lean-methodology

Lean Methodology In A Nutshell

The lean methodology is a continuous process of product development to meet customers’ needs. It was in part borrowed by the auto industry, and its roots are found in the Toyota Production System, which was heavily influenced by Henry Ford’s assembly line system. The lean methodology is, therefore, an evolution from lean manufacturing, based on continuous improvement.

A look into Kaizen and the roots of the Lean Methodology

kaizen-approach
Kaizen is a process developed by the auto industry. Its roots are found in the Toyota Production System, which was heavily influenced by Henry Ford’s assembly line system. The word Kaizen is a hybridization of two Japanese words, “kai” meaning “change” and “zen” meaning “good.” Two of the basic tenets of Kaizen involve making small incremental changes – or 1% improvement every day – and the full participation of everyone. 

Kaizen is actually a process that developed out of the auto industry. Its most infamous roots are found in the Toyota Production System, which was heavily influenced by Henry Ford’s assembly line system. 

In the 1930s a team from the Toyota Motor Company visited Henry Ford’s plant. At the time, Toyota was producing just 40 automobiles per day, while Ford was producing 8,000.

Toyota decided to implement many of Ford’s techniques, but a visit by one of the lead engineers to the local Piggly-Wiggly gave him an inspiration which significantly advanced the basics of Ford’s system. 

Kaizen didn’t gain international popularity, however, until the 1980s when a Japanese organizational theorist and management consultant named Masaaki Imai founded the Kaizen Institute Consulting Group to help introduce the concepts of Kaizen to western businesses.

Quick Intro To Lean Thinking

In their book, Lean Thinking, James P. Womack, and Daniel T. Jones highlighted the key principles for lean thinking and the basis of the lean methodology. Lean Thinking, based on the study of the Toyota Production System, looked at five key guiding principles for process improvement, mainly focused on waste reduction: value, value streams, flow, pull and perfection.

  • Value: The lean thinking paradigm starts by defining value from the customer standpoint. Value can take many forms and shapes, and it can be a practical value (helping solving problems and pain points), perceived value (to establish status), or brand value (trust, switching costs). And this is the foundation of the lean thinking methodology.
  • Value Streams: Once defined how the customer perceives value, it’s important to ma it out and identifies the stream, the steps the customer tasks to get that value, and how each step contributes to delivering it. Once identified the value streams, it is possible to identify the activities that add value to the customer and those that do not. And the latter need to be removed, as the lean methodology is a method of process improvement and, and foremost of waste reduction.
  • Flow: Once the value stream has been improved to remove wastes and add only the activities that add value to the final customer, it’s important to check the flow and ensure that the whole value-creating process is smooth and in case reconfigure the steps taken by customers to in case enable that flow.
  • Pull: Pull is all about avoiding wastes and have in place a just-in-time system, built from the ground up, on the customers’ needs.
  • Perfection: This is what makes lean thinking a continuous, always evolving process, a process that looks at perfecting each step of the way, which requires continuous tweaking, feedback loop and revisiting of the various steps with which value is created and delivered.

Quick Intro to Agile And Lean Startup Movements

In 2001, a group of seventeen software developers met to discuss these lightweight development methods, with the aim of challenging the old assumption of heavyweight software development.

They forged “The Agile Alliance,” as a group of independent thinkers about software development, which agreed on the Manifesto for Agile Software Development.

agile-methodology
Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.
agile-manifesto-principles
Source: agilemanifesto.org

Steve Blank, launched the Lean Startup Movement, which as he explained in a 2013 HBR article “Why the Lean Start-Up Changes Everything:”

 It’s a methodology called the “lean start-up,” and it favors experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development. 

Today startups take this methodology for granted. Yet at the time this was an innovation as Steve Blank recounted:

Although the methodology is just a few years old, its concepts—such as “minimum viable product” and “pivoting”—have quickly taken root in the start-up world, and business schools have already begun adapting their curricula to teach them.

lean-startup-vs-corporation

Some of the key aspects fo the lean startup movement is based on using a “scientific method” and a process of creating, launching and growing a startup.

This focuses on getting insights as quickly as possible from customers without focusing too much on business planning. As Steve Blank remarked in his 2013 article:

A business plan is essentially a research exercise written in isolation at a desk before an entrepreneur has even begun to build a product. The assumption is that it’s possible to figure out most of the unknowns of a business in advance, before you raise money and actually execute the idea.

Once the money is raised:

Developers invest thousands of man-hours to get it ready for launch, with little if any customer input. Only after building and launching the product does the venture get substantial feedback from customers—when the sales force attempts to sell it. And too often, after months or even years of development, entrepreneurs learn the hard way that customers do not need or want most of the product’s features.

In the lean startup movement and methodology, three things are critically important. In fact, those are the new pillars that challenged the old assumption of how an enterprise should look like have allowed the lean startup movement, thus the lean startup canvas.

On the HBR article Steve Blank remarks the waste of time a five-year business plan represents:

No one besides venture capitalists and the late Soviet Union requires five-year plans to forecast complete unknowns. These plans are generally fiction, and dreaming them up is almost always a waste of time.

Start-ups are not smaller versions of large companies

One of the critical differences is that while existing companies execute a business model, start-ups look for one

This point is critical because of a large organization or existing companies operating with known business models.

