Lean has proven to be an effective model for managing teams in some of the most demanding industries, like software development, manufacturing, construction, and many others. With its holistic approach encompassing five core principles - value identification, value stream mapping, flow creation, pull system establishment, and relentless pursuit of continuous improvement - Lean thinking, when executed effectively, can yield a remarkable and far-reaching impact.
To successfully apply the Lean methodology and build an organization where cultural changes are welcomed, it is vital to understand the foundation principles of Lean management and how to implement them properly to achieve an effective organizational transformation.
In this article, we are discussing the 5 Lean management principles, highlighting their unique traits and providing some valuable tips for a successful Lean transformation journey.
What Are the 5 Lean Management Principles?
The five principles of building an efficient Lean management process include identifying value, mapping how value is created, creating a flow, establishing a pull system, and always seeking improvement.
Derived from the Toyota Production System (TPS), Lean is about changing the culture of an organization toward focusing on the people who do the work and continuously improving the way work is done. The vast success of TPS led to the forming and implementation of Lean principles in various processes across industries and businesses.
To better understand each of the 5 Lean management principles and succeed in your Lean transformation, let’s dive deeper and recognize the core of each principle.
The five Lean management principles
1. Identifying Value
To lay the foundations of a Lean process, you need first to identify the team’s work value. You need to distinguish the value-adding from waste activities. To ensure collective understanding and alignment, it is essential for everyone to actively participate in this collaborative activity.
To understand what value is, consider the end product of your efforts and what your customer gets from it. By definition, value is everything that your customer is paying you for. However, some teams are not producing direct value for the company's customers but are enhancing the overall value that the organization delivers (e.g., QA teams).
In this case, the customer is your company. For example, the value of a quality assurance team’s work is the number of bugs they catch and therefore ensure that the whole company will deliver a product of value to the end user.
Lean identifies 7 types of waste. Waste activities can be categorized as pure and necessary. The main difference between them is that some waste activities are necessary to support the value-adding ones, while pure waste activities only bring harm to the Lean flow of work.
Going back to the software development example, quality assurance is the brightest example of a necessary waste. It doesn’t generate direct value for the end customer, but it ensures the development process's value doesn’t get lost.
2. Mapping the Value Stream
The second of the 5 principles of Lean is all about the stream of value. That's why, after you’ve identified the value that your team creates, it is important to visualize its path to the customer. In Lean management, this is usually done with the help of Kanban boards.
Example of a basic Kanban board with 3 columns: Requested, In Progress, and Done
The Kanban board is a tool for mapping every step of your process and, therefore, visualizing your team's value stream. Developed also as part of the Toyota production system, the basic Kanban board is a vertical flat surface divided by columns for the three primary states of any assignment:
Although visualizing your workflow this way is a good start, you should consider mapping your process more precisely by including the steps that compose each stage. For example, a "Requested" stage may have two steps – order received and ready to start. Usually, "In progress" consists of the greatest number of steps.
Depending on your unique scenario, there can be an infinite number of Kanban board examples. In the software development context, for instance, you would normally have steps like tech design, development, testing, and at least a couple of review stages.
When mapping your value stream for the first time, you should focus on value-adding steps to create a Lean process. Be sure to correct it occasionally as your process evolves.
3. Creating a Flow
In the world of Lean, flow is a key concept. Since any kind of waiting is a waste, when creating a flow of value, your goal is to ensure smooth delivery from the second you receive an order to the moment when you deliver it to the customer.
A major impediment to creating a smooth flow is the bottlenecks in your process. As a manager, you should be watchful of how work progresses through your workflow. Make sure to pay extra attention to areas where work tends to get stuck. This way, you can dig deeper and figure out why it happens in the first place. Bottlenecks may be caused by a lack of capacity at a certain stage, waiting on external stakeholders, etc.
Identifying a process bottleneck
Among the most common bottlenecks in any process are the review stages because most of the time, the people reviewing work items are fewer than those that submit it, and often, the reviewers become overwhelmed.
Alleviating the bottlenecks in your process is crucial for the creation of a smooth and Lean process flow. If you can’t alleviate bottlenecks, at least be sure to protect any existing ones from getting clogged.
A simple way to do it is to limit the amount of work that your team can have in progress simultaneously. Having this in mind, you should have a discussion with your team on the topic and agree on acceptable WIP limits to help them achieve maximum efficiency.
Ensure that they understand how harmful switching context can be to their productivity and experiment with different limits until you achieve multitasking efficiency and a smooth flow of tasks.
Once you have created a smooth flow of work, the fourth Lean principle urges us to establish a pull system. The idea is simple, start new work only when there is a demand for it, and your team has spare capacity. Your goal should be to create the value that is actually needed by your customers and avoid creating anything in surplus, e.g., overproduction.
To visualize it clearly, let’s look at how assignments are processed in a pull system versus the typical push model.
Simply put, in a push system, work items are created and then assigned to team members by team managers or leaders. In other words, work is pushed onto the people who will be executing it.
By contrast, in a pull system, the work that needs to be processed is stored in a queue. A team member who is currently not working on anything will go to the queue and take the item with the highest priority that they are able to work on. The people doing the work pull the assignments and start processing them.
