December 2009 - Posts

Monday, December 21, 2009 2:06 AM

What is “Lean”

This one comes from the Lean Startup Circle again. Someone posed the question what is the difference (if any) between capital ‘L’ “Lean” and “lean”. Having had the opportunity to attend a David Anderson presentation on the subject of Lean Software Development, I was sufficiently armed to talk about the subject. Hopefully, I did justice by my instructor but any errors, omissions, or brute handed oversimplifications are purely my own fault. The summary follows. I’ve fleshed out the original email (that I wrote on my G1) to add more background and information.

To understand the origins of “Lean” we need to look at Toyota, for they are the originators of the Toyota Production System which was later referred to as Lean Manufacturing.

Do a quick search on "what we can learn from Toyota". You'll come up with a lot of interesting information. For example, guess how many of Toyota's American employees were laid off over the past decade? Past 20 years? 30? 40? Would you believe that they haven't had a single round of layoffs in half a century (the layoff referenced in the previous link was averted)? We worry so much about preserving "American companies" when in reality Toyota employees more American workers and treats their employees with far greater respect than any of the big three. Rather than laying employees off during thin times they move them to other plants for training and improving their infrastructure (as the Reuters link mentioned, Toyota even went so far as to pay plant workers in San Antonio their FULL SALARY while the lines were shut down). Thus when times are better they have a workforce already trained to face the new challenges of the company.

That’s fine and dandy you may say but what does this have to do with “Lean”? Everything! Toyota’s success goes far beyond their manufacturing processes. It is the entire philosophy at Toyota that still persists to this day even as the largest auto maker in the world. This philosophy can be embodied in one word “Kaizen”. The idea is to make everybody responsible for improving the process instead of dictating how things are done based on theory or “because that’s how we’ve always done things”. To put it simply who is more qualified to identify a better way of laying bricks: the guy baking in the sun who wants to get his work done and doesn’t want to have to fix that section of the wall later; or the manager who hasn’t picked up a trowel in years. Frank Gilbreth, considered the father of Business Process Management based his life’s work answering that very question. Anyway, that’s another post of it’s own we’re talking about the Kaizen philosophy. Enable…correction…encourage employees to take ownership of their work, and opportunities for improved quality AND efficiency will naturally be injected into your process.

Let’s shift gears from Kaizen and talk about Lean Manufacturing. Toyota's approach came from necessity. They had to compete overseas against entrenched competition. There was no way they could establish a dealer network AND a service chain rapidly enough to compete. The solution? Make cars that didn't fail as much. Rather than cut corners to produce cars as rapidly (and cheaply) as possible, they spent the time to make sure they released a quality product that didn't require as much maintenance. There's a reason Toyota has a reputation for making long lasting vehicles...they couldn't afford to do otherwise.

In the same regard, Toyota couldn't afford to pump out cars continuously or build up a large inventory of materials. Thus they devised a system called Kanban to control the flow of supplies. The concept was adopted from observing grocery stores. A grocer can only stock as much product as he thinks his customers will purchase before it spoils or else he wastes the product (and the money spent to purchase it).
Toyota applied this just in time supply to their manufacturing process. And thus Lean manufacturing was born allowing Toyota to go from an upstart foreigner to the largest auto manufacturer in the US. It was a commitment to quality, process, and most importantly PEOPLE that made this possible.

Make no mistake, applying Lean processes alone is not enough to ensure success. You need the right people as well and you need to engender a system of trust and excellence. You need to truly commit to the the principles. Otherwise you're just falling into the cargo cult mentality.

Posted by Mike Brown | 1 comment(s)
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Saturday, December 19, 2009 2:03 PM

Stealth Disease

I am a member of the Lean Startup Circle group (was searching for the Lean Software Group which I still haven’t found). The conversations there are amazing and I highly recommend joining if you’re remotely interested in entrepreneurship (becoming one, helping one, or finding one). Anyway, a fellow group member referenced Eric Ries’ recent interview with tech crunch where he states plain and simple that you’re doing yourself a disservice by having a long term “stealth mode” for your startup. It prompted me to reply as follows:

I think that [keeping your idea a secret] is the first thing to get over as a startup. I see so many people saying, "I'll tell you what I'm doing after you sign an NDA." I'm sorry, I'm not doing that because I might already have the same idea or a similar one and I'm not going to preclude myself from executing on that idea because you might argue I've stolen it from you down the road.

Unless you're talking about some really deep technology that REALLY pushes the bounds of what we do (think Project Natal from Microsof), you most likely aren't the only one doing what you're doing. In fact unless you can name five competitors in your space, you should stop what you're doing and find them. If you are on the lines of Natal, why the hell haven't you filed a patent to protect your work?

The sooner you get a working product that your users can play with. The sooner you can get feedback and in many cases ideas that will significantly improve your product. Going stealth I would argue is a Waterfall startup (opposite of Lean). Think about it in terms of software development. With Lean (or agile) one primary goal is to get a working application in front of your stakeholders quickly so that they can provide feedback as the application is evolving, it avoids the problem of spending a year working on a project only to get feedback at the end from the customer that you totally missed the mark.

If you want to kill a startup, the quickest way is to spend a year developing a product that no one wants because you were in "stealth mode". Especially when your competitor announced their product before it was even available, got feedback on the alpha a week later, and adjusted the trajectory for the beta a month later all the while building a huge viral buzz from previewers who "get the vision" and like it. By the time you've announced a product your competitor has beat you to market without you even knowing they exist.

By letting people know what you're doing, you're likely to get a lot of feedback that you'd pay a lot of money to get otherwise. Such as "this reminds me of...[insert competitor you didn't know of]" or "I'm building something similar, want to team up to make a unified product" or "I like [feature x] but I really wish I could do it by [method y]". All of this feedback can be used to help you adjust your launch trajectory "how can I improve [competitor x's] product", "this guy has a great foundation this would make my product better to integrate our solutions", "it will be simple to add that new method for achieving feature x" to provide a product that better meets your users' needs.

That's the true definition of Lean. And even the largest vendors (think of Google with gMail, Wave, Android, and ChromeOS) can benefit from taking this approach.

Posted by Mike Brown | 1 comment(s)
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