How do you teach an old dog new tricks? In most cases, maybe you can’t.
The way we conduct business has changed fundamentally over the last 30 years. Those that adopted these changes have the opportunity to thrive and those that couldn’t adapt to the new paradigm have stagnated or failed.
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The 1978 English translation of Taiichi Ohno’s “The Toyota Production System” and 1990’s “The Machine That Changed The World” taught the business world a new way to view value and waste in a way most would never have imagined.
These principles apply to everyone. The retiree that fails to embrace the new paradigm, misses the opportunity to reap the rewards of “Just In Time Retirement”.
Today, I’m going to compare how an old-world kind of guy faces a dilemma, to how he could confront the same in this new system.
This new system goes by many names, but I’ll hesitantly start calling it Lean (with a capital “L”). The word lean sounds like doing without or cutting the fat. However, we use it to mean “without waste”.
Now, let’s go to the lesson.
The Wildlife Photographer
I met Buck the wildlife photographer while he was selling his coffee table books at a popular nature preserve. It was obvious that he was passionate about his work, since his gear cost more than he could earn from selling his books this way.
I’m pretty sure his reward was to see people admiring his work as he autographed the volumes that his fans were purchasing.
It seems that to get the lowest per copy cost, he had to buy in lots of 3000 books from China.
Every order was a considerable expenditure and his inventory was now running low.
Buck debated the pros and cons of ordering a new printing of his book versus creating a new book.
He was confident selling his existing book, however, his customers would never buy a second copy except as gifts.
If he created a new book, he would have a product to offer to prior buyers that liked his work.
In the event that everyone hated his new work, his resources would be tied up in worthless inventory, preventing Buck from reprinting his proven product.
Selling coffee table books to impulse buyers is kind of a specialty niche.
If customers love your volume focusing on elk, it doesn’t mean they will buy your wonderful treatment of bears.
What will old world Buck do?
I think it depends on whether Buck is satisfied with the mediocre sales of his original book or if he is a gambler.
Neither option seems too exciting.
Using “Lean” thinking, the world could be Buck’s oyster. Alas, as with many old world guys, he is probably an old dog limited to old tricks.
Lean thinking in two rules:
1) What the customer values (wants to pay for) pulls the “value stream”.
2) Waste (anything not valued by the customer) should be removed from the value stream.
These two rules have changed the nature of business.
Companies are reaching for the unattainable through a process of continuous improvement and some, like Motorola have sought perfection with its “Six Sigma” program.
How does Buck look from a Lean perspective?
He has a book and is looking for customers to convince that they value (want to pay for) his work.
He is not letting customers pull the value stream, however, he’s probably full of arguments to support his methods.
When it comes to “waste”, Buck commits the cardinal sin, “overproduction”.
Building an inventory of product without orders is inexcusable. I’m sure he thinks that it’s all about unit cost, but he doomed himself to failure.
What would a Lean guy do?
First, there is a list of things he would not do. He couldn’t ignore the cost of:
- cash out for inventory
- storage of inventory
- missed sales, due to limited product selection
- resources tied up, causing loss of flexibility
With his resources intact and living in this wonderful “just in time” world, he would use a print on demand service like Amazon to print his coffee table book.
Amazon also makes his book available to a global market.
He can query his point of sale customers as to what new product or service they would value from him. If they want printed material, print on demand can provide it to them, as well as to the global market.
What started as a coffee table book hobby, can now become a business, serving customer’s needs.
Maybe the customer doesn’t value a new photo album, but really values information on the how to’s or where’s of wildlife photography.
Do they want books, videos or live seminars?
As a Lean guy, our photographer can try it all because his resources are not tied up in waste (overproduction).
Unlike Buck, our Lean friend is not limited to one product sold at book signings. His reach and potential are unlimited.
The world is truly his oyster.
What the heck does this have to do with retirement?
Armed with a Lean mind, retiring becomes an opportunity to confront one’s ego and to create an experience based on value as opposed to fear and peer pressure.
As you map your value stream, you’ll find that by eliminating waste, your resources grow accordingly.
Unless you’re a real schmuck, “Lean” will give you the means to retire sooner, richer and freer.
In ensuing articles, I will delve into the tools, methods, and examples of implementing a “Just In Time Retirement”.
You’ve always had the power my dear, you just had to learn for yourself. -Glinda from The Wizard of Oz
This is the 2nd installment in the series, Just in Time Retirement. To get up to speed with this method, please read:
- #1 – A Generation Lost in Space
- #3 – This is What Retirement Could Look Like if You’re Ready
- #4 – Eliminate Waste and the Cost of Ownership