How to build Kaizen (continuous improvement) into your SME

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By Pat Wellington 

“Look we have a suggestion box in the reception area but it remains empty and staff don’t seem to care about coming up with ideas for improvement.” If I had a dollar for every time I have heard this, or a variation on this theme from a CEO or manager I’d be a wealthy woman.

Doing research within companies it is possible to come up with a myriad of reasons why staff are demotivated, but a key factor that comes through time and time again is the fact that the culture and values of the Start up/SME does not encourage and support staff to be creative, come up with better ways of doing things, be it a task or the creation of a new system or procedure.  The traditional Western approach prevails. What do we mean by this?

Traditional Western approach                                 Kaizen approach 

Self                                                                           Team

Own department                                                       Whole organisation

Making do/‘fire fighting’                                            Continuous improvement

Short term financial targets                                       Longer term vision

Results                                                                     Process to achieve results

Proprietorial information                                           Information sharing

Them and us                                                           Harmony

Blame                                                                      Ownership and responsibility

Linked in to the aspects in the right column is the need for a long view focus on customer needs. All the activities within a company based on Kaizen values must be channelled in to providing greater customer satisfaction.

If Kaizen sounds to you more like a brand of air freshener than a management technique let me explain briefly what it is. The term is Japanese and comprises two characters or elements – Kai meaning change and Zen means good. In a management sense, it is normally translated as ‘continuous improvement’. In practice, it refers to a step-by-step improvement in productivity and quality, practised by staff at all levels.

Identification of issues/problem areas/places where there is room for improvement is key in a Kaizen environment.  The concept was first introduced by Dr W Edwards Deming (an American statistician) and Joseph Juran (quality consultant and engineer) in the 1950/1960s to revitalize Japanese car manufacturing.  If and when a problem was identified by workers on the production line the whole line or even the factory would be stopped. A detailed analysis would be undertaken to identify what had caused the problem and the outcome of the findings circulated to all – from the general manager to those on the production line. Now, with the concept being adopted not only in the manufacturing sector but also in all sectors of industry, problem identification and resolution is far more robust in the form of root cause analysis than in a traditional Western organisation.

This is where trust comes in to the equation. Issues / problems that occur should not be swept under the carpet with staff covering their own backs. Transparency / identification of the cause and effect, and learning for all is part of a continuous improvement environment.

Although Kaizen originally focused on products and services, the new generation of Kaizen in the 21st century stresses the importance of putting quality in people, both as individuals and teams. The Kaizen approach involves everyone in the company. It not enough to train only front line/customer care staff, there needs to be leadership, a set of values and commitment from the top of the company if attitudes – and results – are going to change.

OK, so what can you do as an owner or individual manager in an SME to create the environment for continuous improvement to work?

Fundamentally, people want to feel needed, supported and valued as individuals. You cannot force people to come up with ideas for improvement. You have to create an environment where people have a sense of pride in their work, where they feel their ideas and suggestions are listened to, and they are given feedback, not only for those ideas that are implemented but also when they are not. Reward and recognition are obviously part of the equation, but also allowing team members the right to take risks and experiment without fear of retribution if things go wrong.

Ideally you are wanting your team to raise ideas on what needs to be improved, but if this is not forthcoming get your team to contribute, by keeping it small – bring up the question in your team meetings ‘so what small ideas do you have for improving for example – customer records/the layout of our office/the dispatch bay/cover of the phones during the lunch period etc…’ Don’t frighten people in your team to thinking they have to make a mind-blowing recommendation for changes to be made.  However, repetition is vital. Bring up the topic during each weekly team meeting. Celebrate small ideas, wait for ideas to come even if this means a pause in discussion. Make your team realize they have two roles – doing their normal tasks and activities, and contributing improvement ideas. Be wary in your conversation of using the word ‘problem’. Keep it positive and use the term ‘opportunity for improvement’.

Enablement/empowerment is clearly also a key factor. Personal development and multi-skilling are other vital ingredients that make people feel that the company cares about them as individuals, and in turn will encourage them to want to contribute more.

All of this might seem common sense; regrettably it is not common practice. This is all very well in theory, I hear you say, but how does it actually work in practice?

Virginia Mason Health System, a hospital in Seattle in the United States vision was to be a quality leader in healthcare. Having visited Toyota and Hitachi in Japan they developed their own system entitled Virginia Mason Production system (VMPS). The objective in using this system was to find ways of streamlining repetitive and low touch aspects of delivery in order to release staff to spend more time talking with, listening to and treating patients. Waste or anything that did not add value to the patient, was eliminated from the process. For example, in surgery at one time ten different trays were used by ten different physicians performing laparoscopy surgery. The new streamlined process standardised the trays, preparing only one. This saved money, eliminated redundant processes and reduced human error.

Also, as mentioned earlier when something goes wrong, staff are able to signal in this environment a patient safety event has occurred by email or phone, be it as severe as administering too high a dose of medication, or as trivial as spilling something on the floor that might cause someone to slip.  Also within the culture that developed nurses were able to report concerns over the operating rooms and have the situation reviewed and responded to. In the old hierarchical structure concerns may not have been reported to management directly.

So how has the concept of Kaizen developed since its inception in the 1950s?

Kaizen was: Used in manufacturing and focused on processes

Kaizen is now: Used in all areas and focused on people

Kaizen was: Originally a means of increasing efficiency and productivity

Kaizen is now: A broader set of values for business success throughout a company

Kaizen was: Systematic processes and structures throughout a company

Kaizen is now: A more flexible approach, frequently used in conjunction with other systems and ideas

Kaizen was: Attitudes and processes to be learnt

Kaizen is now: Increasingly a natural way of organisational life, to be built on creatively in new business environments

Kaizen was: Based essentially around vertical and horizontal teams in the workplace

Kaizen is now: Increasingly developed through new forms of teams (self managed, leaderless, virtual etc.) and structures.

This is a flavour of Kaizen to whet your appetite. It’s not rocket science, and much of the philosophy/approach is common sense. As an owner or manager in an SME you are in an ideal position to develop continuous improvement. Go for it! You’ll be amazed at the difference it will make to both your working life and those that work with you. And also of course, the bottom line!

To find out more about this topic, pick up a copy of Effective People Management by Pat Wellington (Published by Kogan Page, © 2017). This newly released book will help you to improve your people management skills as an entrepreneur or business leader. It is an essential guide to retaining top talent, handling conflict and keeping employees motivated.

Pat Wellington, pictured above, is a  management consultant who specialises in customer care, business development, team building and personal effectiveness.