Can Lean Principles drive demand?By
When people talk to me about demand, I get lost. Most of the time they focus on macroeconomics, governments, market identification, etc. But my struggle is that I have never seen a tax cut, training, better data, better methods create demand, just customers. Is that too simplistic?
Many times we venture off in the world of demand management. The funny thing to me about this discussion, is if you lack demand what are you managing? Is that too simplistic?
When I think of demand, I think of demand creation. So how do you create demand? Demand starts with identifying customers and markets and what they really value. Lean is centered on determining customer value. When viewing an end to end value stream I believe Lean companies will typically win hands down if they are truly focused on the customer (Amazon, Tesco, Toyota).
Amazon is a great example of a company that uses Lean Principles and creates demand out of the efficiencies they create within the organization: The Amazon Cloud, used book distribution, Prime, etc. There are other companies many in the Lean IT world, such as Google presenting (at Lean Conferences) on the iterative cycles of development and how it is used for creating Demand. The Lean Startup book and “craze” by Eric Ries though initially thought of as only for startups is expanding in the world of customer development (demand).
My thoughts can be summed up from a book called Demand by Adrian Slywotzky (The Times of London named Slywotzky one of the top fifty business thinkers, and Industry Week have named him one of the six most influential management thinkers, “promising to be what Peter Drucker was to much of the twentieth century: the management guru against whom all others are measured).
We often think that demand comes from pulling the right levers….. But real demand is not about these things. Demand creators spend all of their time trying to understand people.
By watching how people actually behave in their own worlds, and by talking to them constantly, demand creators figure out how to solve the big and little hassles we all face—and they make our days easier, more convenient, more productive, and simply more fun. They seem to know what we want even before we do. They wind up creating things people can’t resist and competitors can’t copy.
Yet perhaps the most important trait this highly disparate collection of individuals has in common is a simple one. When confronted with the same question we’ve been pondering —Where will tomorrow’s demand come from?—they don’t point to the government, the Fortune 500, or to macroeconomic forces. Instead, they look in the mirror.
Can Lean be used on the consumption side? If you choose to view Lean as a collection of manufacturing tools it is hard to imagine Lean as a creator of wealth except from waste reduction or internal mechanisms. However, I view Lean as a Business Process (the way we do business). I also believe Kaizen (PDCA) is the cultural center of Lean. You can listen to Dr. Michael Balle (Lean Gemba coach at LEI), noted author, etc. discuss this, PDCA, Kaizen & Culture in a Lean Enterprise.
Lean Solutions: How Companies and Customers Can Create Value and Wealth Together by Womack and Jones was written several years ago expanding the principles of Lean to consumption. The authors, Womack and Jones detailed a Lean roadmap and ask companies to start providing the goods and service’s consumers actually want, when and where they wanted them and without burden to the consumer. Dan Jones (The Future of Lean with Dan Jones) discusses Tesco and Toyota in great detail on how they use Lean to create demand (most specifically at the Lean Summit 2008, video below).
The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company by Art Byrne is a recent book that discusses the power of Lean in the marketplace and the leverage of organizing people around value streams. He makes one of the best business case arguments with examples that I have seen for creating a Lean Enterprise. I bring it up when talking about demand because most people, even Lean Organizations, Lean Enterprises still do not believe in the power of Lean for the demand side. They are really not viewing an end to end value stream. Are you?
You may want to read, Are you Marketing Consumption or Participation?. .