This blog was supposed to cover all the lean principles, however, as I got into it, I felt it was more important to explain the principle in-depth, so it is useable information, rather than something you could look up online. I will follow with each of the principles in subsequent blogs.
You might have heard the term lean, or lean thinking, and wondered what is all the fuss about? Is it some mystical philosophy, or does it have real benefits to organisations, intent on improving their service?
I’ve experienced a training organisation offering funded training on ‘lean principles’ to my team during my career, and when I probed them, they had little understanding of what they were offering, so this blog might be useful to you if you find yourself in a similar predicament.
So, first of all understand, lean is not a miracle or a silver bullet, its not something only understood by PhD’s, consultants or an elitist mob who somehow have insights on this profound knowledge.
Lean is an approach to align your business to meet your customers needs.
Simple to understand, available to all, and doesn’t need any ‘specialist’ knowledge to get going. While there are plenty of ‘tools’ which have been created to help you implement lean, a basic understanding of this philosophy is a hundred times more important than the ‘tools’ and ‘techniques’, in my opinion.
So, lets get into what it is
There are 5 key principles that lean is based on, and before adopting lean in your organisation it is worth knowing what it is.
Principle 1 – Put your customers first
Ok, maybe you have heard this before. Organisations only exist because of paying customers. Customers pay your wage. If customers did not buy your product or service, then, you don’t need me to spell it out – but it would be a very quick demise.
So, what is different about lean, when we are talking about putting customers first? Value.
As customers, we want value from our transactions, we want to be able to buy what we want, when we want it, for a reasonable price. We want it to do what it is supposed to do (no more, no less), we want it to meet all our needs and we want to have a seamless transaction, and the whole thing should leave us with a good feeling. That’s how we, as customers consider value, and we are pretty good at evaluating the things we buy, and rating how valuable the experience was.
We tend to trust organisations that deliver good value to us. We will use them again and we’ll recommend them to others. Think about organisations you’ve bought from, where you have had a really good experience, and you feel they have your best interest at heart, because they know what you want, they understand value from your perspective. It would be great if you felt that way about every organisation that you’ve bought from, but it’s more likely to only be the small few that really get you, and you feel great when you transact with them.
Energy and Finance and Telecommunication organisations tend to be at the wrong end of the spectrum of trust, and perceived value in Australia. Some organisations strategies are short term, lure you in, get your money and hold you in contempt. Fine for short term employee bonus schemes, stock market traders, but the poor customer is left will the bill, and not much value to show.
You know what good or bad value is when you get it, but what about when you are the provider. Who do you provide value to? Do you put your customers first? Is your organisation set up to deliver value to your customer or, are they a byproduct of the real stuff you do? Do you ask your customers how they would like to be served?, and what they really consider as being valuable, and what not?
It is typical that your organisation is set up with management hierarchies, organisational systems, procedures and protocols and multiple departments, each with a particular focus, the extent of this depends on the size of your organisation. We tend to think in batch and queue, specialist areas, we create ‘silo’s’ of capability, and they all report to the boss.
All of this looks great in principle, but these frameworks can be self-serving, rather than customer focused. Organisations get confused within complex networks, where they believe they are they are the epicentre, rather than then enabler, existing at the customers pleasure.
A lean philosophy recognizes the need for systems and structure to meet customer needs, but it also recognizes these come at a cost, so in a lean system, we tend to ask,
“If the customer knew they were paying for this – would they be happy?”
Having this as an essential question for EVERYTHING, will start to guide you towards the principle that customers are ok paying for things they receive value from.
I would encourage organisations to assess if they understand how the customer perceives value, and then query themselves as to how well they are delivering to that perception. It is not uncommon to find we are doing things to antagonize and frustrate our customers, and they usually frustrate us too, costing time effort and resources which the customer is ultimately asked to pay for.
There have been many studies showing the cost of acquiring new customers as opposed to keeping your existing customers happy. If we follow the first lean principle, customers will choose to stay because you are offering good value. Existing customers may also introduce more customers, so both the cost of getting more customers, and retention of customers is cheaper than the see-saw cost of acquiring new customers as the existing ones tip out of the other end.
Reflect on your delivery of customer value in your organisation, and I’d be happy discuss it further with you, if customer value is important to you.
