In these times of rising costs and shrinking budgets, we all have to learn how to do more with less. Carrying too much inventory is inefficient and wasteful in good times, but it can be deadly to a business in times of stress and uncertainty. The same goes for inefficient processes. Your processes may have been efficient once and became inefficient over time, either because technology has changed or because your business has scaled but your processes haven’t. How do you keep your business running smoothly no matter what challenges arise? Lean management offers a solution.

Origins in the Toyota Production System

We’ve all probably heard that common criticism about the Model-T Ford: “You can have any color you want, as long as you want black.” The sameness of these cars went hand-in-hand with the rigid assembly line process with which these vehicles were manufactured and assembled.

After World War II, Toyota Motor Corporation pondered ways to square the need to produce vehicles quickly and efficiently with consumer demand for customization. They developed a manufacturing philosophy called the Toyota Production System, a precursor to lean management. The goal of this system is to eliminate muda (waste) by reducing muri (waste from inefficient processes, processes that make things more difficult, or work that puts too much burden on workers) and mura (waste of time and resources).

The system was inspired in part by grocery stores: shoppers take what they need from the shelf, and the staff restocks the shelf with exactly the amount needed to fill the shelf. The way this works in the factory is that workers take what they need from the “shelf” (inventory), and the production center restocks the shelf with just enough to replace what was used. This method reduces one of the greatest sources of waste: high inventory levels.

A system that pursues efficiency to this degree may seem like it would put a great burden on workers, but the Toyota system is not a sweatshop. Working employees beyond their capacity ultimately produces waste in the form of injuries, mistakes, and burnout. Unhappy workers are less productive, less creative, and more likely to quit. So if the optimal time to complete a particular process is 10 minutes (given available resources and customer demand), but it will not be possible for the current staff to complete the process in this time, additional staff must be added or more efficient processes must be developed. Workers in this system are also empowered to seek out better, less wasteful ways of doing things. While tasks are automated and processes standardized wherever possible, employees are still encouraged to develop and use their intellectual abilities in pursuit of creative solutions and better ways of working.

The result of the Toyota system is a workplace whose activities are rooted in efficient processes with tightly controlled inventory levels, guided by a principle of constant improvement. Adherence to these principles brought Toyota from bankruptcy in the 1950s to the world’s largest motor vehicle manufacturer today, with an annual revenue greater than that of Ford and General Motors combined.

These same principles underlie the lean management philosophy, first articulated in the 1990s. Lean management is a development of the Toyota Production System, adapting its methods to a number of fields, from project management to manufacturing and even to healthcare. The main goal is to reduce waste through continuous improvement of processes. It would, however, be a mistake to think of lean as just a way to increase efficiency. It shifts the business’s mindset from outcomes to processes. Rather than viewing the business as a means to an end, and pursuing that end by any means necessary, lean management recognizes that doing things the right way will lead to the right outcomes. Embracing a lean philosophy requires a change in culture, and that’s exactly what most businesses need to take the next step.

Adopting Lean Management Principles in Your Own Business

Not everybody wants to commit fully to a philosophy. Most of us take bits and pieces from this or that philosophy, using the concepts that make sense to us and discarding the ones that don’t. You don’t have to go all-in on lean management to benefit from its main ideas.

As important to reducing waste is to growth, lean management’s greatest strength is that it’s not just a method for increasing efficiency. It’s not a list of rules to follow; it’s a driver of company culture. Lean is an example of process thinking. Rather than begin with a fixed outcome in mind, you develop a set of processes or good habits that will lead to positive outcomes. It’s not a framework or template that you lay over your current operations. It’s a shift in mindset, a different way of approaching your work.

The market, the economy, your customer base, your supply chain, it’s all constantly evolving. Developing a set of best practices and then never changing them will only lead to failure. Change is hard, so embracing change has to be an explicit value and a cornerstone of culture if you want long-term success.

The basis of lean management, one of its greatest strengths, is a positive disposition toward change. Every aspect of business that can be standardized will be standardized in the name of repeatability and predictability, but those standards are under constant review by everyone who works with them. Everyone is encouraged to seek out better ways of doing things, with processes in place for evaluating and implementing new ideas. In short, lean management encourages a culture of continuous improvement.

As more and more work is automated, the humanistic values behind lean management become all the more important. When work is automated and standardized, employees begin to feel detached from their work. Overwork isn’t the only danger identified by the Toyota system; underutilization is wasteful, as well. By encouraging employees to take responsibility for their work and use their imagination and reasoning ability to improve processes, employees become more invested in success and more engaged in their work.

Thoughtful engagement with work is how great new ideas come about. When a worker isn’t just doing work but is also thinking about how that work is done, they are more likely to find flaws and inefficiencies and suggest better ways to do things. In workplaces that aren’t process and improvement-oriented, workers might not feel that making things better is their responsibility, or they might feel their superiors will be unreceptive or hostile to feedback. Lean principles empower employees and provide them with a forum for making suggestions, as the continuous pursuit of learning and development are fundamental to lean management.

There’s also a sense of humility that comes from knowing that your business isn’t perfect and it can never be perfect. We may have an idea of perfection in our minds, and we should never stop striving for it, even knowing full well that we’ll never reach it. Complacency kills creativity and it kills growth. Lean management principles discourage complacency and doing things because that’s the way they’ve always been done. The culture of continuous improvement that lean management instills will keep your business adaptive to change and resilient in the face of unforeseen challenges, two traits that will make your business stronger today and well into the future, no matter what the future brings.