7 Key Elements to Rapid, Dramatic and Lasting Profit Improvement Initiatives

Over the years, I’ve led or played a role in dozens of business improvement projects over a wide range of industries and company sizes, while also playing casual observer to many more through fellow consultants or other colleagues involved in such endeavors.

Unfortunately, what I’ve found and witnessed is that many of these projects fail to result in long-term meaningful improvement.  This leads to two unfortunate outcomes. 

First, the organization misses out on ‘banking’ the results that have already been identified and perhaps quantified. 

Second, and perhaps even worse, though, is that these initiatives produce what I like to call ‘organizational cynicism’, making future improvement projects even harder to implement.  In fact, I’d guess that at least three quarters of the improvement initiatives in which I’ve been personally involved have followed at least one (and sometimes many) failed prior improvement initiatives, leading to ‘organizational cynicism’ and a general feeling among many employees that this is simply another ‘flavor of the month’ initiative that will soon lose steam and be gone within months if not weeks. 

From the projects that have proven most successful over time, I’ve identified seven key elements that are most helpful, and perhaps critical, to generating both short- and long-term (i.e. lasting) business improvements.

1.     Employ multiple methods to generate solid improvement ideas – Like many consultants, I enjoy analyzing data as a way to identify areas for improvement.  While data analysis can often help lead to hugely beneficial improvement ideas, it typically takes a bit of time to perform and also can lead you to miss some of the most obvious, impactful and easy-to-implement improvements.  Here’s a secret that most consultants won’t tell you – many, if not the vast majority, of improvement ideas already exist in the minds of the organization’s employees.  Whether performing formal brainstorming or idea generation workshops, holding private one-on-one interviews, or meeting employees for a quick coffee break, I’ve often found that some of the best and most impactful ideas come straight from the minds and mouths of the employees.   And in many cases, limited or zero further data analysis is really needed to confirm that the idea makes sense to pursue (these are often called ‘no regrets’ moves – things that you should just simply go and do).   The reason that employees haven’t already implemented these improvement ideas varies, but is typically related to either a lack of support, a lack of bandwidth (i.e. time), a lack of training and capability, or a lack of incentive (or a combination of some or all of the above).  This brings us to key element #2,

2.     Executive and line management must clearly and consistently communicate and demonstrate support for the improvement initiative – It’s great, and often essential, when executive management (especially the CEO) are clearly championing and talking openly about support for improvement initiatives and goals, but for someone who’s buried deep within the organization (where the very best ideas often originate) this often has minimal impact especially if the employee is unsure if their direct manager has the same level of enthusiasm.  Improvement initiatives can often be described as working on the business versus working in the business, and employees need to be encouraged and supported to do both.   One way to do this is to schedule recurring meetings between employee and manager to give the employee an open forum to address any concerns and allow the manager the opportunity to express support and address any roadblocks or challenges the employee may be facing with the improvement project.  In addition to verbal and written support, the manager should also ensure key element #3,

3.     Employees that are responsible for improvement initiatives should be given the bandwidth (time), training (capability) and incentive (motivation) to achieve success – I’ve often seen employees be tasked with owning or being a part of an improvement initiative without receiving any relief from their current (and often heavy) workload, without any additional training and/or without any additional incentive to achieve success.  This can lead the employee to feel demotivated and exceptionally stressed, which in turn can further lead to poor job performance.  Ensuring that your employees have the proper time available and the proper training (when necessary) to accomplish a goal is critical to increasing the odds of implementation success.  The motivation aspect isn’t always necessary and doesn’t necessarily need to be directly tied to the improvement initiative if the employee is given ample support, time and training to achieve a goal (i.e. you don’t have to provide, say, a cash bonus for achieving an x% reduction in cost), but the employee should at least understand that they will receive proper recognition for performing well and achieving results (i.e. which can lead to broader roles within the organization, etc.).  Even with the proper level of support and with sufficient bandwidth, training and incentives, improvement initiatives can and often do fail due to a lack of key element #4,

4.      Improvement ideas must be prioritized and focus must be maintained on only a small number of improvement initiatives at a time – Coming up with a list of 20, 50 or even 100 improvement ideas isn’t unusual depending on the scope and size of an organization.  Implementing 20, 50 or even 100 improvement ideas at once, however, is another thing altogether.   I’ve seen this happen time and time again – people are charged with implementing too many improvements at once, and as a result most, and often all, fail to generate the expected result.  I’ve found that it’s usually helpful to have a project manager assigned to manage the prioritization of improvement initiatives.  If a consultant or consultants are involved, it’s always best to have a client project manager assigned as well.  As improvements are implemented and results are demonstrated, momentum will build for future improvement ideas.  That brings us to key element #5,

5.     Tackle ‘low-hanging fruit’ initiatives first in order to achieve rapid results – Nothing creates momentum like achieving results, and what better way to achieve results rapidly than by prioritizing improvement initiatives so that highly-impactful and easy-to-implement ideas are tackled first.  Although it’s not a perfect science, ideas can usually quickly be grouped based on both level of impact, speed and cost of implementation.  It should go without saying to capture the ‘low-hanging fruit’ first, but many companies miss here by prioritizing opportunities solely based on expected level of impact.  As you might expect, the single biggest opportunities often require significant capital investment and/or a lengthy amount of time to accomplish.  Quickly implementing and capturing the results from a few smaller opportunities can often deliver the same result in a fraction of the time and cost as one ‘big idea’.  Of course, capturing the benefits from any improvement idea requires the ability to properly measure, which brings us to key element #6,

6.     You must have a proper and relevant measurement system in place in order to accurately evaluate improvement initiative results – It’s often said that ‘you can’t manage what you can’t measure’ and the same is true with improvement initiatives.  Without the proper measurement metrics and measurement tools, accurate measurement of the success or failure of an improvement idea is extremely difficult.  For example, if an improvement idea is designed to ‘increase customer satisfaction and loyalty and lead to more repeat purchases’, then you have to find a way to measure the result of this particular improvement idea, since it’s possible that many initiatives are actively being pursued in an effort to improve customer satisfaction and loyalty.  In this particular example, targeting a subset of your customer base with an improvement idea or surveying your customers regarding the improvement idea might be ways to determine the strength or failure of that particular idea (i.e. to minimize confounding factors).  Even with an accurate measurement method, improvement ideas are too often short-lived.  That brings us to final, and perhaps most crucial, key element for achieving long-lasting improvement, key element #7,

7.     In order to achieve long-lasting improvement from implemented ideas and to achieve additional improvement from new ideas over time, you must instill a culture of continuous improvement within your organization – Changing the culture within an organization is HARD, but by ensuring that key elements #1-6 are continuously employed, managed and emphasized within your organization, the culture of the company should adapt to one of a ‘continuous improvement’ organization.  Again, this is easier said than done because it’s easy to get complacent about improvement initiatives especially once ‘low-hanging fruit’ ideas have been implemented.  The best companies in the world, however, don’t ever accept the status quo as the best that can be accomplished.  The results of creating a ‘continuous improvement’ culture include not only a organization that consistently strives for optimization, but also one where employees feel a sense of ownership and pride and are empowered and encouraged to improve.