Lean Business Pitfall

How to Avoid 10 Big Lean Business Pitfalls

In order to succeed in business today, you need to be quick and agile, embracing change and adapting quickly based on your customers’ needs and feedback. The Lean Principles, developed by Toyota, have helped millions of businesses throughout the world.  But that doesn’t mean you can’t learn from the mistakes of other companies.  If you are seriously considering incorporating a Lean business strategy into your organisation, then this list of the 10 big Lean business pitfalls shows the mistakes and failures that others have made in their own businesses. 

1. Lack of Leadership

Many businesses desire the positive impacts of Lean implementation – an early focus is often on the Lean business tools and quick wins. However, many organisations fail to sustain the early gains and return to ‘business as usual’.

Transforming the performance of an organisation often means addressing its culture.  Changing a culture generally means changing leadership behaviour.  Performance and behaviours that are tolerated by the leadership team effectively determine the culture of the organisation.

  • In a Lean organisation, the leadership role moves from managing to coaching.
  • Looking for immediate fixes in operations is replaced by systematically improving processes and standard work.
  • The business vision and goals are simplified and mapped to individual roles.
  • The leadership team aim to support the performance on the key goals and assist teams to address the issues affecting results.

But change is not easy – it can be hard to undo years of a particular way of working. Most leadership teams will require some support to achieve the transition to a new way of working.

Business Manager with problem

2. No Clear Strategy

The danger with a poorly executed Lean business is that it runs on enthusiasm instead of strategy. With no clear goal or vision, and poor tracking systems in place, a Lean business can be doomed from day one. Whether you’re trying to figure out how much money you should budget for an advertising campaign or what your next development project should be, having a well-thought-out plan will help keep your Lean business running on track. Don’t get bogged down by details early on—that just makes things harder than they need to be. But do make sure you are thoughtful about what you want your business to accomplish so that it doesn’t lose sight of its goals along the way.

Be wary about trying to measure everything and set too many goals. One of our clients showed us their 32 KPIs for the year. Not only would a review of these take way too long but the prioritisation and focus is lost if there are too many targets. We much prefer to see a business concentrate on a handful of goals annually that will steer the business towards its vision.

3. No time given to staff to apply Lean Thinking

It is one thing to talk about Lean, discuss vision and goals and even communicate these. But if outside of that, everyone must focus 100% of their time on the day job – when do we make time for the improvement work?  Many employees spent almost 100% of their work time working ‘in the job’. In a Lean organisation, employees require some percentage of that time to work ‘on-the-job’ (making the job better).

Paul Akers talks about his morning meetings at FastCap, which are followed by an allocation of time for every employee to apply 3s and process improvement.  When asked “How can you give away 45 minutes of productive time every day?”, his answer is simple “What takes 8 hours to produce in most organisations can be done here in 3!”

Lean business meeting with managers

4. No Customer Involvement

The name ‘Lean’ is in some ways unfortunate.  I was approached by an employee in a client firm many years ago and she was very unhappy. She said that she didn’t agree with the Lean approach. Her understanding was that ‘Lean’ meant cutting away any cost in the organisation.  We had to arrange some employee communication on the approach before going too much further!

The Lean approach is about understanding value (and waste, the opposite of value). The value must be determined by the customer or the marketplace. This value is constantly changing with technology, competitors and new innovations.

Staying close to our customer requirements and adapting when necessary, is key to a Lean organisation. Conversely, identifying non-value add activities in the current marketplace is also important.

To truly understand how your customers feel about your products and services, it’s critical that you have good communication and feedback channels. You will not only learn from their valuable insights, but also gain long-term loyalty if they see you making an effort to make their lives easier or better. Listen to customers – what they like and what they don’t – and use their feedback as an opportunity for improvement. Doing so won’t necessarily help grow your profits directly, but it could be invaluable when growing your company. Customer centricity has become one of the hottest buzzwords recently and for good reason: putting yourself in your customers’ shoes is by far one of the best ways to succeed today.

5. Lack of Change Management

Lean start-ups are agile and quick, but that doesn’t mean they are immune to change. Without a solid framework in place for handling changes, it will be difficult to get everyone on board with what’s new and exciting. In fact, without adequate change management, any new venture can easily fail before it even gets off the ground.

Make sure you have a system in place for announcing changes and communicating clearly about how your business will evolve as time goes on. Not only will you avoid big mistakes that could put your company out of business, but your team members—and customers—will be more receptive to transitions when they feel as though they were part of it from day one.

“You must learn from your past mistakes, but not lean on your past successes”

Denis Waitley

6. No Value Stream Mapping

One of Deming’s famous quotes was “If you can’t describe what you are doing as a process, then you don’t know what you are doing”. A Value Stream Map plots and end-to-end process from a request to the delivery of that request (either a product or service). The difference between a process map and a value stream map is that the latter aims to identify the overall lead-time for the process.

