The recession has been an extremely disruptive event for many organizations. Many bear relentless pressure to identify new market needs, create appropriate products and services, become more effective and efficient, and develop and modify systems and processes to meet and deliver those goals. In short, the economic downturn has put the spotlight squarely on how an organization creates the value needed by its markets and customers.

Note that I said “creates the value needed.” Creating value is different than eliminating waste. Eliminating waste, while necessary to improve productivity and efficiency, does not necessarily result in value creation. At best it might enhance the value that is already being provided. However, if that value is not the one sought by an organization’s markets and customers, then pursuing waste elimination may not ensure continued sustainability of the enterprise.

If we consider a business enterprise as a system, it might look like the illustration in figure 1 (click on the image to enlarge it):

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