MIT Sloan Management Review

Like most major change initiatives, going lean rarely looks good from the start. The operating efficiencies come quickly, yet sales and profits — for a while — get worse. The solution? Adopt a new financial reporting method that captures what’s really happening in the business.

The past decade has seen a virtual explosion of information about customers and their preferences. Many companies have the ability to gauge customers’ willingness to pay for their products and can determine with some accuracy the effect of price changes on sales volumes.