Reducing this lead-time and improving the overall customer experience is most often achieved by reducing or eliminating non value-added wastes.  Time spent accurately mapping the current state of a process provides an oversight like no other. Operational priorities become obvious and process steps that cannot meet TAKT time are identified.

On first review, value stream mapping appears to be a complicated process and one that many students are challenged with at first.  Confidence is gained by producing a current state map, generally with some support and then creating the future and ideal-state maps with the team.

7. Slow Supplier Engagement

One of the Lean business mistakes you’ll likely make is that of slow supplier engagement. That’s because, while it’s a necessity to work with suppliers, most entrepreneurs don’t realise how much time and effort are required just to get them on board. Failing to engage your suppliers, for example, opening lines of communication can be a huge problem because if they don’t know what you want, they can’t give it to you.

To avoid potential pitfalls like delayed deliveries and delivery failures, it’s critical that you put in place a system for engaging your suppliers right away so you can ensure your supply chain is going to run smoothly.

8. Poor Communication Within the Team

Many businesses rely on ‘word of mouth’ communication or ‘sit by Nelly’ training. Some staff are tasked with multiple manual reminders and in the event of distraction, a key task can be missed.

  • Communication of goals and priorities at a high level is essential.
  • To support these goals, good systems providing timely support to staff are essential – e.g. CRM, ERP, MES, or LMS systems.
  • Another key aspect of a Lean business is good workplace organisation – either a physical workplace or the virtual working environment.
  • Lean working environments should be highly intuitive and have little reliance on verbal communication.
  • Standard Work should be safe, achieve required quality standards, as simple as possible and finally productive.

At every level within your organisation, communication should be built into processes and rely less on human intervention.  When processes fail, or the product or service is late, the culture within the organisation should encourage open discussion and identification of issues within the process.

A huge part of the culture change within an organisation is moving from a ‘fear of failure’ and blame environment to one of collaboration and continuous improvement to build better and simpler processes for everyone.

Lean Leader and Employee

9. Unclear Priorities and Non-existent Objectives

What starts as a Lean business will often start with great ideas and lofty goals, but that isn’t enough. Before a Lean business can achieve success it must set clear priorities, and make sure those priorities are in line with its objectives. If you’re at your wits end trying to make things work or you’re frustrated by what feels like an uphill battle, ask yourself “What am I trying to accomplish? What is my objective?”

If you can’t clearly articulate what your goal is, how do you expect anyone else to know where you’re going or how best they can help? To avoid falling into this trap develop measurable company-wide objectives early on.  With clearly articulated goals and principles, employees at every level of the organisation will be able to make better decisions.

10. Lean Not Being Used Effectively

Another problem with Lean is that many companies that adopt it find out too late that it is just not being properly used within their operations.  Lean training programmes must be carefully targeted at addressing the problems your company has.  In order for these training programmes to be successful, your company must commit to continuous improvement.  You cannot just implement Lean as a one-time project.  It takes dedication and constant monitoring by management to ensure that your Lean projects are successful.

In addition, Lean teams require solid and reliable data to make critical decisions based on your customer’s needs.  Lean teaches you how to collect and present data to support your business decisions. Our Lean training programmes show you how to analyse data so that the data is exactly what your customer wants, rather than what the market says they want.  Learning how to interpret and use data to make sound decisions is essential for your business.

Furthermore, there are many Lean Training Consultants who are hired by large organisations whose culture does not support Lean.  This can be a great disadvantage when applying Lean as you will not have the support of the people you will be working for on your programme.  It is also important to remember that if a company is successful with Lean, they may employ the same programme in the future.  It can become an integral part of their everyday business and becomes how you do business moving forward.

Finally..

Lean business tools are beneficial tools and there are many advantages in using this type of training.  However, these benefits do not come without some common pitfalls.  If you are looking at Lean as a possibility for your business for your company, it is important to carefully consider all of the options available before making a decision. 

There are many types of Lean training programmes and you need to choose which one is best suited to your organisation.  As always, we are available for a Free Online Consultation to answer any questions you may have about starting your Lean project or perhaps you’re looking for a fresh perspective on Lean in your organisation.  Our experienced team can also advise on what financial supports are available to you in more detail.

We hope you enjoyed reading about How to Avoid 10 Big Lean Business Pitfalls.  You may also be interested in reading about our insights on Measuring the Performance of your Organisation and our Top 10 Lean Tips for Business Transformation. All our blogs are available to read here.  Please connect with us on Linkedin and Twitter.

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