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Managing to Connect the Business with the Customer

by Michael Webb | * Comments (1)
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John Shook, Chairman and CEO of the Lean Enterprise institute, just released a newsletter titled “Managing to Connect the Macro with the Micro.” In it he chronicles another of the steps the Lean movement has taken from being “just a kit of process improvement tools” to being a method for thinking scientifically about business problems.

What Makes The Lean Management System Unique

Over the years the Lean movement has attracted thinkers and pioneers who have developed its implications into something quite powerful. As Michael Ballé put it in another recent article:

What makes lean unique is that it is the only full-fledged alternative to the “modern management” invented by Alfred Sloan in the previous century. Lean is a full business system with:

  •  A lean theory of strategy: choosing the customers one wants to pursue, accelerate the delivery flow and improve value, sell at market price, and make your margin by better managing costs.
  • A lean HR theory: customer satisfaction is the key to growth; employee satisfaction is the key to customer satisfaction; fulfilling jobs is the key to employee satisfaction; developing engagement (through kaizen), involvement (through teamwork) and autonomy (through standards) is the key to employee satisfaction.
  • A lean organizational theory: structure functions around knowledge production and pull value through value stream with a pull system; the management line solves its own problems and improves its own processes.
  • A lean financial theory: sales growth is a function of built-in-quality; cash growth is a function of reducing lead-time; profitability growth is a function of eliminating waste; capex utilization is a function of better understanding flexibility, autonomation, and technical minimum solutions.
  • A lean supply chain theory: integrate suppliers by pulling parts and innovations in win-win long-term relationships
  • A lean leadership theory: develop more leaders by teaching them to put customers first, go and see, ask “why?” and show respect.
  • A lean managerial theory: visualize activities; formulate problems; seek root cause; study countermeasures.
  • And so on…

 But this entire paradigm is one in which the ultimate aim is not getting you to apply lean rules, but to get you to deliberately practice PDCA in order to deepen your own understanding of your job, business and industry.

PDCA – which is the scientific method applied to business problems – is also the means of engaging with others (procedure for running meetings, solving problems, etc.)  to help bring everyone to the same general level of understanding of a situation. The more people in an organization, the more important it is to have a means of aligning them (catchball, hoshin kanri/policy deployment, etc.).

John Shook’s newsletter article tells of a new workshop by the Lean Enterprise Institute aimed at helping executives drive that alignment up and down the organization. LEI has been slow in publicly recognizing that the root causes of challenges companies face in improving their performance is inherent in the way they are managed. (I say that because I have known many people who knew this in the 1980’s and 1990’s. But knowing where the problem is and developing effective countermeasures are two different things. LEI has a fairly good track record of this, so I recommend this topic – and these presenters – to any executives seeking to improve in this area.

Connect the Business to the Customer

I’m pretty sure their workshop will be focused on internal issues of organizational alignment. However the logic is unavoidable: the ultimate alignment is external, not internal. It is in helping the customer to realize, prioritize, and solve their problems. Readers of this website know I am referring to the Customer’s Journey. The stages of the Customer’s Journey are the highest point in the company’s hierarchy of values; aligning the business’s value stream maps to these stages is the most powerful way to leverage the scientific method in business.

One Response to “Managing to Connect the Business with the Customer”

  1. The scientific method is used unconsciously by many people on a daily basis, for tasks such as cooking and budgeting. The same elements present in traditional scientific inquiry are present in these everyday examples. Understanding how to apply the scientific method to these seemingly non-scientific problems can be valuable in furthering one's career and in making health-related decisions.

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