Although continuous improvement may seem like something only large companies do, it can be beneficial for small businesses and even tailored to your company’s needs.
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All businesses are either in growth or decline. There is no in-between. All times are either improving or worsening. Although this view is prevalent, it is a little flawed. Truth is, we are constantly ebbing and flowing. It’s not a straight line. It is not a spiral of destruction. It is difficult to tell if you’re improving. Are you improving or declining if today is great but last week was horrible?
For many successful businesses, the answer is to adopt a mindset of continuous improvement. No matter where your business is at the moment, there’s always room to improve. This gives us power and gives us direction. This allows us to continue pushing forward, forging our paths, and establishing our position in the marketplace.
Many entrepreneurs mistakenly believe continuous improvement is synonymous with perfection. They believe their employees will improve if they are constantly harping on them. They can remain unhappy and drive their staff harder. The problem is that the system is much more complicated than that. These same business owners often complain about high turnover. People won’t work for jerks. Talented and valuable employees will choose to work in a better environment and have more options. The people who stay are often those with no better options.
You may feel that you made your employees work as hard as possible, but it is not a good feeling. The system shows that a group of burned-out employees does not equal happy, productive, and experienced workers working in the same direction. This vision of high productivity and continuous improvement seems to be at odds. If you look at it through a perfectionist lens, it might appear that way. However, if we look at it through the systems lens, there is a different way to go.
How can you bring continuous improvement to your business without making your employees harder and harder? These are three simple ways to achieve continuous improvement in your industry.
Metrics and Key Performance Indicators
This culture of continuous improvement was what I created when I assumed the management of a small business many years ago. We wanted to scale up a business that was struggling. This meant we had to change the operational strategies and not do what the company has always done. However, before making this change, I knew it was essential to ensure that the difference was an improvement, not a decrease. How can you tell if the process has been adjusted to make it more profitable and efficient? How do you measure the quality improvement achieved by adding another quality assurance step to your operation?
Metrics are the only way to see how you’re improving. Benchmark data is essential. It is important to know how long it takes to complete each unit. Or that for every 100 units, there are an average of four quality mistakes. Knowing how many units can be completed in an hour is essential. Variations such as seasonality and part shortages must be taken into account.
It is essential to start measuring everything. This is much easier today than in years past. There are likely several tools that you can use to generate valuable reports. It is possible that you don’t need log files or data to create pivot tables to find trends. A few words may be helpful to provide enough information to help you measure critical aspects of your business.
Once you have the data and the insights, it is possible to create Key Performance Indicators. Business uses Key Performance Indicators (or KPIs) a lot. These indicators give you essential information about the company you are monitoring. These tools can help you set goals. They can help you establish acceptable output levels. They were used in the past to maintain balance. We looked at the whole system when a KPI was out of control. This side effect often occurs because we push too hard in one area.
Because we had the data, this allowed us to continually improve.
Learn how to see the systems
While Key Performance Indicators can be helpful, they are not enough to make your business work. They are often overlooked by most people. They only see the chaos of activities and not the flow.
These activities create patterns day after day. These patterns have structures that drive them. This is how you can see the systems. You begin by looking for ways in the chaos. The designs are created by identifying the processes and procedures driving the activities. This will help you avoid playing whack a mole with your business. You won’t improve if you jump from one problem to another. This results in change just for the sake of changing.
System thinking is the key to solving recurring problems. You see things differently. You see things differently.
Plan, study, act.
Dr. Edwards Deming is well-known for his efforts to bring continuous improvement to Japan’s manufacturing sector after WWII.
He used Plan, Do, Study, and Act as one of his methods. The process begins with a plan to make a change in the procedure. The next step is to implement this potential improvement. It’s not blindly applied. It is often tested first in a smaller setting.
Let’s take an example. It seems like it might help catch errors quickly. create a subset. You can make a smaller batch of the new approach to test it.
This reduces the risk. You can quickly revert to the previous result if there is an unexpected outcome. This reduces the chance of failure to make the change. Leaders are often afraid to take risks and stop improvement efforts. This allows you to explore more.