If we agree that improvement is a worthy endeavor, we need to reflect on the most effective way to bring it about.
In order to sustain, businesses must perpetually seek to increase their value proposition. Value is composed of four primary constituents: the customer experience, quality, convenience, and pricing. Assuming you're not fortunate enough to be running a monopoly, you will need to always look for ways to offer greater value than your competitors. This begs the question, "What is the best way to improve?" It seems like a simple question. Yet, the answer may be less intuitive than it first appears. Everyone agrees that improvement is a desirable, if not necessary, business objective. Therefore, everyone should have a well-defined strategy for pursuing improvement. Undoubtedly, there are several viable ways to effect positive change. Name them. If we agree that improvement is a worthy endeavor, we need to reflect on the most effective way to bring it about. Is there a method or approach to improvement that stands out? If so, there is no sense in employing strategies that are less effective. That's obvious. So, really, what is the best way to improve? I recently posed this very question to a member of my team and received an insightful response once she had taken a moment to reflect on it. Stop reading for a moment and consider the question. Jot down your answers. Great ideas come from taking some time to stop and think.
And...we're back. The aforementioned team member to whom I posed this question responded with three suggestions.
1. Learn from your mistakes. Document areas of deficiency and customer complaints and develop strategies to fix the root cause.
2. Take time to research the market for innovative business practices and ideas you have yet to try.
3. Maximize team member engagement and minimize apathy. A bored team is unlikely to expend much energy on improvement initiatives, while a passionate, excited, or fully-engaged team is more likely to exude enthusiasm for getting better.
Though the response differed from what I had in mind, I thought all three of her comments were brilliant and served to demonstrate the value of stopping to think and documenting your thoughts.
How did you do? Did you come up with anything novel? Were you inspired by anything you thought of or noted? I hope so and I hope you'll implement the same. If not, don't worry; I will share with you two more improvement strategies that I know to be foolproof and very effective. I wish I could take credit for creating them. However, as with most things in life, certainly most things I share, these methods for improvement are adopted (That sounds better than "copied" or "stolen", right?) from someone else. They are derived from models developed by one of the most successful companies to ever exist: Toyota.
Toyota is known for its commitment to Kaizen1 (Japanese for continuous improvement). Indeed, Toyota's commitment to making continual incremental improvements, no matter how small, is what led to its remarkable success. To glean some insights into Toyota's method for effecting improvement, it is helpful to dissect the internationally renowned system referred to as The Toyota Way2. Let's keep it simple, though. We'll only take a look at two pieces of the much-emulated system. To do so, we first need to learn another Japanese word: muda.
Wasted Opportunity
Muda3 is the Japanese word for waste and is at the heart of the first improvement philosophy. In business, waste is the enemy. It is the antithesis to efficiency and it intrinsically diminishes value. Yet, most businesses are drowning in a sea of waste. Whether analysing resource allocation, return on investment, operations, production, sales and marketing, or any of the myriad of processes that compose an enterprise, it is relatively easy to find waste in any of its many forms. Toyota categorizes muda into 8 types. These are conveyance (aka transport), inventory, motion (aka movement), waiting, overprocessing, defects, overproduction, and untapped potential of stakeholders. Seek and destroy! In order to create meaningful improvement throughout your business and to increase your value proposition, you need to doggedly search out and eliminate these 8 forms of muda. Do yourself and your business a favor; memorize and familiarize yourself and your entire team on the 8 forms of muda. Take advantage of the host of freely available materials that explore these wastes in detail. Perform random pop quizzes to ensure the team memorizes all 8 forms, internalizes the concept, and develops an intolerance of muda. Begin all improvement communications and initiatives by attempting to identify those forms of muda inherent in the specific process you are addressing. You have got to spot the tumor before extracting it.
