How to Create a Continuous Improvement Plan

If you’re considering continuous improvement, you may be thinking about a continuous improvement plan. Planning any new type of business activity is important, as it will help guide you through the process. A comprehensive plan can encourage buy-in from key stakeholders. It can be used as a way to materialise and solidify your objectives. It can even be used as a way to benchmark your expected results, which you can then compare to your actual results.

The benefits of planning are vast. We’ve touched on a few, but there are far more which you can read further about. So now we understand the benefits of planning, you’re probably wondering how this can be applied to continuous improvement. But before we start, it’s important to first understand what exactly we mean by continuous improvement.

What is Continuous Improvement?

Continuous improvement is defined by McKinsey as: 

an ongoing effort to improve all elements of an organization. It rests on the belief that a steady stream of improvements, diligently executed, will have transformational results.

The key markers of what makes continuous improvement different to other business projects is the focus on incremental improvements over time. Though it can include radical improvements, the practice will generally consider smaller improvements that may otherwise be overlooked. 

You may be familiar with the Japanese term ‘Kaizen’. Kaizen is essentially the never-ending strive for perfection, or ‘change for better’. Continuous improvement has its roots in Kaizen and the 2 practices can be considered as strategically aligned. They both consider small on-going changes as a method to eventually snowball into significant improvements.

One of the reasons continuous improvement embraces small incremental changes is due to the compounding effect. You may be familiar with compounding, from such terms as ‘compound interest’. Essentially, the same effect appears in continuous improvement. As incremental changes continue to occur, the total amount that is increasing also increases. This means each subsequent improvement is more significant than the previous. It can therefore be described as ‘exponential’. This makes continuous improvement a highly effective practice when conducted over a long period of time, and is what makes it so attractive to organisations.

Implementing Continuous Improvement

So now we understand what continuous improvement is and why an organisation may adopt it, it’s time to consider how we might go about achieving it. As previously stated, planning is critical. Planning should occur from the outset, before any activity begins. Think of planning as a ‘guide’. It is a roadmap to how you envisage your continuous improvement coming to life. It doesn’t necessarily have to be final. In fact, we’d recommend updating your plan as events unfold. Nothing is certain in this world, and it’s likely what you’ll expect to happen may sometimes not play out as expected. This is fine, as long as you adjust and update your plan as appropriate. In this sense, the plan should be considered a ‘working document’, something that is constantly changing and updating as time goes on.

Step 1: Solidifying your objectives

Before embarking on continuous improvement, you need to have an idea of what you want to achieve through it. Sure, there will likely be areas that are ripe for improvement that are currently unknown. This of course cannot be accurately predicted at this stage. There should however be organisational goals or objectives that everyone is working towards. For a construction company, it might be to reduce waste. For a consultancy, it might be to increase revenue. For an e-commerce company, it might be to improve customer retention. Whatever it is that your organisation is working towards, this should be considered when devising your objectives.

It's useful at this point to liaise with those who manage the strategy of the business. In many organisations, different individuals will have different ideas of what their companies goals are. It may be a case of balancing the needs of multiple individuals, something we’ll discuss further in the next section. Once you’ve gotten the overall objectives of the company, you can now think about what goals can be furthered through continuous improvement. 

When an overarching goal(s) has been decided upon, think about breaking goals into overarching and subcategories. It may be the case that the overarching goal is made up of much smaller goals that can be improved through incremental projects. An example of an overarching aim could be time-to-market. If a company wants to get their products out the door faster, think about what elements make this up. Delays may be caused by machines breaking, miscommunication of order information and employee underperformance. For this example, your subcategory goals would be: reduce failure rate of machines, improved communication accuracy of order information, and improve employee performance.

For each industry and each organisation, goals and subgoals will differ. It’s up to you and those in your organisation to first define these before setting out which goals your continuous improvement strategy will work towards.

Step 2: Stakeholders

As previously mentioned, stakeholders should be the second consideration in your continuous improvement plan. Managing stakeholders is a delicate art in of itself. Nevertheless, it is present throughout all kinds of business processes, and continuous improvement is no exception.

Stakeholders refers to the individuals in and around your organisation who are likely to be involved or affected by your continuous improvement activity. It is anyone who has a stake in the projects. This can span from C-suite and board level executives, right down suppliers and contractors. Having what we call ‘buy-in’, which is essentially an individual's commitment to the cause, is very important. It can often mean the difference between a successful and an unsuccessful continuous improvement strategy. 

