In today's turbulent business environments everyone is looking for continuous improvements in the products and services which they offer and the ways in which they produce them. Whether these come through 
the occasional 'big bang' breakthrough innovation, or through the more typical incremental improvements and adjustments, constant change is essential, not just to remain competitive but often for the survival of the business itself.
Faced with this challenge we need to rethink our views on innovation and how it is carried out. In particular, we need to think again about who can be involved in the process. Whilst innovation used to be the responsibility of a few specialists in R&D or production engineering, there is no reason why most people in the organisation should not be able to participate in thinking of — and implementing — small changes on a regular basis. After all, most of the innovation task is about incremental problem-solving, getting the 'bugs' out of the system or product. And everyone in the firm comes fully equipped for the task — 'with every pair of hands you get a free brain'!
… because continuous improvement (CI) represents a huge missed opportunity. By tapping in to the creativity of all the staff in the organisation — not just a handful of specialists — it's possible to become much more innovative. After all, with every pair of hands you also get a free brain — it's an awful waste not to use it! The experience of those who have gone down this road might help persuade you — they've managed to trigger hundreds and thousands of small ideas. Whilst these may never win a Nobel prize, they add up to impressive bottom line savings — in reduced waste, reduced time, greater flexibility, higher quality and better service …
CI can be used to deliver performance improvement along any dimension of the business (eg costs, quality, time reduction, etc.) through high involvement of the workforce.
Although obvious, this potentially huge source of innovation was largely neglected in UK manufacturing until comparatively recently. It was only when the messages from Japan became hard to ignore that we began to realise that their success across a range of sectors was due in no small measure to a different approach to innovation. In addition to the traditional use of specialists, Japanese firms built on high involvement of the workforce in regular incremental innovation — a process called kaizen but which is more familiar to us as 'continuous improvement' (CI).
Continuous improvement (CI) is a generic name given to a range of activities designed to engage a high degree of involvement amongst the workforce in innovation. It is really an umbrella term for an organisational approach (high involvement) supported by a range of specific tools.
CI is about an approach to change which is high in involvement but which stresses incremental innovation as its key feature — a 'little and often' rather than a 'big bang' view. Since it is a philosophy it is often linked with more specific change programmes — for example, in business process re-engineering, total quality management or versions of the 'lean' concept. In each case the contribution of CI is to maintaining and extending progress through a regular stream of small improvements.
Continuous improvement — a company-wide process of sustained and focussed incremental innovation |
It looks simple enough, but what it really involves is a bit more tricky …
But making CI happen is easier said than done. Early attempts to emulate Japanese success often led to disillusionment — firms set up problem solving teams and invested heavily in training all their staff in relevant tools and techniques, only to find their programmes had run out of steam some six months later. These days it has become clear that introducing and embedding the new behaviour patterns which make up CI is something which takes time and effort — and there is no magic bullet which will achieve this overnight.
It's a little like learning to drive. To a child the process looks deceptively simple — just hold the round thing, press the pedals and off you go. But acquiring the ability to drive involves extensive learning over a sustained period. First you have to master the individual and unfamiliar controls — not as easy as they look. Then you have to link these individual actions together into sequences like changing gear — remember how much fun learning the hill start was? And finally, after much practice and a lot of ground gears, burnt rubber and irate drivers in front of whom you've stalled for the thirteenth time, you get as far as the driving test and acquire a licence. But this is only the beginning; having demonstrated a basic level of competence, you then have to go on learning — about driving on different roads, under different conditions, in different cars, on foreign motorways and dirt tracks — until after a long period of learning you might consider yourself reasonably good.
Mastering CI involves a similar extended learning process, from acquiring basic competence up to high performance which contributes real strategic advantage. The CIRCA research project at the University of Brighton has developed a model identifying key stages in this learning process — see figure 2.
CI involves an extended journey, gradually building up skills and capabilities within the organisation to find and solve problems. Not surprisingly there are many different techniques which can help enable the process, and for a full account of them you should look at the further information sources. What follows here are some brief explanations of basic tools.
