Lean Management vs. Shared Service

Lean Services & Organisation - The consistent seperation of services and management

Stern Stewart & CO. GmbH
Salvatorplatz 4
80333 Monaco

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The term "lean management" has, with Toyota first showing the way, become synonymous with efficient, manufacturing processes in all industries, based on a division of labor. In terms of the services of an organization, this concept is still only rarely used. This should not be the case, however, because while the "lean" approach in the manufacturing context increased both productivity and the quality of the output, often only one third of service functions are productive, even in well-placed organizations.

This is frequently the result of an incorrect definition of roles and responsibilities for functions, which has a negative impact on dimensioning and output. In the field of accounting and finance, for example, it is not uncommon for a large proportion of the functions to now be organized in a "shared services" structure. No matter how effective the shared service center actually is (capacity management, process design, quality, etc.), all the functions typically remaining in the holding company are not sufficiently closely scrutinized. Probably only a low proportion of these, 10-20 percent, are actually official functions, while the remainder are expert services that have no place in a "corporate center" with leadership claims.

Quite the contrary, in fact: the bundling together has the effect that the function does not properly deliver services, nor does it properly manage, which means that it does not perform its role effectively. Three rules must be observed in order to optimally structure organizations and services in accordance with the "lean" concept, i.e. with high productivity:

1. The holding company must be restricted to performing official functions – and thus made leaner (and at the same time stronger).

2. Building on this basis, the relationship between the holding company and the strategic business units must be such that the latter can also take on company responsibilities – by delegation of official processes "from the top down.

3. "Expertise-driven service functions must be bundled across all levels, and by creating so-called "centers of excellence," a critical mass with specialized expertise must be obtained.

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