—the disciplines reinforce one another to create what lean has long envisioned: an adaptive organization that consistently generates the most value possible for all stakeholders from all of the resources it can bring to bear.

Even more important, the disciplines correlate to tangible skills and ways of working that people and organizations can learn—which, over time, constitute culture—how people behave and think.

The more the organization learns regarding each of the four disciplines, the more it can achieve and the faster it gets at learning and improving itself. Delivering value efficiently to the customer

The organization must start by understanding what customers truly value—as well as where, when, how, and why they do so. It must then configure how it works so that it can deliver exactly that value, no more and no less, with the fewest resources possible, improving coordination, eliminating redundancy, and building quality into every process. The cycle of listening and responding never ends, as the customer’s evolving needs reveal new opportunities to attack waste, create new worth, and build competitive advantage.

Enabling people to lead and contribute to their full potential

The organizations that get the most from their people provide them with support mechanisms so that they can truly master their work, whether at the front line or in the board room. Revamped physical space fosters collaboration, visual-management techniques let everyone see what needs to be done, targeted coaching builds capabilities, and simple “job aids” reinforce standards. These and other changes enable employees to own their own development, without leaving them to figure it out by themselves.

Discovering better ways of working

As customers, competitors, and the broader economic and social context change, the whole enterprise must continually think about how today’s ways of working and managing could improve. To guide the inquiry, people will need a clear sense of what “better” means—the ideal that the organization is reaching toward—as well as an unvarnished view of current conditions and the ability to work with others to close gaps without fear of reprisal. Problem identification and resolution must become a part of everyone’s job description, supported by structures to ensure that problems flow to the people best able to solve them.

Connecting strategy, goals and meaningful purpose

Organizations that endure operate from a clear direction—a vision of what the organization is for, which in turn shapes their strategy and objectives in ways that give meaning to daily work. At every level, starting with the CEO, leaders articulate the strategy and objectives in ways that their people can understand and support.

The final step aligns individual goals to the strategy and vision, with the result that people fully understand their role in the organization and why it matters.

The four build on one another. For example, to create new products that deliver better value to customers, the financial-data company cited at the beginning will need to convince its employees that their ideas matter, encourage them to find new ways to respond to customers, and clarify the company’s purpose.

As the organization’s experience with the system deepens, its capabilities will naturally strengthen. At the same time, lean management fosters a culture that encourages continual reassessment. Gradually, that drive will come to apply to the system as well—the organization will seek to improve its application of lean management, to see how it could push the ideas (and its performance) further. Accordingly, the most committed organizations regularly conduct well-structured assessments of their maturity in lean management, giving them feedback on their progress in all four disciplines while identifying opportunities to reflect and improve.

Dr. Kellen Kiambati holds a PhD in business administration with a focus on strategic management from JKUAT and an MBA from KEMU. She is a certified business associate (CBPA) and a member of the Institute of Human Resource Management of Kenya. She is also the author of Business Research Methods and can be reached on :

kellenkiambati@gmail.com.