Specifically we will look at:
At its simplest, we can see continuous improvement as involving a cycle of problem-finding and solving, like this:
In the first stage — identify — the organisation recognises that there is a problem to solve. This may be an emergency or it may be a minor difficulty which has been nagging away for some time; it may not even be a 'problem' but an experiment, an attempt to find out a new way of doing something.
Whatever the initial stimulus, finding a problem then triggers the next stage which is to define it more clearly. Here the issue is often to separate out the apparent problem (which may only be a symptom) from the underlying problem to be solved. Defining it also puts some boundaries around the problem; it may be necessary to break a big problem down into smaller sub-problems which can be tackled — 'eating the elephant a spoonful at a time'. It can also clarify who 'owns' the problem — and thus who ought to be involved in its solution, if the solution is to stick for the longer-term.
Having analysed the nature of the problem, the next stage is to explore ways of solving it. There may be a single correct answer, as in crossword puzzles or simple arithmetic — but it is much more likely to be an open-ended problem for which there may be a number of possible solutions. The challenge at this stage is to explore as widely as possible — perhaps through the use of brainstorming or other group tools — to generate as many potential solutions as possible.
Next comes the selection of the most promising solutions to try out — essentially the reverse of the previous stage since this involves trying to close down and focus from a wide range of options. The selected option is then put into practice — and the results, successful or otherwise, reviewed. On the basis of this evaluation, the problem may be solved, or it may need another trip around the loop. It may even be the case that solving one problem brings another to light.
In terms of learning, this is essentially a model for experimenting and evaluating. We gain knowledge at various steps in the process — for example, about the boundaries of the problem in defining it, or about potential solutions, in exploring it or about what works and what doesn't work in implementing it. The point is that if we capture this learning it puts us in a much better position to meet the next problem; if it is a repeat, we already know how to solve it. If it is similar, we have a set of possible solutions which would be worth trying. And if it is completely new, we still have the experience of a structured approach to problem-solving.
Brainstorming is the rapid pooling of all and any ideas that a group of people can come up with before any discussion or judgement takes place. Every idea is recorded no matter how bizarre or irrational.
A member of the group offers one idea and the session continues this way until everyone has had a chance to add to the list.
Anyone who has a contribution speaks whenever he or she wants.
Ideas are written down rather than stated out loud, but everyone must be able to see each idea listed.
Also called the 'Fishbone Diagram', this participatory exercise explores the links between the effects and the possible causes of an issue. This tool encourages a group setting for problem —solving and demonstrates that problems can have a number of causes.
Cause and effect analysis is a technique for identifying the possible causes of a problem or effect. The technique uses a Cause and Effect Diagram to record the possible causes as they are suggested.
Use this tool when you want to establish the cause of an effect. The effect may be either a problem or a desirable effect — when something desirable has happened it is useful to find out what caused it so you can make it happen again.
A Checksheet is a tool for recording and organising data.
There are three kinds of Checksheets:
Checksheets will help you to gather and classify data. Checksheets ensures that everyone collects comparable data in the same form, and in a format that allows easy analysis.
A flowchart is a diagram illustrating the activities in a process.
A flowchart can tell you a lot about a process and the activities involved eg Are all the activities really necessary? What controls are in place?
Flowcharts are a useful tool to use when improving a process, especially when you are planning to collect data or to implement a solution. They can also be used to document a new process or to compare an existing process with an 'ideal' process.
Flowcharts are a good communication tool — by using standard symbols everyone will have the same understanding of the process.
This will depend on the purpose for constructing the flowchart. On a higher level flowchart several tasks which make up an activity will be shown as one activity whereas on a lower level flowchart each task will be shown separately.
| stretched circle | start or end of process |
| rectangle | step or activity in the process |
| diamond | decision point |
| arrow | direction of flow |
This flow chart looks at the process of servicing a car:
As the name suggests the basic concept in policy deployment is the development of mechanisms for breaking overall strategic objectives of the business down into small units, each of which can provide the target for groups or individuals in their CI activities over a sustained period. For example, in Nissan Cars the overall strategic target is cascaded down through the organisation via the appraisal process, where everyone has the chance to discuss and agree to certain objectives over the coming year, including a range of targets for their own CI activities. This process — which is essentially 'management by objectives' — is a two-way one but the outcome is agreed targets and a commitment on the part of the employee to achieving them, a recognition that this is what will be used to assess performance over the coming year, and an understanding that achievement will be related to rewards.
