Lean Philosophically
Make Money Meaningfully
Note: This excerpt briefly introduces the first volume of the book, “Lean Philosophically: Make Money Meaningfully,” available here:
https://leanpub.com/leanphilosophically
Stream 1: Introduction to Lean Philosophically
Do you want to create true value? Do you want to make money meaningfully? Ideally, these questions are the same. “Lean Philosophically: Make Money Meaningfully,” explains why and how you Lean Philosophically for profit. You make the money you earn truly valuable by meaningfully observing and fervently divining who your customers are, why they may buy something, what they want to buy from you, and how you ought to delight them the most. Lean Philosophically stretches your thinking toward better understanding what creates true-north value in your life and business so you can make meaningful amounts of money.
Understanding true-north value requires abstractly understanding who and why your customers are, and thus what they most truly value. Like looking at the sun, such high-level, abstract thinking is painful, disorienting, and best done through a conceptual lens. Lean Philosophically filters all complex subjects to help you better see who your customers truly are to discover what they will find personally meaningful in the products and/or services you re-produce. I suggest you put on your green i-shades and thinking cap before proceeding because these abstract concepts can help you see true-value if you learn to look carefully enough.
For example, here is a logo of a global hardware company describing the true-north value it delivers:
Money is the mythical icon toward which the true-north value of life and business Leans. When deciding whether to buy now and receive meaningful true-north value from you, your customers consider how much money they must pay at the point of purchasing your products and/or services. Likewise, you as a business person reflexively want to know how much money you can earn through your work. Without clearly understanding why and what your customers want to buy, and how you deliver their greatest satisfaction, you cannot uplift your profits to where you think they ought to be.
While what exactly your customers individually believe to be truly valuable remains beyond what all people commonly agree, philosophy logically coheres and mediates the general concept of ‘true value’ inherent in money with the way life is and ought to be. Philosophy can guide you past any blinding idolatry of money to your customers’ true religion. When you Lean Philosophically, you consider how best to create true-north value universally for all people, which in-turn supports who your customers are and what your customers individually believe to be most worth their money.
You may wonder how Philosophy relates to Lean, or what the concept of Lean is in the first place. If you are unfamiliar with “Lean,” Lean is simply a name for a set of business theories derived from studying what has made the Toyota Motor Corporation so successful for so long. In the 1980s, business researchers developed the overall concept of Lean from that extensive body of knowledge. John Krafcik, who is now an executive at Google, first coined the term Lean in an article he wrote for MIT about Toyota’s highly successful production systems when he said, “[I]t needs less of everything to create a given amount of value, so let’s call it ‘lean.’” Most fundamentally, Lean business techniques focus on creating the truest value by removing waste and adding only what most satisfies customers’ demands, just as Toyota continues to do today. However, while not complex on its face, Lean demanded a different way of doing business. In fact, one of its main points was to strip away everything but that which provides customers with “value” however truly defined. Lean has continued to evolve into a philosophy of continuous improvement, cost reduction, and respect for people, which the Japanese word, “Kaizen,” represents.
In the spirit of Kaizen, Lean was iteratively improved in the 1990s and 2000s by intersecting it with more quantitative disciplines like “Six Sigma” created around the same time by Motorola. Motorola designed Six Sigma in the 1980s to ensure production of its information technology equipment within six standard deviations of statistical precision. Thus, businesses use Lean to accurately target what people most value, while Six Sigma and other quantitative methods precisely Lean people in that direction. Thousands of books evidence this intellectual legacy of “Lean,” “Six Sigma” and other people-oriented, evidence-based business insights that are referenced throughout this book and these volumes that you can surface with any search.
Lean has evolved to become widely used by most companies of all sizes in some way as part of their organizational DNA — from start-ups to large corporations — just ask any business person whether his or her organization uses Lean!Lean, like most business theories, must be approached abstractly but applied concretely through specific actions to determine what most profitably delights the most customers for the greatest profit, which all capitalists correctly or not consider to be true-north value. However, despite countless business books falling within the Lean canon, a gap exists in this literature due to authors failing to identify what true-north value is being created by businesses for money so money can be truly made. Lean Philosophically attempts to fill this void so you can make meaningful amounts of money with lasting value.
While philosophy is said to “bake no bread,” philosophy helps you analyze what bread you ought to bake and how to bake bread that gets bought and broken. For example, baking either a wedding cake or table bread requires you to satisfy your customers’ very different fundamental needs in Lean fashion. Knowing who your customers are and why and what they most truly value further determines how you will bake bread that helps your customers better become who they want to be, whether that is either married or well-nourished. If philosophy is dead, why not put it to practical use within Lean to find the true-north value of life and business and make money meaningfully? Lean Philosophically if for nothing else than to more effectively guide you to your customers’ point of physical, emotional and intuitive satisfaction.
