Understanding Agile and Lean Methodologies (With Tips)

By Indeed Editorial Team

Published June 29, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

The agile and lean methodologies are two related strategies for businesses seeking to increase the efficiency and effectiveness of their teams and their supply chains. They can influence many production stages, from manufacturing to marketing strategies. Businesses that implement these methodologies can produce higher quality products more efficiently and at a lower cost while maximizing profits and revenue. In this article, we discuss the principles of agile and lean methodologies, the benefits of combining them and some tips.

What is agile methodology?

Agile methodology is an approach to business that works to get products to market faster while ensuring high-quality results, and it is useful in many industries. Here are some of the principles of agile methodology:

  • Deliver early: In order to get products to market as quickly as possible, agile methodology encourages businesses to deliver their products and services to consumers as early as they can. This allows businesses to maximize their revenue and maintain a competitive advantage over other businesses that may enter the same market soon, or already have.

  • Support change: Businesses utilizing the agile methodology promote change within their organizations. For instance, In manufacturing businesses, this can mean supporting changes in manufacturing processes that may increase costs in the short term but save more money in the long term.

  • Deliver consistently: In addition to delivering products and services early, businesses utilizing the agile methodology deliver continuously to customers. This may mean releasing new software updates as soon as programmers have completed development or releasing new products as soon as they are available for delivery, instead of waiting to release multiple software updates or products at the same time.

  • Seek collaboration: Agile methodology promotes collaboration between individuals at all levels of an organization in order to increase efficiency, promote the sharing of ideas and allow for constant feedback. For instance, organizations using this principle may connect members that are involved with the development of a product or service to members that are tasked with marketing that product or service to consumers.

  • Encourage motivation: This methodology asks organizations to place motivated employees into positions where they can be most productive. Organizations using agile methodology rely on motivated individuals to get productive tasks done.

  • Increase face-to-face interactions: Face-to-face interactions allow for clearer communication, increasing efficiency and decreasing instances of miscommunications or misunderstandings. For these reasons, agile methodology promotes face-to-face interactions.

  • Create functional products and services: In addition to releasing early and consistently, agile methodology encourages businesses to focus on working on projects until they have created a functional product or service. This increases the cost effectiveness of development processes and allows for greater use of time.

  • Promote sustainability: In terms of agile methodology, sustainability refers to the capability to continue current productive efforts indefinitely. For example, this may mean ensuring that a business does not entirely deplete all raw materials used within a manufacturing process at some point in the future.

  • Focus on quality: Besides creating functional products or services as quickly as possible, agile methodology also involves focusing on producing high-quality products or services. This quality may increase the time that it takes to bring a product or service to market, but can bring a greater overall revenue from that product or service in the long term.

  • Maintain simplicity: Agile methodology also encourages businesses to maintain simplicity within their business processes as much as possible, cutting out processes that are no longer relevant to the creation of a functional, high-quality product or service. For example, this may mean implementing automation into processes that employees currently are doing manually.

  • Encourage self-organization: In addition to suggesting that businesses to trust motivated employees to complete essential tasks, agile methodology encourages businesses to allow teams to organize themselves in order to be highly efficient and productive. This decreases the need for management oversight and supports independent ownership of responsibilities.

  • Reflect and adjust: The final principle of agile methodology is to seek feedback consistently, making adjustments as soon as is necessary. Teams using this methodology can identify problems and quickly implement changes in order to solve those problems, allowing for increased efficiency, high-quality products and services, and faster delivery.

**Read More: Agile Project Management: Values, Principles and Steps**

What is lean methodology?

Lean methodology is a system of strategies that promotes the creation of value for customers while maintaining the efficacy of a business. The automobile manufacturer Toyota created lean methodology in order to differentiate their business from the competition. This methodology allowed them to improve on the quality of their products, increase the efficiency of their supply chain, and ultimately create value for their customers. Since then, many businesses use lean methodology for the same reasons. Here are the key principles of lean methodology:

  • Create value: Lean methodology focuses on creating value for customers wherever possible. Businesses may create this value through a high-quality product or service, by decreasing costs or by solving a common problem.

  • Sustain a value stream: This principle involves focusing on all elements within a supply chain in order to maximize the value derived by consumers. For example, a company may work to decrease manufacturing overhead in order to bring a product to market at a lower cost to consumers.

  • Support flow: The principle of flow encourages businesses to focus on the movement of products or services through all processes within the value stream to maximize efficiency. For instance, this may mean working with a distributor to ensure that products get shipped the same day that they get manufactured.

  • Practice pull: Pull refers to limiting waste and unsold merchandise by only shipping products when there is an established need for them. For instance, a car manufacturer may use the principle of pull to only send another shipment of their latest model to a dealer once they have already sold the previous shipments to customers at that dealer.

  • Strive for perfection: This principle of lean methodology asks businesses to work towards perfecting the design, development and manufacturing of their products and services, limiting defects or flaws. By striving for perfection, organizations can deliver more value to customers and help inspire future sales.

Read More: Lean Project Management: Definition, Principles and Tips

Benefits of combining agile and lean methodologies

There are many benefits of combining agile and lean methodologies, as they involve many of the same goals and principles. Businesses that can combine both methodologies are more likely to create products that are functional, high quality and delivered to customers as soon as they are available. With lean methodology's focus on creating efficient value streams and agile methodology's focus on creating effective motivated teams, the combination of both strategies allows for businesses to compete at a higher level within their markets, increasing their long-term profit margins and total revenue.

Related: What Is Agile Project Management?

Tips for combining agile and lean methodologies

Here are some tips for combining the principles of agile and lean methodologies:

Focus on improvements

Agile and lean methodologies both focus on continuously seeking to improve processes within the supply chain. This may mean creating teams that consistently seek feedback from each other in order to implement any required changes as quickly as possible, or providing customers with the opportunity to give feedback in order to create better products in the future. Organizations can achieve this focus on improvements by establishing a culture that encourages change and non-judgemental collaboration.

Related: Kanban vs. Agile: Which Project Management Method Is Right for You?

Balance autonomy with teamwork

Both agile and lean methodologies encourage businesses to build teams that can create sustainable value for customers. Agile methodology asks businesses to trust their employees to self-organize into motivated and efficient teams, while lean methodology asks businesses to create teams that can transition products smoothly through all portions of the supply chain. By combining these principles, businesses can focus on developing teams that know how to work well together in order to achieve common goals, while trusting them to work independently to complete their individual responsibilities.

Explore more articles