Continuous improvement committees: permanently looking for innovation

Article written for COSTOS Magazine

Nowadays, innovation is a concept that we cannot afford to leave aside if we want to secure and realize the future of our organizations. Innovation has now become a mandatory element for any business strategy that wants to ensure success. This is what the current competitive context demands, and this is what the new environments in the post-COVID19 era, political, social and environmental crises increasingly require of us.

Innovation can sometimes generate confusion or fear because we don’t know exactly how to approach it. Innovation is in every corner of organizations and can be related to the Product, the Market, the Process, the Organization, the Business Model, the Technology, etc. Each organization must set the strategic tone for its innovation and focus it on any of the aforementioned fronts.

Continuous Improvement Committees are a powerful tool that manages to channel innovation efforts in a practical way, while ensuring results in the short term.

 

What is Continuous Improvement? A bit of history

Continuous Improvement has its origins in the 50s of the last century in Japan, when Edwards Deming (Professor at Columbia University, USA) arrived in the country after World War II as part of the foreign support for the economic and industrial reconstruction of the Asian country. Deming recognized that the Japanese worked hard to be productive, however, they needed clear guidance and leadership (“It is not enough to give the best of oneself; First you have to know what to do, and then do your best.” E.Deming). He used an ancient Japanese concept called Kaizen (change for the better) and from this he implemented the PDCA (Plan, Do, Review, Act) cycle based on decision-making with statistical analysis. In the following years, this methodology was consolidated and evolved to become a key management tool, not only in Japan, but in the United States and the rest of the world.

Continuous Improvement is therefore a method that has survived decades and diverse management trends, positioning itself as an essential when it comes to organizing and structuring innovation efforts. However, our reality and situation imply that these innovations must obtain results in the short term in order to be able to react to the onslaught of the market, competition and external factors.

 

What is the methodology for the implementation of these Committees?

Continuous Improvement Committees are undoubtedly one of the most powerful tools on the road to generating quick results that involve staff in the generation of innovative initiatives with a practical approach. There must be a very high dose of participation and recognition of the personnel who participate in them. These Committees can be very powerful tools in this regard, but they can also cause discouragement and organizational burnout if they are not properly directed and managed.

To do this, a logical sequence of activities must be followed from its organization, to its implementation and monitoring. First of all, it is important to consider that the team that will participate must be multidisciplinary (coming from different areas of the organization) and must have the ability to analyze key information and make decisions that impact both the processes and products as well as the organization.

Secondly, it is necessary to continue with the data analysis of those economic concepts or those with a high impact on the productivity of the business. This statistical analysis will define which areas or initiatives will be prioritized, in addition to serving as the basis on which the improvement objectives will be established in each concept that is sought to be innovated.

Given that the objective is to achieve important goals for the organization in the short and medium term, validated opportunities should be prioritized with criteria such as: expected economic impact, implementation time, investment required, and complexity of implementation.

The initiatives with the best score should be prioritized and promoted by senior management, seeking to motivate staff to generate more and more initiatives. The use of tools such as Pareto, to quickly recognize what the most relevant costs, expenses, revenues, etc. are, will be of great help in prioritizing initiatives.

Once the initiatives have been identified and approved, they must be measured through schedules and indicators that ensure their impact (whether economic or efficiency) and their achievement over time. It is important to mention that it can be proposed (depending on the complexity of each initiative) to carry out pilot tests in a specific segment, area or group to ensure that the new approaches or corrective actions work, in addition to being able to correct in the short term any situation not previously considered.

It is advisable to renew the participants in a reasonable period of time so that the ideas and initiatives do not lose the innovation and speed of implementation required by the organization; At the same time, a wider spectrum of staff is given the opportunity to participate in the improvements.

 

In what areas can they be implemented?

In principle, Continuous Improvement Committees do not have a limitation as to in which areas they can be implemented. As previously mentioned, a fundamental principle is to have the ability to measure improvements statistically so that the results are tangible, therefore, we could think that the areas of budgeting, operational, work control, supply or contractor control, to give some examples, would be the most adept for this type of tool. However, commercial, administrative, human resources, legal, etc., areas can also benefit from these committees, once their improvement objectives are clearly and quantifiably defined.

Some examples of objectives to be pursued with this type of Committee are:

• Reduce overtime
• Reduce the rate of claims
• Increase the percentage of work progress
• Increase the number of approved subcontractors
• Increase inventory reliability
• Improve prices of critical products or inputs (negotiation)
• Increase sales in a specific market segment
• Reduce penalties for late deliveries
• Reduce machinery costs
• Reduce staff turnover

As can be seen in the examples cited, these can easily be transformed into one or more indicators to ensure their monitoring and subsequent real impact. This is a fundamental principle when defining a Continuous Improvement Committee, and that, by being defined in this way from the beginning, will ensure that innovation efforts are understandable for those involved and with a higher success rate (Achievable, Measurable, Agreed, Traceable and Specific).

 

How to ensure its permanence and use?

Finally, let’s talk about the permanent use of these committees over time, making them really become a permanent search for innovation.

First of all, the involvement of staff from the initial stages of defining objectives and measurement metrics is of great relevance to ensure the follow-up of actions over time.

On the other hand, it is important that the working time on improvement initiatives is no longer than 4-6 weeks. This will ensure that people have a sense of urgency to meet their assigned commitments and complete their tasks efficiently. If they spend too many weeks analyzing the same initiative without tangible results, the probability of not achieving the expected results will increase and the team’s demotivation will also increase.

The opportunity to present progress on results during and at the end of the process, in challenging forums, will also keep the staff motivated. These forums can range from presentations to Management Committees that can provide feedback, motivate and focus the team according to the progress they are making, to project fairs with exposure to the entire organization, where teams can show the results achieved; This last type of forum will not only motivate the teams that developed the improvements due to the recognition they will receive, but will also motivate staff from other areas who have not yet had the opportunity to participate in these committees to explore and innovate in new areas of the organization.

Opportunities for improvement are the bread and butter of organizations, and the challenge of constantly innovating is not easy. Therefore, our skills and capabilities to be able to identify them and turn them into real solutions and results, will make the difference to lead the increasingly competitive markets in which we operate and will develop in the coming years.