What does Lean mean? First and foremost it means growth and prosperity for all members of an organisation, involved stakeholders, and the society it exists in. It also means the growth of financial profits generated by the products and services the organisation provides. Lean, fully deployed in the right way, secures the sustainability of both people and profit development. This is the Lean Ecosystem.
What would you see in a business with a well functioning Lean Ecosystem? There would be a high degree of trust, respect and teamwork amongst all members. You would also see that engagement, creativity and innovation are alive, continuously working to find better ways. There will also be a tangible level of diligence, discipline, and drive to meet delivery commitments. In the Lean Ecosystem such behaviours are cultural; they are embedded, natural and shared. As all these aspects are dependent on people’s behaviours and an organisation’s culture, naturally the HR function has a key role to play. HR and culture are often overlooked, even though they are so crucial in embedding Lean and continuous improvement culture.
By definition, an Ecosystem is a group of interconnected elements formed by the interaction of a community within their environment. The questions that naturally follow are ‘what are all the elements of Lean?’ and ‘how do they all work together in a system?’. The answers to these questions are elusive and, to date, are not well described. reLean’s Partners have worked for both Toyota and McKinsey, and truly understand how Lean Ecosystems work, and what help organisations need to achieve them.
Lean Ecosystem™ model and elements
Daily improvement cycle
- Go & See
System Evolution cycle
- Direction Management
- Problem Solving
- Operating system
The fundamental basis for a Lean Ecosystem to prosper and grow is Respect. Implementing a Lean Ecosystem establishes trust and respect with the society it encompasses, working to provide needed products and services. Shared and understood, it binds all employees and stakeholders together in teamwork. In implementing a Lean Ecosystem, an organisation treats all employees and stakeholders in a fair and respectful way, offering the long-term development and mutual security that is needed to sustain it. The executive team and HR function have a crucial role to play here ensuring that the value system is aligned with these principles, and that people with the right intrinsic behaviours are hired, developed and retained.
At the heart of the Lean Ecosystem are Operations, producing and supplying the products and services that customers require. The model for this is well known: processes and people are aligned to value streams using JIT, jidoka, heijunka and standardised work to maximise efficiency. Many organisations successfully run Lean transformation programmes with dramatic improvements in efficiency, reducing costs, freeing up working capital, and boosting sales. The challenge thereafter is sustainability: this is what the Lean Ecosystem does, continuously improving its processes, people and management infrastructure. How does this work? There are two cycles: the Daily Improvement cycle, and the longer term System Evolution cycle.
Daily Improvement cycle: ‘Go & See’
Lean Ecosystems sense continuously. Known as ‘Go & See’, this is a key part of the daily improvement cycle. Every member of the ecosystem is able to sense and detect any problems as soon as they occur. This is backed up with an inbuilt response to investigate the facts and quickly solve the problems. Sensing comes through constant checking of quality, process reliability, material inputs, and many more parameters. Sensing is supported by making the real time status as visual as possible, through such mediums as information displays, charts, graphics, and audible signals. This capability makes a highly significant difference to operations by enabling commitments to be fulfilled each day in a far smoother way. The even greater benefit to ‘Go & See’ is that all members of an organisation are engaged in learning through fact finding, and problem solving. Repetition of this develops the organisations fitness and capability to continuously improve. It is, in fact, culture forming.
Daily Improvement cycle: Challenge
There is an inherent desire to improve inside Lean Ecosystems; this is the attitude of Challenge. It is visible in the way that all members of the organisation strive every day to find better ways of working to meet customer demands. It is somewhat analogous to a survival instinct. This characteristic doesn’t just happen on its own; it takes a conscious effort by leaders and the HR function to create the right conditions. The leadership creates a positive desire to improve which HR systems and processes support. Through this, the desire to improve is engendered in all members of the organisation and is further supported with the permissive attitude of ‘if you don’t try we will never know’. Creating this culture takes time. It requires trust, a shared sense of purpose, and shared targets.
Daily improvement cycle: Kaizen
Lean Ecosystems have the inherent capabilities, resources and fitness needed to make small changes quickly. This is known as Kaizen. The ability to quickly make small changes allows the Ecosystem to harness everyone’s contributions, maximising improvement results. Kaizen is not an exclusive club for the Change Team; instead it is a process everyone is involved in to improve operations. The more Kaizen exists, the fitter the Ecosystem becomes; better able to improve, solve problems, meet challenges, and therefore prosper. Kaizen is created within teams, because usually a single change affects other parts of the system. The different functions in the system are adept at quickly coming together to make changes and share the valuable sources of learning.
System Evolution: Envision
Lean Ecosystems sense the environment and Envision the longer term future. Envisioning means to understand and visualise the future. In the Lean Ecosystem this is the starting point for evolutionary change. It sets the direction in which the organisation needs to move in order to continue to prosper and support society. Typically the extent of the changes will require significant development of processes, people, and management systems. This is why Envisioning involves looking to the longer term: two years, five years, even 10 years. This provides time for the Ecosystem to work out how to get there, and to purposefully develop the capabilities it requires. Envisioning takes into consideration all internal suggestions regarding current operations, understanding from constant benchmarking of competitors products and services, and research into the present and future needs of customers and society.
System Evolution: Direction Management
Lean Ecosystems develop individual, team, and organisational capabilities as they transform and evolve. Lean Ecosystems are rather self reliant, able to learn for themselves as they evolve with new services, products, and business models. Direction management is the process that connects capability building to improvement projects. Considerable effort is made on an annual basis to plan this out. This process is lead by the HR function in conjunction with the executive committee, and makes sure the right balance between capacity for change, resource development, and transformation is reached. Having too many projects, having poorly aligned projects, or having the wrong teams constructs are all hazards, so getting the plans right is crucial. Regular check-points are built into the plans in order to assess progress and keep end goal delivery on track.
System Evolution: Problem Solving
Problem solving is a core business process of Lean Ecosystems, producing results and driving key behaviours such as fact finding, root cause confirmation, and standardisation of successful solutions. Every member of the organisation is trained and accredited with a consistent approach to problem solving. The consistent approach is so important as it removes potential barriers through straightforward dialogue, understanding, and effective teamwork. The problem solving projects are defined and deployed via the Direction Management process each year. Major project themes are broken down into sub-projects in related areas of the organisation, and ultimately to individual projects in each team. In turn, these roll up to support the long-term evolutionary changes. An organisation that excels at solving problems is a formidable force, able to develop in any direction it wants. This is what Lean Ecosystems do.
One of the great attributes of Lean Ecosystems is the degree of teamwork: the ability to connect and harness the combined efforts of an entire organisation in daily operations, improvement and evolution. All of the elements in the Lean Ecosystem combine to make this happen. Nevertheless, the HR function and Management team have responsibilities to ensure teamwork is promoted and supported through HR mechanisms.
So what does Lean mean? It means sustainable profitable growth. With a functioning Lean Ecosystem in place, continuous improvement of operations naturally occurs each day, human capital develops new skills, and there is a steadfast execution of longer term plans.
At reLean we understand how this works. We are able to assist startups in getting this right from the start, as well as to transform existing businesses adopting a Lean Ecosystem modus operandi. In the coming weeks we will share further information on the transformation approach and service offerings. If you would like to discuss more please get in touch and let us know how we can help you
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