Going lean: It's not just for automakers and industrialists anymore. Strategies for streamlining that have traditionally been the stuff of factory floors are now within reach of small businesses. And technology is helping small-business owners achieve it faster.
A Lesson From the Auto Industry
From back-of-shop processes to managing and learning from your employees and client base, "going lean" isn't a new concept—but it is experiencing a 21st century spin. In a recent report from McKinsey & Company, the history of lean manufacturing is rooted in innovations that emerged along the production line at companies such as Toyota, starting in the 1960s. These included bringing frontline workers into the problem-solving process, allowing employees to even stop the line themselves, and also shifting output to a just-in-time model.
Small-business owners can learn a lot from these steps. And software developers suggest that by tying in some app-driven tools, going lean can be more powerful and effective than ever before.
5 Steps to Going Lean
1. Simplify processes, reduce repetition. Apps are increasingly the go-to tools for the endless pile of invoices, accounting worksheets and reservation logs that plague small businesses. And it's not just about automation. "The smartest businesses will integrate them with their websites, thereby turning a company's website into a business hub," says Gabriel Mays, founder of Just Add Content. "This works by using customer actions performed on the website to trigger actions in the apps." For example, a work-request submission could automatically create a draft invoice, schedule a meeting, add a contact to the CRM, create a new item in a project-management app, add the customer to a newsletter, and send the consultant a text message summary. All of this stands to cut administrative costs, again putting more resources toward business growth.
2. Your frontline workers become your key problem solvers. Just as your customers are the key bearers of information about your product or service experience, your frontline workers are your best-informed sources for resolving internal situations. Free them from low-level tasks (as outlined in step 1), and get them involved in process reconstruction. The builders of lean industry knew this: They created "kaizen workshops" where employees who worked on the frontline and were familiar with the day-to-day details were instructed to tackle some of the hardest problems top-level managers wanted to solve. As your predecessors at that scale discovered, deep familiarity breeds deep insight. Capitalize on that.
3. Introduce an "andon" cord. In the old-school lean factory, there was—and still is—a tool that helped reshape how challenges are met. The tool is the andon cord. Pull it and the line stops. The idea was that the individual can save a whole project with a quick-enough response.
Think about how this applies to problem solving in a small business. The dishwasher discovers that a glass measuring cup is broken—he shuts down the prep lines before any more food goes out (preventing a dining-room catastrophe). Your shipping manager discovers that a pallet of boots instead of sneakers left the dock; she stops the trucks before they move another mile (saving fuel and time). Give your employees the equivalent of the andon cord, and they can stop the system and introduce a new piece of information or a warning. This is both authorized and encouraged. Empower your team and cut the waste—and potential damage—out of chain-of-command slowdowns.
4. Promote just-in-time problem solving. The next step is that problems in general are prioritized by a just-in-time process. Like a pyramid (an idea put forth by writer Vivek Naik), you consider the problem with the highest impact potential to be in the top 20 percent of the model, and everything below those are secondary or tertiary focuses until they emerge as significant pain points. Sometimes they never do. But you deal with each solution at the just-in-time level (in the way that lean factories schedule production). Additionally, as the automation from step 1 takes root, more free time becomes available to your team—with it, you can begin to approach the challenges in the bottom 80 percent.
5. Tap into human metrics. The McKinsey report further examines the potential for lean approaches to business presented by new data tools. Product performance plus customer and employee actions surrounding products and processes—these are highly measurable and even linkable to design and marketing. Each touch point becomes a way to gather metrics for assessing usage patterns of, say, mobile devices and online services.
Again, you're looping back to steps 1 and 2: Finding repetition, finding time-consuming inefficiencies, and then bringing in your employees to reduce and revise those practices.
Add Software Solutions to the Mix
Some good news: Relatively inexpensive software-as-a-service solutions are opening pathways toward much—if not all—of the streamlining for small and mid-sized businesses.
"Over the last five years new SaaS apps have brought enterprise power to small businesses at a fraction of the cost," Mays says. "With the affordable solutions available today, even the smallest one-person businesses can do it all without hiring a developer."
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