Leaning Philosophically is not about endless speculation, but rather about analyzing data with new metaphysical perspectives to make real decisions about how to make money well. Knowing how to analyze your business data implies that you and your organization know what true-north value that data reflects and why the data means anything at all to your customers and other stakeholders. You Lean Philosophically to energize and optimize your business through your customers’ lives and existences and what they personally find meaningful. Analyzing valuable data without clearly knowing why and what your customers find most meaningful prevents your organization from reporting as much money as possible at the conference table inside your headquarters during your business meetings.
Structuring Lean Philosophically
Both Volumes I and II of Lean Philosophically structure their chapters, which I call Streams, around a “U/People” acronym, which stands as a ‘meta-heuristic,’ ‘upper ontology’ and business model for use by your organization to uniquely/profitably energize and optimize your customers’ lives and existences. Of course, the acronym, “U/People,” (pronounced as “You Lean People”), stands for, “Uniquely/Profitably Energizing and Optimizing People’s Lives and Existences.” This book advocates that your organization model itself after U/People to most meaningfully make money the right way.
To explain the U/People business model, Lean Philosophically runs quickly through each part of U/People, from one Stream to the next, by synthesizing the essential qualities of each for you to better relate subjects to build your personal and organizational House of Quality. This business model and vocabulary — as supplemented by all the work cited within this book or that you may subsequently discover — allows you and your organization to point your own “true-north” value compass within your “House of Quality” (your true value “HQ”) toward profitably analyzing data to increase your customers’ standard of existence. “True-North” is the metaphorical direction of all true-value in Lean terminology, and your “HQ,” “Head Quarters” or “House of Quality” is where true-north value is re-produced.
Lean Philosophically’s Volume I: Truth Value specifically investigates what your customers most truly value by identifying who your customers are and why they value your products and/or services so you may better analyze how to fundamentally uplift them for the most money. Volume I accomplishes this by gradually introducing philosophical, physical and business concepts, and combining them into further acronyms such as those listed in the glossary for your organization to better understand who your customers are and what creates true-north value for them. With a philosophical twist, Volume II: Channels applies Volume I: Truth Value to Lean tools and methods among other business analytics to describe what products and/or services you ought to re-produce to align all that you identified as truly valuable in Volume I, with who your customers are and why they would buy anything at all from you.
This Volume I: Truth Value surveys some of the major, and most consistently validated philosophical and scientific explanations for who your customers are and why they now will themselves to exist. Volume I does this so you may better understand true-north value in your life and business to make money meaningfully. However, as you might anticipate, this survey could never be exhaustive within a single volume, much less a part, Stream, section, paragraph, sentence and/or word as may be devoted to any given aspect of this universal subject of true value that ultimately makes all money meaningful.
Thus, this discussion only borrows from the brilliance of others so your organization can better identify and test what your customers most value. My end-goal is to help you induce and deduce who your customers are, why they buy, what you should re-produce and how you ought to create truly valuable products and/or services for the most meaningful money. Volume II: Channels provides more guidance on how to apply this received wisdom with specific tools and instruments, particularly those from the Lean wheelhouse.
To help you with this stretch assignment, I provide biblical amounts of in-line references with hyperlinks and an extensive bibliography for you to refer to true experts in each field to supplement your own customer discovery, learning and understanding while building your business i-deôlogy of making money meaningfully. I footnote where I can recognize prior thoughts. Given the breadth of this discussion bridging together diverse disciplines, please forgive inadvertent omissions that I am sure you will surface! I strongly encourage you to use the references and footnotes as best fits your reason to Lean Philosophically that you have in mind within your HQ.
To be clear, you will not find here a unique ideology or “-ism” in the context of the great many others. Rather, the acronyms in this book bring existing, well-regarded ideologies, -isms, and business concepts into your own Lean HQ. If you must call this something, you might call it “Optimism,” which anticipates the panglossian future value your customers and your organizations will receive from doing business by Leaning toward people the right way by doing the right thing.
Further Reasons to Lean Philosophically
If you need some further reason to Lean Philosophically within your HQ and build a business i-deôlogy around making money meaningfully, the following six reasons elaborate on why you ought to do so:
1) Consistently Grow Your Profits. You can help your organization meaningfully differentiate the products and/or services it creates to make more profits the right way. Ideally, your profits represent the true-north value you create in your customers’ lives and existences over and above the economic cost of producing it. In a competitive environment, your profits also represent the true-north value you provide your customers in excess of the similar value your customers could have received from your competitors. However, as you know, you must qualify this idea of true-north value’s association with financial profit since it comes with many caveats, like “the tragedy of the commons” where people free-ride on public goods like natural resources. Nonetheless, ideally you profitably uplift your customers, employees, investors and society best while avoiding such pitfalls. In the end, you must Lean Philosophically so you can consistently understandwhat will be truly profitable for all.
