200. Continuous improvement

Designing an improvement, or continuous improvement, system, or proposing and making improvements both formally and informally within the organizational systems is a necessity to adapt to an environment and a changing world. All organizations propose improvements and carry them out to achieve a series of objectives, especially if their intention is to develop in the future to achieve certain goals.

The WITORG Guide regards continuous improvement as an internal element of the organizational system, as can be seen below:

Continuous improvement - Disruptive improvement
Continuous improvement for an organizational system. EFQM, QMS, ISO 9000 family. Taylorism. Holacracy.

When external element B is observed (ISO 9000, EFQM, TQM, QMS, etc.) or external element C (from which come philosophies, methodologies or tools such as lean manufacturing, lean thinking, Industry 4.0, Toyota system, etc.), we observe the concept of improvement, or continuous improvement, within them, being even a certification requirement in some cases.

With so much jargon about the improvement or continuous improvement, coming from external elements B and C, some organizations perceive the improvement as a workload more linked to get a certification or follow some current fashionable philosophy/methodology.

WITORG proposes a definition of improvement or continuous improvement within an organizational system:

‘The essence of improvement, or continuous improvement, is the ability to adapt, survive and even anticipate changing environments.’

To specify what this premise consists of, several aspects will be developed in the following sections.

I. Competition, competitiveness and continuous improvement

Within the concept of competence everything that puts at stake individuals, groups and all types of organizations in various combinations could be included. This confrontation, competition or game runs the participants’ efforts to achieve some objectives, often having to evolve or improve along the way. It is difficult to say that this competition has not brought important advances in general in all areas of life.

Regarding competition, wars and other atrocities where collateral damage is evident are included. In addition, within an entity that competes against others, there is also internal competition among its individuals or interest groups. People compete with their peers within the same organization to highlight and achieve certain personal goals as well.

Beyond the fact that competition can be more or less regulated depending on the political system, regional or international regulations, laws, etc., it will continue to exist. People condition, by their decisions, their political and regulatory systems.

As a summary, the need for competition to improve seems to be a historical fact. And although the collateral damage can be tragic and even self-destructive, everything indicates that it will continue to be present. Perhaps it is important to create a collective and organized conscience to achieve positive competition without exclusion or serious collateral damage.

An organization competes within a market, economic sector, town, province, country, continent, geographic area or even worldwide. Here are some types of competing organizations:

  • Schools that try to attract students.
  • Sports teams that compete to be the best in their league.
  • Organizations that want to get new projects from their clients.
  • Organizations that struggle to increase their market share in some product.
  • Political parties that intend to win an election.
  • Organizations committed to illegal drug trafficking.
  • Chefs who work to be on top fifty in the world.
  • Any other the reader wants to add.

In terms of competitiveness and competition, perhaps the most visible or recognizable case is that of sports organizations. Many people have visualized two clear examples of sports competition. The first case is the rivalry between the basketball teams Angeles Lakers and Boston Celtics a few years ago. More recently, soccer fans have been able to follow the rivalry between the Real Madrid CF and FC Barcelona teams.

In cases of sports competition, two teams can be observed, one in front of the other, in principle, under equal conditions and with certain rules to be follow. This type of competition allows to observe elements from each team:

  • Each team’s game system.
  • The strategy proposed.
  • Each player’s physical form level.
  • Each player’s involvement and personal motivation in terms of effort.
  • The talent.
  • The level of generosity and collective solidarity.
  • Each team’s budget.
  • Others.

Internally, clubs have an organization with elements for continuous improvement. This internal organization is not as visible to fans in terms of closed-door training, physical preparation systems, diet, recovery methods, tactical preparation, etc. However, when a match is watched, it can be concluded that one of the teams has made improvements to be able to evolve their way of competing, increasing their competitiveness and thus be able to prevail. This is usually evident when tactical changes are observed, physical performance improves and when a team incorporates new players or excludes others.

In addition, changes can be observed in sports in short periods of time that make some teams lag the leaders. They plan changes or evolutions to be competitive again.

When talking about competition between Samsung, Apple or other organizations, it is not so easy to watch what happens inside them. However, the improvement elements are also in each of them and this is seen in changes in their products over time.

