Opinion expressed by entrepreneur The taxpayer is the owner.
They say all businesses grow or die. There is no break. Upgrade or downgrade at any time. This view is popular, but it has a few bugs. The truth is that we are always up and down. The above is not a straight line. Down is not a spiral of complete destruction. This makes it difficult to determine if it is improving. It was great today, but if it was terrible last week, are you growing or dying?
The answer for many successful companies is to adopt the idea of continuous improvement. No matter where your business is now, there is always room for improvement. It empowers us because it gives us direction. This allows us to keep moving forward, paving the way and strengthening our role in the market.
However, continuous improvement is often misunderstood. I have met many employers who equate continuous improvement with perfectionism. They believe that sticking to every little mistake the staff makes can help them improve. This keeps them unhappy, where they can push their people harder. The problem is that the system is more complicated than that. Often, these same business owners complain about high turnover rates. People don’t want to work for idiots. Talented and valuable employees have choices and choose a better culture. Those who stay are often those who do not have a better choice.
Of course, you feel every day that he pushed his people as hard as they could. But the whole system shows that a team of burnout employees can’t beat the happy, productive, and experienced workers who are all pulling in the same direction. Continuous improvement seems to be at odds with this highly productive vision. Looking through a perfectionist lens, it might look like this. But through the prism of the system, we can take a completely different path.
So how do you incorporate continuous improvement into your business without forcing your employees to work blindly? Here are three easy ways to do this:
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1. Metrics and KPIs
When I took over the business of a small business a few years ago, I worked to create this culture of continuous improvement. I wanted to evolve a stagnant company. This meant not only doing what the company was always doing, but also changing its operational strategy. But before the change, I wanted to make sure that the change was an upgrade, not a downgrade. How do you know that recent adjustments mean more profit and better efficiency? How can quality improvement be quantified by adding another quality control step?
The only way to know that it’s improving is to use metrics. Baseline data is required. You need to know that it takes 3 minutes per reader, or an average of 4 quality errors occur for every 100 readers. You need to know how many units are made in an hour. Differences such as seasonality, lack of parts, and employee leave must be taken into account.
This means that all measurements need to be started. These days, it’s usually much easier than it used to be. Perhaps there are various tools you can use to generate useful reports. You may not need log files for research or data to run pivot tables to identify trends. You may find useful reports that provide enough information to measure important aspects of your business.
Once you have the data and trained the information, you can create KPIs. Key performance indicators (KPIs) are common in companies. They give you an important aspect of the business you supervise. They can help you set goals. You can define an acceptable output range. We used them to keep the balance in the past. When key performance indicators stopped working, I looked through the entire system to find out why. In many cases, we pushed too hard in another area, causing this side effect.
With the data, we were able to make continuous improvements. We knew that change meant we were more successful. We don’t trust our instincts. We don’t just change and wait.
2. Learn to see the system
KPIs are useful, but to be truly effective, you need to be able to see your business system. Most people don’t know that. They see the dissonance of activity, not the systematic flow.
But every day, these activities form a pattern. Underlying them is the structure that animates. This is how the system begins to appear. You start seeing patterns in chaos. Identify the processes and steps to drive the activity and create the model. This will help you avoid moles in your business. Jumping from problem to problem does not improve you. This translates into changes for changes. However, if you look at the entire system, you can not only fix the current problem, but also implement a solution that addresses the root cause, so it will not recur.
Systems thinking is the key to stopping recurring problems. You see things differently. You identify how it happened and see how it could happen again in the future. Your solution means more than a temporary band-aid to the problem. This means a system change to create an environment that eliminates this issue.
Related: How to think about your business system
3. Plan, execute, study and act
Dr. Edwards Deming is renowned for his support for continuous improvement and rebuilding of the manufacturing industry in Japan after World War II. His tactics were so effective that Japan outperformed other nations and became a center of quality and profit.
One of the methods he used was planning, execution, research, and action. This process, also known as the Deming cycle, allows you to make changes without worrying about deterioration. Start by planning a step change. Then this potential improvement step is implemented. Not implemented blindly. Often, it is first tested in a small environment.
Here is an example: Let’s say that the quality control process may require additional steps. It seems to help you find bugs early. Instead of creating an entirely new policy that the entire QA team will follow, create a subset. Create a smaller batch to test it. Or ask half of your QA employees to try the new approach.
This limits the risk. If you encounter unexpected results, you can quickly undo them. Limit the risk of switching. Many improvement strategies have been discontinued because leaders are afraid to take risks. This manages that risk and allows for more experimentation.
Then examine the results. Now that you have established the metric and collected all the baseline data, you can measure the results of your changes with normal results. Are you good? Are they worse? Did the output stay the same?
So we act. If the change improves the area of interest, incorporate the change into your standard process. If this does not give you the results you expect, go back to the previous process. It shows that change does not mean to return. That means you are always on the move. Continuous improvement.
It is the opposite of change for change. Leaders unfamiliar with these techniques find it difficult to continuously improve. They succumb to the pursuit of perfection and push people more and more. If they never accept the current effort, they feel they are improving their business. A better way is to define a metric and define a KPI. This will tell you where you are working. You can see if you are doing good or bad for your business.
Then look at the company’s systems and focus improvement efforts on systems and processes rather than efforts. Tell them about the steps your company will take and the tasks it will complete on a regular basis. Instead of focusing on one-off actions, aim for repetitive actions.
Finally, implement planning, execution, research, and action. Use this cycle to reduce the risk of change. Use it to get employees to express their thoughts on how to improve the system. Then try it without worrying that these ideas won’t work and drive your business back. Plans, Dos, Studies, and Acts help you test these changes in real-world scenarios before making changes to processes and procedures.
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You don’t have to be a Fortune 500 company with a formal continuous improvement methodology to enjoy the benefits of continuous improvement. You can understand the basics and create your own process. These can be customized for your team. They can be small and agile if needed. By following these three steps, you can continually improve your business system and increase efficiency, production, and profits.
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