Stephen Parry dispels the myth that being lean is about cutting about waste
Of all the ideas associated with ‘Lean’, ‘cutting waste’ is perhaps the most widely known, but it is also the most misunderstood, primarily because most organisations don’t actually know what waste is. Waste disposal, waste recycling and waste paper – these terms ring familiar bells for almost everyone. But, as Lean shows us, waste is about far more than these things.
To see waste for what it really is, we must always be looking at things through customer eyes. Lean is about delivering value to the customer – and nothing else. So any time a customer tells us: ‘that is not what I want’, we can know we have created waste.
So how then, do we define value? Value is simply about delivering what customers want, how they want it and when they want it. And whenever those criteria are not met, waste has been added.
Cheaper, neater, faster waste
In the service industries, the most significant amount of waste is actually on the outside of the organisations. So why is it that when companies act to cut waste, they only take into account what they see in front of them, inside their organisation?
Look at the PC company for example, which sets up a technical helpdesk to assist customers in fixing their problems. For the company, this is a more cost effective option than sending out engineers, but look at the waste that is being created here.
In setting a 70% ‘first time fix’ target, all the company has really done is to optimise a fix that should not have been required in the first place. This is the institutionalisation of waste; creating unnecessary infrastructures to give customers information about how to fix something that should not have gone wrong. All we now have as a result is cheaper, neater, faster waste.
In the words of Peter F. Drucker: “There is nothing so useless as doing efficiently what should not be done at all.”
Self-service, or self-serving?
The notion of ‘self service’ is another good example of ‘waste cutting’ that is, in fact, waste-generating. Many of these systems are not really about service at all. And now, online, we have waste going up and down wires, and we don’t even have to feel the customer’s frustration any more. It really is ‘out of sight, out of mind’ –as in ‘you’re out of sight Mr Customer, and we don’t mind’.
Online articles, for example, showing customers how to fix a company’s own blunders – this is audaciously ‘self-serving'. When we cause our customers hassle, when we waste their time, when we give them too many options – all of this is waste, and at what cost to your customer and your office? This is the real tragedy.
Walking the customer journey
Even with the best intentions in the world, we could be inadvertently adding this kind of waste to our customers’ environments. So how then, do we remove it?
For every job in the organisation – HR, Accounts, Marketing, Sales, Call Centre – we absolutely must have a clear line of sight and clearly identified outcomes for customers. If your cannot see these clear lines through your organisation, how are you to know whether or not the work you do is actually creating value, or whether it is just institutionalising waste?
This is the central idea in our book Sense and Respond – The Journey to Customer Purpose. To understand and eliminate waste, we must get off our seats and walk alongside the customer through every step of the journey so that we develop a deep awareness of our service from their perspective. This is the first step to providing that perfect combination of efficiency and effectiveness known as customer value.
Stephen Parry is respected around the world as a leading authority in Lean organizational design, business transformation and Lean leadership. He is co- author of the seminal work in this field: 'Sense and Respond: The Journey to Customer Purpose'. Clients of his company, Lloyd Parry Consulting, include global IT firms, outsourcing companies, local government, police authorities and financial service organisations.