A professional first level soccer or basketball team shows its evolution or involution in the competitions where it participates in a classification and in the final results. Each of the players and the organization staff know the situation first-hand. This way, a sports organization evaluates if it continues with the system and players, if moderate evolutions are introduced or if it should evolve urgently with important changes.

In organizations where most people participate, usually in the working field, it is not so simple to observe their moment in relation to others. Maybe people from top management or close to it can be more aware of the situation, however, the clear majority do not feel the competition as it can be experienced in a sports organization.

Hence the following questions:

  • Is it necessary that all people in an organization are aware of the competition in which they participate?
  • In a full-time employee job, do you have the feeling that you are competing when you perform the same tasks or routines day after day?
  • Are all the people in an organization informed about the competitive situation in which they participate? Is this necessary?
  • Are the people in an organization involved in the improvement somehow?
  • Are the people of an organization motivated and want to participate in the improvement? Is this necessary?
  • Is the ‘improvement’ structured within an organization? To what extent is it possible?
  • Any other the reader wants to add.

II. The need for an own language about continuous improvement for an entire organization

If continuous improvement is understood as the ability to adapt to changing environments by an organization with the aim of surviving, it is important to raise the people’s awareness and participation, or at least part of them.

However, it is not always easy. The different departmental jargon within the same organization makes it difficult to do so. In addition, each department or function has different implications in continuous improvement. There are people dedicated to performing operational tasks routines that could provide ideas to improve their work, although they will have the feeling of not participating in an important way in the improvement due to their work is repetitive all the time.

Others may be involved in a project where the new products or services of the organization are defined. These new products or processes will have a great impact on the company’s future survival. Therefore, they will be involved in continuous improvement on the 100th % of their time, regardless of how aware they are of this fact.

You can ask an operator in a construction of a skyscraper, what do you do? We would obtain different answers: I make concrete, I build better and better skyscrapers, etc.

People’s perception about how they participate in the improvement can be facilitated by the construction of a common language, both for small improvements, as for others with more impact on the survival of the organization. The improvements can be applied in many different areas. In internal element 500 of the WITORG Guide, we get deeper into the management of improvements.

The awareness of the need to improve will require a common language, as well as management tools to achieve it. Besides, improvement does not imply a constant workload for people, since the changing environment can present urgent spots to take care of and impossible to plan. Overcoming these urgent spots efficiently and effectively, and remain alive is the essence of continuous improvement, and for this the organizational system is key.

III. Strategic plans and organizational systems

One of the important elements in improvement are the organizations’ STRATEGIC PLANS. Through them, important investments are decided and, also, how resources are used in order to achieve goals in a specific period, which can span several years depending on the organization.

WITORG does not intend to deepen the science, philosophy and tools used in the strategic plans. However, a list of points to consider when formulating a strategic plan will be presented.

  • How many interest groups of the organization participate in the development of the strategic plan?
  • How many interest groups know the strategic plan and access the information about its evolution?
  • Is information available, even any information that is not recommended to be public, about goals and plans of the strategic plan at all levels and within the communication strategy?
  • Is there a management system for the strategic plan in the organizational system?
  • Is the strategic plan one of the management processes of the organization’s business process map?
  • Is there a continuous improvement process within the business process map, and is the strategic plan within it?
  • Do the people in the organization identify the strategic plan as one of the elements of continuous improvement?
  • Are there other elements within continuous improvement, such as Kaizen events, a system to collect ideas for improvement, customer’s non-conformity turned into an improvement project or others?
  • Is there a common language for all the elements of improvement?

An analysis of the above points can serve as a first reflection on improvement within an organization.

IV. The need for measurement

In order to adapt and survive in changing circumstances, it is important to be constantly comparing ourselves with internal and, especially, external references, in addition to acquiring sensitivity about what happens in our environment as well as in more global environments. This means measuring, comparing, being informed, being alert…

Any organization of a certain size with an implanted system (ISO 9000, EFQM, TQM, QMS or lean manufacturing philosophies, lean thinking…), will measure the performance of their management processes or their departments or their functions through KPI. The interpretation of the KPIs will cause, or should trigger, actions to correct or improve these cited KPI. They are, after all, standard requirements.

