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When Business Change Needs to Take the Upper Hand: Take the Lean-led Business Transformation
Featured Best Practice on Lean Management/Enterprise
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Big cross-organizational change can be difficult and not all organizational transformation is the same. Rapid advances in technology, a growing global creative workforce, and market with fewer and fewer barriers to entry are driving a hyper-creative volatile marketplace. New ideas are making established business positions obsolete at an increasing rate. Products and services that survive are exposed to commodifying price pressure.
The world has started to repeatedly demand operational excellence not only in innovation but in the delivery of customer service. Continuous improvement has been deeply emphasized with the increasing demand in the marketplace. Companies must recognize the fundamental market shifts that are occurring and must learn to respond effectively. This can be done by building an organization that discovers, shapes, and brings Lean-led Business Transformation to scale as part of its core business direction and purpose.
Lean-led Business Transformation provides the business the institutional capability and framework to adapt to rapidly changing opportunities
Understanding the Lean-led Approach
An approach based on Lean Thinking provides business tangible results that are evident in financial performance, customer and employee satisfaction, and risk mitigation.
From Lean-led Approach to Lean-led Transformation
Companies are increasingly under pressure to cut costs and grow. Applying the principles of Lean Management allow companies to fundamentally transform their operating models.
Using a Lean-led Business Approach, the company can effectively undertake a Lean-led Business Transformation. An effectively undertaken Lean-led Business Transformation can help the company build a robust, factual understanding of its current state, exposing improvement opportunities to design an end-state operating model with enabling capabilities.
In effect, the company can achieve insurmountable results that competitors will find difficult to follow.
- The company will achieve best-in-class efficiency.
- It will reduce client, financial, and regulatory risk.
- It will create measurable client impact.
- It will lead the company to scale-up with growth.
A Lean-led Business Transformation embeds continuous improvement in the organization. It engages employees to help business leaders successfully govern and execute change.
What Companies Are Facing Today
Changing market trends have pushed companies towards Lean-led Transformation. These market trends are adding pressure on companies to simultaneously cut costs and grow.
- Commoditization of Basic Services. The value of basic stand-alone services is declining leading to the increase in integrated services. As a result of the trend, there is a decreased unit margin per transaction
- Increased Complexity and Globalization of Investments. There is growth in cross-border activity, alternative investments, and alternative exchanges. As a result, technology and compliance investment requirements are changing. Likewise, it has opened an opportunity for growth and revenue diversification.
- Stricter Regulation. There is increased regulatory oversight such as consumer protection. As a result, new processes and technologies need to comply with regulations. There has also been an increased client need for advisory services.
- Increasing Focus on Risk Management. There has been an increase in risk aversion and a demand for risk management. In effect, new risk assessment capabilities and oversight practices have been developed.
- Change in Consumer Behavior. There has been reduced willingness to incur debt as well as deterioration of trust and customer loyalty. Because of this trend, businesses have been experiencing declining profitability and increased competition for creditworthy consumers.
These changing market trends are here to stay and more trends will soon evolve and affect business. Failure to heed these market trends can lead to decreased margins and profitability that can be highly detrimental to business.
Undertaking this form of Business Transformation can drive businesses to undertake executable Lean Programs that will strengthen their capability to meet these challenges.
Interested in gaining more understanding of Lean-led Business Transformation? You can learn more and download an editable PowerPoint about Lean-led Business Transformation here on the Flevy documents marketplace.
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Process Improvement involves analyzing and improving existing business processes in the pursuit of optimized performance. The goals are typically to continuously reduce costs, minimize errors, eliminate waste, improve productivity, and streamline activities.
As we continue to deal with COVID-19 and its economic aftermath, most organizations will prioritize Business Process Improvement initiatives. This is true for a few reasons. First, Process Improvement is one of the most common and effective ways of reducing costs. As the global economy slows down, Cost Management will jump to the forefront of most corporate agendas.
Secondly, a downturn typically unveils ineffective and broken business processes. Organizations that once seemed agile and focused during periods of growth may become sluggish and inefficient when demand drops off.
Lastly, COVID-19 has expedited Digital Transformation for most organizations. One of the quickest and most impactful forms of Digital Transformation is Robotic Process Automation (RPA). Thus, we have included numerous RPA frameworks within this Stream.
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About Joseph RobinsonJoseph Robinson is the Vice President of Strategy at Flevy. Flevy is the marketplace for best practices in business management. Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. The documents at Flevy (https://flevy.com) are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience. Flevy covers 200+ management topics, ranging from Digital Transformation to Growth Strategy to Lean Management. You can peruse a full list of management topics available on Flevy here. Prior to Flevy, Joseph worked as an Associate at BCG and holds an MBA from the Sloan School of Management at MIT. You can connect with Joseph on LinkedIn here.
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