Lean Organisations

images-9Nearly everywhere I have worked, when I was interviewed they were always impressed by the cost savings or performance improvements that I had implemented in my previous job, but always told me that their organisation was running very lean and there would be little scope for improvements.

Its amazing how companies always think that they are always performing optimally, and it’s this thinking that stops them from from improving further.

Take a look at South West Airlines, the company that invented budget airlines, they were profitable 39 years in a row they were the only US airline not to go into bankruptcy during that period. They developed a model that reduced costs to a minimum, simplified the business model, all of which allowed them to offer a low costs service and yet still make profits.

When you look at their model you would say that they had done everything to squeeze out every last cost that could be squeezed.

Yet when you look at Ryan Air they have taken that exact same model and made it even more profitable, they have found ways to reduce costs even further, although some would say this is at the detriment to customer service which is highly valued at South West.

But it just shows that we can always optimise a little bit further, there is always more that can be done, and we need to be constantly challenging ourselves and our companies to squeeze that last ounce of performance out.

I know many people will disagree with that, but that’s probably because it’s easier to maintain the status quo than to keep improving things.

But as leaders it’s our job to create that culture.

When Pep Guardiola took over at Bayern Munich many thought that he would not be able to improve on the previous year when Bayern would the German League, German Cup and the Champions League, this was the first time that they had done that, it was a record performance. I wasn’t so sure he could improve it myself.

Yet under Pep Bayern have won the league quicker than they have ever done, they are, according to some commentators, more dominant and classier than they were last year, and yet Pep claims ‘we can do even better’.

The season is not yet over, and Bayern still need to win the Champions League and German cup if they are to match last years exploits, but in Guardiola, Bayern have a manager will continue to demand more, keep raising the bar and looking to push the team to even bigger and better achievements.

Given it’s unlikely that we will be working at companies who are performing at the same level as Bayern, it means that there will always be room for improvement and we should all look to emulate Guardiola’s attitude, look to install that same spirit and culture within our team.

Even in lean organisations we can always deliver a little bit more.

Gordon Tredgold

#Leadership Principles