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 to make it through a difficult business cycle.
This first impression is not completely accurate. While performing a critical assessment of business processes and expenses can help the business survive a downturn, it’s not the only use of lean business thinking. In fact, lean methodologies can 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 concepts were first developed for manufacturing companies, but their 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. Value is ultimately defined and determined by those customers. So, businesses must ask: What matters to their clients? What are they willing to pay for? What makes a service or a product irreplaceable from their perspective? Any activity, process, or approach that doesn’t 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 valued as capable problem solvers and given resources to address the issues, both the business and its customers win.
- Eliminate waste and non-value-added activities.
A standard procedure is sometimes kept on life support 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. Workflow studies can help document the status quo by answering the following questions.
- 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 the activity in question 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 every process could be improved to minimize or eliminate errors. 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 doesn’t always help.
Technology can make a process smoother and more efficient. However, it’s rarely a complete solution. A dysfunctional process won’t be corrected by laying complex automated algorithms over it. Design the optimal process first, then supplement it with the technology that fits the needs and enhances the outcomes.
- Throwing more people at a broken process doesn’t 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’s 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.