Introducing the Innovation Portfolio Management Playbook
What is Continuous Improvement?
Fundamentally, continuous improvement is exactly what it sounds like – the practice of continually improving and incrementally enhancing the performance of a company’s products, processes, or services. Terms like ‘operational excellence’ and ‘process improvement’ are sometimes used interchangeably with continuous improvement, but this isn’t quite right. Think of continuous improvement as an umbrella term that encompasses all approaches to business optimization and incremental innovation.
What are the Benefits of Continuous Improvement?
Efficiency might not sound exciting or innovative, but it can bring significant results to any business. A rigorous continuous improvement initiative will constantly discover opportunities to save time, reduce waste, or lower expenses. When these individual improvements are scaled across the company as best practices, the impact can be exponential.
One of the most critical challenges of a modern business is to become an environmentally conscious organization. Continuous improvement programs can be an incredibly powerful way to reduce waste and drive efforts to become carbon neutral. Small changes add up to big wins!
Increased Customer Satisfaction
One area that is usually ripe for improvement is the customer experience. If you take a customer-centric approach to continuous improvement, then you can ensure your products and services are fully aligned with the changing needs of your target audience. In addition, the time and money saved internally is a benefit that can be passed on to customers.
Culture of Continuous Improvement
When employees aren’t sharing their ideas, it is often because there is no process in place for them to do so. Employees with access to a continuous improvement platform understand that their ideas will be heard and constructively evaluated. This will shift your employees’ mindset into innovation mode and embed a culture of process improvement and operational excellence.
Higher Employee Engagement
Continuous improvement empowers employees to make meaningful differences, assure them that they have a voice that management is listening to, and facilitate collaboration and recognition among peers. All these factors are drivers of employee engagement, which has been proven to boost productivity and profitability while reducing absences and employee churn.
What are the Challenges of Continuous Improvement?
Developing a culture of continuous improvement in which users are motivated to participate in the process consistently isn’t easy
Manually gathering, evaluating, and implementing optimizations at enterprise-scale is impossible
Your process needs to be sophisticated enough to be effective while also simple enough to be efficient
In large organizations it is difficult to ensure that best practices are shared across departments and not kept within silos
How to Build a Continuous Improvement Program
Let’s take a look at the most important aspects to consider when launching a continuous improvement program.
The first step is to identify your objectives. You may already be aware of what your key challenges are, if you’re unsure right now – don’t worry! You can always start by speaking to your audience to discover the issues that are front-of-mind for them. What’s important is that you set clear goals to work toward as early as possible in the process.
This is the practice of identifying and implementing changes to existing business processes. These changes might optimize the efficiency or performance of these processes, by minimizing waste, costs, or risk, or improving the user experience for staff or customers.
Operational Excellence is an approach to the improvement of business processes with cultural transformation at its core. It involves an examination of both people and process to identify how and why employees are working the way they do. Once these questions become clear, the next step is to adapt those processes in order to optimize their efficiency and efficacy.
Performance Excellence is an approach to continuous improvement based on the Baldrige Performance Excellence Program. It assesses performance holistically, through the prism of seven key areas: Leadership, Strategy, Workforce, Customers, Operations, Knowledge Management, & Results. While Operational Excellence is primarily concerned with procedure, this concept takes a more comprehensive approach to making improvements by covering each of these seven areas in turn.
A continuous improvement process might have many stages, and these should be chosen and prioritized based on your own unique requirements. However, one thing you should always consider is the obstacles and pitfalls that could prevent your process from delivering your desired outcomes.
The first and most obvious obstacle to continuous improvement is finding ideas. If you don’t have enough ideas for ways to optimize your product, process, or service, then you should consider involving a larger audience in your program. It’s equally important to ensure your audience is consistently engaged and motivated to put forward new ideas.
On the other hand, if you have too many suggestions for improvements, then it can be difficult to decide which ones should be implemented. To achieve this, you’ll need to establish an efficient evaluation process, ideally involving features designed to make this easier for you, such as automation and crowd voting.
Once you’ve identified which improvements to take forward, one major challenge remains: implementing them effectively. If your new improvement or best practice needs to be adopted by 10,000 front line workers across your company, then you need to ensure you have an engaging way to communicate to them and track the process. For this purpose, you usually need a dedicated tool.
