• Sunday, December 10, 2023
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Lean thinking is imperative during economic hardship

Lean thinking is imperative during economic hardship

“…..No, Nigeria cannot be a centre of wastage in the 21st Century…” – Anonymous, 2023

Did you know that Benjamin Franklin, a prominent figure in the founding of the United States of America, authored a book in 1757 called ‘Way to Wealth’? This book is a treasure trove of advice on how to make money, start a business, and save for the future.

Franklin’s philosophies on success are rooted in lean thinking, and his adages have been guiding individuals for over two centuries. One of his most famous quotes is that “success is just the consistent application of hard work and thrift.” Additionally, Franklin warned against the dangers of greed and how it can negatively impact profitability.

It’s fascinating to note that Benjamin Franklin’s book, ‘Way to Wealth’, not only offers advice on making money and saving for the future, but also provides valuable insights for individuals and business leaders in today’s world. His maxims, such as “he that lives upon hope will die fasting” and “for industry pay debt, while despair increases them”, are still relevant and can help keep people focused on their goals.

It’s impressive how Franklin’s philosophies about success, based on lean thinking, have stood the test of time for over 200 years. He also wisely cautioned against allowing greed to overshadow profitability, a lesson that remains important today.

One of the key tenets of lean thinking is waste reduction, which is especially important during times of austerity. To truly thrive, public offices and firms must work to minimize waste and maximize efficiency

It’s important to note that in order to boost our Gross Domestic Product (GDP), it’s crucial to have a strong workforce. Unemployment can hinder GDP growth, as can low production levels. To improve our economic standing, we must focus on increasing production and exporting goods and services internationally. However, it’s worth noting that the power sector has not seen significant improvements despite reforms made 20 years ago in the country. It’s really a pity.

It’s concerning that there seems to be a lack of trust between citizens and those in positions of authority. Why is this so? The amount of money spent on repairing oil refineries and hiring aircraft from another country without seeing any tangible results is alarming. Fuel subsidy in trillions of Naira spent over the years could not be justified. This can only happen in peculiar nations such as Nigeria.

During economic crisis, it is crucial for those in positions of power to exhibit responsibility, transparency, and accountability in their financial decisions. Recently, the last minister of aviation was accused of engaging in questionable behaviour by hiring and painting an aircraft from Ethiopian Airline, which he claimed was owned by Nigeria Air.

Unfortunately, this aircraft was flown back to Ethiopia and has not returned to Nigeria, resulting in the loss of the funds spent on it. It is imperative that leaders take their commitment to their country seriously and avoid reckless actions that could harm the country’s financial stability.

Where is leadership commitment on the part of our leaders when there are abandoned projects across the length and breadth of the country? Over 50,000 abandoned projects across the country as reported in one of the main newspapers about 6 months ago. “The value is worth more than 17 trillion naira and still counting.” What could be responsible for this tragedy?

The Team lead of the Institute that conducted a study on abandoned projects in Nigeria was reported to have said that: “The cultural attitude of Nigerians towards projects’ execution was at variance with was obtainable in other climes.” What about the culture of impunity. In Nigeria, those who commit infractions by spending public funds recklessly are not called to justice most times. Some of these people gallivant gallantly from one side of the country to the other looking for chieftaincy titles.

This attitude, according to the Team lead, calls for revolutionizing project management in Nigeria, as many projects are outdated and over-budget. Nigeria, according to the report of the study, has been dubbed a “project management graveyard” by other countries, with numerous abandoned projects visible along the roads. There is need to change this narrative and ensure that projects are completed efficiently and effectively.

We will not be writing this article if some of our leaders are committed. The way some of our politicians with constitutional authority think at times beats ones imagination. Most politicians in elective positions want to repair every tangible national assets including those that are beyond economic repair.

It’s concerning to see that even most of the 774 local governments in the country are not immune to the issue of abandoned projects and wasteful spending. Despite the fact that over half of our population is living in multidimensional poverty, those in positions of authority continue to spend government funds recklessly. It’s important to ask questions and hold our leaders accountable for their actions.

It’s concerning to see that the devaluation of the Naira has become a recurring issue, with the monetary authority denying any such devaluation. While devaluation may attract foreign investors, it can also lead to a surge in interest rates and weaken the manufacturing industry’s productivity due to increased costs of importing raw materials.

This, in turn, can drive inflation and reduce purchasing power. It’s important for us to be mindful of our spending and have contingency plans in place to avoid wasting valuable resources.

It’s important to recognize the value of a contingency plan, which is designed to prepare an organization for potential future events or circumstances. Without such a plan, individuals, firms, and states may struggle to respond effectively to unexpected situations.

In the face of ongoing devaluation of the Naira, it’s crucial for organizations to have a solid risk management strategy in place. However, it’s also important to acknowledge that some states may not have the resources to develop such a plan, highlighting the need for broader economic support and development from the federal government.

In light of the current economic challenges, policymakers have proposed measures to reduce budget deficits through spending cuts and tax increases on luxury items. While these austerity measures may lead to over taxation and reduced incentives for industry, they could also serve as a catalyst for creativity and innovation as individuals, firms, and states adapt to a more competitive landscape.

As Sinclair Lewis once said, “it’s not about how much you earn, but how you spend it that determines your class.” Simply increasing taxes and having numerous tax collection agencies will not lead to prosperity for the nation unless the revenue generated is managed wisely to benefit the economy. In fact, expenditures should not be more than revenue generated.

Nigeria is highly indebted with wastage of resources going on side by side. It’s crucial for individuals, firms, and states to adopt a lean thinking approach as a means of survival in the future. Yes, lean thinking will be a strategy that firms and the country can adopt in times like this when the world is going through economic crises.

Lean thinking is a comprehensive approach to improving business and public services, focused on value management. It’s not just about cutting costs, but rather a mindset and methodology that should be embraced by the entire organizations.

Read also: Management skills

One of the key tenets of lean thinking is waste reduction, which is especially important during times of austerity. To truly thrive, public offices and firms must work to minimize waste and maximize efficiency. Policy flip flops can cause wastage of resources at the level of the firm.

It’s important to dispel the myth that lean thinking is only applicable to manufacturing, as this approach can be applied to any business or process. In fact, lean thinking has been utilized in various contexts, including the British military during WWII and the US Army in Operation Desert Storm to improve logistics.

Additionally, numerous firms have successfully implemented lean thinking to reduce waste and increase profits, such as Henry Ford in 1908, Toyota in the 1980s, and Vanguard UK in the 2000s.

During times of economic hardship, it’s crucial to prioritize efficiency and avoid unnecessary waste. By embracing lean thinking, leaders can enhance productivity and reduce waste without sacrificing quality. With a clear vision and strategic plan, lean thinking can be a valuable tool for individuals, businesses, and governments alike. Thank you.