Continuous improvement is a systematic approach within an organization that involves ongoing efforts to enhance products, services, or processes through incremental changes and a culture of employee-driven efficiency.
Although the idea of constantly striving to become better is
certainly not a new one, continuous improvement as an approach to
business originated in Japan following the close of the Second World
War. As Japan’s automotive industry began to take shape, Toyota Motor
Corporation built upon concepts introduced by American statisticians and business consultants, to develop the philosophy of kaizen.
Kaizen means “change for the better,” and proposes a business culture of on-going improvement. Although this approach to business helped establish Toyota as a major player in the automotive industry, it wasn’t until relatively recently that Kaizen and the continuous improvement model became popular concepts globally.
Today, continuous improvement is integral to the Lean Methodology of maximizing customer value while minimizing waste. But even organizations that do not fully embrace Lean can benefit from continuous improvement by understanding six key principles.
Most often, improvement is not the result of massive, foundation-shaking changes; small, incremental steps are more likely to achieve desired results. Not only does incremental change allow improvement to be made without causing a panic among employees, but by focusing on simple revisions and alterations to existing processes, speed to improvement also increases.
Continuous improvement rejects the notion that ideas must come from the top. Employees at all levels can identify issues, workshop solutions, and access possible opportunities—often beyond what is clearly visible to management. Getting employees involved in the improvement process creates ownership and allows workers to see measurable results from their valuable input.
One key advantage of involving employees in the improvement process is the low cost associated with employee-proposed changes. Most employee suggestions may be accomplished without great expense. In many cases, employees will actually propose eliminating or simplifying unnecessary processes instead of making them more complex, thus saving the organization money.
When management forces changes to established processes, it’s not uncommon for those changes to be met with resistance on the front lines. On the other hand, when employees are involved in proposing changes, they are more likely to take ownership and work towards making those changes work.
Continuous improvement goes beyond simply asking for ideas and then rolling out changes. The changes themselves must be constantly reviewed and improved upon. This is made possible through on-going feedback across every phase of execution.
It is worth noting that changes are not valuable in and of themselves. It isn't called the continuous change model; it’s called continuous improvement, because improvement is the goal. To ensure that changes are having the desired effect, impacts must be quantified, measured, and tracked. Measurability allows an organization to evaluate how successful every change is, and whether it might be successfully applied to other problems. At the same time, seeing the direct positive results of improvement helps ensure ongoing support for other improvement initiatives.
To facilitate continuous improvement, many businesses adopt the PDCA framework. PDCA stands for plan, do, check, act, and is a four-step, ongoing cycle for carrying out change for the better. PDCA is not a single, one-and-done approach, but rather an ongoing cycle that must be constantly repeated to facilitate ongoing improvement.
In the planning stage, a business must recognize possible opportunities, and create a plan on how to change to address those opportunities. ‘Plan’ involves defining problems, assessing resources, setting goals, and choosing methods.
At this stage, an organization tests the change. Applying the changes in a small-scale controlled environment, while being ready to address any unanticipated problems, the business generates valuable data for the next step.
“Check” means reviewing the results of the small-scale tests performed in the previous stage. Results should be analyzed and insights identified to help inform the final step. This may be the most important stage in the entire PDCA cycle, as it allows organizations to clarify their plans, eliminate issues, avoid recurring mistakes, and identify root causes. Make any necessary changes to the original plan, taking it through the previous steps as many times as necessary before finalizing it.
Armed with information and insights from the previous stages, organizations can now apply the refined plan. If it is successful, the business can then incorporate what they’ve learned into other areas. The proven change should become a new baseline, allowing for new improvements as the cycle restarts.
The PDCA cycle is an essential aspect of continuous improvement, providing an easy-to-use framework with which organizations can drive improvements across services, functions, processes, teams, and individuals. As such, effective continuous- improvement solutions incorporate this framework.
Root cause analysis (RCA) is an approach to continuous improvement that focuses specifically on the main reasons and origins behind problems in an individual process. Much like the standard approach to continuous improvement, RCA is iterative. When it encounters problems, RCA analyzes causes and effects until it identifies the root of the issue. To do this, it follows six steps.
The first step in RCA is identifying and observing a problem. Evaluate the impact of the problem and outline the specific symptoms.
Next, research the problem and collect as much relevant information as possible. Develop as clear of a picture of the problem as possible, to help inform the next step of the process.
Using information gathered in the previous step, identify and track as many causal factors as possible. Create cause-and-effect diagrams to help visualize what issues are behind the problems that are being tracked. Look at possible consequences, and continue to break issues down into their constituent parts to create a more detailed picture of the overall problem.
Continue to dig down until the core issue behind the original problem or problems can be identified. Determining why the root cause exists in the first place can help inform possible solutions.
Create a solution to resolve the root cause, thus cutting off the problem or problems at the source. Recognize and account for any risks that might be involved in carrying out the solution.
