Lean vs Agile

As agile & lean practitioners, we’re often asked by clients and interested parties alike to try and delineate the territories for ‘Lean Thinking’ vs an ‘Agile delivery approach’. There are numerous articles and talks that have tackled this question in quite some depth.

It is occasionally tricky to see the ‘value-add’ of conversations like these if the intent is to compartmentalise theory or methodology for simplicity’s sake; i.e. isn’t lean just about eliminating waste in manufacturing processes, and agile a project management methodology for software development? Occasionally people are also looking for what each isn’t in an attempt to protect their patch or status quo (e.g. agile doesn’t belong in operations, or lean is just about process). Enter the evangelists!

What is valuable, is knowing how we as practitioners can apply what we believe to be the right tool, technique or approach to the problem or scenario at hand so that we can assist our customers in realising value.

One thing to note and stress, they are both umbrella terms! They are not really a thing. They are just names used to encompass ways of thinking, and ultimately ways of working including the requisite tool sets and ceremonies.

Given that Lean came before Agile, we’re going to chunk the problem down and start with “What is Lean” in this post.

What is Lean?

“Lean” is a term that was coined by a research team from MIT (Massachusetts Institute of Technology) in the 1990s to describe what they witnessed when touring Toyota manufacturing plants in Japan. That was, the production of high quality vehicles with lower resource consumption in comparison to their western counterparts. In other words, Toyota was delivering the greatest possible value to their customers whilst consuming the fewest possible resources. Lean has since permeated various industries outside of manufacturing, including services sectors such as health and banking and finance, where people interact with processes to deliver outcomes for their customers.

Unfortunately like most management fads, the world rushed to understand how they too can implement this latest methodology called “Lean” / “Toyota Production System” (TPS). When this happens, people tend to look for a recipe that they can adopt to quickly realise the much anticipated benefits (i.e. plug & play). Consequently, lean was misinterpreted by many as simply a set of tools and practices that can be implemented in isolation in their chosen context (kanban, kaizen, fishbone diagrams, andon cords, waste walks, 5s etc.).

Lean is more about what you don’t see on the surface (i.e. the Toyota Management System). We think of lean as a mindset, or rather a way of thinking that is founded on strong values, guided by clear principles, and driven primarily by people, not processes or tools. At its core, lean thinking is based on “respect for people”, putting the “customer first”, and enabling “continuous improvement”. A “Lean House” (framework) is an effective way to portray these beliefs as the foundation of Lean, upon which the various principles are applied to enable the delivery of a consistently high quality outcome, in a timely manner, and at an acceptable cost to the customer (i.e. value).

A Lean House

Applying a lean mindset encourages us to firstly define what is value in the eyes of the customer (i.e. what outcomes should the process deliver for who), and then empower our people to systematically identify and reduce any sources of inefficiency (i.e. waste, variation, overburden or Muda, Mura, and Muri) in the process that hinders the consistent and cost effective delivery of those outcomes. Put simply, empowered and supported people guided by structured problem solving processes and the appropriate tools and techniques is crucial for improving processes for the delivery of consistent and lasting value for customers. Repeat processes must then be standardised, implemented with effective change management strategies, and continuously monitored to ensure that changes are sustained and future opportunities for improvement are continuously identified. Without standardisation, it is not possible to consistently deliver an affordable, timely and quality experience for the end customer (reference back to the “Lean House” above).

Lean Principles

Lean is a management philosophy that originated from the Toyota Production System (TPS) in the automotive industry. It focuses on maximizing customer value while minimizing waste. The primary goal of Lean is to create more value for customers with fewer resources, resulting in increased efficiency and reduced costs. The five key principles of Lean are:

Identify Value

Determine what customers truly value and are willing to pay for. This requires a deep understanding of customer needs and preferences, as well as market trends and competitive dynamics. By focusing on delivering value, organizations can prioritize their efforts and allocate resources more effectively.

Map the Value Stream

Analyze the entire process flow, from raw materials to the finished product, and identify any waste or non-value-adding activities. Value stream mapping helps organizations visualize their processes, identify inefficiencies, and develop plans to eliminate waste and streamline operations.

Create Flow

Ensure a smooth flow of work without interruptions, delays, or bottlenecks. This involves optimizing processes, breaking down silos, and fostering cross-functional collaboration. When work flows smoothly, organizations can deliver products and services more quickly, respond to customer needs more effectively, and minimize the risk of errors and defects.

