We’ve all heard the pitch for Continuous Improvement that says it can help cut costs, improve quality, reduce inventory, increase customer satisfaction, improve safety, increase productivity, and all the rest. Actually, it’s all true. CI can do all of this and so much more if it’s done right. In a broader definition, CI is a systematic approach to achieve one’s vision with less time and other resources consumed than otherwise needed. However, there are some tangential benefits of Continuous Improvement that often pleasantly surprise people who journey down this path. This post will uncover some of the hidden benefits that make CI a better deal than the one you’re likely bargaining for.
Hidden Benefits of Continuous Improvement #1: Builds Your Company’s Reputation
As much as some of us would like to believe that the way we run our businesses on the inside has no effect on how it is perceived on the outside, this could not be further from the truth. It’s no coincidence that some companies have top talent from all over the world lined up at its doors for a chance to join the team. It’s also no coincidence that some companies can’t get good talent no matter how much money they throw at it. Reputation X, an online reputation management company wrote that up to 69% of job seekers reported they would reject a job offered by a company with bad reputation, even when unemployed. The same dynamic exists for sales, partnerships, fundraising, or any other activity that requires outside influence. It’s no doubt that a strong culture of Continuous Improvement attracts people from all directions. Think of companies like Toyota, which is literally nicknamed the Bank of Japan, Tesla, Apple, and Walt Disney. These are all now juggernauts in their respective industries but the culture of CI has been there from the beginning. People inside and associated with these companies are proud to bear their logos and claim affiliation. Little kids want to work there when they grow up. They have to turn investors away.
A deeper dive on sales, which provides the life blood of everything else in the company. People and companies want suppliers they can depend on. For B2B companies especially, any purchaser, planner, or Operations Manager can tell you that much of their day is spent dealing with issues that were passed onto them by unreliable suppliers. One of the first principles of Continuous Improvement is to put the customer first. Companies not observing this principle tend to put “the wrong things” first, which can lead to exploitation of the customer. Therefore buyers of products and services from companies with Continuous Improvement cultures tend to be happier with the relationship. So the next time your sales person goes in to close that big deal, make sure they can proudly speak to your company’s thriving culture of CI.
Hidden Benefits of Continuous Improvement #2: Improves Overall Quality of Life for all Stakeholders
Poorly run business takes a negative toll on everyone involved. I’m absolutely sure that working in a dysfunctional company long enough will take precious years off of your life. Breakdowns, uncertainty, inconsistency, blaming, toxic leadership, and all these factors grind people down, mentally and physically. This dynamic, plus all the fire fighting, blaming, and high turnover, amounts to stressed and unhappy workers, customers, managers, investors, and partners. Next thing you know, sales are slow, then margins are tight, then compensation is squeezed, and the company is unable to reinvest in Research or talent development and so on and so on. It can become a downward spiral of misery. All of this starts from wasteful management practices and the unwillingness to do the hard work to continuously improve.
CI is not just a process for developing better processes, which should be a big enough incentive in itself; it’s a process for developing better people – and leaders. According to the Northwest Pennsylvania Research Center (NWIRC) Gallup poll statistics show that companies who have engaged and satisfied workforces realize improvements in the following areas; improved profitability (21%), higher productivity (17%), fewer defects (40%), lower absenteeism (41%), lower turnover (59%) and fewer accidents (70%). A worker in an environment with a strong CI culture will not only be empowered with the tools, knowledge, and skills to improve their own working conditions, they’ll also be able to transfer this capability to improve conditions at home and in their community. Their children get to be raised in a home where the growth mindset prevails, positioning them to achieve more with their lives as well.
Not only that, managers spend less time fighting fires and more time working toward bringing the company’s vision to life. They go home at the end of the day feeling like their lives have purpose. They have more resources to invest in training and new product / service lines to serve more happy customers instead of only focusing on cutting losses. Shareholders see higher returns on their investments and will likely want to increase their contribution to the company. Additionally, the standard of excellence for the entire community is raised because other companies will need to improve their cultures as well in order to compete for local talent. In the end, Continuous Improvement ensures that everyone who chooses to join and remain on this journey with your company wins.
