7 Steps for a Successful Lean Implementation at your Nonprofit | npENGAGE

7 Steps for a Successful Lean Implementation at your Nonprofit

By on Jul 12, 2018

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From self-driving cars to artificial intelligence, we live in a period marked by rapid innovation and change. Now couple the accelerating pace of change with increasing pressures from funders to spend fewer dollars on overhead, and the fact becomes clear: we need to find new ways of doing things!

Efficiency Drives New Ways of Thinking

I wasn’t born an efficiency expert. When I was growing up in northern Minnesota, I didn’t see examples of organizational efficiency models, and I had never heard of lean concepts. But, having spent most of my career in manufacturing environments, I became aware of these concepts even before lean became the commonly used terminology.

However, when I moved into the nonprofit world, I experienced a paradigm shift. Lean is often thought of as a cost-cutting move for manufacturers. But with grant funding, there is no prize for cutting costs; the goal is to do exactly what you promised you’d do within the given budget. So, the concept of lean as a way to drive efficiency was slow to move into this environment.

But lean thinking eventually found its way into the public and social sectors about 10 years ago, where it has been successfully implemented by organizations such as the Environmental Protection Agency (EPA), Code for America, and the State of Washington.

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What is Lean?

When we look at applying lean concepts in a service environment, our main goal isn’t to take the cost out of a product. Instead, we want to remove the waste out of a process. And the goal is not a dramatic 100% waste elimination in the future but instead a continuous improvement process of waste reduction starting today.

Lean supports clients through two core principles: increasing value and eliminating waste. The lean process is about reducing waste while increasing efficiency, productivity, and quality. The process is designed so we can do more of the things that clients value and less of the things that they don’t.

But if you don’t know who the client is, then you can’t determine which activities add value and which should be defined as waste. So, the first step in the lean journey is to identify the client.

Who Determines Value?

The client is not the next person in the process to whom you’re handing off the baton. The client is the person at the end of the process who benefits from the service you provide through your mission. This step of determining the primary client can be harder than you think, but it’s critical to the success of the entire process.

Once you’ve identified the client, you can then evaluate each step in the process to determine whether it adds value. If it doesn’t add value, then it’s waste and should be eliminated to the extent possible.

A common method used by organizations to organize the process steps is something called value stream mapping (VSM). If you’ve ever participated in a VSM exercise, you may recall organizing lots of sticky notes on a big sheet of paper or whiteboard.

The main benefit of VSM is that it gives you a full view of all the steps in a process, so you can more easily identify waste and form a plan to reduce it. With VSM, each step is reviewed based on these three criteria:

  • Is this step something the client cares about or is affected by?
  • Does this step change the product or service?
  • Is this step done right the first time?

Once you’ve identified the waste, it’s time to remove as much of it as possible. Sound simple enough? Well, as Louis Pasteur said, “Fortune favors the prepared mind.” So, before you jump head first into your lean implementation project, let’s look at some steps you can take to ensure that you’re prepared for success.

7 Steps for a Successful Lean Implementation

  1. Create a compelling reason. There could be many reasons that your organization may choose to implement lean processes—to help more people, expand your mission, or get additional funding. Whatever the reason, keep in mind that people get behind big missions, so make sure your “why” is a big “why.”
  2. Dedicate adequate resources. Lean initiatives often get piled on top of people’s regular workload. If people are going to be involved in the lean initiative on a full-time basis, don’t expect them to do all their regular work as well.

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  1. Educate staff and clients. A common failure of lean initiatives is that senior management assumes they already know what the customer thinks. But if you don’t talk to your clients, you can’t really know what things they value.
  2. Bite off what you can chew (not more). Lean is a continuous process of small wins. It’s not one enormous feat that you accomplish at the end of the year. So, make sure to consider what actions you can take to make processes better today, this week, or this month.
  3. Assign responsibilities. Be very clear about who is responsible for what and make sure that expectations are communicated to everyone involved in the lean initiative. But remember that lean is very much a bottom-up approach, so it’s crucial that people feel empowered to make improvements that make their jobs better.
  4. Plan/Do/Check/Act (PDCA). Part of building an innovative culture is letting people experiment. So, plan what you’re going to do, do it, then check to see if you get the result you wanted. If you see success, then you act on it. You don’t want to put something into practice without knowing that it will achieve the desired result. Checking results before you act allows you to ensure that you’ve worked out all the kinks before you implement change.
  5. Communicate Results. It’s critical that results are communicated, especially with lean initiatives. Communication is so much more than just a component of internal controls or a soft skill! Communication allows you to stop operating in secret. Poor communication is often a hallmark of a fear-based culture: we’re afraid we’re going to fail or look silly. But an important part of building a lean and innovative culture is failure because it tells you what needs to change.

