Critical starting point for LEAN thinking is value. It is important to understand that value is created by the producer but defined by the end consumer.
One of the best illustrations of this backwards thought-process is the current-day airline industry. As frequent users of this service, we have long been countering the definition of value proposed by most airline companies in this industry. Our value equation is simple: we want to get from where we are to where we want to be safely with the least complication and stress and at a reasonable price. By contrast, the airline’s definition seems to involve using their existing assets in the most “efficient” manner, even if we have to visit Timbuktu to get to our destination.
Few airline firms are aggressively endorsing the consumer value definition. Old fashioned “efficiency” thinking suggests that the best way to make use of these airline assets and technologies is to get larger batches of people on larger planes and to do this by sending ever more passengers through the designated hubs. This type of efficiency calculation, focused on the airline hub is driven essentially by cost. Much worse from the standpoint of value for the passenger, it simply misses the point. The end result of this type of thinking is that passengers are miserable – this is not what they meant by value!
Case in point is the standout success story of South West airlines. South West airlines is driven by a LEAN strategy to be a low-cost airline providing short haul point to point routes as compared to airlines like American and Delta with a hub and spoke model.
Lean thinking therefore must start with a conscious attempt to precisely define value through a dialogue with consumers. One way to do this is to start afresh, as in, ignore existing assets and technologies and to rethink on lines of defining value from consumers perspective. This exercise is essential to form a clear view of what’s really needed. Otherwise the definition of value will almost certainly be skewed.
Stating value accurately is the critical first step in lean thinking. Providing the wrong service the right way is waste!
Kanchan is a former Happiest Mind and this content was created and published during her tenure.
