Lean Initiatives: Management Needs to Slim Down, Too, Not Just Operations
By: McKinsey & Co. February 26, 2014
Applying lean principles to management, rather than just operations, can help large organizations re-imagine how they work and unlock value through continuous improvement.
A logistics company faced diminishing returns from years of cost cutting. Managing vendors now consumed many of the gains from outsourcing. Fixing talent and quality issues meant that "low cost"¯ locations were no longer so low cost. And just keeping pace with the latest IT developments meant constant budgetary struggles. How could it get more out of the cost-cutting investments it had already made?
Executives at a financial institution wondered how to fight complacency as they watched competitors start to catch up to their most important product"”one whose success the institution never quite matched. For an asset manager, the focus was on customer disappointment with how long it took to open and fund an account. Every day of delay meant lost revenue both for the company and, more important, for the customer. But regulatory constraints meant that speeding the process up seemed fraught with risk. A government agency seemed to be in an enviable position, with demand higher than ever. But its budget was flat and it recently had to impose a hiring freeze. It needed to manage the influx while maintaining quality standards, without causing highly trained employees to burn out.
How often do you hear of these types of issues in your organization? How often do you confront them yourself?