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Sandrine Olivencia

Tom Ehrenfeld: Don’t cherry pick lean principles, lean is a complete business system

By Sandrine Olivencia, - Last updated: Friday, June 28, 2013 - Save & Share - Leave a comment

There’s a massive amount of energy behind the lean startup “movement” today, which I find both exciting and a bit worrisome. Today I still see a gap between the loud buzz of the Lean Startup “movement” and broader cultural and widespread acceptance. N.B. when I say Lean Startup, for the time being I see this as the Lean (Software-based-Venture-chasing-Home-run-seeking) Startup. A subset of the overall startup world, to be sure, and not an unimportant one.
Yet I’d like to see the learning from the Lean Startups gain broader traction. Has this community been able to codify the key principles in a way that engages entrepreneurs beyond the software crowd? I see a lot of lip service to this, but not yet a lot of evidence. It would be great to articulate the principles and methods in a manner that resonates with the food truck launcher, the next gen footwear maker, the entrepreneur who will roll up local moving companies into a more innovative venture.
That said, there’s a great deal of brilliant application of lean principles to key elements of the (um, software-based venture-seeking high-growth-aspirational) startup world. Eric Ries’ book, for example, does a nice job explaining several aspects of lean enterprise—purpose and process. He demonstrates the value of creating processes that provide adaptability for a venture, and he emphasizes the need to identify/eliminate waste. He touts the importance of product development as a series of experiments designed to learn what the customer truly values, all with the purpose of learning above all.
Yet his book, and much of the current thinking around this that I observe, neatly recapitulates (in a compressed fashion) the learning associated with the original spread of lean for better, and for incomplete. First came the emphasis on processes—a wave that was marked by the spread of value stream maps identifying waste and visualizing processes. This movement also unfortunately was misperceived as aligned with Reengineering. Next came a greater awareness of how lean principles inform product development—another thread deeply informing the Lean Startup literature.
Now I believe that the Lean Startup world, in its compressed wave cycle, must reckon with the hard challenges of teaching people what lean management really comes down to. It’s not simply about creating an organization that has qualities such as agility and customer focus—rather, it’s about creating and practicing management that, to use Peter Drucker’s definition, improves the output of employees in a material way.
This purpose, coupled with lean principles, means management that understands how to design work so that learning and improvement take place by the people doing the work where the work takes place. This is the trickiest piece of the lean enterprise system, is often the last recognized by companies, is seldom given more than lip service; and is also the most important for long-term success.
Perhaps my biggest issue with Lean Startup has to do with its selective application of Lean principles to the entrepreneurial process. It does wonders relating the experimental approach of lean, the power of using customer value to pull your growth (as opposed to pushing products on the world), and the need to account for your activity productively to understand what is adding waste and what is not.
Yet Ries fails to define lean in a full and systematic way that I find satisfying. Having worked with Womack, Shook, Balle and other modern lean thinkers, I would share my understanding of lean as this: Lean is a complete business system that produces higher quality goods and services, by teaching a rigorous scientific problem-solving approach, which aligns its workers to solve problems and engage in continuous improvement, through a disciplined and constant analysis of the work at hand. Higher quality products, deeper customer focus, and ongoing improvement, are the outcomes of greater individual engagement with the work, and this quality is achieved through numerous methods and tools driven by managers (and Management) in a mindful and purposeful way.
I find it notable that Ries states “My hope is that the Lean Startup movement will not fall in the same reductionist trap” of a Taylorist production approach treating people as cogs in the machine—where the system took precedence over the human elements of it enabling learning, adaptability, and growth. It’s ironic that my response to his book was that he has in fact done just that.
In other words, while he discusses the importance of management throughout, Ries invariably describes strategic ways about how to design processes and embed learning and make choices. There’s a good discussion of Five Why practice, but it’s wholly insufficient. Like all new entrepreneurs, his book needs far more rigor and attention paid to the messy work of leading and managing people. The more that lean takes root beyond its manufacturing base, the more it becomes clear that the need for continued clarification of lean management is needed. Hopefully it is in this realm that the world of lean thinkers and the Lean Startup movement will converge.
That said, seeing many individuals test and discuss lean principles (which for me are the most important business ideas I’ve encountered) is exciting. I’m understanding that the important question is not what’s lean about lean startups. If this movement is enabling groups to move forward, to form supportive networks, generate productive conversations, learn through trial-and-error, celebrate successes (and failures!), then the real question I should ask myself is “does it matter?”

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