Lean management or agile? The right answer may be both

Posted by By Stefan de Raedemaecker, Christopher Handscomb, Sören Jautelat, Miguel Rodriguez, and Lucas Wienke from McKinsey & Company

Through thoughtful design, agile and lean management can be the perfect match for companies in search of lasting performance improvement.

Has there even been a time when customers were more demanding of the companies serving them? Industry 4.0 technologies—many barely imaginable only a decade ago—have already enabled genuine breakthroughs in cost, convenience, and customization, creating extraordinary value for buyers while raising the performance bar for producers ever higher.

And then there’s the volatility that never entirely disappears, flaring up in crises that can upend everything from supplier relationships to entire business models—all prevalent in today’s current landscape as Covid-19 creates widespread disruption. It complicates leaders’ efforts to make lasting changes in their organizations—efforts that historically have required years of sustained effort to take root.

Institutions ranging from aerospace manufacturers to tax authorities have nevertheless persisted, focusing their efforts on lean management and agile. Both methodologies have proven their worth as integrated systems for helping improve performance.

The mistake we find many leaders and organizations making is believing they need to choose between the two. In fact, that’s not true. Not only is choosing unnecessary, but the two methodologies complement one another in ways that increase the impact they generate, often by deploying Industry 4.0 technologies to speed transformation. Under this best-of-both approach, top-performing companies combine tools, ways of working, and organizational elements from each to form a custom solution that meets the company’s unique needs more completely and quickly than has been possible.

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