The last two kinds of muda in the list, overproduction and untapped potential, are the most deleterious to a business. Here's why:
Overproduction
First, for the sake of argument, let's fundamentally accept that one or more of the first six forms of muda are present in every process or production method. Philosophically, this has to be true in a world where perfection is impossible. If that's the case, then overproduction is a multiplication or amplification of waste. In other words, in order to overproduce, you have to experience at least one other form of muda during production. Only now, you also have products exceeding demand (i.e. the very definition of overproduction). Slowing or halting overproduction automatically reduces all other forms of muda. Toyota has benefited and been ubiquitously lauded for their ingenious concepts of on-demand production and just-in-time inventory. Consider, for another example, a restaurant on any given Saturday. In anticipation of a large weekend crowd, it plans out how much prep-work to do before the rush. It orders from its suppliers and staffs accordingly. If a market force beyond its control results in an uncharacteristically slow night, it is likely to have experienced overproduction. And, since each of its normal processes inherently contain other forms of muda, such as inventory, motion, conveyance, etc, the overproduction amplifies the detrimental effects. All of the "inherent muda" is not mitigated through the expected sale of the food produced. The over produced food (i.e. that which exceeds demand) is itself waste.
Untapped Potential of People
Second, we can agree that your stakeholders (owners, staff, vendors, customers, and the community in which you operate) collectively possess an immeasurable abundance of talents, intellect, skills, and creativity. As crazy as it seems, businesses commonly ignore this resource pool and rely instead solely on the assets of management or key team members. With concerted effort, businesses can become experts at extracting value to effect improvement from all its stakeholders. Create mechanisms and tools through which it is simple for your stakeholders to both submit improvement ideas or sign up to become part of the resulting implementation projects. Record, track, monitor, and analyse stakeholder involvement. Then, respond to what you discover. Recognize and reward contributors. Encourage participation from dissenters or those who are reluctant or skeptical.
Decentralization of Ideas Generation
I have attempted to persuade you to accept that seeking out and eliminating waste is the best way to improve your business. And, I promised you two strategies. The second, Decentralization of Idea Generation, overlaps the first. Failing to exploit the potential of your stakeholders is not only wasteful, it is disrespectful and exposes other vulnerabilities in your business.
Besides Kaizen, The Toyota Way also emphasizes Respect for People as one of its two foundational pillars. A simple way to implement Respect as part of your improvement strategy is to never proceed with any significant change in process, policy, or operations without first considering input from those stakeholders who will be impacted by the proposed change. This does not mean that you will run your company like a democracy. You will not always implement changes desired by the majority. However, it is sage to formulate strategies for improvement utilizing intel from the many who possess the greatest insights into any particular area of your business. Or, gain fresh perspectives from those with vested interests who are not so closely involved in the day-to-day processes that may benefit from outside-the-box thinking. Again, you should dip into the pool of resources at your disposal. It is replete with nearly limitless perspectives, insights, prospective innovations, and problem-solving potential. Relying solely on management and key personnel (such as yourself) for ideas is dangerous in many ways.
People may be reluctant to enact something mandated by the authorities. In fact, some will even attempt to sabotage such initiatives. Conversely, they are always more cooperative when implementing ideas into which they had input.
Fear, insecurity, and mistrust abound in highly centralized business environments.
Two heads are better than one. If your competition is implementing improvement ideas from a decentralized think tank made up of all its stakeholders while you rely on a highly centralized resource, such as "the boss", they will outperform your business almost every time.
Decentralized idea generation is not nearly as vulnerable to employee turnover or spreading individuals too thin.
Conflicts of interests and misaligned objectives are commonplace in businesses that focus on top-down improvement.
Define specific business challenges for your stakeholders and set relevant parameters within which proposed improvement initiatives will be considered. Then, ask them to make suggestions and to volunteer to implement the ideas management approves. It is impressive to see how much life this strategy can breathe into an organization.
Get serious about implementing improvement and give these strategies a try. Wade into that deep pool of resources at your disposal. Meanwhile, reduce that sea of waste into a muda puddle.
Do you have similar experiences in your organization or in your workplace? What are your organization's methods in effecting improvement? We want to hear about it! Share your thoughts in the comments section below!
You can also watch our videos that deeply discusses Muda or Waste.