3. The Economic Value of Applying Lean Methods Includes Repeat Business
Let's take a close look at the value chain for Lean Law to identify its primary benefits in terms of cold, hard cash.
April 16, 2021 at 07:10 AM
2 minute read
The original version of this story was published on Lean Adviser
A value chain works for any change in process or methodology in any organization. The idea is: 1) look at the process change; 2) examine the outcome; 3) consider the impact of that outcome, and finally 4) assess the value of that impact.
Here is a value chain for Lean Law:
- Process Change: The 'value chain' starts with the individual lawyer who adopts lean. At that individual level, there are new activities and processes, which are really just new methods.
- Outcome: These new methods can have several results. In value chain parlance, these results would be called 'outcomes.' For example, the individual is likely to be more effective, happier, and more secure. There are also outcomes for the work product; it is likely to have more structure, clarity, and transparency, with fewer failures. These are hard things to measure, but in a classic value chain, this is not the stage where measurement is taken. That is not to underestimate user satisfaction. After all, new processes always work best if they are appreciated by and advantageous to those who will be asked to operate them.
- Impact: The chain then moves on to address 'impact.' What the person (or organization) used to do had certain 'outcomes,' what it does now has different 'outcomes,' and the difference between the two 'outcomes' is the 'impact' of the process change. Each of the new outcomes has its own 'impact' and sometimes more than one. For example, more effective lawyers (an outcome) will deliver three impacts, a better service, operate more transparently, and be regarded by clients as reliable.
- Value: Can an 'impact' be measured? In order to measure value of an impact we need to find the economic effect caused by it. This economic effect of an impact is the final step in a value chain and is measurable as money.
The value chain for application of lean methods is shown below.
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