Hidden Benefits of Continuous Improvement #3: Advances the World’s Understanding of What is Possible
A great vision that captures the imagination and inspires the masses is powerful; but in the grand scheme of things, this is the easy part. The hard part is the painstaking work to bring this vision to fruition. It takes a special kind of leader to persevere through the failures, criticism, losses, sacrifices, humiliation, doubt and everything else most people try to avoid to arise victorious on the other side. Why do they do it? It’s usually because they care about other people more than themselves. It’s often because they have decided that they are going to succeed at making the vision happen, even if it kills them (maybe a few times) in the process. However, in the end, humanity is better for it. This is at the core of the Continuous Improvement mindset.
An exerpt from an article on Chron.com cites that Bass and colleagues, in their 1978 paper in “Group and Organization Studies,” termed the effect that transformational leadership has throughout an organization as the “falling dominoes effect.” Upper-level transformational leaders set an organization’s direction and vision, influencing how lower levels of an organization operate. Transformational leaders like Martin Luther King, Jr, Jeff Bezos, Bill Gates, Elon Musk, Michael Jordan, and Steve Jobs, for example, have inspired us all to accept that we can and should be doing more with our lives. All of these leaders have 24 hours in their day just like you and I; they also have an undying flame that is the Continuous Improvement mindset. They, and many others, have raised the bar on the potential for what humans, and society at large, are capable of. Some of them are now leading the race to privatize space travel and exploration, continuing to push boundaries that even entire 1st-world governments failed to achieve. All of them have overcome a fierce backlash from the public; and in the case of MLK, giving his life in the process. It’s the mindset and culture of Continuous Improvement that caused them to have disdain for the status quo, envision a better future, and be willing to sacrifice it all to make it real. This act of courage and defiance takes humankind to a new plateau of excellence.
Hidden Benefits of Continuous Improvement #4: Enhances a Culture of Merit and Equality
In many (I dare say most) companies, decisions are made from the top down and as you near the bottom of the org chart, the way to survive is through strict compliance. Leaders think and behave more like authoritarian rulers over their employees and middle managers are like courtiers jockeying for more power within the company. Workers at the bottom are treated more as a liability than an asset to the company. While workers get laid off with little to show for their sacrifices, CEOs get bloated salaries and golden parachutes, even with abysmal performance. Often times, these CEOs did not get the job because of their superior decision making or professional merit; they got them because of their birthright. In other words, they were born into the right family or belonged to the right network. Although many do have very impressive resumes (on paper), it’s usually a mystery of how one can maneuver into those seemingly closed networks to be considered for such opportunities. However, the days of having the world run by these types of companies and leaders are numbered.
Companies that are run on a model of Continuous Improvement hire, fire, promote and compensate on merit and not on birthright or network. CI is a mindset but it’s also a relentless pursuit of excellence through the application of scientific thinking. Science provides a method of discovering the truth; and the truth is more powerful than birthright. As the world becomes more data-driven, it’s becoming harder and harder to justify turning down people who can show real results for “good ‘ol boys.” According to an article in the Harvard Business Review titled “Management is Much More than a Science,” a recent EY survey suggested 81% of executives said they believed that “data should be at the heart of all decision-making,” leading EY to enthusiastically proclaim that “big data can eliminate reliance on ‘gut feel’ decision-making.” Companies that are devoting themselves on a quest for excellence and truth will ultimately topple those who rule through force or other coercive means. In other words, tomorrow’s leaders will be scientific thinkers and those who live by the principles of Continuous Improvement. Science is the great equalizer with the power to build and destroy empires. Continuous Improvement helps companies to apply scientific thinking at enterprise scale.
There is no limit to the applications and benefits of Continuous Improvement. At this stage, it’s no longer a debate whether or not companies should be practicing some form of CI; the verdict is unanimously YES – getting better everyday is a good thing! There is some debate over how to do it but if the will is there, the way will emerge. Conversely, if the will is weak, there is no way. With that said, there is one undeniable truth that a person or organization must invest the time needed to improve. Given the habit of daily improvement, deliberate practice, and a clear and compelling vision for the future, progress is assured. As I can testify to from personal experience, simply setting aside one hour per day to focus on improvement and experimenting your way to success would be a transformative step forward for anyone.
…then get Certified and coach others to do the same!