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Did you know that businesses waste $1 million every 20 seconds because of poor project performance?
It’s a staggering number for sure, and for growth-focused agencies especially, it’s a statistic to avoid becoming a part of. That’s where lean thinking comes into play: to help agencies avoid waste and inefficiencies and keep projects more streamlined and profitable.
Below, we’ll explain everything you need to know about lean project management and how to implement this process improvement throughout your agency.
The 5 lean project management principles
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Lean project management is a concept under the tree of the Agile methodology. Generally speaking, it involves reducing project waste, increasing customer value through each project phase, and ultimately meeting customer demand.
This project management process was ideated by the Japanese car maker Toyota, which needed a lean manufacturing process in order to improve the mass production of vehicles in the 1950s. Since then, it’s expanded to numerous industries, including marketing, software development, and more.
Lean project management encompasses these five principles:
1. Identify value
The first core value of lean methodology is identifying the value of your current product. To do this, you’ll need to understand who your stakeholders are. A stakeholder is a person who has a stake or interest in a project, and can either be internal or external:
An internal stakeholder is a collaborator in a project. They have an interest in seeing a project through to the end and maximizing its success. Think of a graphic designer helping to run a marketing project.
An external stakeholder is a client who uses your agency’s services. They are affected by your agency’s work quality and are just as invested in the project’s outcome.
Agency stakeholders tend to fluctuate depending on what project you’re taking on. Knowing who your stakeholders are will ultimately help you determine how to maximize value.
For example, identifying value for an internal stakeholder could mean utilizing Kanban boards to reduce project delays. On the other hand, identifying value for an external stakeholder may lie in making a client’s life easier or solving one of their problems.
2. Map value stream
Mapping the value stream of a project is the next phase of the lean project management methodology. Specifically, this is called value stream mapping (VSM). VSM involves mapping out your current project workflows and comparing it to a visualization of your ideal workflows.
It’s simply a way of finding out how you can streamline your agency’s project management operations and rework your existing system.
To help you implement your own VSM, here are the most common types of waste to watch out for:
Overproduction: Overproduction or over-processing means creating unnecessary additions to a project, namely a product or service. For example, unwanted software features can lead to increased project costs and significant resources wasted on upkeep.
Mismanaged backlog: Uncontrolled backlog can contribute to inventory waste. Finishing up incomplete work can put a significant strain on finances and bandwidth.
Motion: Motion waste is basically the unnecessary movement of people and technology. For example, using too many business apps requires internal stakeholders to work harder to keep track of notifications and updates. Redundant work processes also make it difficult for people to navigate projects.
Defects: There’s no getting around it — technical defects can cause delays and lead to client dissatisfaction, returns, refunds, and a host of other headaches.
Expensive tools: Unnecessary product upgrades and new product purchases can waste agency funds — especially if clients never asked for them.
Waiting: Delays may be the most common form of project waste, and they almost certainly negatively affect the final deliverable and client satisfaction
Fragmented teams: Bottlenecks, silos, unnecessary meetings, and miscommunication can hamper a project’s productivity.
Studies show that 11.4% of investments are wasted due to poor project performance, and yet only 25% of companies use comprehensive project management software. Reducing project waste requires you to identify these problems and implement effective project management tools to streamline your workflows.
3. Create flow
This lean methodology phase is all about creating a plan to fix the waste issues you identified in the previous step. To remove waste from your project management plan, you need to break down each stage of product development, audit it, and reconfigure your processes.
For example, if you determine you’re using too many business apps to run your agency operations, the next step is creating a better workflow by consolidating your product suite for your project team members.
Here are some key takeaways to help you get started:
Use project milestones to track your progress. This is key for reducing waste while you improve your project management plan.
Establish clear communication with your team to set the standards for removing waste and ensure everyone is on board with the changes.
Once you create a project plan for removing waste, your team should document the process to prevent relapse.
4. Establish pull
Establishing pull means “pulling” a deliverable from each stage of a project lifecycle. Pull keeps a project in a continuous flow without any bottlenecks or delays. To put things into context, let’s look at an example of a pull system in a marketing agency:
A growth marketer suggests improvements to a client’s landing page and flags the product for review.
A copywriter receives the project, makes adjustments, and passes it on to the next step.
A UX designer reviews the copy and design elements and sends the project for approval.
The marketing manager conducts a final review and completes the project.
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5. Continuous improvement
Lean project management is a part of the Agile methodology, meaning it’s an iterative process rather than a one-time solution. So, the fifth principle is striving for perfection through continuous improvement.
Tending to the needs of internal and external stakeholders will look different from project to project. This means you’ll have to regularly assess your projects for waste and look for ways to further improve your project management processes.
Benefits of lean project management
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We’ve covered the core principles of lean project management, but this guide wouldn’t be complete without mentioning the benefits of embracing this concept. So here’s what lean project management can offer your agency.
Greater efficiency
The name of the game for lean project management is improving project efficiency. Efficiency isn’t just a buzzword — it’s a goal every agency should strive to meet.
The more efficient project management is, the more you can increase your bandwidth and production. This translates to higher profits and increased customer satisfaction.
Lower costs
Chaotic projects cost agencies a lot of money. Therefore, it’s in the best interest of project managers and agency leaders to run more efficient operations.
Getting projects done on time and on budget is crucial for saving money in the long run and maximizing revenue.
Faster delivery
Successful agencies don’t just complete projects on time. They go above and beyond, refining their lean approach to streamline projects and maximize project delivery times.
Faster project delivery is advantageous for all stakeholders because:
Internal stakeholders can avoid frustrating delays, lead times, and bottlenecks and focus on more pressing tasks without unnecessary stressors.
External stakeholders can get what they ask for without dealing with annoying delays — the root cause of a lot of churn.
Better quality
Fast delivery means nothing if quality suffers. In fact, rushing a project to meet a deadline can be counterproductive to meeting customer needs, especially in an agency setting.
That’s why lean project management also aims to optimize quality by removing waste. Eliminating project waste makes it possible for internal stakeholders to focus more of their attention on building world-class products and services.
Without worrying about inventory waste, delays, and defects, internal stakeholders can collaborate seamlessly to develop solutions that meet external stakeholder demands.
Greater stakeholder satisfaction
All of the benefits we’ve mentioned will ultimately lead to heightened stakeholder satisfaction, both internal and external.
Efficient project management will significantly improve internal stakeholders’ workflows, making their lives much easier. External stakeholders, on the other hand, will benefit from high-quality solutions without the need for excess revisions.
Get lean with Teamwork.com
Overall, implementing lean project management allows agencies to run smooth operations, ultimately benefiting both them and the clients they serve. Embracing this philosophy is key to driving customer satisfaction and improving workplace productivity.
However, it all starts by choosing an all-in-one project management platform that facilitates client work. This is where Teamwork.com shines. Unlike other project management software, Teamwork.com empowers agencies to:
Effective client work management to stay on top of scope, set milestones, and collaborate with clients in real time
Powerful project planning, including resource and workload management, time tracking, and seamless invoice generation
Detailed reporting for accurate tracking of project health, utilization, profitability, and more
Teamwork.com also offers complete operations control so you can manage every aspect of project delivery from start to finish. Sign up today to streamline your lean processes with our top-class Agile project management platform.
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