Keeping Your Clients Lean and Mean During Difficult Business Cycles
The words “lean business” can trigger thoughts of austerity, layoffs, and a ban on supply orders. It may seem like a last-ditch effort in a difficult business cycle, a necessary evil.
The first impression is not completely accurate. While performing a critical assessment of business processes and expenses can help the business survive a downturn, it is not the only use of lean business thinking. In fact, lean methodologies stand to add significant value to an already thriving business.
Whether your clients are struggling or thriving, working with them to establish lean business practices is a great way to step into the role of a strategic business advisor.
Begin by debunking a few common myths. Lean business was first developed for manufacturing companies, but its philosophy applies to a broad range of companies. Lean is not about firing people or slashing expenses. The idea of lean business is based on two core values: continuous incremental improvement, and respect for people. Here are a few ways to engage your small business in a lean business conversation.
Focus them on delivering value to customers
Businesses exist for one simple reason: to deliver value to customers. The challenge in thinking about value is that it is defined by the users. What matters to them? What are they willing to pay for? What makes a service or a product irreplaceable from their perspective? Any activity, process, or approach that does not add value in terms that are relevant to the customer must be considered carefully.
Respect and engage people
No matter how involved and well-informed a business owner is, the people on the front line have more first-hand information about how the process works. Encourage your business owner clients to connect with staff in order to co-create the best outcomes. When front-line employees are guided and valued in problem solving, and given resources to address the issues, the business and its customers win.
Eliminate waste and non-value-added activities
A standard procedure is sometimes kept alive long past its useful date. In order to add value, a process must transform the product or service in a way that the customer is willing to pay for. It must also work right the first time.
Does your client’s business have unnecessary processes, like moving materials or people without any contribution to the end result? Is equipment or people idled because of inefficiencies in the production or service timeline? If a procedure or a step does not add value, consider eliminating it. If it is necessary for the process overall to work, minimize it until the process can be redesigned to eliminate it.
Strive for zero defects
Encourage your small business clients to identify common errors, mistakes, and defects. Think through ways in which the process could be improved to minimize or eliminate them. The solution could involve automating a task, adding a layer of quality review, training staff, or investing in better technology.
From the small businesses that have successfully implemented lean business philosophy, here are some lessons learned.
Technology does not always help
Technology can make a process smoother and more efficient. However, it is rarely a complete solution. A dysfunctional process won’t be corrected by laying complex automated algorithms over it. Design the optimal process first, and then supplement it with technology that fits the needs and enhances the outcomes.
Throwing more people at a broken process does not make it better
Similar to the technology puzzle, a solution to a problematic process is to fix the process first – not add more manpower to the equation. Even if you are dealing with a bottleneck, consider whether adding more people will simply shift the bottleneck up the chain.
Without engaging people, you have lost out of the gate
In order to develop effective and efficient business processes, you must involve the people that engage in those processes on a daily basis. Without their buy-in, any solution you attempt will be temporary at best, and won’t maximize the potential of change.
In closing, the hallmark of a continuous improvement process is that it is never done. True lean methodology is not a project for the second quarter of the year – it is an ongoing commitment of attention and resources to making the internal workings of the business better.