Why Lean Needs Innovation
- Lean and Innovation have many similarities, but often solve different challenges.
- Lean can help optimize processes, reduce waste, and increase effectiveness, while Innovation drives new ways to improve production, new products to meet emerging market needs, and the re-invention of internal systems (lead time, supply chain, HR).
- Both systems leverage disciplined processes and work together to create value for customers.
We often hear business leaders say, “If we’re doing Lean, do we really need Innovation too?”, or “We’re good: we do Lean.” Thinking that Innovation and Lean are interchangeable is a common mistake. The truth is that Lean needs Innovation to be most effective. And when a company uses Lean well, they have the discipline and foundation set for Innovation.
When I started working in manufacturing in the mid-nineties, Lean was taking off. Companies were embracing the concept of driving waste out of their organizations and focusing on value. I had the opportunity to be seconded to a one-year project where we were tasked with splitting one division that manufactured multiple product lines into two, with the ‘new’ division leveraging Lean principles. It was a challenging and rewarding experience for me. And while Lean did a great job at maximizing the efficiency of processes and focusing on continuous improvement, I found myself asking the question, “What if we’re missing something by focusing only on the continuous improvement of an existing process?”
Enter Innovation. As a Black Belt, I’ve come to appreciate the emphasis this system puts on leveraging disruptive and divergent images, quotes, data (aka “stimulus”) and team diversity to come up with new concepts that are both meaningful (to the company, its employees and its customers) and unique to the market. Once those concepts are formulated, we see incredible similarities emerge between how Innovation and Lean work.
The Similarities Between Lean and Innovation
Let’s first start by highlighting the common threads between Lean and Innovation:
Both are grounded in the principles and teachings of W. Edwards Deming. He believed that 94% of issues stem from poorly designed systems and only 6% are due to employee errors.
Both focus on the concept of value to the customer or stakeholder. (Innovation calls this “meaningfully unique”).
Both focus on driving waste out of organizations by applying systems thinking and rapid cycles of learning (Plan-Do-Study-Act).
Both have tool kits to support practitioners. Practitioners are required to take significant training to achieve black belt level certification.
Both leverage cross functional teams of people to get the best results.
The common foundation between Lean and Innovation means that the two often complement one another
How Lean and Innovation Differ
Innovation focuses on idea generation and testing through to delivery of a product, service or system to a customer or stakeholder. It is all about speed and learning as fast as you can by trying things and (as we like to say) failing fast and failing cheap. As we get smarter, our innovation takes shape and we get to a place where we can deliver it to our customer or stakeholder.
Lean does more of a deep dive into existing systems and processes to determine where waste exists and focuses relentlessly on driving it out to gain efficiencies. Innovation in the form of a new product or service isn’t a consideration.
How Lean and Innovation Work Together
So how can they work together? Well, consider this example: What if you wanted to come up with a new way to deliver a product, service or social innovation to a group of stakeholders?
You’ll start by using IE Create tools to generate a number of ideas on what you can do differently. Then, by using other IE tools as well as Lean tools (such as value stream mapping), you’ll identify death threats and unknowns. Weekly rapid cycles of learning (IE and Lean) will help eliminate, or at least mitigate, the risks and unknowns.
As your idea takes shape and you want to transition from the old way to the new way of delivering your product, service, or program; you’ll leverage IE’s prototyping and patent tools while considering the implementation of visual systems and other Lean tools to ensure the process is efficient and your idea is protected.
Once the new product/service/program is running through your new system, you can use the continuous improvement tools of Lean to keep identifying and driving waste out of the process to increase value. To keep the momentum and drive for further growth, you’ll use IE tools to maintain a constant pipeline of innovative ideas in your organization.
So, in a nutshell, why does Lean need Innovation?
Lean focuses on driving out waste and improving efficiency. But if you don’t inject new ideas into your business, Lean will turn into a pure cost cutting program – how can you do more and more with less. You can’t cost cut your way back to profitability or high impacts. Many have tried, but none have succeeded.
IE establishes a pipeline of new ideas that can generate both revenue AND internal efficiencies.
Leveraging both Lean and Innovation provides opportunities for professional development and engagement of key staff – resulting in stronger staff retention.
IE tools force individuals to stretch their thinking outside of traditional constraints, which is necessary to generate significant improvements but challenging to do when diving deep into analysis (Lean).
Lean has a solid toolkit for driving out waste and building internal capacity, but for an organization to truly transform, it needs the power of Innovation.