Lean methodology vs. agile – how do these two methods differ and which is most suitable for your organization?
While both are similar, they each have a different focus and use case.
Below, we’ll explore the lean methodology, its benefits, and then we’ll see how it compares to agile thinking.
Lean Methodology 101
What is lean?
Lean is a business methodology designed to reduce waste and increase customer value. This method began in manufacturing but has spread to many other areas of the business world.
Today, lean principles are used in business functions that include:
- Business process management
- Product development
- Project management
- Supply chain management
The central principle of lean revolves around waste reduction, as mentioned. However, this core principle leads to a variety of other benefits, including:
- Shortening product development cycles
- Enhancing the product experience
- Increasing business process efficiency
- Decreasing product time-to-market
- Improving the overall effectiveness of the business
To better understand how lean works, let’s look at a mechanism popularized by Eric Ries in The Lean Startup – the Build-Measure-Learn cycle.
This cycle is a three-stage mechanism that can be used for continual improvement, regardless of where it is applied.
Here is a breakdown of these three stages.
- Build. Create a new product, process, service, feature, and so forth.
- Measure. Evaluate customer feedback, usage data, user testing data, and other relevant information.
- Learn. Analyze that information and apply it to future iterations of the product.
By repeating this process, lean practitioners can generate continuous improvements, create products and services that are more relevant to their customers, decrease waste, and ultimately drive revenue growth and improve organizational performance.
Agile vs. Lean
Both agile and lean emphasize the need to continually improve, learn from customers, and maximize customer value. However, the way they achieve these ends differs and will affect business processes and the organization differently.
Agile, for instance, revolves around responsiveness and flexibility, rather than waste reduction. The primary outcome of adopting an agile approach, therefore, will be increased adaptability.
That being said, the two methods do overlap, so it is useful to examine these commonalities in detail.
Let’s compare a few of these finer points in detail to understand how they differ:
- Speed. Agile is geared towards speed, adaptability, and learning from customers. Using a data-driven approach and operating in small teams allows agile practitioners to react, make decisions, and execute on those decisions quickly. In Lean, however, the same goal is often accomplished by reducing waste and managing the work-in-progress.
- Customers. Customers play a central role in both methodologies. Agile puts the main focus on customers and allows managers to change project criteria at any point in order to meet customers’ needs. Lean, however, with its focus on efficiency, may not be as suitable for volatile and uncertain environments.
- Flexibility. Agile, as we have seen, prefers flexibility over waste reduction. Though increased efficiency is often a byproduct of agile, it is not necessarily the main goal, as it is with lean. Agile, instead, generates benefits such as adaptability, nimbleness, and resilience.
Ultimately, both methods rely on user-centric insights to maximize customer value. As we have seen, however, agile tends to prefer flexibility over efficiency, but with lean, the opposite is true.
Which Is Most Suitable?
To sum up the general points made so far:
- Agile is a good methodology for staying adaptable and resilient in disruptive or fast-paced conditions
- Lean is a good methodology for ongoing business process improvement, waste reduction, and increased efficiency
- Both focus on maximizing customer value
These general points aside, it is important to remember that each organization is unique.
Therefore, when evaluating these methodologies, an organization should begin by assessing its own needs and goals.
An organization that operates in a relatively predictable environment that changes little over time may prefer efficiency over agility.
Another advantage of lean is that because it is more systematic, it can be integrated across the organization and may be easier to embed into organizational processes and the culture. According to some, lean can also help build organizational knowledge, since processes and mindsets are instituted and incrementally improved upon over time.
With agile, however, this may be more difficult – by definition, after all, agile prizes rapid change and evolution, rather than long-term stability and static processes. One potential drawback: it is challenging to build organizational knowledge in an environment that changes too much.
Can Agile and Lean Be Combined?
When researching business methodologies, many managers find value in more than one approach. A manager who likes both lean and agile, for instance, may want an approach that combines techniques from each.
This need has resulted in a large number of hybrid business methods that include not only lean and agile, but many other methods as well.
Hybrid approaches combine various business methodologies, such as:
- Lean and agile
- Agile and waterfall
- Lean and Six Sigma
- Agile and Six Sigma
Hybrid approaches such as these are quite common. For many people, they may be more appropriate than simply following one “pure” approach.