Establish Pull

Align production with actual customer demand, only producing what is needed when it is needed. Pull systems help organizations avoid overproduction, reduce inventory costs, and minimize the risk of obsolescence. By focusing on customer demand, organizations can be more responsive and agile in their operations.

Seek Perfection

Continuously improve processes, eliminate waste, and strive for excellence in everything you do. Lean organizations embrace a culture of continuous improvement, empowering employees to identify opportunities for improvement and implement changes. This mindset fosters innovation, drives performance, and leads to long-term success.

What is Agile?

Agile is a project management and product development approach that emphasizes flexibility, adaptability, and collaboration. It was initially designed for software development but has since been applied to various industries and projects. Agile focuses on delivering value incrementally and in short iterations, responding to changes in requirements, and involving customers and stakeholders throughout the development process.

Agile Principles

Agile is a software development and project management approach that prioritizes flexibility, collaboration, and customer satisfaction. It emerged as a response to traditional, rigid methodologies like Waterfall, which often resulted in projects being delivered late, over budget, or not meeting customer expectations. The Agile Manifesto outlines the key principles of Agile:

Individuals and Interactions

Value people and their ability to collaborate over processes and tools. Agile emphasizes the importance of effective communication, teamwork, and shared ownership. By fostering a collaborative environment, organizations can tap into the collective intelligence of their teams, make better decisions, and deliver higher-quality products.

Working Software

Focus on delivering functional software rather than comprehensive documentation. Agile recognizes that customer needs and requirements often change over time. By prioritizing working software, organizations can deliver value incrementally, gather feedback, and adapt their approach as needed.

Customer Collaboration

Engage with customers and involve them in the development process to ensure their needs are met. Agile encourages frequent communication with customers, seeking their input and feedback to validate assumptions, clarify requirements, and ensure alignment. This collaborative approach helps organizations build trust, manage expectations, and deliver products that truly meet customer needs.

Responding to Change

Embrace change and adapt to new information or requirements, even late in the project. Agile recognizes that uncertainty and change are inherent in complex projects. By being open to change and embracing a flexible mindset, organizations can respond more effectively to evolving customer needs, market dynamics, and technological advancements.

Differences Between Lean and Agile

While Lean and Agile share common principles, such as customer-centricity and continuous improvement, their distinct origins, goals, and methodologies set them apart. In this section, we will examine the key differences between Lean and Agile, focusing on their unique characteristics and approaches to managing projects and product development.

 Origins and Focus

Lean originated from the Toyota Production System (TPS) in the manufacturing industry. The primary focus of Lean is to eliminate waste, optimize processes, and maximize customer value. The core idea of Lean is to create more value for customers using fewer resources, leading to increased efficiency and reduced costs.

Agile, conversely, emerged from the software development industry as a response to rigid, traditional methodologies like Waterfall. The Agile approach emphasizes flexibility, adaptability, and collaboration, prioritizing iterative delivery of working software or products and effectively responding to changes in requirements or customer needs.

Approach to Managing Work

Lean follows a process-oriented approach, using techniques like value stream mapping to identify and eliminate waste in processes. Lean focuses on creating a smooth flow of work, removing bottlenecks, and establishing a pull system that aligns production with actual customer demand.

Agile utilizes an iterative and incremental approach to managing work. Agile methodologies, such as Scrum and Kanban, divide projects into small, manageable tasks that are completed in short timeframes called iterations or sprints. This allows teams to deliver value quickly, gather feedback, and adapt their approach based on new information or requirements.

Handling Changes and Uncertainty

Lean aims to create stable and predictable processes by focusing on continuous improvement and minimizing variability. By identifying and eliminating the root causes of problems and waste, Lean organizations strive for perfection in their processes.

Agile, on the other hand, embraces change and uncertainty, recognizing that complex projects and customer needs can evolve over time. Agile teams are prepared to respond to new information, adapt their plans, and pivot their approach even late in the project lifecycle. This flexibility enables Agile organizations to stay aligned with customer needs and market dynamics.

Performance Metrics

Lean uses performance metrics such as cycle time, lead time, and waste reduction to measure the efficiency of processes and track improvements over time. These metrics guide Lean organizations in identifying areas for optimization and driving continuous improvement efforts.

Agile, in contrast, focuses on product quality, customer satisfaction, and team performance metrics like velocity, burndown charts, and customer feedback. By using these metrics to track progress, Agile teams can identify areas for improvement and ensure they deliver value to customers in each iteration.