A Structured Approach to Continuous Improvement

While American business is credited with innovation, the success of Japanese business over the past half century is purported to be founded upon continuous improvement. Digital watches, TV's and small electronics are examples of technologies developed outside of Japan, but improved upon to a degree that made Japan the worldwide leading producers of each. I suspect that their ready acceptance of Dr. Demming's quality program was a significant contributor to their success. A significant component of any quality program is continuous improvement.

Continuous improvement (CI) can be very beneficial to a small business, which can lead to a competitive advantage. This simple concept just requires a structured approach and disciplined execution.

Most business owners can see opportunities to improve wherever they look. Alone, a business owner can only do so much. With limited capacity, a small business must be selective when considering where to apply a CI program.

CI Candidate Sources

  • Business processes (see another article on this topic) Every business executes a number of business processes and sub-processes. Without doubt, they are not all operating optimally.
  • Brainstorming among staff will reveal areas of the business that invite CI.
  • SWOT analysis lists will contain several CI candidates.
  • Where used, dashboards have the ability to drill down into problematic areas. Remedial actions are already a form of CI.
  • A blank sheet of paper placed in front of the business owner will also produce a good list of CI candidates.

The business owner must either prioritize CI candidates to decide which to pursue first, or in a larger business, begin to delegate them, and the CI process to his/her managers. Trying to start too many CI initiations will dilute the focus needed to gain the promised benefits of a CI program.

The Structured Approach

  1. Begin with regular meetings with stake-holders of the process being addressed. Participants should be formally invited well in advance, and provided with the latest action register prior to the meeting, so that they can come ready to participate.
  2. An action register is used to track each action being addressed. A spreadsheet works well here, with one row per action item and the following columns:
    • Action item number
    • Priority
    • Category (in order to group related actions)
    • Action description
    • Latest status
    • Responsible person assigned (making a group or organization responsible will not get good results; usually no one takes action)
    • Date the status was last updated
    • Target completion date
    • Percent complete (optional)
  3. Facilitator - this person must be able to control each meeting, be well respected by the participants and be a good communicator.

How it works

The first meeting should be used to explain the CI process, the business process chosen to focus on and why, and the objective of the group. The facilitator should define the process steps as it is currently being done, and then proceed to solicit ideas on the weaknesses inherent in the process. Finally, ideas on how it could be improved and how improvements can be measured should be captured. Before the end of the first meeting, the first action items should be defined and someone made responsible for follow-up action on each.

After the meeting, the facilitator should capture the important outcomes of the meeting, and create the action register. The action register should be sent out to the participants as soon as possible so they can begin to act on their assignments.

In each subsequent meeting, the action register is used as the agenda. Each action item should be reviewed and a status given. One should not underestimate the importance of the action register to drive the CI process. By having to give a progress status in each meeting, each responsible person must tell his/her peers what they have, or have not done since the previous meeting. This is a powerful incentive to work on the action items.

Discussion in each meeting will likely uncover new improvement opportunities which will be transformed into new action items. When an action is completed, it should be closed and moved to another area of the spreadsheet.

But how do we know that the process is improving? The best way is to apply several quantitative measurements to the process. Progress can be charted and displayed in CI meetings.

At some point the degree of improvement begins to generate diminishing returns. The facilitator can usually sense this point in time. If the CI effort was successful, it should be celebrated and displayed to higher management and the broader organization.

CI Culture

I was part of an organization where CI was valued enough by senior management that it became part of the company culture. For a small business, this can best be done if the owner takes the role of facilitator, or at least attends several CI team meetings. He/she should be very active in the celebration of successes. Over time, everyone in the business will sense the importance the owner gives to CI, and hopefully from the results produced. When this happens, it becomes part of the company culture in that employees continually examine business processes the participate in or interact with, always looking for ways to improve upon them.