You Can Never Be Too Rich or Too Lean

I am proud of my GE pedigree, particularly the invaluable training in operational rigor, continuous improvement, measurement and repeatable processes that I’ve incorporated into my marketing practice and use to help clients. While developed to improve manufacturing processes, the key principles of Six Sigma and “Lean” have broad and valuable applications — even for law firm management and legal marketing. As the Lean Enterprise Institute puts it:

“The core idea is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with fewer resources.

A lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.

To accomplish this, lean thinking changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.

Eliminating waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. Also, information management becomes much simpler and more accurate….

A popular misconception is that lean is suited only for manufacturing. Not true. Lean applies in every business and every process. It is not a tactic or a cost reduction program, but a way of thinking and acting for an entire organization. [emphasis added]”

Without directly referencing either Six Sigma or Lean, Debra Baker captured their central tenets in a post today on the Law Firm Transitions blog:

“Law firms who understand their business processes — how they lawyer — and use that knowledge to streamline the way they work have a powerful advantage over those who don’t.

When I refer to business process, I’m talking about looking at the discreet [sic] services lawyers provide and understanding what steps go in to providing that service and for what cost. While there may be no “one size fits all” process, there are certain steps that happen every time and there are variables — most of which are known but not always predictable.

With an understanding of how lawyers in the firm work, it becomes easier to assess costs and evaluate ways to improve efficiency and effectiveness across the firm. And, it sets the foundation for sometimes difficult conversations about timelines, communication expectations and fees.”

Streamlining is essentially eliminating waste, or muda in Lean parlance. That waste can take many forms, including:

  • Unnecessary complexity or redundancy
  • Delay in the work product production process
  • Unclear requirements
  • Bureaucracy
  • Slow or poorly managed internal communication

Less waste means more profit per matter, and a reputation for pricing predictability means more business.

Simple to understand, but very hard to execute (I know). Still, definitely worth the effort, and a significant competitive advantage if done well, continually and consistently.

If you’re interested in getting ideas from people who live the lean life every day, check out the iSixSigma Blogosphere. It’s understandable for laypeople, discusses a variety business management and process topics in interesting ways — and even has cartoons.

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