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Monday, May 13, 2019

Watch The Baton Not the Runners

Lean as a way of thinking and acting in business operations has been around for over 40 years. At its very core, the goal of lean is to maximize customer value while minimizing waste. For me Lean is a thinking methodology for running your business.  The of goal of which is to grow the business by adding value to the customer, being efficient by eliminating waste, and engaging all employees in this process.  Lean is about learning to seeing opportunities and continually improving them. 

A metaphor we use to convey a key thinking mistake–and opportunity–is the sport of relay racing.

Consider a relay race. The racers are standing around waiting for the baton from their colleague. The accountant in the finance department, looking aghast at this terrible under-utilization ‘waste,’ would probably mandate a policy goal of “95% utilization of resources” to ensure all the racers are busy and “productive.” Maybe—he would suggest—the runners could run three races at the same time to increase “resource utilization,” or they could run up a mountain while waiting for the baton.

Funny… But this kind of thinking lies behind much of traditional management and product development processes. In contrast, here is a central idea in lean thinking: Watch the baton, not the runners.

In business, the runners are your workforce, and the baton is the unique value you offer to your customers. Business flow describes how well the work — i.e., the baton — is moving through your business system. It’s not about effective resource utilization (how busy people are); it’s about how much value is actually being produced, and how often.

Does your organization measure “productivity” or “efficiency” in terms of how busy people are, or how much time is spent watching the runners? Or does it measure “productivity” in terms of fast delivery of value to the real customer, thereby “watching the baton”? What is the value-to-waste ratio in your work? What are the impediments to the flow of value and how can people feel inspired to continuously strive to improve that flow? Lean thinking addresses these questions.

As an executive, watching the baton is your top priority. The baton is the value. This helps you stay focused on keeping the work moving, not on keeping the workers busy.

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