All lean thinking begins with value as the basis.
Lean defines value from the customer’s perspective. Whatever you think is worthwhile or important is irrelevant. What matters is what the customer thinks. And, more specifically, what the customer is willing to pay you to do (which is at the essence of value).
Beginning with the customer and working backwards is the opposite of how many companies work today. Often, companies end up emphasizing their own features and benefits of their particular good or service and lose focus on the broad picture of the customer experience holistically.
The customer does not exist in a vacuum. Your product or service is just one of hundreds (perhaps thousands) of other value streams that the customer is engaged in.
When you begin with the customer’s definition of value, it opens you up to capturing additional business in the form of taking on additional value streams.
I’m currently writing this post in a Starbucks. If Starbucks had simply decided to provide excellent coffee and to improve their coffee offering solely, then they would be a very different organization then they are today.
I just paid $4.36 for my coffee. What did my money buy me?
- A comfortable place to sit
- A clean and well-lit environment
- Friendly service and human interaction
- An atmosphere conducive to focusing
- The option to purchase food if I get hungry
- A consistent experience (my Americano tastes the same no matter where I go)
- The Starbucks brand
Starbucks customers find each of these things to be valuable. They buy the coffee–but that’s just one small part of the value that Starbucks creates. It’s the total value offering that I’m actually buying. This value offering gets represented in the price of the coffee on a per-cup basis. And hence why people are willing to pay so much (because Starbucks truly creates a massive amount of value for an extremely low price).
If you don’t believe that each of these 10 characteristics is valuable, try removing one from the equation and let me know if you would still consistently frequent Starbucks. Better still, remove two or three–few people would ever return.
By beginning with value as defined by the customer, we take the customer’s experience and needs as the primary driver for a lean organization. It’s the customer (not ourselves) that gets to define what matters and what doesn’t.
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