Think lean

How to achieve maximum growth

Andrew McCombie, managing director of Cornerstone Consulting, explains how you can position your business to achieve maximum growth with a rather simple change in mindset called “lean thinking.”

In a previous Industry Update article I explained the importance of Vision in a business. Creating more value and achieving your goals in business is a process – a process that takes emotion out of the equation and provides a roadmap to success.

This time I want to focus on enhancing the vision you have for your business with a strategy called Lean Thinking.

Lean Thinking is not new in manufacturing – Toyota has used it for years (it’s partly why
they are now the world’s number one car manufacturer), but what is new is the way it can be applied across every business sector, not just production.

Put simply, Lean Thinking is ideas that enhance value for your customers while reducing waste. Value for customers may mean things like less time on the phone to you, quicker delivery of product, web-enabled ordering and tracking. Reduced waste can mean less staff hours on compiling quotes, less defects, one-time data capture, web sales and accounting system integration.

Every business will have a “wish list” of projects.

The real incentive, funnily enough, is the major impact Lean Thinking has on profit. Businesses have recorded 10, 20, 30 per cent and more in profit increases – often with little or no expenditure.

The keys were simple process and system changes, bright ideas from staff or a fresh look at technology solutions. The beauty of lean thinking in my experience is that there is no additional investment in capital required.

Production is increased through efficiency and waste reduction projects such as accounting system integration or re-organised transportation options.

As you can see, every business can utilise the lean thinking principals. So why don’t more do it?

The biggest obstacles are culture change (staff) and deciding to do it (you). And in understanding that, you’re half way to making it happen.

How you might start. Involve your staff right from the beginning. Formalise a series of
meetings to establish the issues and then brainstorm possible solutions.

When people “own” an issue they respond – often in ways you’d not thought possible.

Gather information from the ground up and actively look for ways to enhance efficiency,
maximise capacity and reduce wastage.

Your management team needs to be completely on board as well. Culture change can be achieved with simulated learning situations involving selected staff across all levels.

Whatever you do, don’t despair. The Lean Thinking curve often has a wobble in it as staff are challenged and management get the jitters.

But persevere. Applying lean thinking to a business operation has many results and
outcomes, including personnel changes, increased profits, greater systemisation, greater production, greater safety, more systemised training procedures, better stock levels, better cash flow.

Remember, this is not about the technical nature of Lean Thinking in terms of setting up just in time systems or maximising the inventory and production cycle, this is about the extended concept of Lean Thinking being applied across all processes within an organisation.

Typical large service firms such as accounting and legal practices will benefit from a Lean Thinking process as much as a roofing manufacturer or a farming business.

Many businesses understand that it can’t be done alone. Consider a facilitator who can help break down the barriers between staff and resolve impasses.

He or she can also provide solutions that have worked in similar industries.

Can you do it in your business? The answer is a resounding “yes.”

Start with one project and work your way through your wish list.

Keep in mind the two core objectives – reduce waste, increase value – and you’ll be fine.

*Andrew McCombie is an experienced business advisor with a background as a Chartered Accountant and Tax consultant. As the founder and managing director of Cornerstone Consulting, Andrew created an advisory firm which helps small to medium
businesses by providing practical and insightful strategies for success.

Cornerstone Consulting
Ph: 02 99653772