When most people stop and think about what the Lean methodology is doing in the real world, it’s often viewed as a step-by-step approach to a problem. This means that a company is taking incremental steps toward a fix that is usually the result of identifying a wasteful aspect of its business operations or manufacturing.

As a result of what many people consider a too methodical process, there is a loss of the idea that Lean and innovation can go hand in hand. However, it’s the opposite that is true, as Lean companies that embrace the idea that it can help drive innovation often mean they will excel beyond their competitors by embracing speed and experimentation.

What Is Lean Thinking?

To understand how Lean and innovation can work well together, you have to start at the beginning and truly recognize what Lean thinking is all about. As one might suspect, it’s all about eliminating waste, or, in other words, it’s an approach that aims to provide more value using fewer resources.

If a company can achieve this using fewer resources, it often results not just in a bigger bottom line, but also in customers being more satisfied because the products they are receiving are of higher quality.

This waste is often discovered as overproduction, overprocessing, holding too much inventory, and defects. This isn’t by any stretch a complete list of areas where Lean can help, but it’s a good starting point and most people can infer what else might fit from here.

Five Principles

Lean Thinking itself, which is often described as Lean Innovation, was first used in a book called “Lean Thinking” by James P. Womack and Daniel T. Jones in 1996. These authors argued that to achieve a point in Lean where you can drive innovation, you have to start with the five principles of Lean.

The first step is to Identify Value, which is essentially getting to the bottom of what your customers are willing to pay for. This also means understanding what they will not pay for, and it’s with this level of knowledge that you know where to start making changes.

The second step is to Map Value Streams, which is understanding how and where value is created. Understanding this will then help you recognize where you can reduce waste, and what exactly can be eliminated as part of the existing waste.

Step number three is to Develop Continuous Workflows, which examines the production process and what handovers would need to change for everything to flow smoothly.

The fourth step is to Create Pull Systems, which means products should be created based on customer demand. The fifth and final step is Continuous Improvement, which is a popular and well-known term that basically means to increase overall quality for the customer while reducing the number of cycle times.

If you can achieve integrating all of this thinking into the Lean principles of an organization, you are now set up for moving into more innovative methods in the Lean world. In addition, they will also help a company provide maximum value to customers while reducing waste, which increases bottom-line revenue.

Where Does Lean Innovation Fit In?

At first glance, it’s perfectly okay to be hesitant that Lean Thinking and innovation will really go hand-in-hand. After all, attempting to be innovative can often mean taking risks and being experimental with different and new ideas, which might not work and could otherwise then be thought of as waste.

However, where Lean and innovation actually work together well is by eliminating any activities that do not add immediate value. This will free up resources that can be focused on driving innovation. It might be as simple as reallocating staff to new teams or investing in new and better technologies, as well as more research and development.

If a company is genuinely focused on continuous improvement as part of Lean, this is essentially a call for innovation. The very idea of trying to make improvements that can have a lasting impact on an organization can directly lead to innovations that are going to improve quality, customer satisfaction, and arguably most importantly, efficiency.

Making Sense of This

Let’s look at this one other way to see if it can help make even more sense as to where Lean and Innovation work well together. This thought is really quite simple in that if a manufacturing company wants to use Lean innovation, it will reduce its risk level of producing something that customers don’t want.

Instead, it will focus on what customers are asking for, innovating to deliver based on this feedback, and then improving customer loyalty and satisfaction. For companies that want to focus on Lean innovation, it might require some outside-the-box thinking and conducting focus groups with potential customers to ask them what they would like to see from their products.

The ideas these potential customers deliver could lead directly to the kind of innovation that would not lead to more waste, but would lead to a whole new set of customers and more profits.

Three Main Ideas of Lean Innovation

According to Tucker Marion, an associate professor in Northeastern University’s School of Business, looking at Lean Innovation can be broken down into three primary methodologies.

The first takeaway from Professor Marion is to identify new opportunities using design thinking. The second is to look at the ability to quickly, and with fewer resources, “develop, prototype, learn, validate, and improve business solutions.”

The third and final belief from Professor Marion is that there is an ability to apply Lean processes, which enables teams to reduce waste, leading to incremental improvements, and eliminates any bureaucracy that can often hinder innovation.

Professor Mario says it best when he says, “Where companies have trouble is seeing the funnel of what ideas they should be working on…with Lean Innovation, you’re developing concepts and testing them in a very rapid way.”

The Perfect Example

When it comes to finding the perfect example of why Lean Innovation can be so rewarding, you can jump back in time to 1913. With the introduction of the first moving assembly line by Henry Ford, the time to build a single vehicle was reduced from 12 hours to 90 minutes.

The result wasn’t just being able to build cars faster, but it also allowed Ford to drop the price of the Model T from $850 to less than $300, which made it more affordable and helped accelerate the adoption of cars altogether. The waste that Ford removed from the manufacturing line, all while giving customers a better experience at a lower price, is precisely what Lean Innovation is all about.

Lean Has Untapped Potential for Innovation

When it comes down to it, the Lean methodology has untapped innovation potential. If a company can focus on delivering maximum value to its customers while only using minimal resources, Lean will ask organizations to rethink their current approaches. This would enable a team to begin rapid experimentation, which would allow them to test new ideas quickly and then refine them based on real-world feedback.

Separately, Lean’s emphasis on customer satisfaction amplifies the potential of innovation anyway. If a company can deeply understand customer pain points through tools like Value Stream Mapping, organizations can look to identify any unmet customer needs and then develop value-driven solutions. Focusing on a customer-centric approach will ensure that innovation is both practically implemented and impactful.

Ultimately, the bottom line is that as businesses are facing increasing competitive pressures in changing markets, Lean is going to help eliminate waste while also giving teams the power to experiment to drive sustainable innovation to stay atop their competition continuously.

Other useful Tools and Concepts

The topic of Lean Innovation isn’t going to go away, and that is a good thing, which means you want to do more reading on Lean altogether. A good place to start is with Building a Lean Culture that Lasts, which will help you understand why a culture is critical for any organization to innovate and grow.

You can also spend some time exploring how Lean Six Sigma plays a role in breaking down silos, so different teams can get together and start innovating. You can also switch gears and read more about the Theory of Constraints and how it can help find the bottlenecks in your business and bust through them.

Conclusion

Lean and Lean Innovation aren’t going anywhere and are only likely to get more popular with time. We live in dynamic and changing markets, which means that innovation could be the differentiator between a customer choosing a company they have stuck with for a long time or a company that is now inviting them to try something new.