There are two trends today that are or should be on every entrepreneur and business leaders mind. Today’s market demands that every business at least evaluates how they react to the concepts behind those trends.
I’m referring of course to lean processes and innovation.
Over time, every business develops a certain amount of fat. These are processes, tasks and departments which do not directly serve a key objective of the organization. Essentially they can be trimmed without affecting the organization’s ability to deliver value to its customers. Lean techniques are intended to remove that fat from the organization.
Innovation is the life blood of most if not all organizations today. Being able to identify and determine new and better ways to do things is mandatory to survival. Mere improvement isn’t enough. You need to be able to radically improve or shift your value proposition in order to compete successfully.
There are many forms of lean innovation. However, the most frequent use of the term is to refer to the use of lean techniques on the Research and Development or R&D department. In simplistic terms, the presumption is that R&D is the primary source of innovation and that it – like any other part of the organization – has accumulated wasteful fat. Given those presumptions it makes sense that the fat be trimmed and the R&D become more focused on those tasks that bring actual value.
In this article, I’m going to intentionally not argue with the presumptions. Of course, most strategic consultants would disagree with their validity. However, for our purposes their validity is irrelevant – that they are being used is all that matters.
Given that, there are four main forms that lean innovation takes:
1. Substitution of information based research for experimental research. Experimental research is expensive and wasteful. It is also extremely risky. After all, you could spend an inordinate amount of time, effort and money on looking for a discovery and never actually find it. The lean attitude is extremely risk averse. Therefore, one of the first things that is focused on is finding an alternative to experimental research. Generally this takes the form of substituting information research. In other words, looking for someone else who has done the experimental research and using their data.
2. Elimination of non-critical tasks. Over time every organization collects tasks which either no longer or never did provide value to the customer. Lean techniques focus on the elimination of non-value-critical tasks.
3. Use of strategic or tactical partners. Just as in marketing, there are always organizations which are focused on researching in your area of concern. Not all of those organizations are competitors. Establishing partnerships allows you to share the cost and results of research – informational and experimental. It can also allow you to share the costs and results of development efforts and may actually identify a potential marketing partner.
4. Use of appropriate outsourcing. Establishing partners is based on the concept that you don’t have to do everything yourself. Unfortunately, not every non-critical task can be eliminated or shared. Outsourcing these tasks can prove to be less expensive and risky than doing it yourself.