Continuous Improvement — the critical survival technique

Continuous improvement is what companies need to survive. It needs to be a core competence.

Once upon a time companies could focus on the product that they were best at. They could specialise at one thing, and as long as they stayed ahead of the others in their field, they would remain profitable.

But then the digital revolution came along. And companies that were once leading the way suddenly became obsolete. Kodak and Blockbuster being a couple of obvious examples.

Technological progress is stopping for no one. We regularly hear of more and more companies coming under threat because there are new, digital ways to do things (travel agents, high street shops, taxi firms, newspapers, radio stations, tv companies). It’s really hard to predict what will come under threat in the future, in some cases impossible. You can’t pick the optimal product strategy right now. You just have to be constantly trying things.

But one thing that doesn’t change is how you sensibly manage risk. Any investor will tell you that to manage risk you should diversify your portfolio. Look at Amazon and Google. Once upon a time you would say they were a bookstore and a search engine. What would you call them now? A lot more than that. They do so many different things. Some of these things are great, some of them turn out to be less great (Amazon fire phone, Google Glass). But they try enough things that it doesn’t matter.

Now they did get their initial success from being a great bookstore and search engine. But they are great now because they have never stopped improving. They are great at trying out new things and improving their existing things.

They could never predict the future. They never mapped out all the things they were going to do and followed a plan. They instead continuously tried new things, a little bit at a time. For all the products we’ve seen, there are probably 10 that they’ve tried and thrown away. They have managed to create cultures where employees can continually try new things, and try to improve everything.

And with an ever changing array of products to build and support, there needs to be a structure and set of processes that can change too. You can’t say that “this is the one way to organise our business, this is how we will work forever”. This needs to change regularly too.

Continuous improvement is what organisations need to aspire to. Continuous improvement of:

• the product(s) that they provide to customers;
• the range of products that they provide;
• the processes that the organisation operates by; and
• the structure of the organisation that supports it all.

But what does this really involve? How does an organisation achieve this? There are two key abilities required.

Ideas/problems from all employees and customers

It’s impossible for anyone to predict the future with all this rapid progress. Organisations need to be constantly getting feedback from everywhere to make sure they are understanding any problems and looking in the right place for their solutions. They particularly need to be hearing from:

• Their customers
• Their employees

Organisations that are able to fully understand the problems of their customers and employees, and harness the ideas of its entire workforce, are much more likely to find ideas that will improve the organisation and its products.

Capacity to experiment quickly

It’s no good having all the ideas if you can’t actually action them. Individuals need the capacity to try new things. Teams need the capacity to try new ways of working. Organisations need the capacity to create new teams to focus on a new product. Importantly, things like this need to happen without fear of recrimination. Some of these things won’t work, and that’s expected (like with Google Glass and Amazon Fire phone). But if people/teams are scared that they will be blamed for trying something different that fails, then they aren’t going to do it.

This might sound obvious to some, but how many organisations are actually doing this? Who is actually garnering the ideas of all its employees? Who really knows all the problems that their customers are experiencing? Whose teams have the capacity to try new things? Who can quickly create a team to focus on a new product? New or small organisations often do, but as companies grow they often lose a lot of these capabilities as they bring in people that don’t do this naturally, or they add layers of hierarchy.

Organisations need to put a big focus on continuous improvement, and embed it in the company. It’s the only way to survive in an ever-changing landscape. Organisations that can do this effectively are the ones that will survive. They might not become Google, but they give themselves a good chance of lasting longer than Blockbuster.

If you enjoyed reading please give some 👏 and/or leave a comment. For more stories like this check out my publication, The Agile Mindset.