Nearly half of organisations’ attempts to implement continuous improvement fail. We look at what might be the underlying causes and how fixing the feedback loop between planning and frontline execution can increase the success rate of adopting continuous improvement.
What is continuous improvement?
In a nutshell, continuous improvement is an ongoing effort to improve products, services or processes by eliminating waste and enhancing the efficiency of equipment and work procedures1. To illustrate, let’s look at a couple of famous examples.
The Toyota Way
Toyota has based its evolution from a spin-off of a textile loom maker to the world’s biggest automaker on the concept of continuous improvement. In doing so it has become a textbook example of how continuous improvement can be used as a powerful tool, enabling organisations to optimally utilise their resources and swiftly gain a competitive edge.
An example from the company’s early days demonstrates Toyota’s long-standing confidence in CI. After design plans for a loom were stolen from his father’s firm, Kiichiro Toyoda, son of Sakichi and second president of Toyota Motor responded:
“The thieves may be able to follow the design plans and produce a loom. But we are modifying and improving our looms every day ... They do not have the expertise gained from the failures it took to produce the original... We need not be concerned. We need only continue as always, making our improvements.”2
McDonald’s and the ‘Speedee Service System’
The fast food giant illustrates his words. In 1948 Richard and Maurice McDonald decided to close down their already successful drive-in restaurant for three whole months. They used the time to re-design their entire operation. They transformed everything, from the menu to the arrangement of the kitchen, continuously revisiting processes to ensure the fastest, cheapest service achievable. They created the ‘Speedee Service System’ that became the operational basis of fast food restaurants as we know them today.
To this day, McDonald’s relies on perfecting processes and systems down to the second
The benefits of continuous improvement – reducing waste and operational costs while increasing the effectiveness and efficiency of operations – have prompted many organisations to turn to the methodology. However, not all CI efforts result in Toyota or McDonald’s success. Is this due to a fault with the methodology or to do with the ways in which organisations attempt to implement it?
Is continuous improvement broken?
As Deloitte’s recent research shows, success rate for continuous improvement efforts is less than 60 %3. Even though organisations invest in continuous improvement, they do not necessarily obtain operational excellence. This results in huge productivity, quality and compliance losses across industries. For example, machine downtime is costing Britain's manufacturers alone more than £180bn every year4; overstocks and out-of-stocks cost retailers $1.1 trillion globally in lost revenue5 – such operational losses are clear indicators of the need for process improvement.
This is combined with challenges such as ageing workforce, high employee churn, growing technological complexity and increasing frontline skills gap making the challenge of operational excellence even greater. However, it is arguably not the methods and aims of continuous improvement but how it is being implemented that most often results in the failure of CI efforts.
In Dr. Satya Chakravorty’s words, CI initiatives might
“start off well … but all too often fail to have a lasting impact as participants gradually lose motivation and fall back into old habits.”6
A one-off revision of a process without the systems and practices in place to continuously measure and revise the process is not sufficient to bring about lasting improvement. You wouldn’t expect to win a marathon race by only going for a quick jog once. Similarly, as a manufacturer, you wouldn’t expect to change a single process once and permanently eliminate machine downtime losses.
As Toyota’s Honorary Chairman Fujio Cho explains,
“what is important is having all the elements together as a system. It must be practiced every day in a very consistent manner not in spurts.”
Continuous measurment for continuous improvement!
To continuously improve processes, organisations need to be able to accurately measure losses, identify root causes and then measure the impact of the implemented improvements. This quickly becomes a challenge in the absence of a feedback loop.
A broken feedback loop means broken operations
The absence of a feedback loop is likely to result in costly implications such as inconsistent execution standards, recurrent incidents and losses, non-compliance and ‘tribalisation’ of knowledge - the polar opposite of CI.
How would the plant manager for an automaker, for example, know what is causing the high percentage of defective yield and whether the processes addressing it are effective if the manager never hears from the operators at the frontline? Establishing active, two-way communication between upper management and the operational forefront is key to successfully adopting continuous improvement and obtaining operational excellence.
The feedback loop serves a two-fold purpose:
i) Firstly, the feedback loop is necessary to provide management with visibility over the reasons and root causes behind losses, helping to eliminate recurrent issues.
ii) Secondly, it is essential to establishing a collaborative approach to continuous improvement between head office and the frontline.
It is important to note that if done intrusively, organisations' attempts to gain visibility can negatively impact their frontline operations and actually stall improvement. For example, Ethan Bernstein’s research on the transparency paradox (2012)7 reveals significant operational blindspots even in shop floor operations considered to be fully transparent. Bernstein's research does not challenge the importance of frontline visibility. Rather it suggests that when workers feel overly monitored they are less likely to report on inefficiencies and to share process improvements.
How to fix the feedback loop?
Instead, to gain accurate real-time insight into frontline operations and encourage engagement with continuous improvement initiatives, organisations can equip workers at the frontline with a mobile collaboration solution, designed with their day-to-day operations in mind.
Such a solution would enable workers to seamlessly capture data on issues and process execution as they take place. At the same time, it would help to ensure that the data captured in the field is in an enterprise- friendly format, providing managers with a streamlined, consistent way of receiving, analysing and acting on the frontline feedback.
This way workers on the shop floor can record and report issues and share observations and improvement recommendations in a structured, non-disruptive way and management can respond to the feedback in a clear, accessible format - making the implementation of continuous improvement practices a collaborative effort.
Digitise paper-based procedures for in-line training, execution, and collaborative improvement