CONTINUOUS IMPROVEMENT - WHAT IS IT?
A continuous improvement strategy is a gradual and never-ending process that seeks to increase effectiveness and efficiency.
It's a way to identifying ineffective practices which slow down or halt progress and replace them with efficient practices and good habits.
What it isn't, is an instantaneous 'get efficient quick' scheme that you'll see big gains from. That's because the big gains are actually achieved by creating lots of small incremental changes over time. This is exactly what a continuous improvement strategy is about - an ongoing process to slowly but surely improve the products, services or processes of an organization.
Sound exhausting? Well it doesn’t have to be! It's not so much about putting lots of effort in, it's more about being consistent and persistent. And then as things gain momentum, you start to see big results.
Why adopt a continuous improvement plan?
Author, Darren Hardy, wrote a great book on this called The Compound Effect and if you’ve not read it, we would highly recommend it. Hardy has tested numerous different philosophies and came to realize that whatever success strategy you employ doesn’t actually matter - it all comes down to the Compound Effect. Hardy cites the key to success in anything in business and life is harnessing the power of the compound effect i.e. the effects of small, everyday choices and actions that compound over time, leading you to success (or disaster, depending on your choices).
The compound effect happens whether you like it or not. It’s like gravity in the sense that you can’t stop it, but you can learn to work with it. So, the principle is trying to adapt small good actions, behaviors and practices which over time amount to big results. Let’s think about this principle and harness its power!
In the world of finance, compound interest can lead to surprisingly large returns. A penny that doubles in value each day for 31 days ends up being worth over $10 million.
The real problem for most businesses isn’t massive mistakes; it’s repeated small, poor choices that seem to be inconsequential. These continued choices help the compound effect work against you. If we take this outside of business for a moment a great example, eating 100 fewer calories per day for an entire year would cause you to lose 10 pounds. Spending 30 minutes reading each day could, over a year, lead to dramatic self-improvement and new ideas.
Think of this in business terms - If you can automate a process that saves 10 minutes a day that equates to 42 hours a year. Multiply that by four and you gain an extra working month.
Another great example is the British cycling team. Dave Brailsford, former Performance Director at British Cycling, is a huge believer in marginal gains. His overall goals for his team were to win the Tour de France and win medals in track cycling at the Olympics. He achieved both, and a lot quicker than he was targeted too. He believed that if his team thought about every element of being successful in cycling and improved each of those by 1% then they would significantly improve performance - he wasn’t wrong.
He created strategies for every element that would affect performance - minimizing dust accumulating in the team truck, bringing in a sleep coach to ensure good sleep quality by taking their own mattresses on tour. Each cyclist was taught how to properly wash their hands by a surgeon, they even banned shaking hands at the Olympics to avoid illnesses. All these changes in isolation are small but together made a huge difference. His squad won track cycling medals at Beijing and London and have now won Tour de France numerous times.
The benefits of continuous improvement
Importantly, changes in one area can compound with other areas, what Hardy calls “the ripple effect.” For example, making 5 more follow up calls a day, could lead to 2-3 more orders per week, which in turn increases your conversion rate, which increase production utilization, which spills over to increase the positivity of your team, which in turn makes them more productive. Here's some other benefits:
- Small changes are more likely to happen and less likely to fail: When people try to start exercising, they often declare a big goal and start with extreme changes like going to the gym daily. But this is often unsustainable - once you miss a few appointments, you get discouraged and end the whole effort. Smaller goals are more likely to be achieved, which provides positive reinforcement, and spurs you on to the next goal.
- Incremental changes don’t cost as much: Small changes are likely not as costly and will not impact the budget severely. The emphasis is on eliminating, not adding to processes.
- Improvements can be measured and repeated: Once you’ve implemented a change, you can monitor and measure its effectiveness. This means a return on effort and investment can be seen and it can be repeated or applied to other aspects of the organization.
- You become agile: This constant cycle brings with it a level of flexibility and agility to your business. If you’re always looking for ways to improve, you’re going to adapt to the changing landscape. You’re able to take advantage of opportunities, and this constant will reduce complacency and threats from the competition.
How to go about continuous improvement
The compound effect means reaping big rewards from a series of small, good choices, but the results don’t come immediately, which discourages many people from trying. To succeed, you have to be able to stick to your plan consistently over a long period of time.
It’s not the big things that add up in the end; it’s the hundreds, thousands, or millions of little things that separate the ordinary from the extraordinary. - Darren Hardy, The Compound Effect
8 Steps to implementing a continuous improvement plan:
- Create a team: It’s important that all functions of the business are represented in order to gain buy in from every department. Every person on the team should have in depth knowledge of their respective area and a good understanding of the challenges faced by each department.
- Meet regularly: You need to make sure you are regularly reviewing changes so you can decide on actions to prevent problems and keep up momentum. We would suggest weekly initially and then moving to whatever is appropriate for your business as your plan matures.
- Ask for employees’ feedback: As well as having a multi departmental team to oversee the improvement strategy it is also important to ask for feedback from employees across the company too, they are closest to the workflow and can see greater potential for improvements.
- Allow your team to take ownership: Trusting your team with a good degree of autonomy will create a sense of pride and motivate them to take ownership of the project and ultimately lead to a greater level of productivity.
- Track and measure: Once a change has been implemented, track its progress no matter how big or small those measurements might seem and identify what worked and what didn’t. From this, note the lessons learned and consider how this process could be improved or implemented elsewhere.
- Encourage accountability: Change ultimately is something that has to be delivered from the top down. Communicate the ‘why’ of the project and encourage your people to get involved. This will give everyone a purpose (which experts say is a key factor in motivation). Write a mission statement and regularly share progress updates and intentions.
- Celebrate big successes and all the small victories: Rewarding achievements will help you reinforce your vision and motivate your team to stick to the plan. Don’t forget all the small victories, these add up over time to a create a recurring sense of achievement and purpose.
- Pick a project and get started: It’s difficult to know where to start, you can get overwhelmed with looking too much at the bigger picture. Start small, pick an area of focus and make a decision to start. As you move through your plan you can use lessons learned to then further implement these actions to other areas of the department or wider business practices. Start now, get perfect later!
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