Nationwide Mutual Insurance Co, based in Columbus Ohio, notes a saving of US$28 million, following the incorporation of Lean and Agile practices into its IT system. This company serves as a great case study for how both local and global companies can improve their bottom line by incorporating the Lean Management System.


The Lean Management System is a way of thinking that influences the way we work, engage with others and deliver to the customer. The main goal of lean thinking is to maximise customer value by minimising waste; ultimately creating more value for the customer but with fewer resources.

This workflow concept is actually based on the Toyota Production System, which revolutionised the car manufacturer’s offering in the 1930s by enabling the company to provide a variety of products according to the customers’ demands when its main rival, Ford, could only provide one particular car model. Toyota was able to respond to its customers’ changing desires by shifting the focus of the manufacturing engineer from individual machines and their utilisation, to the flow of the product through the total process. Today, Toyota is still recognised as the leading example of the implementer of the Lean Management System as a highly successful company.

The Lean Management System focuses on five core principles:

  1. Defining value—this is done by identifying what value is through the eyes of the customer.
  2. Mapping the value stream—this is the path that the service and/or product goes through from the point of customer need to delivery. This process includes eliminating any sort of waste in the business that creates inefficiencies and hampers a smooth flow of value in the entire life cycle of the ‘product’ (whatever it is that the customer demands).
  3. Creating flow—making the product flow continuously through the remaining value-added steps.
  4. Establish pull—create or deliver only what the customer asked for when the customer requires it (the concept of ‘just-in-time’).
  5. The pursuit of perfection—in order to reduce the number of steps and amount of time and information needed to serve the customer, trying to perfect the flow.

At Europ Assistance, we like to add a sixth principle: respect for the people. This involves the leaders’ attitude of humbling themselves and listening to the ‘doers’ of the work. Leaders need to appreciate that those who are client-facing or actually doing the work know more because they are closer to the task at hand. Thus, it is important to continually coach them in order to improve their problem-solving skills and their way of working.

The Lean Management System should be a consideration for all businesses because it fosters the empowerment and involvement of the people doing the work—especially at the front line of the business. These people have a direct contact with the customers more than anyone else in the business and they are empowered when given the autonomy to make decisions about their work. As a result, they will be more inclined to add value to their customer service, as defined by the customer. Therefore, if a business is serious about improving its customer experience, it should consider implementing the Lean Management System as a way of working that will engage both the customer and the frontline staff.

One of the main advantages of the Lean Management System is that it fosters employee engagement, which improves employees’ morale. Happy employees have a positive impact on customer service and a good state of mind, which in turn, has a positive impact on the idea-generation and problem-solving process.

Lean thinking is important because gone are the days when businesses would define their products and services and expect the customer to align to what they have to offer. In this day and age, the customers have a voice and they know it—so they do not hesitate to use it. Competition is also tight, hence the customer is not hesitant to make a demand and switch to competitors if the demand is not met. Therefore, the companies that are passionate about their relevance should apply the lean thinking. This means keeping their ears on the ground to listen to the voice of the customer and their eyes peeled to observe and see the better way of working that adds value to the customer’s ever-changing demands.

Lean is a customer-centric way of working that puts the customer at the heart of everything that the business does. It prescribes a way of thinking that influences the leaders to change their mindsets and behaviours to humble themselves and respect the frontline staff’s thinking abilities. As a result, it fosters a leadership style that enables engagement and collaboration in problem solving and the removal of inefficiencies from the ‘system’ (business value stream). As a result, it provides a business with the opportunity to retain customers and attract new ones.

However, it is important to realise that the Lean Management System calls for thorough planning. In general, about 80% of the effort is spent on planning. Since it encourages intensive investigations, analysis and engagements, it takes longer to complete activities. As a result, some professionals criticise it as a slow process. However, when the planning is done to the right degree, it is easier to flow smoothly through the rest of the process.

Customers of a company that follows the Lean Management System will experience a smooth flow of information and material through the value stream. There will also be an improved engagement and flow of ideas amongst the teams and between the customer and the business. Efficient processes lead to a more cost-effective way of producing or rendering a service, hence lower prices. Additionally, efficient processes lead to quicker service and eliminate the frustration of having to wait long in queues. This means happier customers and happier employees.

At the end of the day, the Lean Management System is more about the people than the tools. It is a culture that enables the people (staff, leaders and customers) to engage with each other. The most critical tools that are required for a person to be successful as a lean thinker are the eyes, ears and mind—observe, listen and think before acting. These are the necessary skills that one requires before one can worry about learning any other tool that lean has to offer. Most importantly, in a lean environment, these tools and skills are required at the leader level since the leaders are expected to role model the behaviours that lean calls for and to coach others on how to practice them.

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