By Gary Hinkle
Many organizations have implemented formal continuous improvement programs, often as part of an industry standard quality program such as ISO9000, Lean, Six Sigma, etc. Unfortunately, even with formal programs established, many organizations don’t achieve the full ROI benefits of their continuous improvement efforts. There are many reasons for this, including:
– Little or no understanding of what improvements would really benefit the organization
– Inadequate systems for measuring improvements
– Unclear goals, making it difficult to define improvements
– Poor leadership
– Short-term management agenda
– No incentive
An effective continuous improvement program must at least have clear goals and a system for measuring improvements. To ensure that improvements in one area don’t reduce performance in other areas, a continuous improvement program must take into consideration a broad range of functions and processes.
In order to achieve this, senior management in the organization must be supportive of the effort and should set high-level goals for improvements. Sometimes this may not be accomplished easily, so under these circumstances individuals and teams who are trying to accomplish improvements should do their best to understand any implications of their efforts. A properly implemented balanced scorecard methodology measures performance from many perspectives, insuring that improvements in one area don’t significantly degrade performance in another area.
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For example, a marketing group may successfully reduce overall advertising expenses but may not sufficiently budget for new product launches because they don’t have sufficient knowledge of the completion dates for new product development projects. Another example is a manufacturing group reducing their costs associated with supporting existing products but the engineering costs increase due to additional sustaining support required. These examples illustrate why cross-functional management and support of continuous improvement efforts is essential.
Consider the following characteristics of an effective continuous program:
– Clear goals and support from top management
– Cross-functional visibility and participation
– A culture that strives for actual improvements, not just words in a quality manual
– Benchmarks for establishing goals
– Metrics for monitoring performance
– Balance of short-term and long-term goals
– Continuous improvement of continuous improvement programs
– Multiple aspects of improvement efforts (financial, customer and employee satisfaction, productivity, etc.)
Every member of an organization must do his or her part to continuously improve. Whatever your role is in the organization, make it a priority to ensure that there are clear improvement goals and adequate systems to measure progress in the areas that affect your work product.
