The Building Blocks of a Lean Organization

Building a lean organization not only helps keep operating costs down and making a profit margin or productivity level as large as possible, it also instills high efficiency routines that remain in the long-term as well. Doing so provides organizations and companies with buffers they can then rely on when times are tough or additional effort is needed for success. That said, the building effort is not easy; it requires re-engineering management as well as culture. The change is not a one-time application. It has to be followed through on a permanent basis.

Contents

The Building Blocks

To build a lean culture and operation, four elements need to be in place and followed. However, they don’t take care of themselves. The elements need to be regularly monitored and maintained for ongoing performance. These include focusing everyone on customer happiness, apply standardized work across the board for managers, require regular accountability, and require discipline to force consistency.

Customer-Focus

For most organizations, having more customers buy or to service represents the bread and butter of the entity’s survival and growth. So it makes sense to keep the customers happy as much as possible. That stands within reason; customers who drain resources from a company without returning revenue should be dropped. However, for a lean organization, the real focus is on making sure everyone understands mentally why the organization exists and whom it serves. Even the administrative backroom types need to be on board with the concept that everything exists in the organization because of the customer. So resources shouldn’t be wasted or squandered. That includes removing and cancelling where possible those business processes that contribute nothing to customer retention and growth.

Generalist Management

Standardizing the management level works comes with big benefits. The manager’s role is to keep the organization humming and the productivity level high. It shouldn’t be distracted with special projects or differentiation – that’s the role of the worker bees. Further, by standardizing, managers can overlap each other and fill in gaps easily, keeping the system working properly. Finally, standardized managers retain a holistic perspective versus a silo’d way of thinking. Seeing the big picture of the organization is invaluable for leading it effectively.

Measure and Measure Again

Regular accountability is critical to make sure changes put in place for a lean operation stick and produce results. Accountability is put into effect by designing objective metrics and then making sure people and processes are measured by them often. Some would recommend accountability should be daily, but this runs the risk of creating an accountability bureaucracy and new redundancy. Instead, it should be regular enough to keep current tabs on performance and make fixes when needed.

Responsibility Matters

Finally, discipline is essential to provide a real time, actual result when people and processes are not following the organization’s culture and requirements. An organization won’t stay lean if elements and people think they can drift off as soon as the spotlight shifts away. It’s extremely hard to keep productivity levels up at maintained levels, so discipline is needed to ensure that stability continues.

Running a lean organization is not hard to plan. The challenge is in the implementation. So it’s important to have the right elements in place and stick with them permanently.