What Is It?
Lean transformation is a model for how organizations design, build, and run digital, customer-centric systems. Lean teams thrive on diverse perspectives, iterative design and prototyping, continuous testing, and other techniques to build customer empathy, innovate creatively, and deliver quickly.
Lean methodology originated in manufacturing during the mid-twentieth century.1 It was the innovative idea that revolutionized Toyota’s production system and modernized manufacturing and operational capabilities around the globe in every industry. The methodology defines value from the customer’s viewpoint, focuses on improving processes while eliminating waste, and ultimately boosts innovation. It lays out a blueprint of organizational tools and approaches that digital transformation thrives on.
Why Is Lean Transformation so Essential Now?
Change is the only constant, and that tenet has never been more meaningful as customers and their preferences continue to change and technology continues to evolve. Therefore, businesses must always be ready to react and innovate. By incorporating the elements of Lean transformation, your business – the teams and technologies – can quickly adapt and respond to these realities.
A company’s digital customer experience is an ideal place to adopt Lean transformation for a couple of key reasons. First, digital projects focused on customers thrive when teams tap into the human elements that make digital solutions more useful, usable, and impactful. Technology projects have historically attempted to incorporate user requirements in various formats (and with typically painful outcomes). Lean organizations address this by incorporating customer empathy and a range of stakeholder inputs from a holistic team with diverse perspectives.
Second, the expectations of IT and the CIO’s role in the organization have shifted. For years, IT teams have built and managed systems for scale and predictability. In today’s customer-centered world, however, it’s not enough to just keep the lights on. CIOs are now charged with helping their companies meet customers’ changing needs and react to competitive threats with the same systems (and processes) they’ve always had. Customer-centered organizations have adopted Lean principles to augment scale and predictability with agility and speed.
Lean teams bring the most holistic perspective to finding the right balance between sustaining and disruptive innovation. Sustaining innovations tend to be internally focused, helping you work faster, exploit existing strengths, and build operational excellence. At the other end of the spectrum, disruptive innovations focus on growth, explore new territory, and tend to enhance the customer experience.
How Does It Work?
There are six key elements of Lean transformation:
1. Iterative delivery
Waterfall, big-bang efforts are fundamentally flawed because none of the risk is confirmed until the very end. Your team may wonder: “Are these the right features? Will this technology even work?” When the proverbial veil is lifted, it’s too late to make significant changes.
Iterative projects solve many of these flaws. You create an environment to test and re-evaluate all aspects of the project early and often. Doing so allows you to expose the risks sooner, giving you time to react and adjust. Then, you can focus your limited time and budget on what matters most.
2. Continuous testing
Well-intended iterative projects simply turn into incremental projects when testing is not built into each iteration. Testing different aspects – from the customer journey and basic user experience to tricky system integrations and the final, working solution – is the most effective way to derive feedback and craft the right solution.
Being test-driven goes beyond scheduling ample time for testing activities. You also must consider testing tools, data, content, methods, and participants.
3. Research-based decisions
Customer centricity is the permanent result of technology disrupting the relationship between consumers and brands. The first rule of customer centricity is knowing your customers – who they are, what they want and need, and why they choose you. Observation, studies, and behavioral analytics are key tools for researching and understanding your customers.
At the broadest contextual level, basic customer insights are table stakes for a design thinking approach. If you have this insight, then large-scale research isn’t needed for every project.
In a typical project where the customer is well known, user research still happens, but it’s essentially reduced to feedback and the results of your testing. When the problem domain is new or particularly unique, then smaller amounts of focused research may be necessary to lay the groundwork.
At the heart of Agile, iterative methodologies are the ability to test your work and run experiments so you can use those results and feedback to drive the product. But long before the product takes form, use prototyping to create something to run tests and experiments against. Simple, low-fidelity, pencil-and-paper prototypes are amazingly effective early in projects, and more comprehensive, high-fidelity prototyping tools (e.g., Adobe XD and InVision) are now more economical than ever.
Strong design thinking teams consider prototyping tools and strategies at the start of their projects. Think outside the box with prototyping. Storyboards, animation, and video are also extremely effective ways to communicate the breadth of your project. More advanced product teams invest in platform stubs and virtualization to extend prototyping even further.
5. Cross-functional teams
Digital ecosystems can be complex and have many interdependencies. At the same time, customers can be unpredictable and inconsistent. Combine these challenges, and your business faces compounded risk and uncertainty. That’s why strong digital teams should consist of holistic, cross-functional team members. You’ll want a team that brings a complete skillset but also a variety of perspectives, experiences, and objectives to balance the risk and complexity of digital projects. This includes customer-centered design, versatile engineering, and strong business input. This concept is called the Minimum Viable Team (MVT). When coupled with its product counterpart, the Minimum Viable Product (MVP), these are two strong moves to adapt digital and non-digital teams.
6. Product-oriented development
In some organizations, a product-oriented approach to design, engineering, and servicing systems as distinct products can simplify the overall complexity. This approach also establishes focus for your business so that you organize processes and teams chartered with delivering these products.
Product orientation encourages multiple teams to work independently and helps govern interdependencies and priorities through coordinated, release-driven planning. This approach requires advance thinking about an overall product architecture – usually defined by customer segments, channels, and features – and thinking through service-level agreements (SLAs) among product teams and constituents.
Who Has Done It Well?
One of our large financial services clients is a good example. In a market where competition comes from every direction, the company needed a customer engagement system that could quickly adapt to new trends, regulations, and brand needs. For an organization of this size, it’s not feasible to spin up another big project every time something needs to get done.
When we started working with this client, we engaged mainly with the marketing team to build a digital platform, but marketing was dependent upon the IT organization for a lot of the elements and support we needed, which was difficult to coordinate due to a lack of shared goals and mission. We adopted a Lean process to help smooth these organizational hurdles and it eventually evolved into a more cohesive team that better understood customer needs and could respond to them faster than ever – and with a better product.
Where Can You Start?
One of the toughest obstacles to becoming Lean is resistance to change within the organization. Take small steps with adequate training, education, and leadership mandates to gain cooperation and buy-in. You have to show your colleagues how Lean will help them and your organization as a whole.
You can prove success by starting with a small project, run by a capable team that is committed to the process. Once you prove success with these methodologies, others in your company will want to do the same.
Another challenge with adopting Lean is scheduling and managing distributed resources from multiple teams. This can seem nearly impossible, especially when those resources are shared among other projects. The most effective response is to construct a dedicated and diverse MVT, ideally in a co-located workspace, that consists of a product owner, business owner, engineers, testers, and designers.
This solution may seem radical for some organizations because it alters career planning, challenges centralized controls, and can appear expensive for part-time commitments. Rest assured, the payoff includes improved teamwork and communication, reduced distractions, and minimal wait times.