Stiles Associates Founder Lin Stiles sits down with one of the world’s most respected Lean executives and the former CEO of Wiremold Company, Art Byrne.
Stiles: If 95 percent of your competitors don’t know how to do Lean, why doesn’t everyone flock to it?
Art Byrne: Lean is easy to explain but hard to do. People have the wrong concept starting out, so they don’t do it. If you think about any kind of company – manufacturing, service, etc. – you can break it down to one very simple thing: Companies are nothing but a collection of people and a collection of processes trying to deliver value to the same group of customers.
If my group of people and my processes deliver that value better, faster and cheaper than your company can, I win because the best team is going to win. If you think about it in those simplistic terms – and you think about the only way you increase the value of an enterprise is by delivering more value to your customers than your competitors can over a long period of time – then you’ll start to understand what we’re talking about here. If you improve your own value adding, your ability to deliver better value to your customer goes way up.
Stiles: Learning what the customer values is an important part of that working.
AB: Most companies take their own value adding for granted. If you have a six-week lead time and you take that for granted, the only strategy you have is to get around the fact that your customers don’t like the six-week lead time. You’re trying to get them to conform to your six-week lead time as opposed to you trying to conform to what they want. If you’ve accepted your lead time, you can’t really change that in your mind.
Stiles: Are customers more willing to pay more for something that has greater value added?
AB: Absolutely. If you go to the post office, you can mail a letter for about 50 cents and it’s going to get there pretty much every time. Or, you can run down to FedEx and spend $13 to $20 for the same thing – and people are lined up at FedEx. The only reason they are is because of the time element – they’re going to pay a lot more for that time. You can come up with many other examples, but people will pay more for time. They’re willing to pay more to have something done in a short time and in reliable fashion.