Inspired by Toyota's lean manufacturing method, Lean Management aims to improve business performance, thereby creating value for customers. How can it benefit small and medium-sized businesses, and how can they implement it?
“Lean Management isn’t a program or a set of tools or a miracle solution,” says Sylvain Landry, a professor in the Department of Logistics and Operations Management at HEC Montréal. According to Landry, the approach is too often associated with an advanced process optimization solution designed to reduce waste—and not much else. But Lean Management isn’t just about “doing more with less.” If the approach only leads to job cuts, it hasn’t been successfully applied. “It’s not about optimization through staff reduction, it's a daily management system,” says Landry.
When properly implemented, Lean Management helps cut down on production delays and overall production costs while increasing production capacity at no additional expense. Ultimately, solutions are implemented more quickly, reducing project costs. “Lean Management improves overall business performance, which needs to be geared towards client satisfaction. It helps businesses stay competitive through continuous improvement,” says Nathalie Guillemette, Director of National Bank’s Continuous Improvement Expertise Centre.
To make it happen, managers need to roll up their sleeves and set in motion a profound change in organizational culture, notes Sylvain Landry. “Bosses have a tendency to call all the shots, to give orders, to dictate behaviour. Lean Management is about giving employees room to be proactive and “unlock their potential,” with everyone moving together towards the same goal. That means providing our people with coaching and training to develop their problem‑solving abilities,” he says. It’s as much about employees as it is about managers, who will need to learn a new management style that involves letting their teams come up with solutions to problems.
For the approach to work, the will to implement Lean Management needs to come from the top, and the whole executive team needs to be engaged in the process. “Leadership is a key factor. Everyone should be motivated and inspired to take responsibility,” adds Nathalie Guillemette.
There is a strategic component to Lean Management known as True North. The idea is to have a company vision that guides every decision, like the Northern Star. Key performance indicators are also tied in. All this is applied using a daily management system made up of a number of elements.
One key element is the use of short daily department or sector meetings. These are usually stand-up affairs where people gather around a visual station displaying company objectives, the actions meant to achieve them, and progress to date. Up and down communication is the norm. Managers also need to get out into the workplace on a regular basis to observe, coach, and bring strategy and operations into greater alignment.
Sylvain Landry points out the whole process requires rigour and a clear agenda. “It’s important not to set too many goals at once and overload the visual stations with projects. That just makes teams less effective. Experience shows that when you reduce the number of active projects at any given time, people actually get more done.”
Properly informing and training upper management also makes success more likely. “We hold workshops for managers to help them understand what continuous improvement is and how it can make their business more competitive. They also receive training to help them manage employees differently—to make the switch from ‘command and control’ to delegation mode,” says Nathalie Guillemette. At the same time, employees receive coaching and training to help them develop their creative thinking and problem‑solving abilities.
Guillemette adds that the organization itself needs to demonstrate agility and ensure priorities are re-evaluated regularly, while staying focused on the main goal: client satisfaction.
“Lean isn’t just another management fad; it’s a holistic management system and culture, an adventure that companies embrace and pursue,” says Sylvain Landry. An adventure with significant benefits for the companies who choose to go that route.
Lean Management aims to improve business performance in order to create value for customers. It is based on a set of principles that include:
Lean, kata et système de gestion au quotidien. Sylvain Landry, Martin Beaulieu, Éditions JFD, 2016.
Any reproduction, in whole or in part, is strictly prohibited without the prior written consent of National Bank of Canada.
The articles and information on this website are protected by the copyright laws in effect in Canada or other countries, as applicable. The copyrights on the articles and information belong to the National Bank of Canada or other persons. Any reproduction, redistribution, electronic communication, including indirectly via a hyperlink, in whole or in part, of these articles and information and any other use thereof that is not explicitly authorized is prohibited without the prior written consent of the copyright owner.
The contents of this website must not be interpreted, considered or used as if it were financial, legal, fiscal, or other advice. National Bank and its partners in contents will not be liable for any damages that you may incur from such use.
This article is provided by National Bank, its subsidiaries and group entities for information purposes only, and creates no legal or contractual obligation for National Bank, its subsidiaries and group entities. The details of this service offering and the conditions herein are subject to change.
The hyperlinks in this article may redirect to external websites not administered by National Bank. The Bank cannot be held liable for the content of external websites or any damages caused by their use.
Views expressed in this article are those of the person being interviewed. They do not necessarily reflect the opinions of National Bank or its subsidiaries. For financial or business advice, please consult your National Bank advisor, financial planner or an industry professional (e.g., accountant, tax specialist or lawyer).