Is Continuous Improvement Dead?

Zero to billion dollar valuations in under five years or getting sold for millions in two years. From stone age to the information age the world of business moved at a certain pace. The customer age has given rise to a different breed of businesses – giant killers. Yes, there are startups falling by the wayside due to business model deficiencies but there are others that are thriving. 

Startups are able to think differently and are taking away business from larger brands. So what exactly are they doing to achieve this? Just one thing – create a need where none (seemingly) exists. Some call this innovation; I just call it staying hungry.

Continuous improvements are largely inward focused focusing on the strengths of the organization and then improving their capability to reduce costs or improve customer quality. Although all the quality methods start with asking us to focus on the customer, in practice it’s very difficult to implement this because it’s too technical. It’s like asking everyone to be a bodybuilder versus just doing things to keep fit. I’m an Industrial Engineer by education so I have lived my entire life following and implementing all the popular quality and continuous improvement tools and methods. I also have been a software architect for a good part of my working life, this meant exposure to diverse client cultures, needs as well as cutting edge technology. I have worked in organizations whose employee strength is 5 to over 150,000 or for clients who are as diverse as that. I have also seen the landscape of business change many times in the past 20 years of my professional life.

I have been part of running a startup (GIEOM) for the past 8 years. There is a big difference in the way we work at our startup compared to how I worked at a typical corporate earlier. We have the excels, structured quality programs and the likes but all of them come much later during execution of an idea. The idea itself originated because of just one thing – we are by design, culturally focused outside in. This required most of us including our technical folks spending a lot of time with clients and being one of them. We are not a very small team mind you, but every initiative we work on does not have more than 5 people at any given time. The team is given complete authority to build and test concepts along with customers.

This has allowed us to do two things that is required to be a leader in the fiercest business landscape the world has seen yet – 1. Fail fast, 2. Continuously innovate.

Now let me explain what this means. Just by being a part of a customer’s journey doesn’t give one the necessary insight if you are just doing your job. The small team helps us to be nimble and culturally be designed to be a part of the customer team. Many times this allows us to be ahead of the customer so we know what they need rather than what they want. Henry Ford rightly said “If I had asked people what they wanted, they would have said faster horses”. This is where we go beyond the traditional “voice of the customer”. Yes, VOC is important, but that is used only as a starting point to dig deeper into knowing what the real needs are. But interestingly, some of the best solutions we have built is when we have had no voice of the customer at all. I see similar things happen many times with other startups that we interact with. Of course, we don’t get it right all the time and that is why failing fast is important. We build quick prototypes and see if they work in a small targeted client environment, keeping in mind cost to value of the solution. If it doesn’t work, we move to the next idea quickly.

Interestingly, the most impressive products and solutions are not only coming from startups but large companies (both old and new) who work like one – Lego, BMW, Tesla, Google, Unilever, VISA and the likes.

Does this mean the decades old techniques of quality and continuous improvements are dead? The answer is no; they just need to be adapted to the new ways of working. We can’t solve today’s problems with yesterday’s techniques. Most of these methods are very “engineering” heavy and it will work perfectly if your organization is solely comprised of technical staff. For most organizations these methods must be adapted to suit both the executive management as well as staff on the floor. Like how languages, food and cultures evolve and adapt, these methods must be made simpler so that they can be implemented to enable cultural change organization wide. Yes, we will need statistical models and complex analysis methods but they need to be used as just analysis and monitoring tools by a few specialists, if at all. For everyone else, common sense based continuous innovation will do.

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