A new world of possibilities
There is a constant need to improve processes, products and services. Continuous improvement supports your strategy. It helps your organization develop “an allergy” against inefficiencies and waste and stay receptive for novelty and change. When based on repeatable methods, improvement also plays an important role in developing and empowering people and in letting shine their talent; it drives engagement. As a result, management resources are freed up from running operations and can be spent on making their organization fit for coming opportunities. As shown in the graph below, a significant share of management time should be spent on improvement; and this not in an ad-hoc manner but continuously and systematically.
With the work started by Frederic Taylor, Walter Shewhart, William Deming, Joseph Juran and many others and with the emergence after World War II in Japan of what is now known as Lean Management, systematic improvement has grown into well-rounded sets of knowledge and practices. How these are tought has reached a high degree of standardization. Norms are inspired by and available for their application.
The success factors for continuous improvement are so well-understood now that one can now talk of an „Ana Karenina Principle“ (named after the first two phrases of Tolstoy‘s book):
All successful improvement programs are alike.
All unsuccessful improvement programs fail for their very own reasons.
You can bring to best use in your organization this vast body of knowledge. There is little need to improvise.
What is of critical importance is to choose the right improvement opportunities, to assure resources, namely time, and to provide support to improvement teams so they can address their opportunities with the right methods. Months of stumbling around can thus be turned into days of focused work.
At the same time, the last two decades have brought along significant novelties: the omni-presence and fast availability of massive amounts of all sorts of data together with new analytical methods and previously unthinkable technologies open up „Alice‘s wardrobe“ to a whole new world of possibilities. Better ways of collaborating, of organizing teams and making available knowledge and capabilities have further increased potentials and can be used to significantly accelerate improvement work.
Furthermore, the more operational teams are empowered, the more fluid becomes the border between operations and improvement – with important implications on how the two are managed in one coherent “operating system”. Accountability, decision-making and entrepreneurial thinking become important differentiators – not only at the upper levels of an organization. The world of systematic improvement sees a significant boost to its learning curve. People and methods play a crucial role when it comes to exploting these opportunities.
Starting with Henry Ford‘s 8D methodology and Deming‘s PDCA-cycle, a panoply of frameworks have emerged for systematic improvement, such as Shainin, the Theory of Constraints, Kepner-Tregoe and many others. Take the well-known roadmap for Six Sigma: Define, Measure, Analyze, Improve, Control. Already the roadmap itself creates clarity: teams avoid discussing improvement ideas before they have truly understood the underlying problem. Yet, the full power of systematic improvement, practiced along the Six Sigma or other roadmaps, becomes only visible when looking at the „how to“ level: how in each of the phases a team brings together their skills and competencies with tools and methods to ultimately identify high-quality and sustainable solutions.
Make enough time for improvement
Admittedly, reaping these benefits does take time – yet, less time than most people think and most importantly: it is time well-spent. Given a few basic numbers, it is perfectly possible to estimate the benefits an investment in systematic continuous improvement can create in your organization.
A disclosure here for the case you have “no time” for Lean, Six Sigma or other such methods: done well, these activities have a return on the hour worked that is five to ten times above that of operations.
More importantly still: the benefits of systematic improvement far exceed financial returns. Improvement drives mature operations and frees up resources for more and more valuable improvement. As the graph below shows, mature operations and mature improvement together keep the hiccups in daily operations off the management agenda. That makes important time for creating the future. The more volatile the environment and the more uncertain the future the more important this will be for the longterm prospects of your organization.
Build up a coherent operating system
Imagine you have a high-performing operating system with coherent daily operations and well-rounded systematic improvement. Applying the “80-20 rule” allows understanding the benefit: Out of 1000 problems, 800 will be addressed directly within the daily accountability process. There is no need for management to interfere. Looking at the the 200 remaining problems, again 160 will be solved with Kaizen-like rapid problem solving approaches. Middle management will scope, staff and schedule these to be successful. Out of the remaining 40 problems, 32 are addressed with Lean, Six Sigma, Agile or other systematic improvement projects. Senior managers will sponsor these teams and manage the infrastructure that allows them to be successful. Only 8 residual problems will require full management attention.
For many organizations, such an operating system is more a vision, seemingly impossible to reach, than it is their current reality. Without senior and middle management developing a relently focus on systematic improvement and integrating time for that in their “leadership standard work”, without staff being empowered and enabled to allocate a good share of their own time to solving effectively most of the problems directly at their level, such a system will stay out of reach. What matters is doing these things the right way and hence to bring together people and methods.
Be sure of one thing: the “operating system” that emerges is a hard-to-copy differentiating capability that enables your organization for completely new strategic moves.