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Customer Value – Are you creating enough? | Principles of Lean

2 mins to read
October 1, 2019

By Reagan Pannell

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Summary

Customer value in Lean Thinking is the process of delivering maximum services and products to customers with minimum cost and effort. It involves identifying customer needs, focusing on meeting those needs while eliminating waste and creating a streamlined production process.

“Would the customer be willing to pay for what you are doing right now?”

Identifying what the customer values is so self-explanatory to a business person that I still find it incredible how often I find myself reminding people. Understanding what the customer value is the first of 5 Lean Principles, and it underpins the entire lean thinking approach. So, before you go any further in any activity today, ask yourself, “Would the customer be willing to pay for this activity?”.

Would they be willing to pay while you wait at the printer or while you wait for an email response that someone forgot to share? For the invoice which was wrong because the quantity was inputted incorrectly? For the product that didn’t work?

Every process has a customer, and every activity has a customer. You might be the customer of your action, or you will have a mix of internal and external customers, depending on where you sit within the organization.

If you are close to the customer, you may use Design Thinking to understand how to build your products to maximize engagement with customers. Perhaps you use Ethnography to understand the culture and their customs to gain crucial insights. Or maybe UX tools to design the best user experience. Or maybe you use all three plus more.

However, at the core, it’s the same question.

“What does the customer value? And what is the customer willing to pay for?”

You may work within a centralized support department so your customers will be internal. But the same is true – you need to engage with them to understand what they need. Is it the 15-page powerpoint or a one slide summary? Is it a full detailed report on regional sales across the country, or just the total sales figure.

The 80/20 rule is a great starting point to identify what actually is important.

These examples may sound ridiculous, but when was the last time you sat down with your customer and asked?

And away from work, defining what you value as a person is just as important to understand. Is the way you “spend” your time aligned with what you value?