Waste Diagnostic · System 01 · the question that sorts every step
Who Is This Step For?
Every step in a process feels necessary to the person performing it, because someone once had a reason for it and that person was usually right at the time. Sorting them takes one question asked one step at a time: who is this step for? There are three possible answers, and each one earns the step a different kind of attention.
The idea in one line: a step is for the customer, or it is for a requirement somebody can name, or it is for the process itself. Those are the three piles you sort every step into. Most of the work worth removing from a business sits in the third one, and it stays invisible for as long as whole activities are judged a page at a time instead of a step at a time.
Name the customer first
No step is wasteful on its own. It is wasteful relative to an outcome somebody is trying to reach, so the outcome gets written down first.
One sentence at the top of the page: who this process serves, and what they came for. The client buying a decision. The customer waiting on an order. The employee trying to get reimbursed under the rules. The supplier owed money for something already delivered. Any of these is a defensible choice, and the classification changes depending on which you pick, which is exactly why it gets recorded.
When two people disagree about a step, they are usually disagreeing about the customer without having noticed. One of them is looking at the client, the other at the firm, and both arguments are internally consistent. Settle the customer first and most of those arguments resolve themselves.
The three answers
Ask the question of a single step and the honest answer lands in one of three places.
The three piles get three different goals, which is the entire reason for separating them. Work in the first pile is protected and improved. Work in the second is preserved in purpose and reduced in cost. Work in the third comes out. Naming the pile is what this system does; putting a number on each pile is System 02, and deciding what to do about the third one is System 03.
Treat the three piles as a way of looking rather than an accounting system. Some steps sit plausibly in two of them, and the conversation you have while deciding is usually worth more than the label you land on. Write the disagreement down next to the step and carry on.
Is it work the customer came for?
A step belongs to the customer only if it passes all three of these. Two out of three is a step in one of the other piles.
The hardest implication is that internal effort alone is not value. Seniority, duration, difficulty, and attendance have no bearing on which pile a step lands in. A two-hour meeting with four senior people in it belongs to the customer only to the extent that it produced a decision, an insight, or a deliverable the customer needed. Held because it is Tuesday, it belongs in the third pile, and the expensive calendar entries are what make it worth finding.
Is it work a real requirement forces?
The middle category is the one that gets abused, because it is the one that ends the conversation. Everything in it has to survive a single question.
“What exact requirement or risk would we violate, and who requires it?”
Answers that hold
- A statute, regulation, or payer rule you can point to.
- A clause in a contract you have signed.
- A licensing, professional-ethics, or insurance condition.
- A documented safety or control requirement.
- A quantified financial, legal, or privacy exposure.
- A technical constraint that cannot be removed yet.
Answers that don’t
- “We’ve always done it this way.”
- “Finance likes to see it.”
- “Somebody might ask for it later.”
- “That’s how I was trained.”
- “The old system needed it.”
- “It would be risky to stop.” — with no risk named.
When the answer holds, the step still splits in two. Keep the purpose and challenge the design, by asking a second question: is this exact execution the minimum reliable way to serve that objective? “We have to be able to prove this was approved” is usually a real requirement. Three people printing, signing, scanning, and emailing the same approval is usually not the cheapest honest way to meet it. The objective stays in the second pile and the excess around it moves to the third, even though everyone involved would describe the whole thing as required.
The middle pile is a holding area with a time limit. Anything parked there keeps its exemption only as long as the requirement is real and the implementation is the leanest one that satisfies it.
Break the process into single steps
This is where the method usually fails, and it fails quietly.
“Client onboarding,” “invoice approval,” and “intake” are containers rather than steps. Asked who they are for, the answer is always some version of “required,” the whole container gets an exemption, and the exercise ends having found nothing. Break each one into individual actions with one actor, one input, and one output apiece. The decision in the middle of the container may well be required. The six touches arranged around it usually are not.
Give waiting its own rows, and keep two different clocks on every one. Touch time is the minutes somebody spent working on it.Elapsed time is how long the case sat between one action and the next, counted in hours or days, including the time it spent in an inbox with nobody touching it. In office work the second is typically many times the first, and because waiting belongs to nobody it never gets counted unless it has a line of its own. A week in an inbox is a step in the process whether or not anybody performed it.
Reconstructing the process at this level is slow by hand, and it is the part an AI assistant is good at, as long as you keep it classifying rather than improving:
Open ChatGPT, Claude, or whatever you use, and send these four messages one after another in the same chat. Paste your walkthrough into the first. In the second, replace [X] and [Y] with the customer you named and what they came for. None of them asks for improvements yet, on purpose.
- “Here’s how this process really runs, in my words. Break it into individual actions, one actor and one output each, and put every wait between them on its own row. Don’t suggest any improvements yet.”
- “The customer of this process is [X] and what they came for is [Y]. For each row, say who the step is for: that customer, a specific requirement, or the process itself.”
- “Wherever you answer ‘a requirement,’ name the requirement and who imposes it. If I haven’t told you, say you don’t know and ask me, rather than assuming one exists.”
- “List the rows you’d argue about, and for each one tell me what I’d have to check to settle it.”
A worked example
A firm of about thirty people describes one of its routine processes as “invoice approval, takes a couple of days.” Written out as individual actions with the waits included, it comes to eleven rows and two weeks of elapsed time.
The customer is named first: the supplier, who has already delivered and wants paying accurately and on time. From there most rows sort themselves quickly.
Earns the second pile
- Checking the invoice against what was ordered and received. Nobody outside the firm values it, and it is the control that stops the firm paying for things that never arrived.
- Retaining the record for the statutory period. Required, dated, and citable.
For the process itself
- Typing invoice fields that software had already read correctly.
- Nine days in one inbox, because every invoice needs the same approver regardless of amount.
- Two emails chasing that approver.
- Fixing a duplicate payment created by two spellings of the supplier’s name.
- Copying the filed record into two more places that nobody maintains.
One genuine control, whose design nobody had looked at in years, and which could probably run on a threshold instead of a person. Around it, the majority of the elapsed time is the process serving itself. None of it was anybody’s fault, and everyone involved was doing their job correctly, which is the reason this question works and the reason asking whether people are working hard enough never does.
Once every step has a pile, you have a map of where the work goes and who it serves. What it does not yet have is a size, and a long list of small annoyances is easy to produce and hard to act on.System 02 covers the patterns that turn up again and again in office work, and how to tell a costly one from a merely irritating one.