The lean startup instead iterates until it finds a business model that fits that startup. In fact, Steve Blank defines the lean startup as:

a temporary organization designed to search for a repeatable and scalable business model

It is crucial to emphasize the fact that the business model needs to be repeatable and scalable.

Toward Continuous Innovation In Business

continuous-innovation
That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.
the-continuous-innovation-manifesto
The Continuous Innovation Mindset is a Manifesto proposed by Ash Maurya on blog.leanstack.com

Related Agile Business Frameworks

AIOps

aiops
AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms.

Agile Methodology

agile-methodology
Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Agile Project Management

agile-project-management
Agile project management (APM) is a strategy that breaks large projects into smaller, more manageable tasks. In the APM methodology, each project is completed in small sections – often referred to as iterations. Each iteration is completed according to its project life cycle, beginning with the initial design and progressing to testing and then quality assurance.

Agile Modeling

agile-modeling
Agile Modeling (AM) is a methodology for modeling and documenting software-based systems. Agile Modeling is critical to the rapid and continuous delivery of software. It is a collection of values, principles, and practices that guide effective, lightweight software modeling.

Agile Business Analysis

agile-business-analysis
Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Business Model Innovation

business-model-innovation
Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Continuous Innovation

continuous-innovation
That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Design Sprint

design-sprint
A design sprint is a proven five-day process where critical business questions are answered through speedy design and prototyping, focusing on the end-user. A design sprint starts with a weekly challenge that should finish with a prototype, test at the end, and therefore a lesson learned to be iterated.

Design Thinking

design-thinking
Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.

DevOps

devops-engineering
DevOps refers to a series of practices performed to perform automated software development processes. It is a conjugation of the term “development” and “operations” to emphasize how functions integrate across IT teams. DevOps strategies promote seamless building, testing, and deployment of products. It aims to bridge a gap between development and operations teams to streamline the development altogether.

Dual Track Agile

dual-track-agile
Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.

Feature-Driven Development

feature-driven-development
Feature-Driven Development is a pragmatic software process that is client and architecture-centric. Feature-Driven Development (FDD) is an agile software development model that organizes workflow according to which features need to be developed next.

eXtreme Programming

extreme-programming
eXtreme Programming was developed in the late 1990s by Ken Beck, Ron Jeffries, and Ward Cunningham. During this time, the trio was working on the Chrysler Comprehensive Compensation System (C3) to help manage the company payroll system. eXtreme Programming (XP) is a software development methodology. It is designed to improve software quality and the ability of software to adapt to changing customer needs.

Lean vs. Agile

lean-methodology-vs-agile
The Agile methodology has been primarily thought of for software development (and other business disciplines have also adopted it). Lean thinking is a process improvement technique where teams prioritize the value streams to improve it continuously. Both methodologies look at the customer as the key driver to improvement and waste reduction. Both methodologies look at improvement as something continuous.

Lean Startup

startup-company
A startup company is a high-tech business that tries to build a scalable business model in tech-driven industries. A startup company usually follows a lean methodology, where continuous innovation, driven by built-in viral loops is the rule. Thus, driving growth and building network effects as a consequence of this strategy.

Kanban

kanban
Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.

Rapid Application Development

rapid-application-development
RAD was first introduced by author and consultant James Martin in 1991. Martin recognized and then took advantage of the endless malleability of software in designing development models. Rapid Application Development (RAD) is a methodology focusing on delivering rapidly through continuous feedback and frequent iterations.

Scaled Agile

scaled-agile-lean-development
Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.

Spotify Model

spotify-model
The Spotify Model is an autonomous approach to scaling agile, focusing on culture communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg, and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.

Test-Driven Development

test-driven-development
As the name suggests, TDD is a test-driven technique for delivering high-quality software rapidly and sustainably. It is an iterative approach based on the idea that a failing test should be written before any code for a feature or function is written. Test-Driven Development (TDD) is an approach to software development that relies on very short development cycles.

Timeboxing

timeboxing
Timeboxing is a simple yet powerful time-management technique for improving productivity. Timeboxing describes the process of proactively scheduling a block of time to spend on a task in the future. It was first described by author James Martin in a book about agile software development.

Scrum

what-is-scrum
Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.

Scrum Anti-Patterns

scrum-anti-patterns
Scrum anti-patterns describe any attractive, easy-to-implement solution that ultimately makes a problem worse. Therefore, these are the practice not to follow to prevent issues from emerging. Some classic examples of scrum anti-patterns comprise absent product owners, pre-assigned tickets (making individuals work in isolation), and discounting retrospectives (where review meetings are not useful to really make improvements).

Scrum At Scale

scrum-at-scale
Scrum at Scale (Scrum@Scale) is a framework that Scrum teams use to address complex problems and deliver high-value products. Scrum at Scale was created through a joint venture between the Scrum Alliance and Scrum Inc. The joint venture was overseen by Jeff Sutherland, a co-creator of Scrum and one of the principal authors of the Agile Manifesto.

Read Next: Lean CanvasAgile Project ManagementScrumMVPVTDF.

Related Topics: StartupBusiness Model InnovationProject Management.

Read Next: Agile Methodology, Lean Methodology, Agile Project Management, Scrum, Kanban, Six Sigma.

Read Also: Business AnalysisCompetitor Analysis, Continuous InnovationAgile MethodologyLean StartupBusiness Model InnovationProject Management.

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