You’ve set your goals – great! Now it’s time to think about your audience. Ask yourself who is best placed to successfully contribute towards your program, and at what stage of the process they should be brought in. For example, if you want to optimize a very specific part of your offering, then you should usually only involve stakeholders with relevant experience. However, if you are looking for more general broad improvements then it makes more sense to involve as large an audience as possible.
Historically, front-line employees have not been given many opportunities to contribute towards continuous improvement initiatives. Yet these workers often have invaluable knowledge gained from extensive experience working with your products, services, and processes.
While these workers might have less hands-on experience with the day-to-day operation of your business, they have technical expertise and knowledge that can be just as useful. It’s often really easy for these teams to access and use the digital platforms used for continuous improvement.
This is usually the largest audience available to any company, and one that offers great potential for continuous improvement. Your customers sometimes know your products and their pain points even better than your employees, and they always appreciate the opportunity to have their voice heard.
You might assume that everyone wants to be involved with innovation … and in theory, you’d be right. But in reality, it’s sometimes not so easy to find people who are willing to put in the work to make it happen. Fortunately, there are a few well-established ways to engage users and ensure they are participating in a meaningful way.
In many cases, the best way to catch the attention of your stakeholders is to get creative with a unique reward. This could be as simple as a dedicated parking space, or a lunch meeting with your CEO. These kinds of rewards can often be just as attractive as financial ones.
One of the best things about continuous improvement is that the benefit it brings is often easily quantified. Because of this, many companies are able to justify rewarding contributors with cash bonuses or gifts. This can be a set amount for a specific challenge, or it can be based on the ROI an improvement has generated after implementation.
Total Quality Management (TQM) was developed by American statistician William Deming. He proposed a 14-point system companies could use to deliver consistently against their continuous improvement targets.
Essentially, it focuses on creating a working environment where every employee is responsible for quality and receives all the resources they need to achieve it. A regular reassessment of guidelines is conducted to ensure quality and streamline processes.
The word ‘Kaizen’ literally means ‘good change’. It’s an approach made up of many small improvements that lead to major benefits incrementally. The concept can be traced back to post World War Two Japan, when the country was in crisis and needed to rebuild. Today, Kaizen is famous for driving continuous improvement at global brands such as Toyota, Nestlé and Unilever.
Kaizen can be summarized as 4 steps:
- See – understand how resources are being used inefficiently
- Solve – seek solutions to these problems by asking your employees for ideas
- Standardize – apply successful solutions to other areas of the business
- Sustain – keep coming back to your solutions to ensure they remain effective.
Kaizen’s genius lies in its attention to detail when tackling problems, and the power it gives to employees to bring about change to the business.
Another approach devised by William Deming; the Plan-Do-Study-Act (PDSA) model provides a best practice overview for implementing ideas. Once an idea has been submitted, management will make sure that it can be tested. Results of the test will be analyzed and, lastly, the best ideas will be adopted and learning outcomes shared with the rest of the business. By sharing the outcomes of these experiments, businesses develop a better understanding over time of what will and won’t work.
The LEAN approach to continuous improvement is all about doing more with less. It involves:
Delivering Value: Understand your customers’’ needs and focus all your improvement efforts on meeting them.
Mapping Processes: Understand the stages your product or service goes through before it reaches the consumer.
Optimization: Both in terms of how smoothly a product or service moves through the stages you’ve mapped out, and by eliminating waste.
The LEAN method is an approach to continuous improvement reduces uncertainty and helps us to understand how best to use our time and resources.
There are several approaches to running a continuous improvement program, but some are more effective than others. Before committing to any one solution, you should consider a range of factors to identify one that’s best-placed to serve your needs.
The old-school suggestion box is the original solution used by most companies in the pre-internet era, and it remains a popular (but basic) tool for gathering ideas. Over the years, the suggestion box has led to countless wins for companies who’ve used them, but its weaknesses lie in the time and effort required to process large numbers of ideas manually.
Nowadays, there are an endless number of digital tools that enable businesses to carry out a basic submission process. Several organizations attempt to design their own tools from scratch, and some have been successful. However, DIY tools like these often fail to have the functionality and flexibility needed to be an effective solution for large-scale organizations.
