The Difference Between Agile, Lean and Lean Startup

Agile, Lean and Lean Startup are not the same things. It might be in vogue to describe a team or organisation as “agile” or “lean”, but these are actually distinct methodologies that provide solutions to different types of problems. Knowing what these differences are will make it easier to understand which of these approaches is most relevant to your organisation.

What is Agile?

Agile traces back to the world of IT. IT projects involve so much complexity that it is almost impossible to evaluate what needs to be done before doing it. For example, you may upgrade your ERP system and find that complications in development turn a three-month project into a nine-month exercise in futility. The project budget blows out and is still a failure. The Agile methodology is about prioritising high value functions and testing this with users throughout the development process. This prototyping identifies and corrects errors early on. Imagine you are building a bicycle. Don’t build the whole thing and then see if it works: test while you build. Spin the wheels to make sure they turn. Get people to test the seat. Is it comfortable? Agile is ideal for complex projects with clear end goals.

What is Lean?

Lean is a manufacturing methodology that focuses on minimising waste. W. Edwards Demming pioneered this approach in Japan with his work with Toyota. The idea is to design a simple manufacturing system, measure everything and work toward continuous improvement. Most interestingly, Lean opposed the idea of a large factory line that only produced a single thing. Lean manufacturing focused on being able to transition between tasks quickly so work was not just efficient but flexible. They also had the infamous “stop” button where workers could halt production if they had a serious issue. This means that any issues in the production line are fixed immediately. If you build bikes with this method, you’ll constantly improve your processes and drive efficiency. In short, you’ll make more high-quality bicycles. Lean is a great philosophy that works across industries but has been historically most successful in manufacturing.

What is Lean Startup?

Lean Startup combines agile and lean with customer development. Agile tests the product against users. Lean Startup tests the product against the market. The key concern of Agile is to avoid creating a product that doesn’t work. The key concern of Lean Startup is to avoid creating a product that people don’t need. Find a problem worth solving first and build a business model around it. Lean Startup involves listing the assumptions of a business model and testing the riskiest ones first. The goal is not to create nor even to make money. The goal is to learn. Do people even want bicycles anymore? If the answer is no, you get to save your money and find a better idea. Lean Startup is ideal for entrepreneurs and startups that are still looking for a business model that drives genuine value. But it can also be used by large organisations, if they have the flexibility to respond quickly to new information and listen to customer needs.

Which is best?

It depends. These are different approaches that were developed to solve different problems. I would never contract an IT that didn’t use Agile development. I would not work for a manufacturing company that didn’t adopt at least some lean principles. If I started my own business or joined a small startup, I would definitely adopt Lean Startup. But they are not mutually exclusive.

You can use a combination of all these approaches to help your organisation better face its challenges.