Some would describe Continuous Improvement (CI) efforts as a process to seek perfection. To me, this flies in the face of the very nature of a continuous improvement approach. By its very nature continuous improvement implies that perfection is never reached. There is always room for improvement. So, to me continuous improvement is about continually striving to achieve the next level of performance. Every year businesses set goals and strives to improve on their performance over previous achievements. The process tends to be annual, and the assessment of progress varies throughout the year. In a CI process the assessment of progress occurs much more frequent.
A CI process includes four major activities, Planning, Executing, Monitoring, and Actions. Each of these activities merit attention but, in this blog, we’ll focus on the monitoring process in the cycle. As Goals for an organization are set, companies typically follow through by developing Strategies to achieve them and Tactics to utilize in implementing the Strategies. But what do we monitor? I find that most companies appropriately and proactively monitor their Goals. However, I also find that many of them are less than committed to monitoring the effectiveness of the Strategies and Tactics. Intentional monitoring at the strategy and tactic level are key to an effective continuous improvement process. The best way to do this is through establishing appropriate Key Performance Indicators (KPI’s).
By using KPI’s we’re able to identify areas in need of course correction to achieve performance improvement. Even if our monitoring indicates that we are achieving, or exceeding, our goals, this level of monitoring provides a baseline from which to identify opportunities for improvement. KPI’s can be defined at the activity and the results level. Both provide important information in the continuous improvement process. Activity level KPI’s measure process steps that are critical to the achievement of tactics and strategies. Result KPI’s focus on the final result of those activities.
So, let’s say you have a goal to achieve $100,000 in sales for the month. You plan to utilize 2 different strategies to achieve this goal. 1.) Outbound calling efforts to prospects, and 2.) Networking Social Media. Each of these Strategies will have tactics (process steps) associated with them that are intended to achieve certain results. For instance, outbound calling efforts might be planned for 10 individuals, calling 50 prospects per day, connecting with 15, spending no more than 15 minutes on each call, achieving 3 scheduled appointments, that result in one sale. Activity KPI’s would measure everything up to the sale. The sale would be reported as a results KPI. You may have similar but different KPI’s for the second strategy. But let’s not get lost in the semantics.
Suffice it to say that your KPI’s need to monitor and report on the key activities and results that indicate progress towards your goals. Who uses these KPI’s depends upon who is responsible for the accomplishment of any particular process, strategy, or goal. Here’s why. Those responsible need to be close enough to the activity and expected results to determine when the organization would benefit from course correction to achieve improved efficiencies or results. Seeing the results frequently, or in “real time”, is critical to quickly identifying areas that merit improvement.
The establishment of KPI Dashboards that are consistently and frequently provided to the individuals responsible is critical to establishing a continuous improvement culture. Managers or responsible parties only need to see their respective KPI’s during business operations. Additional dashboards reflecting broader perspectives can be shared on a less frequent basis as a means of keeping the entire team focused on achieving the goals.
Additionally, those responsible need the authority to make course corrections quickly. Some improvement ideas may require more analysis and/or investment needing additional approval or time for implementation. But what’s most important is that the improvement is identified, vetted, and implemented as soon as possible. Once a decision is made to implement improvements, implement quickly, update KPI’s and repeat the process of monitoring and identifying further improvements.
I can’t finish this blog without a word about culture. We’ve all heard the saying, “What gets monitored, gets done.” Well we tend to monitor what’s most important to the organization and what’s important in your organization defines your culture. Establish a culture of Continuous Improvement by establishing complete and appropriate KPI’s, encouraging identification and implementation, and recognizing those involved in capturing improvements.
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