Business process management software (BPMS) is a solution that helps organizations to design, manage and automate various tasks and processes. It can help to make those processes more efficient by speeding up and optimizing them. As a result, employees have more time to dedicate to more challenging work.
These are solutions that have been built from the ground up specifically to help businesses implement effective continuous improvement programs at scale. There aren’t many solutions dedicated to continuous improvement – idea management platforms or other tools are often used. The solutions that do exist vary in terms of price, sophistication and flexibility, but they all offer a platform with a range of features to help organizations gather, evaluate, and implement ideas for continuous improvement.
What is Continuous Improvement Software?
Continuous improvement software offers a dedicated tool to transform your employees’ or customers’ ideas into wins for your organization. It’s a digital workspace in which your employees can collaborate to generate and develop ideas, evaluate them, identify and implement the suggestions with the most potential, and track the business value they deliver. Every large organization committed to developing an effective continuous improvement program should make sure that the software they choose is intelligent and flexible according to their specific needs.
How does Continuous Improvement Software work?
Continuous improvement software provides you with the means to gather ideas and move them along the various stages of the pipeline to execution as efficiently and effectively as possible. This means that it will generate high participation levels from your audience and provide a workflow that ensures that everyone knows what to do, and when, in order to identify and develop the suggestions with the highest potential.
Here’s a summary of a typical continuous improvement software process. But note that not all solutions have the same capabilities:
The Continuous Improvement Process:
The first step is to generate ideas for continuous improvement from your audience. You can achieve this by launching targeted campaigns that ask for suggestions about specific business challenges. The best solutions will offer a variety of engagement tools and incentives to help you get as many high-quality ideas as possible from your audience.
Once your ideas are in, it’s time to evaluate them. At this stage, you can invite experts to assess ideas against predefined KPIs to identify the most promising ideas, and you can progress them automatically through your organizational structure.
At the end of the evaluation stage, you can undertake comparative analysis to identify ideas with the highest cost-benefit value and move them forward to implementation.
As your approved ideas become realized, you’ll be able to manage their implementation through various built-in project tracking features. The best solutions will also offer the option to integrate with your preferred third-party project management platforms.
Measure ROI & Reward
Your audience’s ideas are now a reality and there are just two things left to do. The first is to monitor their performance which you can measure using your solution’s analytics and reporting tools. Lastly, you might like to give the person who came up with the original idea a soft or financial reward in recognition of their contribution.
Innovation doesn’t have to be disruptive to bring results. With Q-optimize you can set up a continuous improvement process that is streamlined to manage incremental innovations that accumulate to deliver impact at scale.
Benefits of Q-optimize
Innovation at Scale
Cultivate an innovator’s mindset amongst your audience and make sure everyone’s ideas are considered
Gather and spot ideas that will deliver incredible bottom-line results for your business
Leverage the wisdom of crowds against your toughest challenges and biggest opportunities
Gather and prioritize a pipeline of innovative ideas for sustainable business growth
Don’t Just Take Our Word For It…
A single idea from the Qmarkets platform has resulted in almost $40 million of added value for the business.
Based on our previous experience, we decided to implement Q-optimize. The modern, powerful SaaS architecture and, above all, the required flexibility, were the decisive factors.
We’re really happy to be using Qmarkets’ idea crowdsourcing tool to help drive innovation at the DOT. The platform is going to allow a whole new level of engagement and transparency.
We are very satisfied with our experience of both the Qmarkets platform and the team behind it. The Qmarkets platform assisted us to streamline our innovation efforts and help materialize the important ones.
…And that’s continuous improvement! Hopefully you’ve gained a firm understanding of the various approaches to continuous improvement and the solutions on offer. Next, find out about the other key approaches within innovation management by visiting the pages below.
Idea management is the structured process of collecting, screening developing, and implementing ideas that can help your organization to be more innovative and efficient.
Innovation & technology scouting allows companies to bypass these obstacles and deliver new products, services, and solutions that can dramatically enhance their value proposition.
Trend management refers to all the activities involved in scouting for and acting upon trends to fuel an organization’s innovation efforts.
Innovation portfolio management is a term that describes the maintenance and progression of an organization’s various innovation projects.