Organizations without systems such as those mentioned will perform, in a more or less formal way, KPI measures as well. They will compare themselves with the environment and will act if needed.

However, we see constantly how both large and small organizations enter crisis and disappear, having acted or not. An organization’s disappearance is not because it has not measured performance, the reasons can be many and varied. Generally, they disappear due to their inability to adapt to the environment. Performance can be measured, and problems detected, without being able to evolve or mutate to adapt to the new environment. Although without measurement and evaluation, it would surely be more complicated to act.

Knowing what happens in the environment and internally is, in some way, measuring. This way of being alert is necessary. However, if immediate action is not associated, we would be talking about a ‘paralysis by analysis’ or an inability to act.

In Europe, many of the implemented social achievements have been reduced since 2007. It is a process that has occurred due to the need to adapt to a new environment. Many organizations have disappeared in this time, many of them surely measured KPI, they were even certified in some standard. Therefore, measuring is necessary to improve our ability to adapt to a changing environment, but it is not enough.

In addition, in the last ten years, the ways of measuring have changed radically. Technological advances allow us to measure faster and more frequently than ever before. The terms Industry 4.0 or topics that we deal with in this guide, show the current possibilities of measuring and, above all, of learning through measurement. To split hairs, we are talking about continuous improvement of the KPI measurement. Not forgetting the objective of learning or knowing oneself and the environment and taking immediate action.

In conclusion, the following points are indicated:

  • Measuring is necessary for an organization to survive and to maintain or improve the living conditions achieved, but it is not enough.
  • Measuring as knowledge of ourselves.
  • Measuring the environment to be able to compare ourselves with it and detect changes or threats.
  • A common language to measure and above all to act.
  • Measuring as an element to activate actions for adaptation to the environment and survival.
  • Measuring to improve our organizational system.

V. Micro improvements and macro improvements

In the following scheme, two types of improvement can be observed: micro improvement and macro improvement:

Micro improvements / Macro improvements
Micro improvements = continuous improvements? Macro improvements = Disruptive improvements?

Examples of micro improvements:

The elimination of ‘MUDA’, a concept associated with lean manufacturing, requires the management of a great variety of mini-projects that affect quality, OEE, stocks, etc.:

  • The quality function, as a requirement of the standards (ISO 9001, EFQM, TQM, QMS, etc.) must manage the non-quality costs, introducing improvement plans to reduce them.
  • The security function has plans to improve security. Sometimes improvement projects arise from an incident or accident at work.
  • The environmental function manages the waste costs with the objective of their continuous reduction over time.
  • The maintenance function, through preventive maintenance and improvement projects, focuses on the reduction of breakdowns, downtime and maintenance costs, with the aim of improving their management indicators.
  • The product and process engineering introduce modifications aimed at improving costs, quality, functionality, etc.
  • Any function or department of an organization make changes and improvements with the aim, in principle, to evolve in a positive sense.

These improvements will not bring great benefits in most cases, although all together can add important figures. Nor will they require large investments. The most remarkable thing is the fact of being aware of the opportunities for improvement and carrying them out as an organizational attitude.

Macro improvements examples:

Look again at the scheme presented in the previous point. Next, the macro improvements:

  • New manufacturing processes that reduce the cost of the product and can impact the market, increasing its quota, or even eliminating the existing producers up to that moment.
  • New products that replace the existing ones, eliminating old competitors or increasing market share.
  • Technological disruptions:
    • A non-existent product in the market is created and becomes a necessity or an element of general use.
    • New business models offer services in an alternative way to existing ones, with competitive advantages that achieve an important market share.

The people involved in the micro improvement type are usually related to operational routines. Sometimes the daily operations occupy almost 100 % of a person’s time and energy. The fact that one can have some time to participate in improvement groups, will be the way to be part of it and understand its importance.

People who participate in macro improvements usually devote most of their time to them. Designing new products, processes and services is a job where one is more aware of the importance of development in the future of an organization.

