Do you know the three fundamental business issues that guide lean transformation for any organization? It’s the purpose of the company, the processes it follows and the people that make it a business. Thinking deeply about purpose, process and people is key to Lean transformation.
Like the Digital Transformation that started in the late 1990s, Lean Transformation requires a change in mindset. Conversations on the Digital Transformation went on to the mid 2000s before people were sufficiently prepared to take the leap. Meanwhile, the Lean Transformation started through a methodology that was created to support the Toyota Production System. The Lean methodology, as we know it, has its roots in the Just In Time processing, coined by Toyota in 1934. It became known as Lean Manufacturing around the 1990s.
Lean Transformation aims to reduce or eliminate waste in work and effort. Thus leveraging productivity reducing costs of production and increasing customer satisfaction levels. The change in mindset is the equivalent of transitioning from a waterfall type of production to an Agile one. And it’s not that easy at all.
However, the three pillars of Lean Transformation can help us better understand the reasons behind this necessity. And, of course, the basic consideration that can get us one step closer to its realization.
1. The purpose of the company
We all know a new company needs to, somehow, achieve considerable cash flow to be viable. Eventually, if a company is to prosper, it needs to continually augment its business with new customers, returning customers and… happy customers.
Suppose you, yourself have a startup you’re trying to grow and scale. What is really the reason you’re doing it? Is it the money? Is it something else? Well, as it turns out, if you wish to do well for yourself, you need to solve at least one problem; not one of yours, but one of your customers’. As such, you need to find out which problems are the most important to customers, figure out a way to solve them and make it your purpose to keep solving them, and any new ones, so you can build a business around them, turning them into an asset. If your customers consider your company their go-to-company to solve their problems, you’re in business!
2. The process of the company
Most companies that use established business models to grow and prosper, are not optimizing for performance or profitability. Believe it or not, that’s the truth for most lifestyle companies or even for startups that haven’t begun to “get it”. Let’s try and elaborate using an example:
Suppose you have fully described a product with detailed specifications, time-frames and plans to sell, partner and grow to a healthy company. That’s pretty much a waterfall approach. And there’s a catch. If you’ve miscalculated the validity of the problems you’re trying to solve, ignoring their importance till your release date, chances are you’ll find insufficient buying power waiting for you at the end of the hallway. Now, if you think about it, if you’ve precisely executed your plan, there may be no budget available for you to take corrective measures. It may already be too late for you and your team. We’re happy to inform you, there is room for improvement!
How about taking things one step at a time?
First sit down and have a nice chat with a few of your customers. Perhaps learn about them and their daily workflow. What pains them, what needs to be solved? What would bring them real value?
Then, how about building a solution for them with the least effort? Something that works but doesn’t necessarily have the entire feature-set built in from the first version. And how about running this version by them, see what they think in terms of value to their daily routine. See how they respond, what they like and what they don’t; what they’d change. Surely, this could help you understand if you’re on the right track, building the right product for them? If you found yourself off course, it wouldn’t be too late, would it? Catching this type of mistakes early on in the development process, gives you the opportunity to make amends, finetune your course and carry on towards the right direction. Your team will thank you for it!
And remember! If your customers think your product is brilliant, it’s likely they’ll bring more customers in, for new business. And if they perceive the value they received as being tenfold the money they paid for your solution, they will keep coming back. That is, provided your product is reliable and invariably solves their problems.
3. The team that makes up the company
Of course, as we at Starttech Ventures always say, the people that make up your company are more important than any process. Consider this: if you build a team that provides all the skill-set you need, they have the right attitude and are getting along well, you’re probably there 80% of the way. A great team work towards a great process. They will be productive and open to feedback. As a result they will keep an eye on your customers and they will be OK with changing anything towards a better direction.
Even though this description closely describes the Toyota way, we’ve found it works wonders in SaaS product development, as well. And here’s how it works:
- Each team member is here to create value for the customers
- Work is delivered to customers in iterations, which are full cycles of production, generating a new, “shippable” version of the product
- Everyone keeps an eye on the value created for the customers, versus the generated business value and improves their processes accordingly
- Each new version incorporates what everyone learned from the last release
- Each new version is based on a better production system than the last one was
- Every team member gets out of each iteration with more knowledge and a better idea of who their customers are and what they need
What more could you ask? You get a better team or what you need with each iteration of your product!
How can you go the Lean way?
It’s not that hard, if you think about it. Here are five steps you can take:
- Find your purpose. Who do you want to help solve their problems? Why?
- Find out what the problems worth solving are for your target audience.
- Go out and find a few good people that believe in your vision. Try to consciously discover whether their core values match yours well enough. This will get you a long way towards your dream-team
- People need to believe in a common cause, to set common goals and work towards them.
- Help them set up a few processes that will help them work in iterations, trying to learn something out of each one of them, getting a bit wiser every time.
Finding new ways to go Lean
Of course, you can always find new ways to do things the Lean way. If you manage to incorporate it to your daily routine, you’ll be surprised with how many aspects of your business can use it. Be it your business model, your target audiences, your product, your pre-sales or after-sales support process, your sales cycle or your marketing efforts, Lean can live in each one of them.
Now, you don’t have to take our word for it. Why don’t you try it out?