![\"\"](\"https:\/\/blog.planview.com\/wp-content\/uploads\/2020\/03\/Wastebasket-shutterstock_197452889-1024x721.jpg\")
<\/p>\n<\/p>\n
Several of us among Planview AgilePlace\u2019s founders and early employees first learned about Lean in the context of logistics and manufacturing. We wrote and implemented software that helped big companies buy and move and track physical goods. So we learned about the Lean concept of reducing waste in terms of inventory, transportation, motion, etc.<\/p>\n
It made a ton of sense. I was really proud of the low-inventory, just-in-time supply delivery process I helped implement at my former employer. But, like many other people doing product development work, as opposed to physical production, it didn\u2019t seem to apply to me. My work doesn\u2019t take up space. I can sling around ideas without leaving my desk. I\u2019m a \u201ccreative.\u201d Why would we not want to keep churning out great ideas?!<\/p>\n
The epiphany came for me when I read Mary and Tom Poppendieck\u2019s\u00a0Implementing Lean Software Development<\/a><\/em>. They helped me to a) see how the canonical Lean wastes could be reimagined to make the same basic ideas fit my white-collar business world and b) that getting rid of waste wasn\u2019t necessarily a matter of cutting but rather focusing our energies in ways that create value. Our waste elimination efforts should be focused on removing the things that prevent us from generating value.<\/p>\n Completed work in the hands of our customers is valuable. Until then, it isn\u2019t. That flies in the face of accounting practices that carefully track inventory and assign it a financial value. But from a customer perspective, it\u2019s true. From their viewpoint, we need to be making just enough product at any given time to ensure that they get what they want when they want it.<\/p>\n Your organization is a value stream that takes in raw materials of some sort, processes them through a series of steps, and delivers goods or services as an end result. You may not own a physical factory, but you at least have a virtual one.<\/p>\n Somewhere along the line of that value stream is at least one bottleneck. That\u2019s not a criticism; it\u2019s just a fact. Some step in your process has a lower maximum capacity than the steps that come before or after it. That constraint is the limiting factor for the delivery capability of your entire system.<\/p>\n Trying to squeeze too much through that bottleneck is not only not helpful, it\u2019s damaging. At a certain point, the extra work starts requiring so much coordination, reporting, replanning, and rework that less is actually being finished \u2014 and more slowly. Never mind how fast you are starting things.<\/p>\n As a Lean leader, your goal is to balance the work in the system to the capacity of your constraints.<\/p>\n If your customer orders something and you deliver it within days, that\u2019s very valuable. You can probably charge a premium. If you can manage inventory well, like Dell or Amazon, for example, you can probably collect the customer\u2019s money not only before you deliver the product but also before you take ownership of the materials that go into delivering it.<\/p>\n If you deliver in weeks, depending on your industry, your customer probably thinks you\u2019re doing fine. If it takes months, that\u2019s a long time. But years? Your customers will likely want their money back.<\/p>\n Context matters a lot, but in every business there is a delivery timeframe that delights, satisfies, annoys, and then loses a customer. If a customer orders something from you, at some deep level, it\u2019s because they want it now. The longer they wait, the more likely that their needs have changed and that you will fail to satisfy them.<\/p>\n You don\u2019t know what your customer wants. You don\u2019t. You may do lots of market research to understand your industry. I hope you invest liberally in regularly communicating with your existing customers. But, even so, if you\u2019re doing anything at all innovative, you will be working on projects for which there is no real market data. (By the way, if your portfolio doesn\u2019t have a healthy mix of innovation, your business won\u2019t survive for long.)<\/p>\n Your customers can give you great feedback on incremental improvements to what your company does now. And you should always be thinking of them when developing new capabilities. But the only way for them to give effective feedback for entirely new capabilities is to see, touch, and try them. That process begins with giving your customers a\u00a0Minimum Viable Product (MVP)<\/a>.<\/p>\n Instead of packing a new product or service with lots of theoretically valuable new capabilities, you should incrementally deliver a series of capabilities so they can be tested through actual experience. Each can be accepted, rejected, or enhanced. By applying what you learn from the MVP, you can build on successes instead of being stuck with embedded failures in your finished product.<\/p>\n How this works for you will depend on your industry. The larger and more capital intensive your business, the more this may require you to invest in capabilities for virtual design, rapid prototyping (through 3D printing for example), prefabrication and modular assembly, etc. But it will pay huge dividends in the long run.<\/p>\n To further explore the MVP concept, we highly recommend that you read Eric Ries\u2019s\u00a0The Lean Startup<\/a><\/em>. MVPs aren\u2019t just for startups in Silicon Valley. In fact, GE has run one of the biggest successful implementations.<\/p>\n So that means we should build things quick and dirty? Just throw something together and ship it, right? No.<\/p>\n As a Lean leader, your goal should be to deliver value in increments that are as small as you can feasibly make them so that you can rapidly adjust your plans based on current market conditions. But you should be doing so in a way that\u2019s sustainable once you are ready to ramp up from innovation to operations.<\/p>\n Companies spend a lot of time and effort controlling the time and cost of projects to deliver new capabilities. But in most cases, the majority of the cost of the product or service produced by a project comes after the project ends. Think about the total lifecycle cost of a building, a new model of car, new software package, or a hospital \u2014 each of which is initially built via a project with a notional end date.<\/p>\n In reality, you and\/or your customer will be investing for years to maintain and improve any of these long-lived assets. You\u2019ll save money in the long run and maintain much more flexibility for incremental innovation if you invest in making your product robust and sustainable.