Many people think that the Entrepreneurial Operating System (EOS®) and Lean are competing management models. In reality, they complement each other. EOS is a proven business operating system while Lean is a methodology for continuous improvement. Organizations that implement both can achieve tremendous results.
As a Certified EOS Implementer™ (and once an EOS Integrator™ at a company I led), I have witnessed time and time again how EOS can transform a business. I also have first-hand experience with Lean and what it can help companies achieve. Approximately 15 years ago, I was trained as a Lean Six Sigma Black Belt and led the Lean transformation for the company I was working for. It was nothing short of amazing.
For those of you unfamiliar with Lean, its focus is on eliminating waste to improve processes and ultimately provide more value to customers.
Thinking of the acronym DOWNTIME makes it easy to remember the types of wastefulness Lean addresses:
There are many Lean tools people can use to work on improving these areas. EOS overlaid on Lean principles can make process improvement efforts even more effective.
EOS starts with the leadership team and works its way down through the organization, providing tools to help individuals succeed in their roles and contribute to reaching company goals. Lean starts with the people on the front line or plant floor—that’s where the ideas come from. This is often called “Going to the Gemba.” Lean is a great methodology for making process improvements from the bottom up, and EOS is an overarching business operating system that helps guide and facilitate process improvements.
EOS and Lean complement each other, enabling organizations to strategically and methodically make positive changes.
As an example of how they overlap and have a synergistic effect, suppose a company has a Rock (90-day priority) to improve the effectiveness of a key process that is riddled with redundant data entry and an abundance of errors. The Rock owner leads a several-days-long Kaizen event to improve this process. Doing so is consistent with the EOS Process Component™ and Lean’s principles for eliminating wasteful practices that hinder productivity and service quality.
Lean also fits beautifully into the Issues Component™ of EOS. The EOS IDS™ (Identify, Discuss, Solve) methodology helps find the root cause of an issue and Lean tools can take business leaders deeper into making corrective actions.
I’ve seen it all in action while working for an $80 million manufacturing business. We were able to reduce scrap from 5% ($4 million) of revenue to 0.8% ($640,000)—the savings went right to the company’s bottom line.
Also, we initially had $1.3 million in unusable inventory that took up a whole warehouse, and we got that down to $50,000. It essentially freed up valuable warehouse space, and we could put in a production machine—taking a space that wasn’t adding value to one that was making money.
EOS and Lean make an ideal pairing. While Lean is most associated with manufacturing companies, its principles are applicable to any type of company in any industry. There are always processes of some sort in an organization (customer service processes, technical support processes, etc.) that may need improvement. Likewise, EOS is effective for companies across all industries.
When implementing EOS, Lean, or both, an organization needs its top leaders to be all in. That buy-in and engagement are absolutely essential for achieving transformational results.
If your company has implemented Lean and you want to discuss how EOS can advance your process improvement efforts, I welcome a conversation. Reach out to schedule a call!
