Why do so few organisations make continuous improvement activities a habit?
I stumbled across this question on Quora the other day and it caught my interest as I’ve asked myself this many times over.
Over the past 10 years it has been my job to ‘do’ continuous improvement and make it part of a business’s culture and mindset. I’ve done this in a whole diversity of organisations varying from multinationals to my brothers e-mobility startup.
Of course all these organisations have approached continuous improvement differently and have been in different stages of implementation but there are commonalities in the way each of these businesses adopt, or do not adopt, a continuous improvement culture.
Why Would You Want A Continuous Improvement Culture?
As obvious as this question seems, it is relevant to answer given the fact that many businesses have a hard time implementing and/or sticking with improvement initiatives.
The assumption is that every business and business owner has a vision. Some, not perse tangible, goal to work towards to. This could solely based on being the best in the market, having the happiest customers, making xx amount of money or saving the world 1 blog at a time. Usually this vision is future based and something to strive for.
This would mean that there is always a reason to improve!
The 3 Elements Required For A Continuously Improving Business
1. Method For Continuous Process Improvement.
For the sake of clarity I define continuous improvement as the set of methods and techniques required to make result-driven improvement initiatives happen on a process and/or business level.
Lean, for example, offers a handy toolbox for making this improvement happen and the modular improvement cycle (based on the Six Sigma DMAIC cycle) forms a perfect structure for every type of required improvement. Of course there are more methods to continuously improve the business and its processes.
The ‘right’ method for any company will depend on the specific requirements and the methods already in use.
2. Structure For Performance Management
Performance Management is done by business owners and managers to ensure that an organisation is doing the right things right. Performance Management gives them the tools to define vision and goals and to communicate, measure, report and steer processes and people. Performance Management therefor provides the required structure for continuous improvement.
These are made visible and have a target attached to them.
As soon as a KPI structurally performs under target this is a trigger for a continuous improvement action or project.
By ensuring the KPI’s are measured in a visible way (for example literally having red and green KPI’s on a whiteboard above your desk) and by making sure everybody knows and understands how this works, you can make sure that every improvement initiative is the right step forward towards your strategic goals.
3. Continuous Cultivation Of (Personal) Leadership
Leadership would be the third element that needs to be in place to ensure a continuously improving organisation. Whereas both continuous improvement and performance management are techniques every business can learn and apply; they will not be as successful and effective without proper leadership.
I will use other blogs to delve deeper into this fascinating topic but leadership, in this context, does not just mean the ability of the one in charge to ensure her employees are willing and able to follow in her vision. It also means the ability of each and every individual within that organisation to follow in their own vision. It means that each individual pursues their own dreams and cultivates their talents in the most optimal way.
The business would then be a facilitator in this process, making sure organisational and individual visions are aligned and talent, ambition and passion are matched to roles, functions and activities.
The term Operational Excellence is often coined for the combination of the first 2 elements. In an OpEx organisation, performance management and the continuous improvement of the organisation, people and processes are seamlessly aligned. Performance Management and Continuous Improvement thus continuously reinforce each other.
I’ve seen great results made possible with the implementation of just these but adding the third element will ensure the magic required to achieve whole new levels of success.
What Are The Reasons Behind Not Doing Anything To Ensure A Continuous Improvement Culture?
Check out some of the responses on Quora:
Gregory Rader: Most companies are lazy…or perhaps more accurate to say they are complacent. If a company can remain profitable without pushing the envelope then they have little incentive to do so. These companies then attract employees who are more interested in stability than continuous improvement or innovation.
There are also many situations in which companies fail to adapt to their changing circumstances. A small entrepreneurial company will lose its edge as it grows if it adopts the structure of a larger organization without intentionally preserving its entrepreneurial culture.
Companies like this get locked into inefficient behavioral patterns and don’t change until an innovative competitor enters their market and forces them to reform or be disrupted.
