Running a business in the digital age is associated with high costs and risks. Today, mechanical work is automated, creative work areas are preserved. Against this background, smart organizational structures and processes, which inevitably have flat hierarchies, are indispensable in order to guarantee long-term preservation on the market and to reduce costs and risks. Companies with steep hierarchies usually find it more difficult to optimize processes and innovate because too many instances and regulations interfere with flexibility. Companies with flat hierarchies, on the other hand, can adapt more quickly to permanently changing market conditions. There are various instruments that help companies to operate particularly efficiently and increase their own competitiveness. One of them is ‘Lean Management’.
The Lean Management Concept
The so-called ‘Lean Management’ approach has existed since the 1990s, with the term ‘Lean’ coming from the Japanese. It is a problem-solving approach which is holistic in nature and originally originated in ‘Lean Production’. The latter is about process optimization of development and production conditions for higher efficiency and quality. ‘Lean Management’ has broadened this focus and added the perspective of the end user. Customer orientation is decisive here, i.e., the precise target group analysis and clarification of questions such as: Who is my customer? What does my customer want? Why does my customer want what he wants? Or how can I best satisfy my customer? The actual company goals have been partially rewritten as a result, because the own image is more important than ever before. In ‘Lean Management’, the employee is also regarded as a ‘customer’, as he has considerable value for the company as an intermediate instance. To make use of his abilities and to develop knowledge and skills are important pillars of successful ‘Lean Management’. Another important eye-catcher in ‘Lean Management’ is the internal cost reduction, which today, in addition to the well-known minimization of errors and the conservation of resources, represents an essential maintenance factor for companies. In order to achieve both the customer’s goals and their own, ‘Lean Management’ extends to all sub-areas of a company, including the level of corporate management (Lean Leadership), administrative processes (Lean Administration), process coordination along the supply chain (Lean Supply Chain) and the product development process (Lean Development), within which ‘Lean Production’ is used. There are numerous methods within this concept and its sub-disciplines, so that a separate lexicon has now been created for this purpose to make it easier for users to get started and understand (https://www.management-circle.de/lean/lexikon/).
Procedure in Lean Management
‘Lean’, as it is commonly called in professional circles, is applied in practice in small groups in which situation-related problems and tasks are solved with the help of the above-mentioned methods. Here, one always starts from a current context description (What is the actual state?) and then approaches the solution approach together. The context description already contains the basic value from the customer’s point of view as well as the value stream. Approaching the solution then goes through three levels – flow, pull and kaizen – which means getting into the flow, working on the problem solution and striving for perfection. These five core principles according to Womack and Jones () make ‘Lean’ what it is: A truly successful concept for optimizing corporate structures and processes. According to forecasts, approaches like these represent the future of successful business.
Limitations of Lean Management
Obstacles arise in the first place when the basic concept is not properly understood and individual employees of the company cannot appear properly in their function within the concept. Here one can create remedy by means of founded training as well as practical exercise in the business process. To be successful with ‘Lean Management’ not only costs the efforts of each individual employee, but also time, patience and openness for a mindset of ‘Lessons Learned’, i.e. the willingness to speak openly about errors that have occurred and how to deal with them, for future error avoidance. The aspect of the role of each individual is a further limiting factor, because only if all employees support the concept in a motivated manner ‘Lean Management’ can be successful. The same applies to a lack of cooperation skills, which is essential for this. Likewise, the enterprise actors must have uniform conceptions regarding cost, quality and customer understanding.
Alternative approach to improving the value chain
An alternative to ‘Lean’ is the concept of ‘Agility’, commonly called ‘Agile’, which stands for mobility and was launched in the USA at the end of the 1980s. Flexibility and speed are what ‘Agile Management’ is all about, in order to prevent a waste of resources by producing past the market, i.e. the value of the customer. Core values of Agile Management are: People and interactions, functioning results, cooperation with the customer and adaptation to changing conditions. This is where processes and tools, documentation, contract negotiations and plan tracking come into their own. This is the essential difference between ‘Agile’ and ‘Lean’, whose main focus is on reducing complexity and standardizing optimized process flows, which are important for the value chain. ‘Agile’, on the other hand, relies on non-standardization to maintain its high flexibility. Furthermore, the Agile concept focuses on the end product, while ‘Lean’ focuses primarily on the process, although both want to ensure customer satisfaction through their respective approaches. There are strong similarities between ‘Agile’ and ‘Lean’ with regard to their inherent leadership principles, which support independent, collaborative work with the main focus on customer orientation. But the two approaches are also similar with regard to permanent process improvement in a short period of time, open feedback (Lessons Learned), resource conservation and simplification of work processes.
Which of the two concepts you choose is perhaps first and foremost a matter of type. A glance at their different methods could, however, significantly support the decision-making process here. In addition to the numerous methods in the ‘Lean’ lexicon above, these would be for ‘Agile’: Scrum, Extreme Programming, Unified Process, FDD, RAD, AMDD, DSDM, EVO and Agile Enterprise. Life Science companies can also benefit from these management concepts. In today’s fast-paced world, with ever-changing results in Life Science research, Dx teams must remain flexible to respond quickly to change and continue to serve the market. Those who consistently implement ‘Lean’ or ‘Agile’ in the company fulfil the best prerequisites for future innovative action steps. At dedicated partnering conferences, founders of the industry can make good contacts in order to learn from the experience of other companies. The DxPx Industry & Investor Partnering Conference on Diagnostics, Digital Health, Precision Medicine and Life Science Tools offers an optimal platform for all Startups and Growth Companies in the field.