Lean or Self-Inflicted Chaos - A case study on how hyper-growth firms prioritize between flow and resource efficiency

Abstract: The majority of previous research within the field of lean views variation in a process as a phenomenon to be minimized or eliminated. Some later research suggests that variation needs to be traded off with the potential customer value it can generate. In a company that experiences hyper-growth, there is an inherent presence of variation in the demand and operational processes. This raises the question, how do hyper-growth firms handle all of this variation and what are their priorities from top management regarding flow and resource efficiency? By conducting a multiple case study on three companies that are currently in the state of hyper-growth, the aim is to determine the priorities between flow and resource efficiency through semi-structured in-depth interviews. The findings of this paper suggest that the companies experiencing hyper-growth deliberately inflict large amounts of what the authors define as intended variability, an extension of unpredicted variability, to optimize their customer offer. The companies prioritize flow efficiency which in turn requires costly buffers. However, the findings imply that through the collection of large amounts of user data, the companies can use predictive analysis to make intended variability predictable. This in turn enables the companies to achieve greater resource efficiency over time while maintaining high flow efficiency.