The best organizations in the world start by solving a problem. Once they find the right market-fit and create the right solution, they start to grow and succeed. The company grows, learns, iterates, and becomes bigger and better in every facet. There comes a time when these organizations have their processes are replicable enough to allow for optimization. The focus shifts from growth and revenues to profitability and margins.
Continuous improvement was born in response to that focus shift. Initially, manufacturing companies championed the cause. As their processes were typically automated with machinery, inefficiencies were quickly visible and in turn, fixable.
At Cardagraph we’ve started helping more and more manufacturing organizations get simple visibility around continuous improvement. It has become apparent that service and tech companies haven’t utilized the principles of continuous improvement to realize their fullest potential.
If you want to optimize your business for profitability and increase margins, read on! What follows are 3 principles you can implement today for continuous improvement to take hold across your organization.
Small, incremental improvements are the key to successful CI
When scientists set up experiments, the goal is to change only one thing. This allows them to then measure what happens when one thing changes.
When problems arise in a business, management often makes sweeping changes to solve those problems. If this happened in a scientific experiment, the amount of variables would effectively nullify the results of that experiment.
Continuous improvement is built on the idea that small and incremental changes make big impacts. Incremental change is not only better because of the outsized effect it can have, it also allows for close inspection of its effectiveness without affecting other parts of the business. Red herrings start to pop up when wide, expansive changes are made.
Start small and the next step (measurement of effectiveness) will lead managers astray less often.
Improvement can and should be measurable and repeatable
An organization grows and succeeds in large part because a sustainable, repeatable process is identified and used at scale. However one step in the process can make or break that growth and success.
As we discussed in the previous principle, small changes can make big impacts. So making changes to solve a problem without measuring those changes’ effectiveness is a recipe for a large-scale disaster.
In order to measure effectiveness, leaders need to be able to quickly and simply see the effect of that change across a number of perspectives. Monitoring should start with employee productivity, time-to-action and defective/unacceptable outputs. What’s more, it should automatically measure things on a continuous basis. Process reviews should not happen monthly/quarterly, they should happen on a smaller scale daily and weekly.
Once measurements for effectiveness have been established, the next step is to test, learn and iterate in the process. After all, the entire goal of continuous improvement is to make the successful changes repeatable and scalable.
Feedback is essential
Too often, the process espoused by modern enterprises to make decisions doesn’t consider employee feedback. Feedback is a central principle in continuous improvement. Much like a software company wouldn’t change to a new programming language without first checking to see what their developers thought, organizations shouldn’t make sweeping changes without asking what the effect would be on their employees.
It typically takes one of two forms; employee feedback and data/statistical feedback. This is vital for two main reasons:
- To ensure organization-wide adoption and ownership of CI principles
- To have context both in the numerical and emotional sense
Managers can’t be good managers if they’re not listening to both the employee and the data perspective. Employees are the ones carrying out the process, so it makes sense that they’d be the best source for ideas on how to improve. And the data is just as important to show the relative worth of the changes made.
Cardagraph and CI
Interested in implementing CI in your service-based organization? We make it easy with automated reporting and continuous data aggregation, storage, structure, organization, and visualization. Let Cardagraph help you understand current efficiency levels, make suggestions on how to improve, then monitor the effects of incremental changes made.