Organizations that are on alert internally and externally, looking for improvements, both micro and macro, and with a common and shared language on continuous improvement, are considered, in WITORG, to be more prepared for survival. This is simple to say, the question is: how do you manage to translate this into an organizational system?

If survival is important, each organization must consider how it wants to organize its continuous improvement or adaptation to current changing environments. For this, there are no magic formulas, but it will always be easier from self-consciousness.

VI. The importance of organizational systems in continuous improvement

So far, in the internal element 200 of the WITORG Guide, concepts such as the following have been commented:

  • Macro and micro improvements.
  • Measurement of KPIs.
  • Continuous improvement even in the measurement of KPIs.
  • Continuous improvement as an element of adaptation to the environment for survival.
  • A common language for improvement.
  • B. Quality systems.
  • Unpredictable workload facing a change in the environment due to readjustments or improvements to be made.

Questions like these may arise:

  • How is all this organized?
  • Can an organizational system gather all this complexity?
  • Are organizational systems capable to follow and adapt to the changes that a changing environment presents, or always remains the feeling of being late?
  • Are the organizational systems rigid to adapt to the environment at the speed that change happens?
  • Are the organizational systems based on point B rigid, or do people in an organization make them rigid?
  • Others.

From WITORG, it is not intended to present a solution or system to organize continuous improvement, but a few premises to take into consideration:

  • Common and shared language.
  • The need to be alert externally and internally.
  • The management of micro and macro improvements supported by the common language.
  • Consciousness to understand that continuous improvement must evaluate the relationship between workload and the capacity available of the actions generated from micro and macro improvement constantly. Adaptation to the environment and survival do not understand constant speeds (see point 500).

This guide reflects on the organizational systems and their improvement systems considering the premises described in points 300, 400, 500 and 600.

VII. The Taylorist influence in the improvement systems

The standards or quality systems implanted historically in many organizations have helped them to evolve their organizational systems even being of Taylorist origin. Certifications require within the requirements an orientation towards continuous improvement. Thanks to this, it is undeniable that there is a certain orientation toward improvement based on a Taylorist conception.

However, very Taylorist organizations cannot detach themselves from their departmentalization or from the hierarchies established in their organization chart. The position within the organization chart represents the professional status of a person within the organization. And if the salary differences are considerable, it will not only be a matter of professional status, but also of social status. Once an organizational chart is established, its change can mean a loss of power, professional status and social status. Most people fight against a loss of status, beyond the real need of changes that an organization required to adapt to the environment.

The Taylorist departmental organization will also condition the continuous improvement as there is opacity in the information. Between the fear of the loss of departmental power and the lack of communication, it will be difficult to obtain an orientation to improvement as demanded by the quality standards requirements.

The implementation of a quality standard is usually done in organizations where there is already a power distribution established (hierarchies and departments). The design of the management processes is a quality standards requirement. However, when it is carried out in organizations where the distribution of power is already created, these management processes will be considered as power is distributed. Thus, the processes resemble the old departments or areas of power directed by specific persons (the Taylorist system).

This does not mean that all organizations miss out on the opportunity to create management processes aimed at creating an efficient organizational system. When the implementation of the standards has been made as an opportunity to reorganize the organization leaving aside the distribution of power established, the results have been generally satisfactory.

However, it is observed, in fact, that the implementation of quality standards on an already established distribution of power (Taylorist system) usually involves:

  • Poor design of management processes: management processes that represent the old areas of power (departments or functions).
  • Once the design of the management processes has been carried out, there is difficulty in changing them due to the associated loss of power of some of the parties involved.
  • Very low frequency of management processes reviews. The world may be changing, and the organization will not review its organizational system yet.

If the above points are confirmed, what happens when the following occur:

  • A global economic crisis.
  • Changes in the consumers’ tastes.
  • A Competitor improves what an organization does.
  • Other business models emerge.
  • New products appear from the competition.
  • New regulations are implemented in the market.

As a last reflection, the four premises indicated for continuous improvement within an organization are difficult to apply when living with negative elements of Taylorist influence.

Taylorism will be deepened in: