Woman reviewing charts and graphs

Businesses of all sizes and types are now embracing the lean business models that revolutionized the manufacturing industry in the 20th century.

Lean operational philosophies focus on the ongoing improvement of activities across the value stream to reduce inefficiencies and deliver maximum value to the customer. By continually optimizing practices that are effective and eliminating those that aren’t, small businesses can also save on operating costs, increase team productivity and morale, and provide better project visibility for stakeholders.

Here are some ways that you can introduce lean principles into your enterprise to achieve smart, sustainable growth:


Make Quality a Priority

The total quality management (TQM) movement became popular among manufacturing firms in the 1980s, and it continues to influence organizational thinking today. We’ve long known that implementing rigorous quality control standards can reduce waste, improve customer satisfaction, and save companies money in the long run. Now, many firms are looking to develop ways of “building quality in” – ensuring quality throughout the entire process rather than simply checking the end result.

Idea: In software development, there’s a technique called pair programming in which two programmers work together at one workstation. One writes code, the other observes and considers the strategic direction of the work, and they switch roles frequently. Even if you aren’t in the high-tech space, think about how you could apply this concept.


Develop a Customer-Based Philosophy

Though most companies would claim that they always put their customers first, many neglect to integrate customer experience and opinion across the entire product cycle. Even without a big R&D budget, small businesses can conduct market research and gain a better understanding of what their customers value the most. Being attentive to customer opinion is all the more important in today’s media-driven world, where prospects put as much weight on public online reviews as on personal recommendations.

Idea: One easy-to-implement market research tactic is social listening. Are people mentioning your brand on Twitter? Have they posted on Instagram from your location? What are the demographics and interests of your Facebook followers? Start answering these questions with a free or low-cost social listening tool, or through informal sleuthing.

Reevaluate Business Processes

Business practices – especially those that are devised and implemented through top-down approaches – can easily become ineffective as your enterprise grows and evolves. One lesson that the automotive industry learned and leveraged was that frontline employees must be included in the decision-making mix. Since they’re involved in production and service on a daily basis, they’re ideally suited to suggest changes that will reduce waste and redundancies and maximize customer satisfaction.

Idea: Many business leaders suggest setting a timeframe to reevaluate all of your business operations, like every six or twelve months. But reevaluations are also good to do after major changes. And COVID-19 brought major change to all of us. Use this moment to see what realizations and practices can be brought into the post-pandemic world.


Focus on Forecasting

One major challenge for small businesses is being ready to meet market demand by managing inventory and capability. A low supply can leave money and customer satisfaction on the table. On the other hand, businesses often waste money on maintaining an overabundance of inventory. The solution, of course, is better forecasting – but it’s so easy for entrepreneurs to get sucked into day-to-day operations and fail to see what’s coming. Fortunately, there are some low-cost technologies that can facilitate forward thinking.

Idea: A wide variety of sales forecast templates are now available online at no cost. They can help you create projections that can be used for goal setting, budgeting, investor acquisition, and more. Just run a Google search for free templates for B2B leads, retail, subscription-based sales, or whatever best applies to your business model.


A Team Effort

Adopting a lean business model dedicated to continual improvement can take time and effort, but it doesn’t have to happen all at once, and as a business operator, you don’t have to do it alone. Your whole team can be empowered to look for innovative ways to reduce inefficiencies and better serve your customers. Plus, when your bank is Citizens Bank, you always have a trusted financial partner in your corner. We’re proud to continue an 87-year tradition of service to small businesses in Tennessee.