As with any change, continuous monitoring is important in RCA to ensure that the issue has been effectively resolved, and that the solution has not created other problems.
Organizations looking to implement continuous improvement can model their strategy based on a few key traits and practices.
Embracing continuous improvement means actively seeking input from employees at all levels. It is important to recognize that valuable insights and innovative solutions can come from anyone within the company.
Employees are encouraged to identify and address even the smallest of issues or inefficiencies within processes. This proactive approach prevents small problems from escalating into larger issues that could negatively impact overall performance.
To effectively implement continuous improvement, there needs to be a systematic review process in place. This will help assess the usefulness of new processes or changes to existing ones. Ongoing evaluation ensures that improvements are both measurable and sustainable.
At the core of continuous improvement is a willingness to adapt and evolve. Organizations must be open to updating—or even eliminating—outdated processes to maintain efficiency.
There are a number of advantages from implementing continuous improvement in a business.
Wasteful, inefficient processes eat up employee time. Worse than that, they force employees to expend effort on ineffective tasks. Continuous improvement cuts away and refines processes, leaving only the impactful and important. At the same time, continuous improvement gives employees a voice and lets them know that their input is valued. Together, these factors contribute to increased employee satisfaction in their work.
Improved employee satisfaction naturally leads to decreased employee turnover rates. When employees feel fulfilled and appreciated, they are much less likely to leave a company, even in the face of more-lucrative offers. They begin to think of the organization as more than simply an employer; it becomes a part of who they are, and they gain ownership over its success.
Lean methodology and continuous improvement allows for detailed and repeatable workflows. Workflows establish proven steps and best practices for accomplishing work quickly, efficiently, and effectively. Continuous improvement allows organizations to streamline their workflows, identifying improvement opportunities and eliminating extraneous tasks and processes.
Unnecessary waste processes are more than just time consuming; they’re expensive. Continuous improvement helps businesses distinguish important processes from superfluous ones, saving money in the process. Additionally, with reliable workflows and a clear understanding of exactly what is required to complete important jobs, managers can improve the accuracy of their budgets.
Customers may not be interested in an organization’s internal processes or workflows, but they are certainly interested in the value the organization provides. Continuous improvement helps businesses better understand customer needs, and create a refined process for delivering on those needs.
Continuous improvement is just that: an ongoing upward trend in terms of products, services, and internal processes. By focusing and working towards improving their business, organizations eliminate the risks associated with stagnancy and complacency. This creates a competitive advantage over companies that are not following a similar methodology.
Introducing a culture of continuous improvement yields a range of benefits that all contribute to overall organizational success. Among these benefits, three stand out most prominently: operational efficiency, reduced waste, and improved quality.
The whole point of continuous improvement is to streamline workflows for better services and products, which naturally leads to increased efficiency. This efficiency allows businesses to produce more with fewer resources. In turn, that leads to higher productivity and profitability.
Continuous improvement methodologies like Lean emphasize identifying and eliminating various types of waste, such as unnecessary steps, overproduction, or defects. By reducing waste in processes, businesses can achieve significant cost savings. Waste reduction initiatives also have a positive impact on the environment since businesses consume fewer resources.
Continuous improvement focuses on identifying and addressing issues that affect product or service quality. By continuously refining processes and implementing best practices, businesses can deliver higher-quality products or services, leading to increased customer satisfaction and loyalty.
Any company looking to optimize operations and foster a culture of innovation can utilize a continuous improvement approach. These strategies are particularly beneficial for organizations seeking to align with industry best practices and improve their overall performance. More specifically, businesses should consider implementing continuous improvement when:
- They want to eliminate inefficiencies across departments or teams.
- There is a need to enhance product or service quality to meet customer expectations.
- The organization wants to encourage employee engagement by asking them to contribute ideas.
- There is a need for cost reduction and resource optimization.
By adopting continuous improvement strategies, businesses can increase customer satisfaction and reduce costs, all to maintain a competitive edge.
Once an organization has laid the groundwork, it can start implementing continuous improvement methods using a structured approach. One effective methodology is following the PDCA framework. However, organizations can also leverage other tools and techniques to help identify weaknesses and develop plans for continuous improvement. For example, they can use process mapping to visualize current workflows and pinpoint areas of inefficiency or waste. RCA offers a deeper look into underlying issues causing problems or bottlenecks in processes.
By combining these tools and techniques with the PDCA framework, organizations can create a comprehensive approach to continuous improvement. This integrated approach supports a thorough evaluation of current practices to identify improvement opportunities.
The industry leader in enterprise operation automation and workflow management, ServiceNow is an obvious partner for any organization interested in continuous improvement.
ServiceNow Continual Improvement Management provides essential tools and features, designed to bring data, processes, and people together. Incorporating advanced machine-learning technologies, and based on the essential PDCA framework, Continual Improvement Management helps users identify potential problems, set SMART (Specific, Measurable, Achievable, Realistic, Time-bound) goals using data-driven KPIs, and create comprehensive task lists.