Its value in CI is to provide a focus and targeting process which moves on from simply improving things on a project by project basis. In policy deployment targets are linked to strategic objectives and local activities mesh together to contribute to meeting these. For example, if the overall target includes an objective to become competitive by reducing customer lead-time by 25%, then policy deployment would ask, for each area, how they could cut 25% of time out of their overall operations. In turn this would cascade down to the individual units within the area, and down to the individual teams, with the same question. Each individual team will then use CI tools to explore the sources of wasted time, and the kinds of thing which might cut it down — and on a project by project basis they would chip away at the time taken within their area. In aggregate form this would result in major savings.
Two key features are important here — the use of 'stretch' targets which give impetus, and the use of monitoring and measurement against these targets as a way of guiding the process and maintaining momentum. In addition there is a strong component of 'know why' as well as know-how — in other words, there is an attempt to explain the rationale behind the strategy and how improvements in a particular area contribute to it. For example, in a chemical plant working towards the target of 'zero breakdowns' each machine has detailed operating and maintaining instructions attached. These have been developed through CI activity and include not only the new operating procedures but also a section on why these steps are important. There is thus an element of organisational learning, of turning tacit into formal knowledge. Similar functions are performed by the storyboards which characterise progress along the road to meeting strategic targets.
Policy deployment is concerned with strategic objectives so the timescales for typical 'campaigns' are long. For example, in Japan the 'mid-term plan is the key driver in firms, and this represents a clear statement of objectives and targets over the next 3 years.
'Total quality', 'lean manufacturing' and a host of other prescriptions to explain the productivity and performance gap between Japanese firms and the rest of the world repeatedly stressed the high level of involvement of most employees in the day-to-day problem-solving. The scale of this is impressive — firms like Toyota receive annually around two million suggestions, whilst Kawasaki Engineering report a staggering 7 million — and they implement the vast majority of these. (To put that in perspective, it was estimated in 1989 that workers in the Japanese car industry made an average of 1 suggestion per worker per week; the European equivalent figures were 0.5 suggestions, per worker, per year!)
That picture is changing fast — recent survey data suggests that 65% of companies consider CI to be of strategic importance, and around 50% have instituted some form of systematic programme to apply these concepts. A further 19% claim to have a widespread and sustained process of CI in operation, and of those firms using CI 89% claim it has had an impact on productivity, quality, delivery performance or some combination of these.
Dutton Engineering does not, at first sight, seem a likely candidate for world class. A small firm with 28 employees, specialising in steel cases for electronic equipment, it ought to be amongst the ranks of hand-to-mouth metal bashers of the kind which you can find all round the world. Yet Dutton has been doubling its turnover, sales per employee have doubled in an eight year period, rejects are down from 10% to 0.7%, and over 99% of deliveries are made within 24 hours — compared to only 60% being achieved within one week a few years ago. This transformation has not come overnight — the process started in 1989 — but it has clearly been successful and Dutton are now held up as an example to others of how typical small engineering firms can change. At the heart of the transformation, which Ken Lewis, the original founder and architect of the change, has set in train, is a commitment to improvements through people. The workforce are organised into four teams who manage themselves, setting work schedules, dealing with their own customers, costing their own orders and even setting their pay! The company has moved from traditional weekly pay to a system of 'annualised hours' where they contract to work for 1770 hours in a year — and tailor this flexibly to the needs of the business with its peaks and troughs of activity. There is a high level of contribution to problem-solving, encouraged by a simple reward system which pays £5-£15 for bright ideas, and by a bonus scheme whereby 20% of profits are shared.
There is increasing recognition that continuous improvement (CI) offers more than just operational improvements in performance. If CI efforts can be sustained over the long term, the opportunity exists for considerable strategic advantage, as organisations move on from bringing and maintaining their processes in control to improving them and developing totally new ones.
Research suggests that this learning is a bit like climbing a staircase towards full-scale capability in continuous improvement. But perhaps it is more like trying to climb up an escalator which is moving downwards — you have to keep working hard just to stay in the same place and even harder if you are to make progress. For this reason many CI programmes seem to lose momentum over time.
