The Lean Digital World Event

The Other Side of “Lean”, A World of Major Enterprise Applications

Having studied “lean” related to small business startup as designed by Steve Blank’s customer discovery process and its “agile” offshoot from his student Eric Ries, one tends to forget how Taiichi Ohno, Toyota’s production chief after WWII, changed the world of manufacturing too.  Yesterday, rising at 6 AM to participate live in a worldwide discussion and sharing of “lean production” gave this  entrepreneurship educator insights for growing small businesses beyond inception into maturity.

The host organization was leanUK.org who run the Lean Enterprise Academy and coordinate a vast group of lean purveyors.  Participants on their smooth global webinar were from the United Kingdom, Spain, South Africa, Germany, France, Bulgaria, Ukraine, and Canada to name many.  Their combined knowledge blew this entrepreneurship educator away.  Lean is being applied to large engineering projects, bakeries, and automotive after markets. Just one individual is Christoph Roser, a professor of production management at Kalsruhe University in Germany. He based his research and teaching on decades of experience implementing lean manufacturing including five years working for Toyota Japan.

Taiichi Ohno would hardly believe the influence his production changes to eliminate waste and increase efficiencies have wrought.  Almost every major corporation in the world embraces some form of lean philosophy, and entrepreneurship is just one of many systems that co-oped his principles to improve a process.  Ours happens to be the design of a successful new, never-seen-before way of doing business. Think of those digital enterprises that have changed old needs into more efficient and less wasteful ways in transportation, temporary lodging, communication, on and on -Uber, AirBnB, Facebook, and Dropbox to name a few.

The only entrepreneurship books and authors I know of who bridged both worlds of “lean” -startup and manufacturing, are James Womack and Daniel Jones, two of whose books are sold on the leanUK.org website.  Their first The Machine That Changed the World was first published in the fall of 1990 was to wake-up organizations, managers and investors stuck in an old-fashioned world of mass production.  It detailed how the approach pioneered by the Toyota company did more and more with less and less.  Their book tour around the world sold 400,000 copies and convinced many audiences, but raised the question, “how do we do it”, “what are the key principles to guide our actions”?   Lean Thinking was written to address such questions

Because Japanese build from the ground up, bits and pieces of Toyota’s system were confusing to others without an understanding of the whole.  Womack and Jones summarized lean thinking into five principles specific value by specific product, identity of the value stream of each product, make value flow without interruption, let the customer pull value from the producer, and pursue perfection.  These principles are the guiding model for lean manufacturing to this day.  Intrapreneurship speaks of pioneer models (original one that became big) and greenfield plants (built in the countries repeating the production model) from the Womack-Jones book.  Through four years of digging and a networking with lean thinking executives the two authors gained an understanding of the work needed to convert mass production organizations into leanness.  Specifics were gleaned like periodic evaluations, demand immediate results,  let momentum expand your scope, eliminate the “muda” of errors and waiting at the source, remove anchor-draggers, and make everything transparent.

Eric Ries, on the other hand, showed how constant innovations creates radically successful businesses by “just-in-time” change or iterations using the Steve Blank customer development process as partner.  Whereas traditional business planning had used pro-forms projections, secondary research, and basic guesses, the customer development questioning of end-user or personas who would buy the product or service established facts.  The concept or idea was either validated or it was not, allowing changes to improve the idea for the target market or showing the idea would not work and a pivot was necessary (to another idea).  The notion of a prototype or MVP (minimal viable product) to show the end-user as early as possible brought the customer into the partnership early to gain insights.  Through the basic two tools of the business model canvas (BMC), a one-page, nine-component chart, or the BML, “agile” loop to build-measure-learn each in continuous repetition an entrepreneur pushes feasibility.

The production version of “lean” makes manufacturing more efficient and less costly whereas the entrepreneurship version changes how new companies are built by learning what customers want. We owe a large debt of gratitude to Steve Blank for putting the tool with the customer into a process of discovery.  HIs original class at UC Berkeley still operating today makes a startup team complete sixteen different weekly canvas inputs to improve a concept and make sure it appeals to a market.

The dynamic lean digital event forced a comparison of the two “leans”, and it is interesting for those of us in entrepreneurship education to pause and recognize the large corporate use in addition to new venture planning.  Some of lean manufacturing can be applied to the scaling of a small business.  As a startup passed from early success through transition to scaling the company, each component of the BMC needs to be expanded and move to completion at the same time new product-market fits are designed to create new revenue streams allied with the original concept.

Thanks to terrific panel leaders, Nigel Dalton (Sydney), Laura Motkola (Toronto), and Basil Petrov (Sofa) for guiding the speakers through a plethora of information and to www.leanUK.org for sponsoring. 

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