What business leader doesn’t want to cut costs, trim waste, and reduce errors? And what company executive wouldn’t like to improve efficiency, increase customer satisfaction, and see profits grow?
Implementing continuous improvement as a management practice allows organizations across industries to solve problems on an ongoing and continual basis. It improves everything from employee engagement and retention to the ability of that business to successfully scale and grow its profits.
Sounds good. So what exactly is continuous improvement again?
In the workplace, continuous improvement is a defined and applied strategy. Its goal is to make improvements to every aspect of the business. Everything can be improved, including products, services, and processes.
The approach can be incremental or sweeping. This means a problem can be solved by making small, impactful changes or by introducing something entirely new all at once. Whatever the approach, the process of examining and improving your business, is never done.
Interview with Karen Martin
InHerSight spoke at length to Karen Martin, a leading authority on business performance improvement, problem solving, and Lean management systems; president of the global consulting firm TKMG, Inc.; and president and founder of TKMG Academy, Inc.
Q: Why is continuous improvement good for business?
Let’s break it down:
1. Continuous improvement benefits the bottom line
Whether it’s a government institution, a not-for-profit, or a for-profit commercial entity, everybody should be looking at their non-labor expenses and reducing any waste. There tends to be a fair amount of waste built into processes over time because they may not have a continuous improvement culture initially and all of that extra effort costs money.
A lot of people don’t think of it that way, but any extra effort, whether you’re correcting a problem, or you’re clarifying something that should have been clear to begin with, or you’re wasting supplies, or you’re delivering something to the customer that isn’t exactly what the customer asked for—all of that causes chaos and it costs money.
In other words, continuous improvement allows an organization to become more and more responsible in how they’re spending their money, and that allows them to grow profits.
Even a government entity or not-for-profit (who often say they don’t care about profit) has to care about profit because you have to have money to reinvest in the organization. A government entity has to be able to buy new technology; they have to be able to grow their staff if they take on new services. To say, “we don’t care about profit” isn’t a realistic view of business, whether a government institution or health care or not-for-profit.
2. Continuous improvement benefits employees
If continuous improvement is rolled out well, the people who do the work are viewed as the experts of that work, and they are deeply engaged in improving the work.
This isn’t a top-down initiative where the boss tells the employees how to improve the work and what specifically they’re going to do. Rather, the role of the boss is to set boundaries, like a budget or regulatory restrictions.
After setting any necessary boundaries, you let the people who are the experts at doing the work innovate and use their creative potential to create. They’re the ones who already know that the processes aren’t working the way they need to, and they’re the ones who have more hands-on experience with the work to know what might work.
So, it’s deeply engaging. People love to solve problems. People just don’t like dealing with the same problem over and over and over, but problem-solving produces quite a high.
When you unleash your employees (with boundaries) then the leadership team can sleep at night because they know that they’re not just going to have people running amok, and the people that are doing the work get a chance to create some control about how they do their work.
Read more: Participative Management & The Bottom Line
3. Continuous improvement benefits customers
The biggest benefit of all is to the customer. That’s what the Lean management approach to continuous improvement is at its core—delivering greater value to the customer.
In the case of a government entity, that’s the taxpayer who is using those services or relying on those services. With manufacturers, it’s the people buying the product. By delivering higher value, you have better respect in the marketplace, fewer customer complaints and (in the case of the private sector), you grow your market share.
4. Continuous improvement benefits the boss
Leaders who lead with a continuous improvement mindset can sleep at night, because they know problems won’t fester. Instead of firefighting, problems can be anticipated and proactively dealt with before they become larger issues. In a continuous improvement culture, you build a strong foundation of standardized and error-proofed work to begin with, so that you get out of that firefighting mode.
Q: What about employees who struggle with change?
You need to differentiate between change and improvement: Change is anything that’s done differently than before. Improvement is doing things better than before.
A lot of employees that resist come from environments where they saw a whole lot of change and not a whole lot of improvement. They bring that experience with them. They may even be working for a company that now wants to evolve into a continuous improvement culture, and they’re rightfully suspicious or skeptical of the organization’s ability to turn that around.
I would argue that it won’t get turned around with the same leadership team because if they had that philosophy of continuous change already, they would have been doing it. It usually takes one or more new leaders coming in and convincing the rest of the leadership team that it’s the right way to go, and then they can make the turn around.
Employees have to see it by example; they need proof that leadership will do what it says it will do in order to get on board.
Q: Is there ever a time things are going so well, you can stop improving?
An emphatic no, because business conditions change all the time.
Things might be going great on Monday and by Wednesday, a new customer demand could come in, or they launch a new service or the weather changes or COVID hits. Nothing is static for very long; it’s dynamic.
When organizations don’t develop flexibility and agility in how they operate, they’re less able to change processes or solve problems when changes do occur. They don’t evolve with the changing conditions.
I’ve never seen a process that couldn’t be improved or an employee morale situation that couldn’t be improved. Improvements can be made internally and externally. You look for problems that are critical to the customer and you look for those that are critical to the business, such as financial health or employee health.
Q: Can you improve more than one thing at a time?
It depends on the size of the organization and it depends on the functions that need to be involved in making the improvement. You want to watch out for implosion—where there’s just too much being placed on one part of the organization at one time.
We use a grid to look at what the work effort is required for every department to make an improvement. You don’t want one department hammered with needing to be involved with every improvement. IT, for example, often has to be involved with everything, and you can’t do that.
Very large companies can take on a whole lot of different pockets of improvement or problem-solving cycles all over the place as long as they don’t cross over into each other’s areas. Very small organizations will have to pick just a few.
About our source
Karen Martin, president of the global consulting firm TKMG, Inc. and president and founder of TKMG Academy, Inc., is a leading authority on business performance improvement, problem solving, and Lean management systems. As a thought leader and skilled management coach, Karen has shaped how leaders and improvement professionals approach business performance in over 45 countries. She is the author of the award-winning books The Outstanding Organization and Clarity First.