<\/p>\n You may need, at times, to make short-term sacrifices in this area in order to meet market expectations. But you should understand that, when you do so, \u00a0you\u2019ll face additional costs beyond just doing now what you should have done then. Just like borrowing cash, borrowing against your future incurs interest. Choose carefully when taking on technical debt.<\/p>\n Did you ever play the telephone game when you were a kid? One person whispers something into another\u2019s ear, who whispers it to another, and then to another, etc. By the time the message gets to the end of the chain, you usually end with the last person receiving and sharing a message that\u2019s hilariously different than what was first said.<\/p>\n Well, the same thing happens inside your company, but it\u2019s not so hilarious. Marketing asks the customers what they want. The customers do their best to share the picture that\u2019s in their head. Marketing does their best to write that down. But fails. Product management does their best to understand what marketing asked for and translate it into a plan that the company can execute. But fails. Engineering does their best to design a system that matches the plan. But fails. And so it goes, on down the line.<\/p>\n By the time the customer gets the finished product, it never exactly matches what they envisioned. If there are a lot of handoffs, especially handoffs of written specifications with a delay between request and execution at each stage, the mismatch can result in failure.<\/p>\n Many organizations try to solve this problem through ever more rigorous processes of documentation. But this exacerbates the problems of excess WIP, delays, and extra capabilities we discussed above. It is bound to fail.<\/p>\n The Lean solution is to bring together the members of the value stream so that they can function as a cross-functional team. Communication can happen directly rather than through documentation. Ideas can be demonstrated instead of described. Feedback loops can be shortened. You can build a better product, faster.<\/p>\n This change can be hard for organizations that are built around functional silos and the idea of maximizing resource utilization and efficiency. But if you can understand and implement a\u00a0flow-based model<\/a>, you\u2019ll achieve a better economic outcome.<\/p>\n Executives often pride themselves on their ability to multi-task, to juggle lots of projects, and spread their attention across many subordinates. We may or may not be right about our personal capabilities in that regard. Regardless, the type of work executives do is fundamentally different than their employees. Someone who is primarily consuming the output of others, evaluating it, providing feedback and making decisions will necessarily switch back and forth quickly between contexts.<\/p>\n On the other hand, someone whose fundamental job is to do work is different. An overwhelming abundance of\u00a0research<\/a>\u00a0shows that the more people have on their plates, the more they lose productivity.<\/p>\n Whether you\u2019re working on architectural drawings, or engineering specifications, or computer code, or installing light fixtures, or developing a new advertising campaign, it takes time to get your \u201cmaterials\u201d together, to get your head around the problem, to do the work, to ensure you\u2019ve done a good job, to wrap things up so you can hand your piece of the puzzle off to the next person involved.<\/p>\n The more projects \u00a0you\u2019re assigned and trying to work on simultaneously, the less of your time is going towards that central bit of doing the work. You are wasting a higher and higher proportion of your time in \u201cset-up and tear-down.\u201d And, aside from the pure mechanical inefficiency of this multi-tasking, these are people we are talking about.<\/p>\n All of those projects, that set-up and tear-down, that sense that most of their effort is going towards the process rather than the result \u2014 all of that adds up to stress. Inflicting that upon them is neither productive nor moral.<\/p>\n To further understand the impact of task switching, we recommend the work of Jim Benson and Tonianne DeMaria Barry.\u00a0Personal Kanban<\/em>\u00a0and\u00a0Why Limit WIP<\/a><\/em>\u00a0do an outstanding job of explaining the economic and personal costs of task switching.<\/p>\n Your customer pays for high-quality output. Your long-term economic viability depends on sustainable, efficient output. You can\u2019t afford defects to reach your customers. So you need to do testing to ensure high quality. But you can\u2019t solve quality problems through testing, and neither can you afford the extra WIP of rework generated from testing. The goal of your testing shouldn\u2019t be to find problems so they can be fixed. It should be to identify root causes so you can fix your system to avoid future defects.<\/p>\n It\u2019s common to discuss Lean and waste in terms of customer value. In fact, I did that recently in a blog post that described\u00a0seven\u00a0principles of business fitness<\/a>. It\u2019s a good, simple rule of thumb that value is anything your customer would pay for if you itemized your bill and waste is anything they wouldn\u2019t. But, while the ultimate arbiter of value is our customer, properly serving the customer requires building a smoothly flowing system through which value is delivered to the customer.<\/p>\n A great business system is one that:<\/strong><\/p>\n 1. inspires employees to pour talents and energy into An expanded view on waste takes that\u00a0entire system into consideration. Our goal is building business fitness so we can do more, not just cutting to have less.<\/p>\n In addition to the resources mentioned throughout this post, here are a few more\u00a0that address applying Lean to business functions:<\/p>\n Several of us among Planview AgilePlace\u2019s founders and early employees first learned about Lean in the context of logistics and manufacturing. We wrote and implemented software that helped big companies buy and move and track physical goods. So we learned about the Lean concept of reducing waste in terms of inventory, transportation, motion, etc. It…<\/p>\n","protected":false},"author":127,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[38],"tags":[511],"class_list":["post-12829","post","type-post","status-publish","format-standard","hentry","category-work-collaboration","tag-leankit"],"acf":[],"yoast_head":"\n7 Wastes That Impact Business Growth<\/h2>\n
1. (Too Much) Work in Progress<\/h3>\n
2. Delays<\/h3>\n
3. Extra Capabilities<\/h3>\n
4. Technical Debt<\/h3>\n
5. Handoffs<\/h3>\n
6. Task Switching<\/h3>\n
7. Defects<\/h3>\n
The Bottom Line<\/h3>\n
\n2. repeatedly creating high-quality, innovative products that
\n3. delight customers so they become raving fans and repeat buyers which
\n4. generates growing revenue (and eventually profits) to reward investors so
\n5. they cheerfully provide more resources to keep the virtuous cycle going.<\/p>\nRecommended Reading<\/h3>\n
\n