How to be a lean leader

The busi­ness en­vi­ron­ment is grow­ing tougher by the minute. The “lean” strat­egy is a proven ap­proach that can bol­ster your team’s pro­duc­tiv­ity and prof­itabil­ity.

Finweek English Edition - - ON THE MONEY - Step 1:

there is no short­age of failed fads (“busi­ness process re-engi­neer­ing”, any­one?) in the man­age­ment world. One ap­proach has, how­ever, stood the test of time. While the term “lean man­age­ment” was coined only 25 years ago, the con­cept is al­most a cen­tury old. It was first de­ployed in 1918 by the Ja­panese en­tre­pre­neur Sa­kichi Toy­oda, who es­tab­lished a very suc­cess­ful weav­ing en­ter­prise. His com­pany started build­ing cars un­der the name Toy­ota in 1935 and its con­tin­ued man­u­fac­tur­ing suc­cess dur­ing the oil cri­sis in the 1970s en­cour­aged other Ja­panese com­pa­nies to adopt the com­pany’s ap­proach. Soon, its “lean” pro­cesses reached other coun­tries and the world’s top busi­ness schools.

So, what is lean man­age­ment?

“In essence, it is aimed at im­prov­ing op­er­a­tional per­for­mance in com­pa­nies and or­gan­i­sa­tions. It fo­cuses on max­imis­ing value for the cus­tomer and min­imis­ing waste of any re­source, in­clud­ing phys­i­cal re­sources or peo­ple’s time,” says Glen Tyler of the Lean In­sti­tute Africa. The in­sti­tute is a not-for­profit com­pany, based at the UCT Grad­u­ate School of Busi­ness, which ad­vises pub­lic and pri­vate sec­tor com­pa­nies on how to im­prove the ef­fi­ciency of their op­er­a­tions.

Adopt­ing the lean ap­proach in­volves a cou­ple of steps:

De­ter­mine what your cus­tomers re­ally want from you. What spe­cific ser­vice or prod­uct will meet their needs, and what spe­cific price and at what spe­cific time?

Map each step of all your busi­ness pro­cesses to de­liver a ser­vice or prod­uct. Get rid of all those ac­tiv­i­ties that do not cre­ate value for your cus­tomer. These ac­tiv­i­ties are de­fined as muda (Ja­panese for waste) and typ­i­cally in­clude over­pro­duc­tion, ex­ces­sive in­ven­to­ries, mis­takes and de­fects, un­nec­es­sary move­ment and trans­port, over­pro­cess­ing and wait­ing.

For ex­am­ple, over­pro­duc­tion could be print­ing doc­u­ments that no­body reads, and un­nec­es­sary move­ment can in­clude con­stant email com­mu­ni­ca­tion (or walk­ing long dis­tances) be­tween de­part­ments that

Step 2:

should ac­tu­ally be closer to each other if the of­fice space was de­signed bet­ter.

Make sure that all the re­main­ing ac­tiv­i­ties fol­low on each other in a very tight se­quence so that your prod­uct or ser­vice reaches the cus­tomer as quickly as pos­si­ble. All bar­ri­ers, in­ter-com­pany bu­reau­cracy and bot­tle­necks should be re­moved.

Re­peat steps one to three un­til all waste has been eliminated.

The ben­e­fits of lean man­age­ment are pretty self-ev­i­dent: your cus­tomers get ex­actly what they want, and you de­liver what is needed, at ex­actly the right time, and in ex­actly the amount needed. Mean­while, you save costs by get­ting rid of un­nec­es­sary ac­tiv­i­ties and over­heads which don’t add value to your clients. Your prof­itabil­ity and com­pet­i­tive­ness will in­crease. And as the fo­cus of your or­gan­i­sa­tion shifts to what is re­ally im­por­tant, the qual­ity of your prod­ucts and ser­vices is en­hanced, and cus­tomer sat­is­fac­tion im­proves. This, along with bet­ter work­place or­gan­i­sa­tion, bol­sters em­ployee morale. Lean man­age­ment also forces var­i­ous de­part­ments in a busi­ness to work much closer to­gether to op­ti­mise pro­cesses.

“Fire­fight­ing prob­lems as they arise is of­ten the de­fault po­si­tion of many South African or­gan­i­sa­tions,” says Tyler. “In­stead, lean man­age­ment en­cour­ages analysing the process, search­ing for bot­tle­necks and find­ing coun­ter­mea­sures.”

The nat­u­ral en­e­mies of lean man­age­ment are bu­reau­cracy and “sin­gle skilling” (em­ploy­ees who are en­cour­aged to spe­cialise in one very nar­row field). Also, a re­sis­tance to change. Lean man­age­ment may re­quire up­end­ing the sta­tus quo com­pletely. And re­peat­edly. It will take some con­vinc­ing to get em­ploy­ees, al­ready jumpy amid con­tin­u­ing re­struc­tur­ing pro­cesses and job threats, to em­brace such a rad­i­cal ap­proach.

Step 3: Step 4:

Sa­kichi Toy­oda Ja­panese in­ven­tor and in­dus­tri­al­ist and founder of Toy­ota

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