Improvement IQ: The Golden Rules of Continuous Improvement

You may have heard the statement: “It’s simple. Do the right things, with the right people, the right way.” In an ideal world it would be simple, but we don’t live in an ideal world. Stuff happens in the world. Mathematicians call them variables. So how can we figure out what the right things to do within our organization are?

First you can apply the four dimensions identified in our website. With an understanding of what is going on within the processes of an organization (Voice of Process) and what is needed (Voice of Business and Voice of Customer) and some ideas on resolving problems (Voice of Employee), we can create a laundry list of potential things to do – but you cannot do everything, at least not out of the gate. Prioritization exercises may provide some context, but we don’t want to start implementing changes without a focused effort on results that matter – to the business, the employees, and customers. So, what is the recommended approach? Here are several golden rules that apply when implementing Continuous Improvement efforts.

1. Don’t make bad things happen faster. Speeding up a process that produces defective outputs (insurance forms that are incomplete, defective products, etc.) just means more rework (cost!). Fix the errors before you speed up processing.
2. Technology is not always the answer. If technology speeds up one part of a process, but overall processing time remains the same (see above), then we just spent a bunch of time and money on something that didn’t improve anything. This is waste.
3. There are three outputs of any process: Time, Cost, and Quality. Don’t increase one by sacrificing others. It is not a success when you reduce time and decrease quality.
4. Understand the Cost of Poor Quality (COPQ). The cost of poor quality are the costs associated with a sub-optimal process. These costs can be measured in dollars. It is a good way to prioritize improvement opportunities.
5. Understand the concept of “Value Add”. Everything that your organization does should be considered with the following checks – and every process needs to check all three components.
   1. Is my customer willing to pay for what I am doing?
   2. Is what I am doing done right the first time?
   3. Something changes