What Does it Mean to Be Lean?
Posted: 21st October 2014 08:49Three years ago, entrepreneur Eric Ries came up with the idea of the lean start-up. This is a business that attempts to keep its go-to-market plan as short and simple as possible, meaning it can act quickly and maximise profits. It’s now a term that many businesses are applying to their activities, whether they’re a start-up or not. It’s the latest trend in the corporate world, and it’s all about making sure that you are as efficient as possible for maximum success.
Cutting excess is one of the major aspects of this business style. Be less verbose about your plans and talk economically. Now this doesn’t mean that you should gloss over the details, but you need to stop and think about whether you’ve got too much going on. Being more efficient is less about completely getting rid of procedures, and more about streamlining the ones you’ve already got in place. Many of the world’s largest companies will spend a great deal of money perfecting their processes, and making sure they change as the environment does. Companies such as Evolve are often brought in to do this for them.
Go through your business plan, and work out what’s taking too long – which are the processes that are slowing you down in terms of getting to market, or serving your customers? Those are the ones that need your attention, and need to be changed if you’re to be a truly lean business.
Now it’s very important to note that lean doesn’t mean thin or malnourished. A lean athlete is still muscular and agile. You need to bear this in mind when cutting out the excess. Reducing your staffing levels to the bare minimum is a sure fire way of exposing yourself to risk further down the road. While redundancies are an unfortunate side-effect of streamlining, they should only really be your last resort – it is almost always the process itself that is slowing things down, not the number of staff.
Improving Cash Flow
Ultimately, having a very lean business will mean that you’ve got a much better cash flow, because you’re spending far less on running things – leaner is cheaper. It also means you can act quickly, which is so important in modern business. Agility is the other buzz-word of the moment, and it’s only achievable if you’re already lean and ready to move your operations to take advantage of the latest developments. It’s much slower to change an overweight business than it is a lean one.