The importance of Kanban for companies

The popularity of Kanban

Kanban has become one of the most popular working methods in companies in recent decades. For several years, the use of Kanban has been limited not only to manufacturing companies, but IT companies have also increasingly enjoyed the Kanban’s governance principles and practices.

The originally Japanese management method is also on everyone’s note at home-grown IT companies. But not all managers who talk about it also know what it means. The knowledge of many IT company executives is limited to the signal cards, which represent the progress of a project in the Kanban and give the Japanese working method its name (kan = signal and ban = card). However, the importance and benefits of the Kanban go far beyond that.

The use of Kanban in digital transformation

Kanban was originally developed as a method of controlling the production process at the Japanese car manufacturer Toyota. The aim of the new method was to align the delivery of material with the actual consumption at the production line and thus to reduce local storage.

Kanban was thus one of the first cornerstones of lean management theory, which is about the efficient design of the entire value chain of a company. The objective of Lean Management is to avoid additional costs without added value for a customer in the company.

After it was discovered at the beginning of the 21st century that Kanban was also very suitable for use in software development, the method quickly found its way into the entire IT industry and digital transformation. Since important software tools have taken up the method, the typical Kanban boards are an integral part of the premises of most companies.

Why Kanban is good for startups

However, the use of Kanban as a management method is not limited to IT companies or IT departments. Kanban is ideal for companies across all industries to manage projects, lead teams, and generally make the company better. Not all the principles and rules of the Kanban can be applied one-to-one to the working environment of a non-manufacturing company. But if you look more closely at the management method, you will find many points that can also facilitate and improve the work in a young company. The following four points show the most important areas in which a startup company can implement Kanban profitably.

Good teamwork

One of the basic principles of Kanban is to encourage employees to show leadership at every level of the organization. Kanban believes that improvement processes in companies will only work if all levels of the organization participate.

This basic principle is particularly important for companies. Unlike an established company, the organization is still in flux at a young company. As a result, the distribution of roles or the field of activity of the individual employees is often still very blurred from each other. Efficient teamwork in defined roles and activities is often not possible. To make matters worse for startups in terms of teamwork, employees are often spread across multiple locations around the world. This makes it all the more important to involve all employees of a startup in the management of the company at their level.

In terms of teamwork, Kanban can play to his full strength. Unlike other management methods, Kanban creates a sense of (self-) responsibility throughout the company. When all the employees of a startup work with Kanban boards, a kind of collective responsibility quickly arises. It is a good feeling for every single employee to have completed a task and thus made an important contribution to the success of the big picture.

Intelligent project management

Intelligent project management is a success for many startups. IT startups in particular need to be able to meet dynamic requirements quickly. Kanban panels are excellent tools to create the foundation for intelligent project management. The division of the individual project to-dos into “to do”, “in progress”, “in review” and “done” creates clarity and clarity for all parties involved.

In addition, the Kanban system makes it possible to assign priorities and deadlines for each task. For example, so-called “accelerated” tasks can be defined, which must be handled with high priority. For startups where “firefighting actions” are almost always on the agenda on important topics, this is an essential skill. But the definition of fixed dates is also of great relevance for startups. IT companies usually receive precise specifications from their clients as to when a project is to be completed or has to go live. The alignment of a project on a fixed date can be done very well with Kanban.

High development efficiency

The Kanban approach is all about maximizing the efficiency of any task of a production or development process. Put simply, the Kanban is about getting things done as efficiently as possible and ultimately shortening the project timeline if possible.

Kanban panels are ideal for managing Work in Progress and visualizing the work run-up of various development projects from start to finish.

In practice, developers often “suffer” from working on many construction sites at the same time. This carries the risk of dispersal. Developers often no longer know which subprojects should be prioritized. Kanban panels can make a valuable contribution against the danger of dispersal and false prioritization. At first glance, an overflowing Kanban panel reveals that a development team may be struggling with a lack of focus or effectiveness.

The consequence of an overloaded kanban panel must be to reduce the number of ongoing work or to reorganize the work within a development team

The goal must be to maintain the developer’s ability to work efficiently without interruptions and have fun at the same time.

Continuous improvement

Another essential principle of Kanban is the continuous improvement process of a company. In view of the fact that there are hardly or no processes in start-up situs, the establishment of a continuous improvement process is of considerable importance for a young company.

The Kanban method does not specify detailed practices of what such an improvement process should look like in practice. However, in many companies that actively use Kanban, two practices have become established that are also very helpful for startups.

The team should meet daily, ideally in the morning, in front of the Kanban Board for a daily status meeting, where the project progress is shown on the basis of the individual activities. At this status meeting, the team should primarily discuss upcoming issues and find solutions to them. A status meeting should usually last no more than a quarter of an hour. Longer discussions should be outsourced to the Operations Reviews.

The Operations Reviews serve to analyze the successes and failures of projects in a kind of retrospective. The respective reasons should be discussed with the highest possible degree of objectivity. Ideally, an Operations Review will include all employees who have worked on a particular project. In the context of an operations review, a so-called root-cause analysis is often performed. This analysis is based on the Kanban principle, which is to correct problems rather than manage them. The Kanban panels help to quickly identify the causes of errors and to gain appropriate insights to troubleshoot future projects.

Conclusion: Kanban fits for start-ups and companies in transition

The arguments and examples provided in this paper have shown that Kanban can make an important contribution to the functioning of start-ups

Start-up companies usually have to contend with a variety of complexities and friction surfaces that prevent successful and above all efficient work.

The basic principles and practices of the Kanban are excellent for making startups faster, more efficient, better and more successful in the long term. Kanban should therefore have a permanent place in every young company.

It is also important here that such processes of change can also be observed in companies in the midst of digital transformation. Kanban is an exciting approach for renowned companies as well.

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