Login  |  Newsletter  |   News   |   Agenda   |   Search   |   Jobs   |   Forum   |   Advertize
Source: Business-improvement.eu
Lean: Value adding organization
Swans are agileLean versus Agile? Improvement and Change are like Yin and Yang

By Dr Jaap van Ede, editor-in-chief Business-improvement.eu, 21-11-2016

Being Agile, adapting your company rapidly to new situations, seems to be the opposite of being Lean or efficient. This apparent contradiction can also be characterized as change (Agile) versus improvement (Lean), or innovation (Agile) versus efficiency (Lean).

Initially Agile was, unlike Lean, not much more than a buzz-word. When you want competitive advantage, then you have to innovate fast. How to do this remained however unclear, until recently. Several methods became available to make you agile, examples are Scrum, Lean Startup and Holacracy. These methods are based on the same principle: sense and respond. Options for change are pointed out, actions are taken to realize those options, and finally it is checked whether the results are like they were intended.

This sounds familiar to Lean specialists, since here is a large overlap with the well-known plan-do-check-act or PDCA-cycle! Improving your business with Lean, or adapting it with Agile, technically works more or less the same. Therefore these methods are like Yin and Yang, or are two sides of the same coin. The key question is however: how to keep your improvement activities (Lean) in balance with your change activities (Agile)?

Agile, producing as flexible as possible. Is this opposite of Lean, producing as efficient as possible? At first sight this seems to be true!

Lean means improvement, by increasingly better gearing production steps to one other, with the aim to improve the flow (value stream) towards the customers.

Agile means change, by adapting products or services continuously to the current market demand. Every adaptation will make you - at least temporarily - less Lean. For example, when you decide to make a new type of product, it will take some time to adjust your supply chain.

In the table below, the apparent contradiction between Lean and Agile is reflected by keywords:

Lean Agile
Improvement Adaptation / Change
Efficiency Innovation
Value creation for the customer Co-creation with the customer
Stability / Standardization Disruption
Tuning Interaction
Professional skills Self-organization

Higher purpose
Yet, on a higher level, there are more similarities than differences. And this is not surprising, since both methods have the same purpose in mind: increasing the value created for the customers.

This could also be seen as applying Darwin's principle of surviving by being the fittest, in this case the organization best adapted to the customers' needs. First, this encompasses adaptation to the "climate" or market demand (being Agile). Second, this encompasses developing the best "reproduction system", or producing in the leanest, cheapest way (being Lean).

In nature changes take place at random, after which natural selection follows. That approach will not work for companies, since it is your company that you want to survive. Therefore both Lean and Agile recognize that change needs direction. You need a compass, mission or a higher purpose: to what end do we exist as a company or organization.

This higher purpose does not mean that there is a blue print of how this mission is fulfilled in the far future. The path to that future is uncertain. This is also recognized within Lean ánd Agile.

Companies must to be efficient or Lean, and they must to be agile enough to adapt to changing customer needs
Companies must be efficient, which is achieved by 'streaming'  (Lean) production, and they must be agile enough to adapt to changing customer needs.

Sense and respond
To cope with uncertainties it is needed to take small steps, learn from it, and then adjust the strategy if necessary. This means that there a cycles of sense and respond: which improvement options are there, and what can we do together (as a team) to realize those options.

This angle of approach could be labeled as scientific. Hypotheses are formulated continuously, after which experiments are carried out - of course within safe boundaries - to learn. That way, Lean improves supply chains step-by-step. Agile uses the same incremental approach to fulfill the needs of the customer increasingly better, by developing new or altered products, or by adjusting the roles of the people in the organization.

Described this way, Lean and Agile work essentially the same:

  1. There is a mission or higher purpose which gives direction.
  2. With this mission as guidance, problems and improvement options are made visible, with the aim to bring a higher goal closer step-by-step, or with the aim to fulfill the mission better, by incrementally developing new or altered products or services.
  3. The organization is set-up in such a way, that everyone can contribute maximally to gradual improvement and adaptation.
  4. After each improvement or adaptation, it is checked whether the result is as expected, and measures are taken to prevent a relapse.
The mission of this website: Inspire to create flow in business processes!
Three advantages of free registration:
  1. You will to be able to read all our articles, with many process improvement hints
  2. You will receive our newsletter every 6 months, with summaries of all new articles and case studies
    (and we promise to send you no other e-mail)
  3. You will be able to post on our forum

To sum up: both Lean and Agile concentrate on finding improvement options, take action to realize those options, and check if the results are as expected. The well-known cycle of Plan-Do-Check-Act or PDCA therefore is the basis of both methods!

However, as discussed earlier, there is no improvement or adaptation without direction. Therefore, it is better to speak of a Sense-Plan-Do-Check-Act cycle (SPDCA). In the table below, this idea further elaborated:

Lean en agile zijn als yin en yang Mission / Higher Purpose
(to prioritize possible improvements or adaptations)
What improvement options are there concerning the value stream?

What improvement options are there concerning the business?

  • regarding the products or services
    (route A)
  • regarding the organization
    (route B)
Wat is the next improvement step? Route A:
What is the next sub-functionality of a product or service to be developed?

Route B:
What is the next adaptation of the organization?

Find and implement solutions, together with the shop floor, and by applying Lean tools. Route A:
Develop minimal viable (but safe) product

Route B:
Change roles, define new responsibilities

Check if the value stream is improved.

Route A:
Check if the new sub-functionality of the product or service fulfills the customer needs better

Route B:
Check if the adjusted organization fulfills the customer needs better.
(evaluate and repeat)

Conserve what is good.
Prevent a relapse, continue to improve by starting a new SPDCA-cycle

Route A:
Conserve what is good.
Continue to adjust or develop products or services by starting a new SPDCA-cycle

Route B:
Conserve what is good.
Continue to adapt the organization by starting a new SPDCA-cycle

Note that there are two routes within Agile. Via route A products or services are adjusted or newly developed, by applying methods like for example Scrum, Lean Startup or Business Model Design. Via route B the organization is continuously adapted, for example by self-steering teams, or by self- steering circles as in a Holacracy.

Yin and Yang
One question remains to be answered: If Lean and Agile are technically so much alike, why is it so hard for organizations to be both Lean and Agile?

This is because organizations need to decide constantly what takes precedence: Improvement (Lean) or adaptation (Agile)! As mentioned before, if the focus is too much on being Lean, a company becomes less Agile and vice versa. Lean and Agile can be considered to be two sides of the same coin. Both methods strive for an effective organization, creating maximum value for its customers.

Or, maybe you'd better say, Lean and Agile are like yin and yang, because these methods are complementary and need to be in balance. This balance depends on the (market) surroundings. Sometimes an organization needs to be more chaotic (agile) to rejuvenate itself in time. That way it is prevented that it makes products, or provides services, that nobody wants anymore. (In which case the organization would have became good  - Lean - in doing the wrong things)

On the other hand, being to chaotic isn't desirable either. In that case the supply chains are too often disturbed, and there is no time to keep them Lean.


Do you need help with the implementation of Lean?

Referral to this article on internet?
Use this link: https://www.business-improvement.eu/lean/Lean_Agile_Yin_Yang.php

Arnout Orelio