Lean Operations in High Growth Tech and Traditional Back-Office
By Dale Lawrence
In today’s environment, where operations need to keep growing capabilities, the Lean methodology will help drive efficiencies, build sustainable growth and ensure your business can scale regardless of the type of operation. The approach is the same whether you have a start-up in the growth phase and straining to scale effectively or a back-office support team that is overwhelmed with sudden volume. Going back to the fundamentals of Lean as the toolkit will help you identify the gap and provide ways to improve. During COVID, the need for Lean is even more important.
Focus on the operations as a whole, not each individual silo
‘Systems thinking’ is where all of the inputs, outputs, processes, dependencies and don’t forget, your people all play a part. This operating model needs to be truly understood in whatever growth or sustain mode you are in. By drawing upon stakeholders from each group, you can then understand how each piece contributes to the output of the system, which activities bring value to your customer and what dependencies will impact any change. This assessment will also inform which parts directly or indirectly contribute to your customer’s experience and the business objectives.
As an example, in a high growth start-up, the entrepreneurs who designed the first idea likely used a vision to drive everyone’s focus but haven’t spent the time to carefully plan out the path. This makes sense as start-up is a disrupter and they need to focus on the main direction they are aiming for instead of the ground they already covered. As they grew, each wave of new employees joined and spent most of their energy helping further growth. Without applying Lean thinking, these organizations find themselves in a cash flow problem as few take the time to ensure the growth has a foundation of driving customer and operational excellence.
For traditional business, it isn’t growth that caused inefficiency but the product of years of developing habits. In effect, ‘the way we do work is the way that it was done before me’. As new workers join the team, like ancient civilizations, the ‘elders’ pass on the agreed-upon ‘story’ of how work is done. The challenge is, unlike the start-up company where employees are encouraged to look for new ways of doing things, traditional business wants the opposite. One true way of work. However, the goal of standardization is important as long as there is a healthy culture of continuous improvement. Most traditional companies miss that part and build their metrics to standards and reward those who manage to them, regardless if it causes damage.
One very large tech company I saw up close had a different challenge. Pre-COVID, money was never a problem. With unlimited power to spend and very few controls, the leaders and employees didn’t develop a focus on managing resources or delivering value to their customers. Everything was about moving forward, leaving a wake of poor processes and errors behind. In fact, errors were ignored and expected to be resolved by later versions of their constantly evolving systems. Layers and layers of overlapping systems. However, when the pandemic hit, this same organization scrambled to adjust by sending all their workers home and closing down their campus (with all of the contracted service providers severely impacted). Without the habits of understanding their end-to-end operating model, enormous challenges beyond working from home (e.g. Flex work) likely occurred. Their workforce had not experienced this separation before nor had developed the understanding of how the business operated outside of their own project work. As recruitment and onboarding were managed by external partners and all of the support structure had been designed to be onsite, many of the business enablement functioned would be disrupted.
Use a Lean lens to forge a path forward
By identifying forms of waste, constraints to flow, how work aligns to the customer demand, the ways that all work is connected and reducing defects to output, regardless if you are a new company or a traditional one, the principles are the same. Understand how you operate, where you are going to (target condition), elevate your gaps (don’t bury them), champion continuous improvement and above all, don’t forget your customers.