Most improvement is an incremental process. It is rare to get something completely right the first time so, over time, we improve parts of the system so as to continue to improve the whole. A Japanese phase for such incremental improvement is 'Kaizen". Read this article for insights into incremental improvement of your business.
Incremental improvement, or Kaizen, probably goes on in your business all of the time; and so it should.
Given that you have a limited amount of human and other resources at your disposal, one would be wise to focus the Kaizen process on the "best" parts of your business or the parts that will most benefit from it.
Kaizen is more of a management philosophy than a specific set of actions or body of knowledge.
Kaizen means (ideally) a business-wide attention to incrementally improving the areas of your business which will have the greatest return from the application of time, money and other resources to a Kaizen process.
Accidental versus Intentional
Kaizen ideas can come about largely in two ways.
The first is what we might call an accidental improvement when you get some brain wave on how to improve a part of your business. These flashes of insight are extremely valuable but one should be careful to not necessarily run off at a tangent and begin to implement them.
A great idea for keeping your brain waves available to you so that you can implement them at a proper point in time is discussed in the Project Management part of the Time Management article (see Time Management article).
With the second, you may systematically approach Kaizen so that you get the most value from it. We will have a look at this sort of process now.
Kaizen and Goals
Hopefully you have developed a set of goals for your business so that you and your staff are very clear on the direction that your business is taking.
When you look at these goals, you can do a form of "Gap Analysis" that shows how far a particular goal is from being achieved. This distance is the “gap” between the goal and the actuality.
Assuming, for the moment, that all of your goals are equally important, you may choose to focus your Kaizen effort on the goal that has the largest gap between where you want to be and where you presently are. This means that you are continually focusing on the goals that are falling behind.
80/20 and Kaizen
However, The Amazing 80/20 Rule (see The Amazing 80/20 Rule) tells us that most likely your goals are not equally important. An alternative approach to choosing what activities to Kaizen could be to rank our goals and various other processes within our business according to the 80/20 Rule.
We would then focus on those goals and/or components of the business that are likely to have the greatest impact. This makes a lot of common sense as the fastest way to gain improvement in your business.
Kaizen and Theory of Constraints
The Theory of Constraints optimising technique (see Theory of Constraints article) explains that there is usually only one, or at the most very few, bottlenecks in your business that govern how much throughput your business can have.
Therefore, devoting time, attention and other resources to elements of your workflow that are not bottlenecks are less productive for increasing your throughput than focusing on the bottleneck. Applying Kaizen to some area other than the bottleneck means that the business is still constrained by the bottleneck. Focusing on the bottleneck first and making it as streamlined as possible means that the entire throughput of your business can grow.
Therefore, when looking for a Kaizen candidate, we should certainly make sure that we have paid attention to the workflow bottleneck before spending time on various other parts of the business.
It is logically consistent, that the constraint in your business is also likely to rank very high on the 80/20 factors within your business so the constraint will surface either under a Theory of Constraint approach or an 80/20 approach.
A Kaizen System
Kaizen by its very nature is a concept for business improvement rather than a specific technique.
However you could set up an ongoing approach to your business with, for example, a quarterly plan. In each quarter, you could identify the areas of business that you want to improve using the ranking techniques discussed above. These can then be set as goals for the quarter. If they are set as goals, they should use the SMART approach (see Goal Setting article) so that there are clear-cut objectives for the business.
These incremental improvement goals can also be set at multiple levels within the business. At the very highest level of your quarterly plan, you as business owner might set company wide objectives. At the various lower levels in your organisation, the people responsible for managing at each of those levels can set their own Kaizen objectives.
Ideally, these might contribute to the overall objective, but that does not necessarily need to be the case. Things that are important at a lower level of the business may make some contribution to the higher level but may not be particularly significant in the grand scheme of things.
Probably, the thing to focus on with a quarterly Kaizen strategy is to ensure that people know what Senior Management considers to be the principal things to focus on and then allow individuals to Kaizen activities that are within their control and which lead to the overall Kaizen objective of the company.
Wikipedia - Kaizen is Japanese for "improve". In business, kaizen refers to activities that continuously improve all functions and involve all employees from the CEO to the assembly line workers. Read more at Wikipedia.
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Youtube - Kaizen The Secret behind Japanese Productivity - link