Yes, efficiency drives new ways of thinking and acting! A successful lean implementation can open the door to greater efficiency, more empowered employees and service delivery that clients truly value.

ABOUT THE AUTHOR

The “Federal Grant Insider” Lucy Morgan delivers straight talk with a sense of wisdom and humor. She is a CPA, MBA, GPA Approved Trainer, Speaker, Author of 3 books including “Decoding Grant Management- The Ultimate Success Guide to the Federal Grant Regulations in 2 CFR Part 200” and “The Diamond Mindset” an Amazon ranked best-seller.  Lucy is a leading authority on Federal grant management for non-profits, institutions of higher education and state, local and tribal governments.  She has written over 200 articles on grant management topics which are featured in LinkedIn, various E-zines and on the MyFedTrainer.com blog.

Comments (30)

  • Karen says:

    Lucy, in what ways have you communicated the lean outcomes to your donor audience?

  • Brinkley Cox says:

    I really appreciated the step on informing staff. Too often new policies and procedures are implicated without informing teams.

  • rachel says:

    I appreciate these concepts. I’m curious how one gets buy-in from top level staff for a lean strategy, especially those who believe you must spend money to make money.

  • Michelle Booth says:

    I love that it talks about communication and how important it is.

  • Jennifer Lange says:

    Excellent idea to ‘borrow’ from our for-profit neighbors!

  • Jeremiah Pierce says:

    This is great thank you for sharing.

  • Claudia says:

    I appreciate the concept but have found that its hard to get staff “buy in”. Its no foreign concept that change is hard for people to get on board with.

  • Becky says:

    We have a lot of room to improve in the implementation of lean processes within our team and organization as a whole. Onward and upward!

  • Madelyn says:

    Creating a compelling reason — such an important step!

  • Petra Hall says:

    Communication is key, but I suspect many charities already have staff doing more than their job descriptions is de rigueur. For them, the key words are going to be “don’t expect them[staff] to do all their regular work as well.”

  • Tammi Burkhardt says:

    Reducing redundancy and succinct meaningful communication are essential is practicing lean.

  • JoAnn Strommen says:

    Several points to think on / change as needed.

  • Lindsay says:

    We definitely have some work to do when it comes to lean processes. Thanks for the write-up!

    P.S. Hello from Thunder Bay, ON – North of Northern Minnesota!

  • Maggi says:

    I think we already run so lean that if we get any leaner we will disappear altogether. With only four people of staff to cover an entire state we by necessity must run lean processes to get the job done.

  • Jayme says:

    Communication is key across all levels, and I also agree with other posters who feel that their organizations are already quite lean as is.

  • Heather says:

    I like the idea of accomplishing many small steps instead of a few big ones.

  • Amy says:

    Absolutely agree with #1! I find any time I need to make a change, the easiest way to get others on board is to give them a reason. Once people have buy-in, the process is much easier.

  • Jillian Wade says:

    Great article! We are in the process of hiring quite a bit and the efficiency of each staff member is a good point to keep in our minds!

  • Kerry Ayres-Smith says:

    Very interesting concept. I’d never heard of this idea of lean presented in this way. I’d heard of streamline, which I guess is similar, but it is interested reading how this author purposes to make these lean cuts.

  • Barb says:

    Good info, thanks!

  • Jenny Stephens says:

    “Part of building an innovative culture is letting people experiment. So, plan what you’re going to do, do it, then check to see if you get the result you wanted. If you see success, then you act on it. You don’t want to put something into practice without knowing that it will achieve the desired result. Checking results before you act allows you to ensure that you’ve worked out all the kinks before you implement change.”

    I love testing and see how things turn out. It’s the only way I feel comfortable and sure what is happening is correct.

  • Karen Stuhlfeier says:

    Interesting – I need to read this again.

  • Angie Stumpo says:

    Love “make sure your why is a big why” – it should always be like that in nonprofits.

  • Sunshine Watson says:

    So much to think about here! Thanks!

  • Joanne Felci says:

    LOVE this: Lean is a continuous process of small wins. It’s not one enormous feat that you accomplish at the end of the year. So, make sure to consider what actions you can take to make processes better today, this week, or this month. It is so easy to want to do it all at once…which might mean you never make any change or that you set yourself up to fail or both.

  • aps says:

    Thanks for sharing this timely and relevant information

  • Julie Ann says:

    For me, “lean” is something to always keep in the back of my mind. I love ironing out clunky and inefficient processes!

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