Four steps for implementing continuous improvement

Continuous improvement (CI) is a company's ongoing effort to enhance business processes, services and products. It is a key part of achieving operational excellence, an approach that aims to make an organization's processes more efficient. Its ultimate goal is to ensure customers' expectations are met, while the company's operations are continually improving. 

Whether you are aiming to create a long-term culture of CI or are seeking improvements in efficiency or customer service, this blog contains four steps that will help you implement CI using a method that is scalable, sustainable and easy to mobilize across the whole organization. 

These steps are: 

1. Define the team purpose
2. Create purposeful performance measures
3. Design performance boards and implement team huddles
4. Problem solving
5. The importance of investing in continuous improvement
6. More resources from PEX Network 

1. Define the team purpose

Defining your team's purpose can be achieved through a facilitated session with all the members of an operational team. The team should define their purpose by answering questions such as:

• Why does the team exist?
• What is the core purpose of the team?
• What does success look like?

These are simple questions but may be difficult to answer, and different team members might have different opinions. Ideally, a team purpose will be no more than two sentences, preferably one.

An example of a team purpose for an accounts payable team in a finance department might be "to pay suppliers within the agreed payment terms for the goods and services received."

The whole team should be involved in creating their team purpose, reaching a consensus on its definition.

2. Create purposeful performance measures 

This exercise could directly follow the first step in the same workshop and will also require facilitation. Creating the team's performance measures is possibly the most crucial step in the continuous improvement journey, as these will strongly influence the focus of the team.

The performance measures will vary greatly depending on the purpose of the team, but ideally will:

• Be directly linked to the team’s purpose
• Show whether performance is improving or declining over a period of time
• Show current performance clearly, measured against a target or expected outcome
• Be measurable through available data
• Help the team to seek improvements/act

An important point to note here is that you are creating measures that focus on the service delivered, not evaluating any individual’s performance. The aim is to improve problem-solving rather than monitor individuals.

The team should have both lead and lag indicators for each performance measure. A lag indicator measures something that has already happened and a lead indicator is something that will influence the achievement of the lag. The team should focus more on the lead indicators, as these are more likely to influence them.

"Create measures that are focused on the service delivered, not on evaluating any individual’s performance."

If we continue the theme of using an accounts payable team as an example, a lag indicator might be the percentage of suppliers that are paid on time. 

There are likely to be lead indicators that strongly influence whether the organization pays its supplier on time. These might be the percentage of  invoices received on time, and the percentage of goods receipted on time.

If the team focuses on improving the two lead indicators, the lag measure will also improve.

A range of visuals should be used to bring performance measures to life. This could be line graphs, charts and/or color-coded data tables.

3. Design performance boards and implement team huddles

Designing a performance board that is visible to all team members can help with visualizing ideas. For teams that are located in multiple locations, digital performance boards can be used effectively.

Ideally, team members come up with innovative ideas for their board, however the most typical may include:

• Team purpose
• Individual status that can be linked to workload priorities, e.g. amber, green or red. (Some teams like to use other visual elements, such as emojis)
• Visual performance measures such as those created in step 2
• Actions, including recording and reviewing these. Note that these actions should not be business as usual tasks, but instead should be linked to identified problems or out of the ordinary tasks
• Team successes
• Upcoming events or changes 
• Project status, including any projects that affect or involve the team and how they are progressing
• Root-cause problem solving. The key problems currently affecting the team and the stage of resolution
• Strategic deployment. How the team are tracking against their strategic objectives (more suitable for teams mature with CI)

A huddle is a session where the team comes together to review performance, plan for the day and progress problem-solving activity. 

I would recommend daily huddles of 15 minutes for teams with high volume operational work and 30 minutes for teams with lower volume work (but no less than two huddles per week). The huddle facilitator should be decided on a rotational basis. Ideally, three roles would be in play, including a huddle leader, a timekeeper and someone to ascribe actions that go on the board.

Teams benefit greatly from receiving feedback and ongoing coaching to develop their huddles and problem-solving activity over a period of time.

4. Problem-solving

This includes both simple every day problem-solving and complex root cause problem-solving.

Problem-solving naturally follows steps 1-3, as teams will easily identify problems that restrict them from achieving the goals they are monitoring on their visual board and reviewing in huddles.

Actions are created at every huddle, with owners and dates assigned and older actions reviewed and removed when completed. Post-it notes are the most commonly used method for this.

"Each team should always have one key problem they are working on, which is likely to involve an element of complexity."

Each team should always have one key problem they are working on, which is likely to involve an element of complexity. This problem may require collaboration with other teams and departments. The team will need to use a root cause problem-solving methodology that will help them follow a structure, using different tools and techniques to properly define the problem, identify the root cause, and choose and implement an appropriate solution.

An experienced problem-solving facilitator is required to support a group through the methodology and ensure discipline is kept to solve root causes rather than just symptoms.

The importance of investing in continuous improvement

There are many other steps in the journey to mature CI ways of working, however these four simple steps applied widely across the whole organization can put teams on course towards changing behaviors and culture.

An investment in time and expertise is required for this, typically with an initial one-day workshop/training session for steps one to three, a separate training session and workshop facilitation for step four, and coaching support periodically thereafter. E-learning can also be useful prior to workshops and training sessions that introduce CI concepts.

Here are three further tips to making the process a success: 

• If possible, at the start take each team to see a successful board from another team/organization. This can help team members see what is possible and put things into practical context.
• Create a maturity assessment that will help the organization track progress of each team over a period of time and identify the required coaching support and best practice teams.
• Senior leaders must be engaged and regularly visit teams, asking questions and offering support. The principle of transparency needs to be role-modelled to allow teams to feel safe to highlight problems and true performance.

More resources from PEX Network 

• Find out why continuous improvement is a facilitator to organizational transformation
• Read our definitive guide to operational excellence
• Watch our webinar on meeting the maturity measurement challenge

This article was originally published on August 29, 2019 and updated on April 24, 2023.