The Customer Defines Value

The quote underscores that the customer is the ultimate authority in any business. This aligns with the first Lean principle that value is defined by the customer. Not senior leadership, not middle management, nor engineering, marketing, or finance. The end customer.

In Lean thinking, value is determined by what the customer is willing to pay for. Unfortunately, the typical value stream is often plagued by unnecessary tasks, handoffs, errors, rework, and delays, making ‘value stream’ a bit of a misnomer—more like a ‘waste stream’ (amirite?? 😁) until Lean principles are properly applied.

In a Lean enterprise, the primary objective is to ensure a seamless flow of value to the customer by eliminating waste and proactively solving problems.

This requires a deep understanding of the customer’s needs and preferences and ensuring that every process and activity in the organization contributes to delivering what the customer values.

By stating that the customer can “fire everybody in the company,” Walton emphasizes the accountability that every employee has in delivering value to the customer. It serves as a reminder that the success of any business hinges on its ability to meet and exceed customer expectations, especially in an unpredictable market where customer loyalty can shift rapidly.

Gathering the voice of the customer as early and often as possible is a good start.