Lean thinking: fighting rising costs and diminishing impact

Clive Brazier is director of Sustainability for Business, a consultant at NCVO and a Lean management certified professional.

How you ever poured over annual financial reports that show an increase in overheads and concluded that you’ve got to do something about it? Your first thought might be that you need to raise more funds this year to cover your higher overheads – however as most people working in charities know, raising extra funds isn’t as easy as it sounds.

Perhaps your answer is the same as last year (no increase in salaries, try to purchase better, tell everyone to be more frugal), but if you decide to do the same as last year then it’s likely you will get the same result as last year. Albert Einstein told us that ‘insanity is doing the same thing over and over again and expecting different results’.

So how else can you reduce your costs to direct more of your funds to the front line? The old monolith British Telecom coined a phrase back in 1996 that encouraged us to ‘work smarter, not harder’. That phrase succinctly describes the concept of lean thinking.

What is lean thinking?

Lean challenges you to view your charity in a new way, not radically differently but different enough to make you look at your processes and identify all the steps that add value for your beneficiaries. Anything you do that does not add value is defined as waste. Lean is about identifying, quantifying and reducing that waste.

For example, you may have a process in your charity that involves the excessive double and triple checking of work. If you find a document that has been passed from department to department for checking and signing, you have found waste. Spending resources on triple checking work which could have been right the first time isn’t an efficient use of your staff time.

Lean is a methodology that uses a box of tools to map out your charity’s processes and identify where and how waste is created and where to eliminate that waste. Just like choosing the right sized spanner for a plumbing job, your lean thinking toolkit will provide you with the right tool to stop your charity leaking money through inefficiency.

Lean can be implemented throughout all processes in your charity from fundraising to delivering impact. However it is likely that you’ll want to see the benefits in just one or two of your processes at first – perhaps you could choose payroll or invoicing to start with, as a mini project to assess the appropriateness to your charity. That way you can introduce your people to the concept in bite sized chunks.

How can you engage with lean thinking?

Once you have decided that it’s time for your charity to be more efficient, you may need some guidance on the best way to analyse your current process and implement solutions. An awareness of some of the common pitfalls found in badly planned lean thinking projects will help you to avoid them.

NCVO’s upcoming workshop, ‘Introduction to lean thinking’, is designed specifically for the voluntary sector and will take you through the process of implementing lean thinking step-by-step.