Thinking Lean? Think Social Business

Lean production at Toyota. Source: www.toyota-forklifts.ch

Lean production at Toyota. Source: http://www.toyota-forklifts.ch

For my money, Lean Thinking is one of, if not the most influential management philosophy of the last sixty years.

Ever since the 1950s, businesses large and small, from manufacturers to service providers, have been investing in the tools and techniques that have become known as “Lean” to boost profits and efficiency.

Toyota is the most famous exponent and the company where much of the practice began, but there are plenty of other examples of organisations that have benefitted across the public and private sectors.

To a greater or lesser extent, Lean has probably influenced every organisation active today.

Social Business, by comparison, is still in its infancy.

Many businesses still assume it means a Facebook or Twitter strategy and are dubious about how  “social” can be of benefit to them, beyond a channel for marketing promotion.

But I would argue that any team of managers applying Lean Thinking today needs to consider Social Business as an essential part of their strategy if they’re to get the maximum value from their investments and truly gain competitive advantage.

How are the two related?

Let’s look first at how they’re defined:

Lean: “The creation of more value for customers with fewer resources. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.” (taken from http://www.lean.org)

Social Business: “The culture and systems that encourage networks of people to create business value.” (IBM)

Culture, people and value: there’s some clear correlation.

As Social Business is often mistakenly defined by social media platforms, so Lean is also often misunderstood as a set of tools and processes.

In fact it’s a philosophy designed to focus organisations on how they can deliver more value to customers by meeting demand instantaneously with ‘perfect’ quality and zero waste.

To do this means creating a culture of continuous improvement involving everyone at every level – as well as partners and suppliers too.

Foundational to Lean is a focus on the customer and an understanding of their needs so that customer demand can “pull” products and services through the production process.

Based on this definition it’s clear that one ingredient is essential for successful Lean transformation – good communication.

Managers need to be active and involved in the change process and visible and accessible to the wider workforce, which in turn must be well connected to ensure that the organisation can respond swiftly and smoothly to customer demand.

It’s here that Social Business transformation has a vital role to play.

By encouraging the culture and establishing the processes and technologies to enable more networked and flexible communication and collaboration, organisations can equip themselves with the means to successfully practice Lean.

In effect, organisations can apply Social Business methodologies to empower their workforces – another essential aspect of Lean.

It’s only by empowering people to take decisions and make changes that the proactive, incremental improvements can be achieved which Lean identifies to create better organisations.

In practice this means giving people the means to make their voices heard: to express ideas, make recommendations, share their achievements and gain feedback and recognition.

Again, the application of Social Business practices makes this possible.

A great example is the recent work by IBM (my employer) with Tesco, where by putting in place an internal collaboration platform and new working practices, colleagues across the organisation can communicate in a much more fluid way and be freer to focus on the customer than on navigating the structures of the organisation to get their ideas heard:

The business landscape has changed tremendously since Lean first came on the scene, but today I believe it’s more valuable than ever.

Business has become more networked, sophisticated and complex, driven to a large extent by technology.

This creates more potential for waste – whether in people’s time or materials – and that’s bad for the organisation and for its customers.

I’ve argued before that every business is a Social Business because the act of business itself is inherently social; an “Unsocial” business would have a hard time recruiting employees and forming partnerships with suppliers and distributors …let alone attracting any customers!

The difference is that now we have the technology, processes and expertise to enrich that innate sociability, encourage it and enable it to deliver benefits to the organisation and the people it serves.

So adopting Social Business shouldn’t necessarily be considered as the radical change it’s often portrayed.

Rather, it’s a natural extension of the practices they’re already applying today.