2) Develop a Core I-Deôlogy, Purpose and Values: You ought to adapt the U/People acronym and business model to your organization’s core value theory to make money meaningfully by Leaning through all business fads, including Lean itself, which will eventually fade away. Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, writes, “… adopting pre-packaged principles without much thought exposes you to the risk of inconsistency with your true values.” Ultimately, your organization must relate your customers’ true-north values to what they pay so you can more effectively serve them products and/or services that energize and optimize your profits that you will rain down on your shareholders.
In one of the best regarded business books of all time, “Built to Last,” Jim Collins and Jerry Porras wrote:
[I]n short, we did not find any specific ideological content essential to being a visionary company. Our research indicates that the authenticity of the ideology and the extent to which a company attains consistent alignment with the ideology counts more than the content of the ideology.
Lean Philosophically supports this statement because taken to its extreme, universal, true-north value strategies get no free lunches, and so achieving optimum profitability requires your organization to adopt strategically unique degrees of ideological sophist-ication. Thus, you must determine how your true-north value theory operates as a compass within your business i-deôlogy to make money meaningfully, and Lean Philosophically helps you decide on a sound basis through which channels your customers’ value streams ought to flow.
3) Evidence Long-term Efficacy. Beyond zealously producing short-term profits, applying humanities-focused business models like U/People and concepts such as Corporate Social Responsibility, improves business performance and increases shareholder returns in the long run. Common justifications for humanities-focused value streams flowing within such business models and concepts include your organization’s reputation management, risk management, employee satisfaction, innovation and learning, access to capital, and financial performance. Again quoting Collins and Porras in “Built to Last,” they said that:
[C]ontrary to business school doctrine, we did not find ‘maximizing shareholder wealth’ or ‘profit maximization’ as the dominant driving force or primary objective through the history of most of the visionary and successful companies.
The authors found that organizations that pursue customers’ greater purposes are better able to motivate employees and other stakeholders while uniquely energizing and optimizing their profits over the long-run. This concept has been reinforced by numerous other studies referenced by Collins and Porras and elsewhere.
In regards to how your business treats internal stakeholders, scholars Jeffery Pfeffer and John Veiga wrote a well-received article in 1999 titled, “Putting People First for Organizational Success.” Pfeffer and Veiga compiled a number of studies correlating the efficacy of well-run people-services programs and organizational profitability. A number of subsequent studies confirmed this too. These authors’ research suggests that corporate cultures that self-organize themselves around what people most value perform better in the short, medium and long-run.
4) Innovate. Chiat\Day art director Craig Tanimoto asked each of us to “Think different” in Apple’s same titled 1987 ad campaign. Combining philosophy with Lean in the practice of true-north value discovery provides a different perspective on how you may build wealth by upgrading your customers’ lives and existences. Philosophy allows you to evaluate Lean and all business theories organically from first principles to reach new conclusions that serve the same fundamental goals of making money meaningfully. Your organization Leans toward who your customers are to identify how to improve the basic human condition for profit. Clearly understanding what your customers believe is valuable allows your organization to pivot flexibly toward what better solves your customers’ problems for the highest margins.
Innovating requires your organization to find the confluence of what is possible, practical and demanded. Data analyzed through metaphysics toward what customers most meaningfully value can help you find this intersection. By Leaning Philosophically, you may iteratively re-confirm that your thinking remains on this side of non-sense as you develop and market your products and/or services. You can then incrementally test whether your customers really experience a revelation of true-north value from the products and/or services you re-generate. Through this process, your organization coheres its business i-deôlogy with what customers will actually purchase so they increasingly congregate at your stores.
5) Increase the Probability of Your Profitability. The principles described in this volume increase the probability that you will make profitable business decisions despite fickle markets. While empirically studying whether you make more money when you Lean toward what your customers most meaningfully value is outside the scope of this book, these principles cohere with well-regarded advice from scores of renowned tycoons, scholars, philosophers, theologians and poets who are all liberally quoted here. The balance of the two volumes of Lean Philosophically improves your chances of effectively achieving its obvious yet often disregarded main point that you and your organization ought to fervently seek true-north value to make money meaningfully. This book provides the fundamental structure for why and how that occurs.