The journey is certainly worth making — but there are obstacles to be surmounted along the way. The following pages give some examples of the major 'rocks' along the road to CI …
The first barrier is one of 'mindset' — the need to believe that everyone has the capability to contribute to solving-problems. We shouldn't underestimate the effect that years of separating out 'thinking' and 'doing' jobs in factories has on the way we view people. After all, it wasn't that long ago that we spoke of how many 'hands' were employed in a factory. These ideas, which have their roots in the Industrial Revolution and found their high point in the mass production factories set up by Henry Ford and his contemporaries, are based on the belief that there is one 'best' way of organising things. Specialisation and division of labour means that people need to do what they are told — and not to fiddle round with the system. That kind of arrangement works well when the world outside is stable and predictable — but in today's manufacturing environment the only certainty is uncertainty. Now we need to change our way of thinking, and to mobilise every bit of creativity we can get.
One key way of doing so is to recognise that everyone has something to contribute in the way of problem-solving skills. Of course, not everyone can contribute at the same level, but incremental improvement is certainly within everyone's capability.
Enabling this change in mindset is difficult; it often requires a shock to the system. Benchmarking, crisis, the realisation that others do it differently and better can all provide triggers for change. For example, the 'lean manufacturing' revolution came about because the big Western car makers suddenly found their competitiveness threatened by a different (mainly Japanese) approach which had been mobilising the incremental problem solving capacity of their workforces. Firms like Toyota had been getting upwards of 2 million improvement ideas every year for the past fifteen years — and they were putting the vast majority of these into practice.
The next barrier is to move from recognising that everyone has the capability to improve things to organising this capability in a systematic fashion. It's easy enough to ask people occasionally for their ideas, or to get a 'learning curve' effect around a new piece of equipment where everyone joins in the problem-solving to get the thing up and running correctly. But such random and occasional problem-solving isn't enough; we need to make CI a systematic habit in the organisation. People need to see part of their job as finding problems, analysing them, developing possible solutions, implementing them and reviewing the results — and they need to make sure they capture what they have learned on the way.
Enabling the transition from occasional problem-solving to systematic CI needs a combination of understanding why and how (through training) and the use of some form of learning cycle which provides the structure for finding, solving, implementing and review. Deming's famous wheel — plan, do, check, act — is a good example of this kind of cycle. But the organisation also needs to set up some kind of 'idea management system' to make sure that suggestions for improving things can be responded to — not always with an immediate 'yes' but at least with a recognition that the idea has been received and that the effort in contributing it is appreciated. Showing that appreciation can be done financially, but an increasing number of firms are not paying for ideas but providing some kind of token recognition — for example, donating a small amount to a nominated charity for every idea suggested.
Above all the key here is practice — like any new behaviour, at first it feels strange and unfamiliar. It only gets to be a habit when we practice and reinforce it regularly.
Once established, a systematic CI process can bring considerable benefits, in terms of reducing errors and waste and enhancing performance along different dimensions. But there is often a limit to how far such CI can help — especially when all the 'obvious' and pressing problems have been tackled. In many cases there is a marked dip in interest and activity in CI after the initial 'honeymoon' period — and one probable explanation is that the CI — whilst now a habit as far as the organisation is concerned, isn't going anywhere in particular.
What is needed at this stage is some way of connecting CI up to the strategic goals of the business, so that improvements are made not for their own sake but because they attack some target which is important for the survival and growth of the firm. And to make this happen we also need to introduce some kind of measurement — otherwise we will never know whether and by how much we have improved towards those targets.
Enabling a focused approach to CI can be helped by adopting some form of 'policy deployment' a structured way of breaking down the overall business strategy into specific targets which individuals and groups can work towards. Skills in monitoring and measurement can be developed through training in process management — and reinforced, as before, by plenty of practice!
Not all problems in CI can be solved in a single area; many will involve other parts of the organisation, or even outsiders. Whilst CI might work well in one area of production — or even on the whole production floor — its impact will always be limited unless some way is found for applying the ideas across departmental and functional boundaries. Finding ways of joint-problem solving may also have the side effect of breaking down the brick walls and barriers within the organisation and helping develop smoother flow.
