Have you ever started a job and wondered why the office still sends paper forms through to accounts, pins the latest roster up in the breakroom, or keeps all their process instructions in a dusty folder?
Most businesses start small. Apple famously with two founders, so too Australian tech giant Atlassian. In those exciting early days, tasks and processes are done in the way the founder or owner does it. But, it’s a small business so even if it’s not the most efficient method it gets the job done. Then, all of a sudden, these processes become ‘the way things are done’. The business grows, newcomers enter but no one pushes for change. Growth continues, but systems and processes don’t change and become a bottleneck for the business (see for example manufacturer ATP Science). If the leaders don’t notice the problem or experience the pain, it goes unchecked and inefficiency becomes the norm.
Often it leads back to a resistance to change. Another assessment is businesses don’t have the capacity or resources to manage change. In the relentless pursuit of growth or even survival it’s hard to stop, review and change things. But, in our experience businesses who succeed and thrive must have an appetite for change and a focus on improvement.
So, what can managers and leaders do to create a culture of improvement? For organisations to even begin encouraging these behaviours it helps to have an approach in mind. Consider the following approaches to process improvement and how these can be employed in your business.
1. Map, improve, automate
Process mapping and process improvement are interconnected. Usually, mapping comes first. Put simply, process mapping means taking daily business processes from hard copy manuals or peoples’ heads, and transferring them into a computer system – there are a number of software options to help. It sounds simple, but it can actually be incredibly complex: processes that are second nature for your staff can be very difficult to explain or clarify on paper.
Improvement comes next. Once your processes are visible, it’s easier to see what needs to change. In fact, the act of process mapping itself can lead to improvement – as people record processes, double handling and inefficiencies become apparent and can be changed on the spot.
Process improvement can also offer opportunities to innovate within your business. For instance identifying opportunities for automation. For example, you could use an automated system to inform staff about shift changes, rather than posting a paper roster. Or you could use an automated system to answer customer emails, with the most urgent or unusual being flagged for review.
One example is Australian telco Codecom. They relied on accounting software to handle many of their financial, customer service, payroll and sales processes. But as their business expanded, they outgrew the software. Moving to a new solution, designed for bigger businesses, allowed them to unify all their business tools. In turn, they were able to review and change all their processes. They identified unnecessary manual processes and automated them. They implemented new functionality which enabled them to innovate their sales and customer management processes and improve customer service and retention. But they didn’t stop there. The new system gave them access to all their data in one place, which gave them the insights they needed to find more opportunities for positive change.
But process improvement isn’t something you do once and never think about again. Improvement needs to be continuous and ongoing to have the most impact. As your business grows, technology gets more sophisticated, and customer demands change, your processes must also evolve to keep pace – and that commitment to continuous improvement requires a top-down approach, with senior leaders at the fore.
There are a number of strategies and methodologies around process improvement, but Six Sigma and Kaizen are probably the best known and most established.
2. The Six Sigma Story
Six Sigma is one of the best-known, longest lasting process improvement methodologies. It originated at Motorola in 1986-7 – although it was based on much older concepts. Companies including IBM, Xerox, General Electric, and Kodak have all used Six Sigma practices.
The Six Sigma approach is based on a rigorous cycle of Measurement, Analysis, Improvement, and Control. Traditionally, it was about using data to improve production and avoid defects. The term ‘Six Sigma’ refers to standard deviations on a bell curve – the idea is to reduce defects to six standard deviations around the mean. In statistical terms, this would mean a rate of 0.02 defects per million opportunities for error. The goal is to make manufacturing processes so efficient that errors are practically non-existent.
More generally, Six Sigma refers to companies introducing a culture of continuous improvement and measurement. Some of the key principles of the philosophy – including a focus on customers, data driven decision making, identifying the root cause of problems, and process oriented improvement – are now almost ubiquitous. Most businesses, whether they subscribe to Six Sigma or not, follow at least some of these guidelines.
"Improvement needs to be continuous and ongoing to have the most impact. As your business grows, technology gets more sophisticated, and customer demands change, your processes must also evolve to keep pace."
3. Six Sigma Success
Because the approach has been around for so long, Six Sigma has evolved and adapted to suit changing business practices. Now, Six Sigma academies train executives in the principles of the approach, and practitioners can achieve Green, Yellow, Black and Master ‘belts’ which symbolize their level of training.
Of course, an approach that has been in use for decades also has its detractors. Six Sigma has been criticized for focusing on statistics and neglecting the human side of implementation. It has also been criticized for failing to deliver – with some studies showing that up to 60% of all corporate Six Sigma initiatives end with unsatisfied businesses and lack of change.
If you choose to adopt a Six Sigma approach to improvement, it’s essential to have buy-in from upper management, defined goals, effective training for staff, and a long-term plan for improvement.
4. Continual Improvement with Kaizen
Like Six Sigma, Kaizen is an approach to operational improvement that originated in Japan. In fact, the word Kaizen roughly translates as ‘continual improvement’. Unlike Six Sigma, Kaizen is a general philosophy rather than a strict set of practices. Kaizen was used to transform operations at Toyota in the 1980s, and the book ‘Kaizen: The Key to Japan’s Competitive Success’ by Masaaki Imai, helped introduce the philosophy to a Western audience.
The three underlying principles of Kaizen are: that human resources are your most important asset; that processes must evolve by gradual improvement rather than radical change; and that improvement must be based on a quantitative evaluation of performance. Imai also stresses the importance of working as a team and involving everyone in process improvement – not just management.
Critics of Kaizen say that its benefits are overstated, and that the focus on eliminating waste above all else can lead to problems in other areas. Like Six Sigma, Kaizen relies on buy-in from management and employees – or you run the risk of paying lip service to improvement without actually making any changes.
5. Small changes, big impacts
A major focus of Kaizen is reducing wasted time, wasted effort, and wasted materials. The approach aims to reduce waste in five main areas: movement, time, defects, over-processing, and variations.
Waste reduction can come from seemingly small improvements – for example: using Skype or conference calling rather than travelling to a meeting; making frequently-used files more accessible to workers; setting up standard templates for reports to reduce writing time; and improving staff training for manufacturing processes to avoid errors.
The idea is that these small changes add up to greatly improved efficiency and reduced waste over time, which leads to improved customer service and reduced operating costs.
Implementing a Kaizen approach to improvement doesn’t have to be complicated.
- Start by introducing a way for employees to share their ideas about things that need to improve – such as an ideas log or anonymous suggestion box.
- Put aside time each month to identify areas of waste or inefficiency – think about how these areas could be improved to eliminate this waste.
- Make a plan for change. Too many simultaneous changes can be overwhelming, so think about staggering the introduction of each improvement to give people time to adjust.
- Implement your changes, and continue to assess as you go.
Why change matters
If your business is going well, introducing a new way of thinking can seem like more trouble than it’s worth. It is challenging, but leaders must ask: are we committed to excellence? If the answer is “yes”, then change management and improvement must become part of the businesses culture.
Whether you adopt a data-driven Six Sigma methodology, take a more people-focused Kaizen approach, or choose your own path remember process improvement is about making your business more efficient. Making your processes clear and visible and automating tedious manual processes can lead to better results for customers, greater job satisfaction for your staff, and reduced operating costs for you. And that’s only the tip of the iceberg. It can give you and your team more time – which you can choose to spend finding yet more ways to serve your customers and better your business.
If you’re looking at a paper form right now, maybe its time to hit the pause button and start the conversation.