How can an organization build a culture of continues improvement?

The idea of continuous improvement comes from the Japanese word kaizen and has been adopted by western corporations and individuals alike since the publication of Masaaki Imai’s book Kaizen: The Key to Japan’s Competitive Success in 1986. Any kind of change takes time, and changing a culture (rather than implementing a program) can take many years. If you are looking to create a culture of continuous improvement for your business, patience and planning are necessary.

Too often we see that executives thinks that to build a culture of continuous improvements they just have to hire a Lean Manager, Operational Excellence Manager, Change Manager and then it will be solved.  To build an effective continuous improvement culture with inside an organization one need to understand that it is not just about executing a handful projects with a methodology of process improvements. But it is a good place to start—and an organization may reap tangible rewards from those projects. But more is required to drive sustainable results over time and embed continuous improvement into the very heart of the organization.

Last week Dr. Hole had a meeting with a director who represented a medium size organisation that wanted to discuss changing their organizational culture to one of continuous improvement. The Director stared to tell how he wanted to have different programs on how to provide awareness of continuous improvement within the organization so they could change the culture.

Yes, the belief out there is that if you tell people how important something is and give them a short teaching of continuous improvements, that it will happen.

Building a culture of continuous improvement starts with developing a strategy that involves measuring work, improving work, and changing work.  The strategy is only effective when the organizations employees have commitment to the organization and understand how to be innovative.

This type of culture doesn’t happen overnight.  This can take years to build and the larger the organization, the more difficult it is to make happen and the longer it could take.  Many people want to just jump in and start teaching program, certifying people, building dashboards, and the like.

That’s a program… not a culture!

The first step in building this type of culture is to identify the types of behaviors that the organization expect their employees to exhibit on a regular basis.  Five years from now, if you were to come back to you organization, what would you expect/hope to see?

Success rate for continuous improvement efforts is between 50 – 60 %.

With such great potential, continuous improvement has been a highly attractive endeavor for decades. Yet although many companies recognize the value of the discipline, they continue to face challenges in turning aspirations into realities. Indeed, the success rate for these efforts turns out to be less than 60 percent.  A major — if not the biggest — factor affecting the deployment of long-term continuous improvement initiatives today is the fundamental change taking place in the way companies manage and execute work.

Establishing an effective culture of continuous improvement has rarely been easy. The path to building a continuous improvement culture is littered with efforts that failed to cross the proverbial goal line. Significant changes in the current work environment are likely to make it even harder in the future. Chief among these changes: the growing need for knowledge workers to perform ad hoc work, rapidly evolving manufacturing processes, an increasingly variable workforce, and the potential power of big data. These changes arguably enhance the potential rewards of continuous improvement, but they also mean that strict process definitions alone won’t make continuous improvement stick. Continuous improvement needs to be more than just an exercise in better defining and adhering to processes; it should embody several important elements that don’t even appear on a process map and yet are essential to creating a climate that empowers and equips people to drive improvements in the context of the changing workplace.


Persistent leadership

Aligning organizational leaders behind each project and confirming their sponsorship and involvement is one of the most fundamental and important factors affecting continuous improvement. Continuous improvement doesn’t happen overnight – it is a multiyear journey that requires long-term vision and commitment, so expectations and a strong leadership mindset should be instilled across the organization early in the process. Equally important is conveying that continuous improvement is not just a cost-cutting exercise. Rather than focusing on individual projects, continuous improvement aims to produce transformational, long-term results. It can achieve this by building and profiting from the early momentum generated by initial quick wins, and it requires striking the right balance between establishing centralized governance and support and distributing ownership throughout the organization.

Common pitfalls and implications for a changing work environment: Although early momentum often gets leaders on board, their attention and endurance can waver, particularly when presented with potentially disruptive capabilities: for example, big data’s voluminous insights or additive manufacturing’s ability to up-end the research, development and production process. Over time, individual managers can begin to impose their own agendas and preferences, charging off in different directions, chasing different incentives, and weakening the investments the organization has made in developing a cohesive improvement culture. With change occurring at such a rapid, and at times, disruptive pace, leaders should make sure the original vision stays top of mind to provide critical guidance for long-term success.

Real change management

Too often, change management has a bad reputation, and for good reason. It’s often done too late, it’s too soft, and it’s viewed as optional. Change management should be more than just tagging some people as “change agents”, sending out a pithy communication and putting a few folks through training. What’s missing is “real” change management. Continuous improvement organizations exist to drive change. As such, they should be experts at managing change. Real change management is not fluffy or optional. It’s tangible, quantifiable and critical to driving sustainable adoption. There are many aspects of change that can and should be tangibly measured such as how well a future state vision was communicated or understood, how much people buy-into that vision and their readiness to change from the current state. These measures can be translated onto a change management dashboard with green, yellow, red colors pinpointing where things are going well and where targeted efforts are needed to improve awareness, readiness or capabilities.

