Lean thinking and process improvement is extremely popular and rightly so. Lean thinking uses a number of practices and approaches to ensure that the processes in an organisation are as efficient as possible and, most importantly, address what the customer wants. In just on example, I have seen lean processes change a 3 month process where paperwork travelled 1.5 miles, into a 30 minute process where the paperwork travelled 3 feet. Very impressive. especially for the customer who got their improvements to their house approved far quicker.
It may surprise people to find out how some of the lean techniques have been incorporated from balanced scorecard thinking and where the two approaches have aligned their thinking. For example, an article by three consultants who worked at Unipart (Thomason, Ashley, Jackson) “Hoshin Karni or Getting your ducks in a row” has only three references and one of these was to Kaplan and Norton’s Balanced scorecard work.
It is interesting to compare the lean approach with the cause and effect model of strategy maps used to drive change within the balanced scorecard. The simple model is that money comes from customers, so you have to satisfy their needs. This thinking is identical to lean thinking.
The strategy map cause and effect model says that you have to focus on the few things in the process perspective that make the biggest difference to the customers. This is identical to lean thinking and practice.
Now the lean approach provides lots of tools at this level (The process perspective from the balanced scorecard’s point of view) to help you optimise the processes. In contrast the Balanced Scorecard is agnostic towards such techniques. It does not mind what is used. The important point is the result. What objectives does the organisation have to focus on to ensure it delivers the benefits for the customers.
Where the balanced scorecard’s cause and effect model across its perspectives does add something is in the link between the objectives in the process perspective and the objectives in the learning and growth perspective. Here the balanced scorecard asks the question, what skills, knowledge and capabilities do we need to “Learn and grow” to improve the way we deliver our processes so they deliver what the customers want?
The important difference here is that the balanced scorecard is asking two extra questions, that lean puts less emphasis on:
1) What capabilities do we need to develop as an organisation to continue to serve our customers
2) What are the mechanisms and drivers of change that will bring this about.
These are important questions. One question is about how change is managed in the organisation which of course will be important to the lean implementation and the adoption of lean thinking. The other is about the ongoing capabilities that the organisation needs to develop to continue to be effective and serve its customers.
Obviously staying lean will be one of those capabilities, but there will be others as well. The strategic balanced scorecard approach of using strategy maps to tease this thinking out brings an extra dimension to the lean model and will help lean be a part of the organisation’s longer term competitiveness, effectiveness and efficiency.