mation, one woman could run a large number of weaving machines. He applied similar principles to automotive manufacturing. He documented these principles, and Toyota’s underpinning philosophy, in a short book, Toyota Production System.
The essence of the Toyota Production System, which later gave birth to the term Lean Manufacturing, is a systemic method for the elimination of waste ("Muda") within a manufacturing process. Lean also takes into account waste created through overburden ("Muri") and waste created through unevenness in workloads ("Mura").
- Muda is anything that takes time but does not add value to your customer
- Muri – overburdening people results in safety and quality problems; overburdening equipment causes breakdowns and defects
- Mura – unevenness; heijunka is levelling out the work schedule; behaving more like the tortoise rather than the hare
Working from the perspective of the client who consumes a product or service, "value" is any action or process that a customer would be willing to pay for. Essentially, Lean is centered on making obvious what adds value by reducing everything else. As Mr Ohno says in the foreword to his book: “All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value-added wastes”.
“The key to the Toyota Way and what makes Toyota stand out is not any of the individual elements…..But what is important is having all the elements together as a system. It must be practiced every day in a very consistent manner – not in spurts”
— Fujio Cho, President of Toyota Motor Company, 2002
Lean has now caught on in many areas of business, including construction, services, integration, higher education, accounting and Lean Six Sigma, the combination of lean and six sigma approaches.
Applying Lean to Business Innovation
It was Eric Ries and his mentor, Steve Blank who led the charge when it comes to applying lean principles to innovation. Ries documented his journey to Lean, and its principles and practice in his 2011 book The Lean Startup. Steve Blank and Eric Dorf have written The Startup Owner’s Manual: The Step-by-Step Guide for Building a Great Company, which guides you through the Lean Startup process. Ries wrote a later book, The Startup Way, which he says “owes its title to Jeffery Liker’s magisterial The Toyota Way”. This shows how the Lean Startup system can become a system of entrepreneurial management that can lead organizations of any size from any industry to growth and long-term impact.
Eric Ries had a number of successes and failures as an entrepreneur and came to realize that startup success can be engineered by following the right process, that entrepreneurship is a kind of management. He was successfully applying what are now recognized as many of the principles of lean innovation, which ran counter to the then perceived wisdom about entrepreneurship. He began to look outside entrepreneurship for ideas that would help him understand his experience. He found these ideas in Lean Manufacturing and applied them to create the framework that he would document in The Lean Startup.
The Lean definition of a startup is
- A temporary organization
- Designed to search for a repeatable and scalable business model
- Designed to fail fast and be continually learning. By failing fast, you know quickly if your idea is no good
Startups are not smaller versions of large companies. The ones that succeed go from failure to failure, all the while adapting, iterating on, and improving their initial ideas as they continually learn from customers. While existing companies execute a business model, start-ups look for one. However, you can have lean startup initiatives within large companies, and many large companies now have innovation incubators that follow the Lean Startup method. Indeed, many have incorporated the Startup Way into their management system.
The Four Pillars of Lean Startup
The Four Pillars of the Lean Startup method are:
Quickly build something that yo