Understanding Value: It’s the Perspective


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Lean is a primarily a product dominant thinking methodology. Lean was based primarily on the Toyota Production Process, which was an avid follower of Dr. Deming. Lean became more problem/solution orientated and another outgrowth of Dr. Deming, Systems Thinking, moved more to the Peter Senge approach illustrated in The Fifth Discipline. A crude analogy at best but viewing implementing each method, you could either choose between the Systems Archetypes or the Lean way, PDCA/PDSA. I chose Lean as my primary method. However, the Systems Thinking side has always remained with me and I believe has caused me much internal strife with Lean (more about this later).

I created this short introduction to Lean Service Design. In this video, I highlight how services were originally created as a way to support products. When you apply Lean these are all wasteful activities unless a customer is willing to pay for them. Of course, a few of them cannot be eliminated so they are just non-value adding steps in the process.

If you watch the video, you will see that many of these services have become more valuable than the product. Would you buy a smartphone that did not have apps? Would you buy a Kindle without Amazon services? Would you buy an iPod without iTunes? Would you buy a Caterpillar without the dealer network? You get my point.

The problem that exists is that Lean continues to view the “System” from the inside out. When you ask what a customer will pay for it creates a point of transaction. It is viewed as a transactional exchange.

The new way of thinking is viewing it from the outside–in. This is pretty simple. Go put yourself in your customer’s shoes. The only problem with this thought is that more than likely the customers are basing their decision as a transactional value, the same way you are viewing it. Now, it may sound silly but to understand value, you have to take one more step. You have to create value in the place the customer does the work with your product or service. It is from the user point of view that you must understand value. At that point, you start understanding the value of Systems Thinking. It is at that point that you understand Service Dominant Logic. The Value Chain is not broken. However, it is completely oblivious to the user. He does not care what it takes you to deliver that product or service. The user only cares what it takes to get their job done.

Republished with author's permission from original post.

Joseph Dager
Business901 is a firm specializing in bringing the continuous improvement process to the sales and marketing arena. He has authored the books the Lean Marketing House, Marketing with A3 and Marketing with PDCA. The Business901 Blog and Podcast includes many leading edge thinkers and has been featured numerous times for its contributions to the Bloomberg's Business Week Exchange.


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