You Should Run A Lean Business
75% of startups fail, how can the lean methodology increase your odds of success?
In the fast-paced world, we live in today, there is an increasing need for organisations to shed off their extra fat and become lean.
But what does it mean to be a lean organisation, especially in these times when it has become a buzzword which is not fully understood.
So What is the lean methodology all about? And why should you run a lean organisation?
But first off, this article would not be an in-depth introduction to the lean methodology. It would simply be a guide, with the aim of exposing you to some core tenets that would be invaluable in building a business that is made to thrive in this current business climate.
What is the LEAN Idea?
At the heart of the Lean methodology, is the belief that almost no organisation gets it right off the bat. Business plans are almost useless seconds after they have been prepared, entrepreneurs never fully know what the market wants, the first few years of running a business are often totally different from what was envisioned… Etc.
Build-Measure-Learn
With all this uncertainty, the lean method prescribes for businesses to be run with the intent to learn through failure. Unlike contemporary business wisdom that tries to avoid failure, the argument is this:
Every business idea is based on an unfounded hypothesis. So if if you can test your product quickly, instead of spending months or even years developing a product that the market may not need, you can quickly iterate smaller changes or pivot when your hypothesis turns out wrong.
This ability to quickly test the market and create products based on realtime information is what makes lean organisations agile in any market condition. It is also known as the Build-Measure-Learn feedback loop.
Burn Off Extra Fat
The lean methodology is also about doing away with non-essential extras and doing more with less.
Lean organisations do away with as much bureaucracy as possible. They tend to be flexible, with different teams given high levels of autonomy. This enables faster build-measure-learn feedback loops.
Another area lean organisations do away with extras is hiring and resource management. Lean organisations favour flexible workers over more specialised ones. This keeps the teams small and agile. Lean organisations also do not shy away from automation or outsourcing certain responsibilities.
This minimalist way of working keeps the organisations overhead low while maximizing input.
Also, a lean organisation is focused on building quickly to gather the information that would make it better, hence, they have a more minimalistic approach to making products. In order to build quickly, they are focused on making the minimum viable product i.e a product that does exactly what it is meant to without extra bells and whistles. The bells and whistles can always be added when it is time to iterate on the product.
Why You Should Run a Lean Business
- It is grounded in reality: the truth is that no matter how much you try to avoid failure in business, you would encounter it. So failing fast and learning from the mistakes at a point in time when it would not be deadly to your business is one of the bests decisions you could make.
- It is cost-efficient: working with essential staff and technologies keeps costs low and you will need that extra money in order to stay afloat.
- It is consumer-focused: Lean organisations are always testing their products in the field to better understand their consumers and make products better suited to them. Hence, they have a leg up against other organisations that spend a lot of time creating products that will most likely be out of touch with their consumers.
- It fosters innovation: building a business that is able to quickly iterate on their products or pivot based on real-time data from consumers while giving employees the necessary autonomy needed, is a recipe for surprising results.
There is a saying that practice makes perfect. With the lean methodology, you get to be better at making products for your target consumer faster than your competitors. However, lean is not just about speed, it is about learning. Using the lean methodology, you can create a business that lives, learns and as a result is very adaptable.