Common pitfalls and implications for a changing work environment: Change management is frequently an afterthought rather than an integral part of a continuous improvement plan. By the time process improvement teams call in the change folks when they’re getting ready to implement, it’s often much too late and hampered by unrealistic expectations. In fact, many process improvement teams expect that sending a wellworded email from a senior leader is sufficient motivation for people to adopt a new way of working. Not surprisingly, those approaches to managing change rarely succeed. Given the fluid and diverse nature of today’s workforce – or “labor supply chain”, it’s important to be able to gauge levels of readiness and willingness across diverse groups of people that may have very different motivations and allegiances.

Manage what you measure

It’s true that applying metrics and measurements to behavior can have profound effects. Yet measuring the wrong things can be counterproductive. For example, a company striving to provide superior customer service might not necessarily want to judge employee performance on the length of calls alone. An effective continuous improvement culture has an understanding of what should get measured – and how this measurement results in value for both the company and the customer. Also, senior executives should be evaluated on similar categories of performance as employees on the front lines are – a concept known as “cascading scorecards.” The actual metrics should be tailored and relevant at each organizational level. Implementing cascading scorecards can align focus and behaviors to common goals throughout a company, and can help people see how their day to day actions contribute value to the broader company goals and priorities. To encourage cultural change, these metrics should also align to incentives that drive the right desired behaviors.

Common pitfalls and implications for a changing work environment: Big data enthusiasts beware – despite the exponential growth in data now available at management’s fingertips, it can be challenging to separate true signals of value from the noise. Companies must still go through the process of defining what to measure, and they must prioritize what to improve. Big data holds remarkable promise – but used carelessly can be a distraction. Companies should maintain focus and discipline on the key metrics tied to customer value and quality.

Let the data guide the way

There is no one-size-fits-all model for continuous improvement. Effective companies customize and incorporate continuous improvement tools and methods to fit their particular goals, challenges, and culture. However, one tenet holds true: any continuous improvement initiative should be based on data-driven decision making. Companies that also invest in analytical techniques, such as employing quantitative hypothesis testing approaches and leveraging advanced visualization techniques, are able to separate facts from speculation and can boost their chances of success. As always, companies must choose from among multiple tools, methods, and concepts when deciding exactly how to implement data-driven methods. The key is developing and using a consistent and repeatable approach to process improvement.

Common pitfalls and implications for a changing work environment: Organizations that lack a strong culture of data-driven decision making can get caught up in some variation of “the loudest voice wins.” Without an objective means of data-supported decision making, managers with the most persuasive or aggressive personal styles often win – whether or not their pet projects are the most beneficial to the business.

Do fewer things better

Companies with strong cultures of continuous improvement have sound governance capabilities that enable them to hone in on top improvement opportunities, allocate resources effectively and manage the changes to completion. This frequently means doing fewer things better. This concept starts with the rollout of continuous improvement capabilities. Leading companies start with smaller-scale, but still fully invested and empowered, pilot projects before launching on a grander scale across the business. As their programs grow more dispersed, they develop a coordinated approach to cross-organization execution and benefit tracking, focused on a consistent set of shared priorities across the business. It may be tempting to rely on an existing organizational structure to do a top-down rollout of continuous improvement within a functional group. However, such an approach can miss some of the biggest and most valuable opportunities that are usually found by analyzing and improving the end-to-end process or value stream. These value streams can cross multiple organizational silos and business units and the handoffs between groups tend to be where problems emerge. Successful companies realize this and put in place methods to prioritize and coordinate value stream initiatives that resolve conflicts, assign accountability, and drive toward the greater good of the overall business.

Common pitfalls and implications for a changing work environment: Once they experience some initial success, organizations can be tempted to take on too much and can quickly find themselves inundated with process improvement opportunities. Too many initiatives underpinned by a sea of data can prove counterproductive as managers and front-line employees’ attention and motivation dissipate from initiative overload. Indeed, our experience suggests that what works for continuous improvement in the beginning of an initiative may not work 18 months later. This is particularly true in manufacturing and research & development environments, which have already begun experiencing the disruptive change potential of additive manufacturing technologies. Effective organizations start out with continuous improvement pilots in one or two process areas, learn from this experience, and then adapt accordingly to manage success and relevance before rolling out to remaining areas.


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