A stakeholder plan should aim to convince stakeholders of the value of continuous improvement. Once they’re committed, it should seek to continue their involvement and support throughout the lifetime of the strategy. Some projects will take time to deliver value, so keeping stakeholders engaged is critical for the duration, until the benefits are eventually realised.

A strong stakeholder plan should begin with a stakeholder map. This is where each relevant individual or organisation is plotted, along with their support and level and influence on the continuous improvement project or strategy. There will be some stakeholders who are involved throughout the entire strategy, and others who may just be for 1 or 2 projects. Make a note of this, as this can become important later.

Next, you should consider that different stakeholders have different needs. It may be somewhat of a ‘balancing act’, trying to please everyone. One of the ways to mitigate this is through holding stakeholder workshops. Stakeholder workshops are where you bring different stakeholders with different needs together to find mutually agreeable aims, that you can then prioritise. There is plenty of information online about how to best conduct stakeholder workshops. An example of one of those guides can be found here.

Once stakeholder objectives have been established, you should consider how stakeholder will be continually engaged. As previously mentioned, continued support and engagement is a critical success factor. To ensure this remains the case, we suggest forming stakeholder communication plans. Stakeholder communication plans should detail each stakeholders preferred communication channel, along with an idea of communication frequency. Some stakeholders' recurring feedback may be more valuable than others or may be required more often. Likewise, other stakeholders may have less interest or will be less available, so bare this in mind.

You may wish not to conduct these activities until your strategy is underway. If this is the case, it's still important to make a note of it in the continuous improvement plan. This way, it can be actioned once the strategy is underway.

Step 3: Detailing the Strategy

So you’ve established your objectives and liaised with stakeholders. At this point, you may have some ideas in mind for what continuous improvement projects to pursue. But before jumping straight in, you want to have a strategy laid out that maximises your chances of success.

There are a few things to consider when detailing your strategy for implementing continuous improvement projects. 

The first is to start small with a promising project. By implementing a small project initially, you reduce the risk of a large disruptive change causing any disturbance. Likewise, choosing a project with a high chance of success is likely to encourage key stakeholders, increasing their buy-in. It may be the case that the chosen project has the potential to be rolled out on a large scale. It’s still sensible to start this project out on a smaller scale, reducing the risk initially of a large-scale disturbance until greater buy-in has been achieved.

Next, it’s important to consider that not all projects will be an instant success. To deal with this, we build in room for trial and error. This may be an allocated time window, budget or resource allocation that allows for experimentation. By detailing this to begin with, it avoids any surprise requests further down the line that might reduce the confidence of stakeholders. It’s also sensible here to have a contingency plan in place. Stakeholders will feel more secure knowing that there is a ‘backup plan’ in case whatever continuous improvement project does not come to fruition.

Thirdly, you want to make sure that you’re continually measuring the results of your continuous improvement. Establishing success metrics, and measuring the baseline and future results will give you an indication of how successful each continuous improvement project is. This will become extremely valuable in the future when convincing stakeholders that investment in continuous improvement projects is worthwhile. It also provides an objective way of assessing each project, in a way that's easily understood across the whole organisation.

Lastly, your strategy should focus on gathering feedback from as many sources as possible. Remember our stakeholder communication plan? This is where this becomes important. Measuring your own success metrics will only tell half the story. In order to paint a full picture of the impact a continuous improvement project has had, you should aim to gather feedback from a variety of sources. By doing this, we’re ensuring any other side effects are accounted for, and that each project can be assessed as comprehensively as possible.

Step 4: Evaluation

The final stage of your continuous improvement plan is the evaluation. Here, we’re not just looking at whether the project(s) was a success or not. We’re also looking for any learning that has occured throughout the process. A key fundamental of knowledge management is retaining the organisational learning that occurs throughout business processes. Having a formalised process in place, detailed within the plan, is a great way to make sure this is the case.

In the evaluation stage, it’s important to be as reflective as possible. Don’t be afraid to admit where things have gone wrong. Continuous improvement is a long journey, and it’s better to be open about weaknesses and learn from them, rather than not addressing them and letting them persist. The evaluation can also serve as way to detail the next steps to the strategy. Perhaps there is follow up projects that are necessary, and extra time and budget is required. The evaluation is your chance to sell this to key stakeholders. By being open and honest, highlighting both successes and failures, you can gain the trust of key stakeholders. This trust in continuous improvement will solidify their buy-in, allow you to keep on continually improving.

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