At this point, you’ve probably read this a hundred times: “Lean does not only mean cutting costs”. And you’ll read it 100 times more if that’s what it takes. The reason for the emphasis on this particular point is the fact that it is so basic and yet so many organizations get precisely this point wrong. They will trim departments, lay off staff, slash payrolls, all with the assumption that doing so means being lean.
Yet, lean is never about subtraction. It has never been about subtraction, and it will never be about it. It is all about the elimination of waste, friction, and blind spots. All of which contribute in one way or another to keep an organization from operating at its optimal rate.
This is precisely why a lack of visibility is the biggest source of waste in an organization, and not excess staff.
The Real Cost Of “Hidden”
A CEO typically reviews their organization’s monthly performance. The reports are all as neat and as straightforward as they can be. However, the data is three weeks old. By the time the CEO has gotten to its review, the campaign currently underway has already passed its point of correction. It has underperformed, the delay has compounded, and the opportunity for possible correction has long gone.
However, throughout the process, the CEO was under the impression that he was running a “lean” ship since he’d already overseen some of the measures mentioned earlier. When he thought he had clarity, he really only had the illusion of clarity while moving through a fog.
Every decision the CEO makes without proper real-time insights adds an invisible layer of inefficiency. Inefficiency borne out of the difference between what is happening and what is known.
The Myth Of Leaner Headcount
The easiest thing anyone does when they decide their organization must be lean is to consider downsizing. There’s a reason why it is so lucrative. It is easy to measure. You have 100 people one day, you downsize to 80, and boom! You now think you’d become 20% leaner. The reality couldn’t be further from the truth.
Moreover, on a purely non-quantitative scale, adopting this approach has more negative consequences than positive ones. Fewer people within an organization means fewer eyes, slower detection of problems, and, of course, more room for costly mistakes.
Lean management isn’t about fewer hands rowing the ship; it’s about ensuring that each hand moves in syn. That is only ever really possible when everyone, from the CEO to the intern, operates from the same, live, real-time understanding of what’s actually happening in the organization and the business they operate in.