Reducing waste is key to growth

John Stepleton realised a 28 per cent productivity improvement in his call centres within a week; Jeff Booth was able to dramatically speed up the time it takes to get a vendor up on his building materials web site; Mike Jagger saved $60,000 (Dh220,000) in IT costs from his first session; and Ken Sims was able to handle a 100 per cent increase in business in 2008 without adding any headquarters staff.

These CEOs and many other mid-market leaders are embracing the Toyota Production System referred to as Lean. Often misunderstood as a tool exclusively for manufacturers, Toyota's methodology for eliminating waste is having a huge impact on large and small companies in all sectors of the economy.

In fact, I'm so bullish on the power of these simple, yet powerful tools, that I'm confident the first company in any industry that fully embraces the Lean methodology will dominate their industry over the long run - as Toyota has the auto industry.

And for those thinking Lean is synonymous with the overly complicated and expensive Six Sigma approach to quality improvement, you can relax. Lean, though it requires a real change in mindset, uses a few very simple tools to drive dramatic improvements.

John Stepleton, who built RDD, a 500-person, three-time Inc 500 winning research company, was the first CEO to turn me on to Lean as a powerful tool for mid-market service firms. So successful was his implementation, his firm was recognised by the Northwest Shingo Prize for its innovative implementation of the Lean principles.

"What better time to take the plunge," notes Stepleton.

"With the economy struggling, it is the perfect time to begin integrating Lean into your business. I began my journey more than four years ago and of all the strategies I've implemented over the years - and I've tried a lot of different things - Lean proved to deliver the biggest bang for the buck."

If you're not sure it's right for your business, Stepleton emphasises, "I implemented Lean into my call centre business where I had $10/hour employees engaged in continuous improvement programmes that realised productivity improvements of 28 per cent in time periods as short as one week."

One of the keys to Lean is objectively modelling and measuring productivity and then using simple visual systems to eliminate costly mistakes.

In Stepleton's case, they colour coded research forms to make sure the appropriate number of subjects for each campaign was called.

"One of the things that a company can control in a market like this is operational excellence by removing waste in a system," notes Jeff Booth, CEO of Vancouver-based BuildDirect. In doing so, Booth has dramatically sped up the time it takes to get a new vendor up on his building materials web site.

Booth engaged Guy Parsons, early partner with Jim Womack at the Lean Institute, to help

Guy Parsons warns, however, that Lean is not about reducing headcount, it's about reducing waste. In turn, you take the time your people get back from eliminating wasted efforts, steps, and activities and you re-purpose people to serve customers, make sales, and grow the business.