Ed Caruthers: Another reason is corporate stress. I worked briefly for a company where one group actually did a ‘lean’ activity, following an order from the point it came into the mail room until the product shipped. But the company was losing money, employees were being laid off and everyone left had barely enough time to do the minimum required for their jobs. Nothing was done with the results and some of the team members were in the next lay off.
Unfortunately, failing companies are the ones that most need improvement and the ones least likely to make the necessary investments.
Ron Jacques: Having been through more than my fair share of both successful and unsuccessful Lean Initiatives, it basically comes down to failure by top management to indoctrinate the necessary cultural norms to support not only the deployment of Lean but the ultimate sustainability of it. Many companies have invested huge sums of money in going well down the lean path only to think that it operates on cruise control at some point.
Lean is a business philosophy and culture which needs to be nurtured, maintained and sustained. It is everyones job, every day. Until you have reached that level of execution, you are not doing lean. Most companies do not have the wherewithall to sustain that level of commitment. Turnover at the management level, mergers and acquisitions and a whole litany of other reasons often lead to dissolution and or death of most Lean programs. It is rare to see one that has been sustained for more than 10 years. I know of a few and boy can they kick the stuffings out of their competitors. It is an awesome site when you see one that works.
Jim Baran: Many companies fail to make improvement relevant to their employees. Most have problems sustaining improvements because their employees see benefits as one sided.
Companies typically deploy only the “tools” of lean or continuous improvement to drive short term profit gains. They are impatient for results. CI becomes forced.
Successful CI companies help employees turn the improvement lens inward. This creates shared purpose and value – not scorecards.
A summary of these wise words and my own experiences added. Here’s a, non-exhaustive, list of reasons why companies often fail to make continuous improvement part of their culture:
- Complacency. Where a business lives in that lovely place of denial. This often happens to first movers or niche specialists; the immediate need for change then only comes as soon as a new competitor comes into the market.As Gregory mentions, this is also one of the pitfalls of startups that have grown really fast.
- Corporate Stress. This is in my experience one of the most common reasons for organisations to not stick with improvement initiatives. The time it takes, the long-term vision that is required to ensure the successful implementation and reap the accompanying results is often not a luxury businesses afford themselves.Setting up your business this way requires knowledge, training and lots of hands-on experience and this means an investment in time and money.If your business is under performing and when you’re losing money, continuous improvement is very likely not a priority.
- Poor introduction of Continuous Improvement. I’ve seen it happen a number of times: Lean, or an other method is rolled out in a big whoosh of expensive consultants, intranet messages and other propaganda. Where employees are rounded up for workshops, spend time on giving their input and never really see any change or result.Where the method and the need for some quick results are deemed more important than the long-term involvement of the people involved. Yes, you will get quick-wins but you will never create a culture of long-term change. One in which everybody has their own role in the improvement process, a role that everybody is happy to take.
- Lean (or another method) is introduced for all the wrong reasons. “We need to implement Lean because we need to downsize”. This is obviously linked to the poor introduction and simply awful. How anyone can expect employees to happily cooperate when this is the goal of the program is an enigma to me.Of course, this specific goal is not always outspoken, which makes matters even worse.
- Not sustaining Continuous Improvement. Improvement initiatives are often considered as temporary; something that is introduced and then let go. Often the need to do more improvement projects goes away as soon as the consultants go away or after the desired financial gains have been achieved.And that of course defies the whole concept of a continuous improvement culture.
What To Do To Make A Continuous Improvement Culture Normal?
In the end it boils down to 2 things: vision and leadership.
If continuous improvement is not part of a business’s long term vision, it’s just never going to happen.
The business owner/entrepreneur/board of directors need to be really clear themselves on the fact that a continuously improving business is in the best benefit for the company and for all involved.
It needs to start there!
Leadership follows this vision. Continuous Improvement needs to be part of the strategy. It should be included in the strategic goals and boil all the way down to individual goals.
Employees will be hired, trained and coached on their continuous improvement abilities.
Continuously improving processes, tasks and people will then, no matter the chosen method, simply be a no brainer.