Asking the right questions about Lean?

In a thread on the Design Thinking Network Blog, blogger Nick Crane asked the question, “Can Lean enhance or contribute to ‘Service Design”? Graham Hill, who can be found at the Customer Insider blog left the following comment to this question:

Hi Nick,

Are you sure you are asking the right question? Let me explain.

In a previous life I was Head of CRM for Toyota Financial Services in Germany. I was taught and used Toyota’s approach to lean, to improve all aspects of Toyota’s and its dealers’ customer-facing business. Toyota doesn’t see lean as a collection of tools (unlike many so-called lean experts), but rather as an organizational philosophy to engage the whole organization in creating more value together with customers. Toyota’s approach to lean is much closer to design thinking than you may think.

I actually see little difference in Toyota’s approach and Design Thinking. I actually find it amusing at times how stereotyped Lean has become around waste and how distant from the words Customer and Value. Lean has always been first and foremost about finding value from the customer’s perspective and with the customer. Waste is a byproduct. My perception of waste.

Womack & Jones in their earlier ‘Lean Thinking’ book describe five core principles that apply to lean:

  1. Specify value from the standpoint of the customer
  2. Identify all the steps in the value stream, eliminating whenever possible those steps that do not create value
  3. Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer
  4. As flow is introduced, let customers pull value from the next upstream activity
  5. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

Womack & Jones expanded upon these five principles in their later ‘Lean Solutions’ book:

  1. Solve the customer’s problem completely
  2. Don’t waste the customer’s time
  3. Provide exactly what the customer wants
  4. Deliver value where the customer wants it
  5. Supply value when the customer wants it
  6. Reduce the number of decisions the customer must make to solve my problems.

At its heart, lean is all about providing the most efficient ways for customers to create value with the company; how they want it, when they want it and where they want it. And about continuously improving how much value can be created. What Lexus calls ‘the pursuit of perfection’. These could be design principles for almost any service design project.

Iterative Cycles seem to be the buzz words these days. New books and methodologies such as the Lean Startup, Little Bets, Adapt, Service Design, Agile and even the new Toyota Way book all seem to be focusing on iterations but they are fundamentally just PDCA (Plan–Do–Check–Act). Test a hypothesis, improve on it and test it again.

The key to integrating lean and service design is to focus on where they complement each other. For example, the Toyota project planning process identifies stretch targets for a piece of work before the best way to achieve them is identified and developed. The more stretching the targets, the more innovative the required solution to meet them must be. It doesn’t take much imagination to see how the service design approach of iterative prototyping with customers could be used to provide better solutions to stretch targets. In a way, Toyota already does this. New services introduced are continuously reviewed by Toyota, its dealers and selected customers to look for improvement opportunities. Some integrated marketing campaigns my team introduced (involving marketing, sales, customer service, finance, the field force, dealer and customer activities) were improved over 50 times in their first year of operation. A case of continuous iterative prototyping. And this isn’t an isolated case. There are many other places where the service design approach complements lean thinking and vice versa.

It isn’t a case of lean enhancing or contributing to service design, but taking the best of both worlds and combining them together. Lean doesn’t have all the answers to service design. It has a powerful framework that looks at EFFICIENTLY creating value for customers. And perhaps surprisingly, service design doesn’t have all the answers to service design either. It has an equally powerful framework that looks at EFFECTIVELY creating value for customers.

I take my hat off to Graham for his explanation and comparison of the two methodologies. I have stayed away from many discussions in System Thinking because of the bickering that takes place about the differences with Lean and primarily Standard Work. I have always thought what a shame, that such rhetoric takes place when these methodologies have so much in common and so many talented people supporting each.

Like many things in life, you shouldn’t be asking whether you should use EITHER lean OR service design, you should be asking how you can combine the best of lean AND service design.

Contact me on graham.hill@web.de if you need more information on combining lean and service design.

Graham Hill
Customer-centric Innovator
Twitter: @grahamhill

Further Reading: Lean Consumption (HBR)
http://www.mindmappingworld.com/files/LEAN%20consumption.pdf

Graham, you are right in saying that Lean or any methodology does not have all the answers. We should be trying to find the best solution and even before that the best questions to deal with our latest problems. Granted we all have to follow some pattern or methodology to prevent chaos but we should all be happy to leave each of them evolve. If little value is found in the method, it will die soon enough on its own. On the other hand, if it has value it will thrive.

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Continuous Improvement, The Toyota Way

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