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Lean into a sustainable business model

Sep 14, 2018
By Aine Logan

In business, we are constantly reminded of the importance of improving how we do things on a day-to-day basis. Save money. Improve efficiency. Increase margins. Improve customer satisfaction. Business leaders are faced with the difficult challenge of creating a streamlined, effective business model that won’t break the bank while providing a best-in-class customer experience.

On initial reflection, this presents a complex balancing act with many varied and conflicting goals and the idea of doing less with more sounds like an almost impossible task. However, with something like lean management, the core philosophy would suggest that the balancing act is possible; that an organisation can use fewer resources while improving efficiency and reducing waste to deliver an optimal customer service.

In these uncertain times, with Brexit on the horizon and a fluctuating economy, businesses need to be innovative to generate a profit, cater to customers and remain financially sound. Naturally, this is no small feat. However, a lean management philosophy can help provide the answer. Having an efficient, effective and sustainable business model catering to flexibility and adaptable customer practices will promote success.

Supporters of lean management would suggest that it has the potential to help position all businesses for long-term success, and businesses adopting lean management principles have reported significant savings in operating costs across short time frames.

The lean management philosophy is about removing waste from the process; essentially eliminating all activity that doesn’t provide value to the customer. While this improves efficiency, there are other areas worth considering when employing a lean approach:

  • The customer - Knowing your customer is the first step in lean management. By clearly understanding who they are, their location and their values, managers can easily identify wasteful practices that don't provide direct benefit.
  • Performance – It is important to assess both business and staff performance. Establishing reporting systems that make results easy to identify, and hosting regular meetings to discuss problem-solving, will improve accountability within an organisation. Top-performing employees will be more efficient and thus leaner and should lead by example.
  • Business functions – Business owners will need to understand what their company can do. A business with more capability will tend to be leaner, as it is more likely to be operating at peak capacity, producing more with a limited resource.
  • Attitudes - Lean management must also involve employees, and everyone will need to be brought on the journey to achieve the business’s strategies. A focus on training for staff, personal development, and improving system knowledge are factors that will provide value-add to the customer.
  • The customer at the fore – People instantly think lean management is solely about cutting costs. Leaders can always find ways to save money by subtraction; however, it is unlikely to succeed if it disregards what is best for the customer.
Business leaders will know that simply decreasing expenses doesn’t always save money. Businesses today should consider employing a lean philosophy, to convert wasteful practices into those that benefit the consumer while maintaining a customer-centric focus and developing their people.

Aine Logan is a Manager in Grant Thornton NI.