Tuesday, 19 June 2018

When Continuous Improvement Isn't Improvement

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When is Continuous Improvement not Continuous Improvement? It's not a dad joke, it's one of my favourite annoying questions I pose to clients when we are working through any form of LEAN or 6 Sigma programs.I'll wait a little while as people ponder the question... go on you as well… OK, so When is Continuous Improvement Not Continuous Improvement? It's when you are applying Continuous Improvement to the wrong thing.

Time To Stop Polishing

Most people have heard of the Law of Diminishing Returns, this is the point where it costs you as much to get the improvement, it's a lot earlier in the process than you would think. Most people talk about it as the last 5-10% of the process when really, it's closer tot the last 20 or 30% depending on your process. There is another point on this returns curve that people don't talk about enough, it's the Point of Negative returns which is where it costs you more in inputs (direct money, about, time, opportunity cost) to carry on working on something. So there is a point where your continuous improvement work is actually draining the organisation and you should think about this at the start, where are you going to be happy in putting the thing down and saying, yep it's good enough? So yes there comes a point in every continuous improvement process where it's time to stop.

Time to Completely Change

If I had asked people what they wanted they would have said Faster Horses
by Henry ford

The Electric Light bulb did not come from the continuous Improvement of candles.
by Oren Harari

Habit 2: Begin With the End in Mind
by Steven Covey
7 Habits of Highly Effective People

Thos are two great quotes that sum up this section completely. There comes a point where you actually have to stop and do a bit of Covey thinking and figure out what the End In Mind is, (if you don't know Covey's 7 Habits of Highly Effective People get off to a bookshop & buy a copy!). i.e. what is the thing you are trying to achieve? what is the final outcome that you would like? In the case of Ford he wanted to get people from A to B in as short a time as possible, clearly adding more horses to the cart would be an option but at some point, you need to radically rethink things. In the same vein, Edison wasn't interested in figuring out how he could improve the performance of a candle, he was interested in how he could provide sustained light with this new-fangled electricity stuff

Time to Stop Improving the Wrong Thing

The final example I give of when continuous improvement is not continuous improvement is when you are quite simply trying to improve the wrong thing. For example, if you try to improve the processes around a non-bottleneck operation when you haven't yet worked on the bottleneck there is really no improvement happening here. You need to only improve area's where it adds value if in double head back up to our curve and guess when you are 100% living past the point of negative returns.

Summary

Continuous Improvement in an organisation is a great thing, it is the only thing really that drives improved wealth in an organisation if you stop and think about it for a while. Knowing where to apply the continuous improvement is however critical to it adding wealth. If your Continuous Improvement program isn't adding to your net profit line then it's time to stop and ask if what you are doing falls into one of my 3 categories above.