Last year, 650,000 new business started in the UK alone which isn’t a big surprise if you have your finger on the business pulse of the world. We live in the time of startups and incredible entrepreneurship. Social media, technology and a strong desire for carving a new career path combine to bring new business birth after new business birth. We’re all a little bit braver and more open to making our own luck.
Perhaps you have a few ideas yourself, or you’ve braved the scary drop off into the unknown and you’ve begun the process of starting a business?
If that’s the case you’re already well aware of how expensive your startup dreams are. You really do need to tread carefully with financing a startup because quickly, things can go from exciting to ‘over in an instant’.
This is where something called lean project management and lean startup comes in.
Lean startup is a term coined in 2008 by Eric Ries who devised a system that should help decrease the number of startups breaking down.
It is now a known methodology for new businesses which helps to reduce product development cycles with various approaches, which results in businesses needing less initial funding. The focus on this initial stage being ‘leaner’ results in a vulnerable startup being less likely to fail, because that initial ‘Bambi’ stage is much stronger and able to withstand issues.
Using lean project management as a startup is all about getting rid of wastefulness, so those precious resources aren’t just drained unnecessarily. You work hard to strip down everything that leeches on your funds like time, work and materials. Anything that does not add value to what you are trying to offer and build. Essentially, you’re trying to get your product available to the customer as quickly as possible. You can see Eric Ries talking about Lean Startup in this Youtube video.
Lean Project Management
The lean project management approach goes further than the lean startup methodology. Lean project management in itself is a vast and rich pool of knowledge for startups to use. The very basic idea is to maximise value and minimise waste. Just focusing on that alone will help your startup, even if you don’t want to get stuck into the processes behind it.
If you do want to make the most of this incredible way of managing any project, like developing or launching a product, then you’ve a lot to gain because lean project management can be applied to any industry, task or business.
The Five Key Lean PM Values
There are five key lean PM processes to understand and taking the time to understand them means you have 5 core guidance principles to follow at all times. This is invaluable as a starting point for learning how to apply lean PM to your startup processes. When so many things are going on and everything gets complicated, having 5 simple values to stick to means there’s a clear process to return to if you do lose your way.
1. Understanding Value
You have to completely understand exactly how your product is of value to your customer. How much are they willing to pay? You can only know that if you understand how much they value the product. Once you know the value you can change your costings to meet that price.
2. Map The Value Stream
The value stream is a set of actions which result in a product delivery at a set price. Mapping this stream means using different techniques to visually represent the sequence. Seeing it all laid out enables you to see where waste is occurring, at which point you can adjust the sequence to get rid of the waste, optimising your workflow. Kanban is a useful technique to use for this purpose.
To use a Kanban system you would use visual aids like images, paper with writing on, cards or anything you like really which then represents the sequence it takes to get the product made at the agreed value. This can happen on a whiteboard, on a wall, anywhere you can place the production chain imagery. Many businesses even use software to run all their projects in a Kanban style to reduce bottlenecks and improve production-line efficiency.
3. Making Sure The Value Stream Flows
The idea of mapping your value stream is making sure that it flows properly. Which is why an extra stage of ensuring that it does flow is necessary. It isn’t enough to simply map it out, you have to analyse it and adjust it to make it as lean as possible.
4. Employ A Pull Approach
A push approach is where products are made and projects are run in a way that determines what the customer wants internally. This creates a huge amount of waste because it isn’t actively responding to what the customer demand is. With a pull approach what the customer demands leads the production. It can only work though if there is right research into the target customer market.
5. Seek Continuous Improvement
Basically, lean project management never stops. It never ends. The beauty of it is that you can always apply it to what you are doing. Things change constantly in project management so your goal should always be seeking constant improvement in order to eliminate waste thus forever optimising your workflow as much as possible.
Lean Thinking Defines Value As Providing Benefit To The Customer: Anything Else Is Waste – Eric Ries
If you have an interest in applying lean PM to your startup, take a look at the following resources:-
- Lean project management introduction (Video)
- Agile project management with Kanban (Video)
- Lean project management (Article)
Applying lean project management to a startup from the very beginning is sensible. You should consider it as an excellent way to manage risk.