Pull system production vs. push production
As a Lean organization, your goal is to deliver value to your customers in the most efficient manner. A good way to ensure that is by focusing on two key flow metrics:
The cycle time of your tasks is the time your team is actively working towards their completion, while throughput is the number of tasks that you finish in a predefined time frame.
As a leader looking to implement the 5 Lean principles and Lean practices, you should aim for shorter cycle times resulting in an increased throughput of your team.
5. Seeking Constant Improvement
This Lean principle is closely related to the concept of continuous improvement, which is an integral part of Lean management.
Your goal is to constantly improve every process in your team by focusing on enhancing the activities that generate the most value for your customer while removing as many waste activities as possible.
Continuous improvement can be achieved with the help of methods such as Plan-Do-Check-Act, known as PDCA but is more of a mindset that you have to inspire in your team. To help your team achieve continuous improvement, you should consider the way you lead them.
If you are among the traditional managers that prefer to be in control of every single activity and micromanage even the execution of small tasks, you may have to embrace a change to your style and implement a shared leadership model.
Continuous improvement can only blossom if every person on your team embraces ownership. This can prove difficult when they can’t even handle the smallest issues on their own. Place more trust in their expertise and increase their independence in time according to their performance.
A good start would be to incorporate the Lean/Agile practice of the daily stand-up meeting where you can keep them accountable. During the short and concise meeting, every person explains what they’ve done during the previous day, what they intend to do today, and if there are any obstacles in their way.
Besides applying each of the 5 principles of Lean, you’ll also have the responsibility to enlighten your team and help them understand why each one of the Lean principles is important with the goal of embracing them as a culture.
3 Good Practices to Implement Lean Successfully
To ensure a successful implementation of Lean management processes, there are three fundamental prerequisites you need to address: setting explicit objectives, cultivating a lean mindset, and starting with small steps.
1. Set Clear Goals
First of all, you need to know what your end goal is and communicate that with everybody on your team. What are you trying to achieve by implementing the Lean process within your company?
Is it optimization of your workflow so you can have faster product deliveries? Are you trying to increase your overall business profitability as a result of it? Or perhaps, you want to ensure business and organizational agility?
Whatever that goal is, it needs to be clearly defined. This way, you will be able to share a path to achieve it, motivate people to take the journey with you and assist them by removing any obstacles that appear on your way to process perfection.
2. Establish a Lean Mindset
It is important that you lead the change, not manage it. Once you know the implementation's outcome, you need to integrate the Lean mindset within your team.
Dealing with the human factor and getting everybody on board might be a major challenge. That’s why, to get started, you need to explain to your team members what Lean is and make sure they understand its benefits not just from an organizational perspective but from a personal one too.
The Lean process is about delivering superior customer value by eliminating waste and cultivating an environment of shared leadership where your team members receive more responsibilities and seek continuous improvement. Once your colleagues understand that, they will be more likely to embrace the change.
3. Start Small and Find a Change Agent
A good practice is to start with a single team and later spread the Lean practices across departments, eventually transforming your whole company into a Lean organization.
If you are working at an enterprise level, you can form a pilot group of members of different teams so they can serve as change agents after they return to their original teammates.
For example, if you have a large RnD department that consists of multiple teams working independently, you should ask for volunteers from each team.
A good way to ensure that they will be fitting change agents is to select only people who are not only enthusiastic but are influential in their teams (e.g., senior members, informal leaders, etc.). Once you set a strong foundation, introduce the 5 principles of Lean management.
Lean Principles Frequently Asked Questions (FAQ):
What Are the 5 Principles of Lean?
The five principles of Lean encompass identifying value, mapping the value stream, creating flow, establishing a pull system, and striving for continuous improvement. They were established and popularized by the Toyota Production System (TPS), developed by Taiichi Ohno.
What Are the 3 Fundamental Concepts of Lean?
A Lean management system is based on 3 principles: creating value for customers, eliminating waste, and striving to improve continuously.
What Are the Key Pillars of Lean?
The 2 key pillars of Lean management are continuous improvement and respect for people.
Focusing on continuously improving the way you work through experimentation, knowledge sharing, and introducing small changes one after another will ensure that your team is developing and increasing the delivery quality to your customers.
Respect for people emphasizes the importance of people in your organization. Sharing ownership and building trust in people is fundamental when creating a Lean team of highly motivated team members with great morale and trust.
A successful Lean implementation requires a deep understanding of the theory that stands behind it. To answer questions like “How to start a Lean project?”, we suggest you start by understanding the 5 principles of Lean. When taking the first steps to implement a Lean process into your organization, you should:
Present the idea of Lean to your organization and make sure that they understand the expected change and how it will benefit the whole organization.
Start by separating value-adding from wasteful activities.
Visualize the value stream that you deliver to your customer on a Kanban board.
Create a smooth flow of delivering value to your customer by either alleviating or protecting the bottlenecks in your process.
Pull new work only when there is a demand for it, and you have a spare capacity.
Adopt the proper culture to achieve continuous improvement in your process.