You may quickly measure how effectively you Lean Philosophically by analyzing how your customers respond when you follow this book’s precepts. While predicting human behavior always involves some degree of randomness due to your customers’ rational irrationality, which limits your business projections, Lean Philosophically allows you to better identify the difference between what is tactically correct and what is not for the greatest chance of your achieving profitable success.
6) Meaningfully Analyze Your Data. Most importantly, observing true-north value in your life and business allows you to guide your scientific methods, particularly when you lack clean data, as increasingly large datasets improve your ability to quantify and understand what your customers most truly value beyond what they just purchased.
The best, most recent attempts to quantify true-north value outside of economics and marketing have been in the fields of psychology and neurology. Behavioral economics and “marketing neuroscience” increasingly identify what customers most truly value before they pay by quantifying customers’ systemic biases and responses. However, to complement these studies and balance a dogmatic focus on obtaining data, Lean Philosophically leverages inductive logic, deductive logic and intuition to discover what matters most both before it can be counted and when it cannot be counted at all.
You cannot accurately see how much people will pay when such true-north value cannot be counted unless you ask blindingly difficult questions. Lean Philosophically summarizes, unifies and abstracts business methods through new vocabularies, frameworks and acronyms so you may confidently hypothesize what your customers most truly value both before you measure and when you cannot measure at all. Lean Philosophically connects metaphysical abstraction to how your customers actually live, exist and confess their deepest needs within whatever blessed data you may obtain. Lean Philosophically is the art and social science of business.
This mentality of questioning first through interrogatories is similar to what the famous management guru Peter Drucker wrote about the same Asian culture that produced Lean:
The Westerner and the Japanese mean something different when they talk of making a decision. With us in the West, all the emphasis is on the answer to the question . . . . To the Japanese, however, the important element in decision-making is defining the question.
– Peter Drucker
More recently, Jeffrey Leek, PhD, professor of data science at the Johns Hopkins Bloomberg School of Public Health said:
So the key challenge in data science is actually really nicely summed up in this quote by [Mathematics Professor] Dan Myer. He says, ‘Ask yourselves, what problem have you solved, ever, that was worth solving, where you knew all of the given information in advance? Where you didn’t have a surplus of information and have to filter it out, or you didn’t have insufficient information and have to go find some?’ … This goes to the heart of our philosophy about data science. We are interested in answering questions with data. We think the question should come first, and the data should follow after.
Lean Philosophically allows you to inductively and deductively question the meaning of and correlations within data as it applies to your customers’ lives and existences. Lean Philosophically bridges gaps in your analysis so you may ask beautiful questions and answer wicked problems with what good data you can obtain. Thus, Lean Philosophically and its 3WH method of interrogatory analysis represents a form of “Design Thinking” as well by crossing all business disciplines within the U/People business model so your organization can wholly identify why, what and how your customers will buy from you. You ask who to maintain an empathetic customer-centeredness, why to define problems, pierce ambiguities and achieve “aha moments,” what to ideate and re-design delightful solutions, and how to prototype and test really tangible benefits.
Thus, by normalizing how you discuss true-north value across your organization, you can then better connect all topics and disciplines to holistically identify and quantify how you can meaningfully make the most money by doing good while analyzing the data you have well. For example, of any business fields, finance excels at gathering and synthesizing big data sets, but finance still shows limited though often lucrative success in accurately predicting true-north value creation since its methods of analysis generally do not use any sort of “Design Thinking,” “Systems Thinking” or “Lean Thinking.” As you will see, all financial analysis boils down to philosophical perspectives as well. So, if you have little data or work in less readily quantifiable fields, how do you to better qualitatively and quantitatively analyze true-north value? You and your organization must ask beautifully inspired inductive and deductive hypotheses to create true-north value with either a lot, little or no data by knowing why and how your business Leans toward who your customers truly are.
Once you determine who your customers are mostly by what they do, your organization then can inductively relate why they value those activities to what your organization can satisfy them with the most. You deduce what metaphysically related products and/or services, functions, features or benefits they will actually buy. This allows your organization to better hypothesize how to make the most money meaningfully by identifying and relating these metaphysical factors to your customers’ lives and existences to enter, expand or create new markets.
In Volume II: Channels, these inductive/deductive relations will logically apply throughout the departments of your HQ, such as your marketing, operations, R&D, finance, and strategy departments. Volume II will focus on how you ought to align and cohere your customers’ highest values with your broad executive functions like your chief financial, marketing, human resources, and other executive officers. This process will naturally transform your upper-management into chiefly functional, meaningful and innovative officers. Once you do this, your HQ will uniquely/profitably energize and optimize customers’ lives and existences from analysis to execution.
