Managing the Lean–Agile Paradox in Complex Environments

Abstract

The decision to incrementally improve existing processes and products or introduce breakthrough innovations depends on the context a company is facing. In situations where problems are known, it is better to incrementally improve, while in complex situations where problems are not known, a probe-sense-respond approach based on experimentation and the exploration of new solutions is preferable. Lean management adapts well to the first type of context, while agile management fits the second type of context. However, organizations must increasingly consider both approaches and become ambidextrous by introducing incremental improvements and breakthrough innovations simultaneously. This requires embracing the paradox between exploiting and exploring, adopting a new leadership mindset, and dual strategic, organizational, and behavioral models. This paper proposed a framework to implement lean and agile approaches simultaneously using the paradox theory to justify and manage this co-existence. This framework is threefold. First, managers need to differentiate between lean and agile, finding ways of keeping the two approaches separated. Second, lean and agile should be integrated so that synergies between the two approaches can be generated. Finally, managers need to achieve a dynamic equilibrium over time between lean and agile. Contributions to the theory and practice of this approach were discussed.