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Jeff Liker

Dan Jones: The Laws of Lean Organisations

By Jeff Liker, - Last updated: Monday, March 15, 2010 - Save & Share - Leave a comment

It is not too far-fetched to think of lean as the science of getting useful work out of an organisation. But in this case the organisation does not exist in isolation – it has to serve its customers, work with its partners (employees, suppliers, distributors, shareholders etc) and find its place in the physical, economic and social environment in which it operates. This changes over time and so the laws of lean organisations will also change as societies face new challenges in the future. This is how I would summarise the “laws of lean”.

The first lean law states that the leaders of the most successful organisations drive their businesses out of a deep understanding of the real needs of their customers. The know exactly what their organisation should be doing to design new products and solutions and how to help customers’ acquire and use the right products, services and knowledge they need to solve problems in their lives.

Great leaders like Jeff Bezos introducing resellers on the Amazon website and Sir Terry Leahy pioneering home shopping and modern convenience stores at the UK supermarket retailer Tesco both had to do so against strong internal opposition. They said that what is right for customers will ultimately be right for the business, whose task it is to make it work. In other words as Jim Womack and I showed in Lean Solutions, organisations need to first define value from the customers’ perspective, which then becomes the purpose of the organisation.

The second lean law states that the most successful organisations will create and deliver this value with the minimum wasted time and effort of its staff and assets, without excessive cash, costs and capital expenditure and in a sustainable fashion in harmony with the environment. Organisations do this by eliminating unnecessary variability, overburden and waste from the core processes that create the value customers are paying for and from all the enabling support processes. And they work with partners to apply the same principles to entire value streams from raw materials to the use of the product. We described the principles of lean process design and the techniques of value stream analysis in Lean Thinking.

The third lean law states that the most successful organisations are able to focus the efforts of people in the organisation on achieving the purpose and streamlining the processes to deliver that purpose by teaching them to use the scientific method to plan their work and to solve problems interrupting the flow of work. Real progress is only made by conducting successive experiments and real learning is only gained from participating and reflecting on these experiments. In other words creating a learning organisation able to continually respond to the changing needs of its customers and the changing context in which it operates. John Shook very ably describes the management practice that drives this learning process in Managing to Learn.

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