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Wednesday, July 15, 2020

Executive Education

If It Ain’t Broke — Fix It! Seeking Continuous Improvement is Critical in Business.

It doesn’t matter if you’ve been in the CEO’s chair for a day or a decade — the idea of change is always frightening. When business is going well, it can be tempting to make organizational processes ironclad and immutable. Comfortable leaders may not think that exploring new ideas is worth the time or effort; after all, why would they bother trying something new and risky when the current system works just fine?

This complacency is a mistake. All businesses thrive on innovation; the processes that deliver positive results now might not work five years, or even five months, down the line. Moreover, just because a business’s structures are functional doesn’t mean that they can’t work better. 

For most of my career as a chief executive, I’ve specialized in helping struggling companies reverse their downward spirals. In each case, I spent months — sometimes years — helping organizations revamp their cultures, rewire communication channels, and reformat their management structures. Inevitably, there comes the point when operations are running well enough. The company is no longer on the precipice of disaster, day-to-day operations run smoothly, and business thrives. Relieved, company leaders instinctually double down on the new processes, unwilling to risk change if it means rocking the boat and putting their newfound achievement and stability at risk.

Business development consultant and researcher Brad Power noted this damaging trend towards complacency in an article for the Harvard Business Review. Power writes, “After one round of improvement, [leaders] gave up and let their organization get flabby again. Organizations, like people, need to stay fit and make improvement a habit to be competitive. So why don’t they? Why is sustained process improvement so rare?”

The truth is, advancing — or even maintaining — achievement is all but impossible unless an organization establishes a culture of constant improvement.

Prioritizing innovation has a markedly positive impact on business performance. In 2013, a study that assessed the relationship between company culture, firm performance, and organizational innovation in 154 branches of ten notable Turkish banks found a firm connection between formally encouraging innovation and achievement. The researchers concluded that organizations that weave a culture of constant improvement and support for innovation into their company cultures tend to achieve more than those who complacently rely on established processes.

That said, it’s not enough to simply encourage innovation. Business leaders need to take an active role in building a culture of continuous improvement — otherwise, the benefits changes provide won’t persist for long.

Research backs this idea. One 2018 study shared in the Harvard Business Review found that lacking senior leadership often causes improvement projects to fail. Researchers found that the projects that enjoyed strong support from top leaders demonstrated 35 percent greater improvement after a year than those without high-level backing. Leader-supported projects were also less likely to backslide; 79 percent performed above baseline after a year, while only 61 percent of projects without support did the same.

In practice, it appears that hands-on effort isn’t only required for establishing an innovation culture but also for maintaining it. Last year, a research initiative conducted across 30 teams at the Mayo Clinic found that previously strong continuous-improvement cultures began to erode when team leaders were unable to take part in daily group “huddles.” In multiple cases, lower-ranked staff began keeping important information to themselves because they felt less comfortable sharing without leaders encouraging input. Huddles eventually broke down in these leader-absent groups — as did the team’s continuous-improvement culture.

It is abundantly clear that managing for results is as key to the business improvement cycle as any strategic planning session. What, then, should leaders do to build and maintain a culture of continuous improvement? Here are a few insights.

Create Structures To Guide and Measure Progress

You can’t encourage innovation if your team doesn’t have the necessary tools to succeed in their daily work. Before planning for change, prioritize organizational alignment. Ensure that employees on every level have a clear understanding of the business’s purpose and how they fit within it. Then, establish management structures that provide team members with the support and guidance they need to succeed in their daily work.

Once you have a foundation that facilitates day-to-day effectiveness, you can begin establishing a culture of continuous improvement. As mentioned earlier, it is crucial to construct formal management structures that can propel team members into innovative thinking — otherwise, efforts to encourage continuous improvement may fall to the wayside.

At the Tyden Group, leaders at every level rely on what we call the Change Agenda Action Plan. This action plan is a formal document that helps team members identify future achievement milestones, process development goals, and contributions to key change initiatives. The benchmarks outlined in a Change Agenda aren’t step-by-step guides; instead, they describe high-level tasks and prompt team members to further change-related goals creatively and on a reasonable timetable.

Establish Weekly Goals Beyond Immediate Projects

At Tyden, we use the Weekly Top 5 to break the long-term, high-level change goals outlined in the Change Agenda into manageable short-term objectives. A Top 5 to-do list encompasses the five most essential items that need to be addressed to keep both immediate projects and long-term change initiatives on-track. These lists can include any plans, decisions, processes, initiatives that have milestones due that week. In my experience, they offer an invaluable means to ensure that employees can balance their usual responsibilities while not losing sight of change initiatives.

Schedule Periodic Meetings to Check in on Change Initiatives

Routine meetings are a must. Regular meetings hold team leaders and members alike accountable for their action plans. These conversations help everyone on the team stay current on action items, report on successes and identify problems that could decrease effectiveness before they begin to impact performance. The frequency of these meetings is entirely up to your discretion; generally, a once-monthly conversation works well to keep team members moving forward with their long-term change initiatives without distracting from more immediate business projects.

Business is an ever-continuing labor of thought and effort. There will never be a single operational structure that facilitates perfect performance at all times. Procedures and structures must be continually innovated to allow for growth and new ideas.


Written by Robert Logemann. Here’s what you’ve missed?
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Robert Logemann
Robert Logemann currently serves as the CEO for the Tyden Group, a leading manufacturer of track and trace systems, and has built his career by optimizing business and management processes. Over the course of his career, Logemann has helped struggling companies in fields spanning the gamut from medical technology to consumer goods find success. Robert Logemann is an opinion columnist for the CEOWORLD magazine. Follow him on LinkedIn.