Enabling this move outwards involves a combination of training, development of cross-functional team skills, development of process measures and adapting tools and techniques to cope with inter-group problem-solving — for example, by using joint fishbone charts.
The next challenge in CI is to move from a position where managers drive the process — either directly by their involvement, their choice of projects, their taking responsibility for implementation, etc. — or indirectly. Letting go of the reins and passing them to autonomous teams or individuals that manage themselves is not easy and requires high levels of trust. But without such 'empowerment' there are always going to be limits on what is improved and how; making this move is an important step towards creating the kind of organisation where everyone is part of the R&D system.
Enabling it to happen requires a commitment to do so on the part of management, some structural changes in terms of the levels of responsibility and decision-making in the organisation — and training and development. There is no possibility of devolving control of CI to a self-managing team unless they have the necessary skills to take this on.
The last obstacle in climbing the CI staircase involves moving towards risk-taking and experimentation. Instead of using CI as a way of solving problems around setting, maintaining and gradually developing standards, the organisation needs to learn to innovate in more open-ended fashion — very much like what goes on in the laboratory. Of course too much experimentation would be a disaster, but encouraging everyone to try new things out can be an important source of growth. 3M is a company famous for its product innovations — it currently has some 60,000 in its range and aims to derive half their sales revenue from products invented during the past three years. they are able to do this — and have built a successful business on doing it for many years — because they encourage such experimentation — everyone is allowed to spend up to 15% of their time experimenting, trying things out, doing things because they are curious to see what happens.
These days there is a lot of talk about 'the learning organisation' — but all that really comes down to is an organisation in which people are regularly involved in a cycle of experiment, review and reflection and capturing the new knowledge created.
Enabling this to happen is a mixture of training and development plus allowing people the space and time to carry out such experiments.
There are many resources available to help explore CI and the various tools and techniques within it.
In particular:
CENTRIM hosts a web site which holds information on most of the basic CI tools and is part of a continuing research and experience sharing network for CI across Europe. Amongst CENTRIM's publications is Innovation News.
CENTRIM's web plays host to CIRCA — a research project set up to investigate how continuous improvement can be introduced and sustained in UK industry. The project represented a collaboration between industrial and academic partners and was launched under the auspices of the Department of Trade and Industry. The second phase of the research was supported by the Engineering and Physical Sciences Research Council.
EuroCINet is a network of companies and research institutions with a common interest in the subject of Continuous Improvement. "Research and mutual support are the ways to make progress in this field."
In addition there are many books and articles which can provide some guidance on CI and the tools and techniques to implement it. Useful starting points are given on the following pages.
Atkinson, P (1990): Total quality management: Creating culture change. Kempston: IFS Publications.
Bessant, J and Caffyn, S (1996): High involvement innovation. International Journal of Technology Management, 14(1), 7-28.
Bessant, J, Caffyn, S, Gilbert, J, Harding, R and Webb, S (1994): Rediscovering continuous improvement. Technovation, 14(1), 17-29.
Deming, W E (1986): Out of the crisis. Cambridge, Mass.: MIT Press.
Fukada, R (1990): CEDAC — A tool for continuous systematic improvement. Cambridge, Mass: Productivity Press.
Gallagher, M and Austin, S (1997): Continuous improvement casebook. London: Kogan Page.
Imai, K (1987): Kaizen. New York: Random House.
Japan Management Association (1987): Canon Production System: Creative involvement of the total workforce. Cambridge, Mass: Productivity Press.
Kaplinsky, R (1994): The challenge of Easternisation. London: Frank Cass.
Kaplinsky, R. den Hertog, F and Coriat, B (1995): Europe's next step. London: Frank Cass.
Robinson, A (1991): Continuous improvement in operations. Cambridge, Mass: Productivity Press.
Schroeder, D and Robinson, A (1991): America's most successful export to Japan — continuous improvement programmes. Sloan Management Review, 32(3), 67-81.
Schroeder, M and Robinson, A (1993): Training, continuous improvement and human relations: The US TWI programs and Japanese management style. California Management Review, 35(2).
