Boardroom Confession 2 of 5: Continuous Improvement is Continuously Diminishing

From Boardroom Confession to Shop Floor Resolution

On any given day, hundreds of boardroom conversations are focusing on the need for financial and operational performance improvement. Too often, the talk centres on excuses for performance misses instead of real and rapidly implementable resolutions. To change the dialogue, cheque out our Boardroom Confession Fridays, where we unpack the biggest issues being discussed behind closed doors and share tips for bringing those conversations to the shop floor and engaging front-line employees in the solution.

Follow along and get inspired to turn talk into action, and action into results.

Confession 2: Continuous Improvement is continuously diminishing.

Continuous improvement has its roots in lean methodology and the manufacturing approach developed by Toyota and TBM in the 1990s. In many organisations today, however, it doesn’t bear much resemblance to the original concept’s relentless quest for perfection. This is a big problem, especially for manufacturers that publicly make claims about their commitment to operational excellence. Organisations either need to take these claims seriously or take them out.

Complacency can be part of the problem.

In companies that have done lean for a while, it can be easy to fall into a rut. Leaders start to feel like they’ve already found all the major opportunities to improve, and they lack the urgency to keep digging for the next area of breakthrough performance. This leads to a mentality that good enough is indeed good enough, and it can cause companies to overlook new opportunities to get better. This can be a dangerous trap to fall into, especially in the current economic climate where costs are up, and demand is unpredictable.

Daily improvement really isn’t CI’s job.

More often, a dearth in CI breakthroughs is the result of CI departments not doing the right kind of work within the organisation. Sometimes companies get into the bad habit of putting any type of improvement project on CI’s plate, even the smaller and less significant initiatives, or assigning CI the jobs no one else wants to address.

If, for example, your continuous improvement experts are spending significant time comparing planned to actual results and doing the course correction work and root cause analysis, this can indicate a bigger performance problem because operations teams and shop floor associates should be empowered to do this work themselves. When employees at all levels have the tools and authority to address performance deviations and course correct in real time, it frees CI teams to focus on higher-level strategic initiatives such as capex improvement and roadmap issues instead of the smaller day-to-day improvements.

CI leaders don’t want to be the bad guys.

Sometimes CI leaders are limited in what they can achieve because of personal relationships with their counterparts in the production, operations, and maintenance departments. While it’s CI’s job to constantly push the envelope and keep finding areas for improvement, relationships matter, too. CI leaders don’t always want to damage those relationships by asking the tough, nuanced questions that challenge their peers to think and act differently.

This is another reason to keep internal continuous improvement experts focused on the larger, more strategic initiatives with the bigger payoffs and to consider using consultants to go after the daily improvements. The 1% and 2% daily gains add up over time to give companies significant competitive advantage, so both types of improvements are essential. But giving the glory and bigger wins to CI and allowing consultants to drive the incremental work often creates a more positive and rewarding working environment for everyone involved.

Create a continuous improvement culture with real impact.

Ensuring the greatest possible results from your CI efforts depends largely on how CI is perceived within your organisation as well as how employees at every level are engaged in the process. If your boardroom confessions are focused on a lack of meaningful improvement, it’s worth taking a closer look at where CI is spending its time and what’s standing in the way of uncovering your next major area for gain. Also be sure to tune in next week when we dive into employee engagement—and what’s helping and hindering it—in our next boardroom confession.

If you haven't had a chance to read our first article in the Boardroom Confession series, explore the discussion on delayed recognition of performance problems – Boardroom Confession 1 of 5: Resolutions Take Too Long.