Lean Startup is based on the idea of Lean or Lean Manufacturing. Lean is developed by Toyota as the Toyota Production System (TPS). Both approaches try to reduce waste, focus on the process and put the client is central. However there is a fundamental difference as Lean manufacturing is about continuous improvement of an existing product or production process. With Lean Startup the product is not there yet, when you start. In case of Lean Startup it is about the process iterations of Minimum Viable Products pivoting or preserving. As soon as you have a Minimum Viable Product “running” and you can preserve or extend the product by pivoting, you can slightly use TPS also as ‘production process’

To create the Minimum Viable Product with a product market fit is the challenge, after it you can project Lean manufacturing partly.

What can you learn from the Toyota Production System (TPS)?

TPS has two pillar concepts: Just-in-time (JIT) or “flow”, and “autonomation” (smart automation). Smart automation is very interested because it focus on the very human aspect, whereby automation is achieved with a human touch. In this instance, the “human touch” means to automate so that the machines/systems are designed to aid humans in focusing on what the humans do best. It is something to keep in mind when we follow the Lean Startup method.

Just-in-time (JIT) on the other hand is less valuable for lean startup.

In 1999, Spear and Bowen identified four rules which characterize the “Toyota DNA“: (source: Wikipedia)
Rule 1: All work shall be highly specified as to content, sequence, timing, and outcome.
Rule 2: Every customer-supplier connection must be direct, and there must be an unambiguous yes or no way to send requests and receive responses.
Rule 3: The pathway for every product and service must be simple and direct.
Rule 4: Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization.

Actually you can use this rules also for Lean Startup but you should change it slightly:
Rule 1: All work shall be highly specified as to content, sequence, timing, and outcome as far the uncertainty of the new product or service allows it. But do not create “one time use” specifications, try to re-use content in iterating MVP’s.
Rule 2: Every customer-supplier-partner connection must be direct, and there must be an unambiguous yes or no way to send requests and receive responses.
Rule 3: The pathway for every product and service must be simple and direct.
Rule 4: Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization.

wastes-lean

Then the focus on reduce waste. It is all in the name lean. TPS divides three types of waste: muda (“non-value-adding work”), muri (“overburden”), and mura (“unevenness”) Firstly, muri focuses on the preparation and planning of the process, or what work can be avoided proactively by design. Next, mura then focuses on how the work design is implemented and the elimination of fluctuation at the scheduling or operations level, such as quality and volume. Muda is then discovered after the process is in place and is dealt with reactively. It is seen through variation in output. It is the role of management to examine the muda, in the processes and eliminate the deeper causes by considering the connections to the muri and mura of the system. The muda and mura inconsistencies must be fed back to the muri, or planning, stage for the next project. (source: Wikipedia).

For the “designof a Minimum Viable Product (MVP) muri  is important. Perserving a MVP means to take care about muri and mura. Actually this is typical growing what works. It can include the pivots for an Engine of Growth.

Lean leadership and Accounting
According Toyota Production System (TPS), the role of the leaders within the organization is the fundamental element of sustaining the progress of lean thinking. It is important for Lean Startup. Also Lean Accounting is essential. In TPS, Lean Accounting provides truly Lean approaches to business management and financial reporting. In case of Lean Startup it is important to find the right metrics for adding client value and creating growth.

Continuous Improvement (relentless elimination of waste) and Respect for People (engagement in long term relationships based on continuous improvement and mutual trust)

Continuous Improvement and Respect for People
Continuous Improvement in TPS breaks down into three basic principles (source: Wikipedia):

  • Challenge: Having a long term vision of the challenges one needs to face to realize one’s ambition (what we need to learn rather than what we want to do and then having the spirit to face that challenge). To do so, we have to challenge ourselves every day to see if we are achieving our goals.
  • Kaizen: Good enough never is, no process can ever be thought perfect, so operations must be improved continuously, striving for innovation and evolution.
  • Genchi Genbutsu: Going to the source to see the facts for oneself and make the right decisions, create consensus, and make sure goals are attained at the best possible speed.

Continuous Improvement is obvious when you start a new business, service or product so you can also directly use within Lean Startup. It is actually the basics.

Respect For People is less known outside of Toyota, and essentially involves two defining principles (source: Wikipedia):

  • Respect: Taking every stakeholders’ problems seriously, and making every effort to build mutual trust. Taking responsibility for other people reaching their objectives.
  • Teamwork: This is about developing individuals through team problem-solving. The idea is to develop and engage people through their contribution to team performance. Shop floor teams, the whole site as team, and team Toyota at the outset.

Respect For People leads to engagement. Engagement of the team is the oil in the engine of a new business.

Tools
The Toyota Production System (TPS) uses various tools. The following tools can also be used (in an adapted version) for Lean Startup:

If you are interested to know more about Lean Startup, then feel free and contact me by entering the contact form.

 

Leave a Reply

Your email address will not be published.