Continuous improvement necessary for business

Continuous improvement is vital to the growth of businesses, argues Dave Bradley. Picture: Tony Marsh

ALMOST by definition, continuous improvement is a long-term strategy to improve your business in terms of customer value and satisfaction, quality, speed to market, flexibility and reduced cost. In today’s economic climate, many businesses are looking at short-term strategies just to survive.

So how do you balance the current reality with the need to pursue continuous improvement initiatives for the future? This is not an easy dilemma to resolve but what is clear from looking at the history of successful companies is that long-term strategies, such as continuous improvement, cannot be abandoned if future growth and success for the business is the objective.

One of the primary objectives of continuous improvement strategies is to increase the skills and capabilities of all employees so they can effectively engage in problem solving at work.

Organisations understand that enhancing the skills of your people can make your business perform better – and in fact this is one of the most important aspects of continuous improvement – but how do you balance this with the current business conditions?

Late last year we set out to dispel myths and present real-time examples of successful businesses across Europe that have quality, business excellence and, above all, continuous improvement at their core.

Quality Scotland hosted an event that brought together some distinguished European experts from market leaders including Bosch, RBS, Selex and Optos to discuss what impact the values of quality, continuous improvement and business excellence has had on their respective businesses.

What became apparent from this enlightening and highly engaging event was how continuous improvement was helping these globally renowned businesses measure their success in terms of being customer driven rather than “cost” focused.

We learned that these large organisations engage all staff to deploy appropriate quality and business improvement mechanisms across their respective business divisions, with the one common goal of ensuring improvement adds value, reduces any margin of error and strives to continuously build on capability. Much of this continuous improvement engagement process focuses on “lean management” where enhanced customer experience, efficiency and cost reduction are critical to success.

Organisations know that rising to the challenge of adopting these lean principals requires talented people and developing a self-sustaining pool of lean experts to carry forward the transformation has to become the focus too.

Our keynote speaker on the day was Ehrtfried Baeumel, leader of business excellence at Bosch Bamberg GmbH and a dedicated evangelist on continuous improvement and business excellence matters. He stated that the basis of business excellence is a strong and clear vision and a logical, applicable strategy, comprehensible to everybody inside and all partners outside of the organisation, to adopt.

He stressed that this is not about writing down strategic goals. It is about measuring and monitoring the achievement of targets. So you have to define strategic outcomes and key performance indicators.

As Mr Baeumel stated: “It’s crucial to communicate the vision and strategy, the current status and the objectives of the organisation to everyone associated with the business. Once everyone knows, understands and accepts the strategy as well as the targets they’ve received, they will work on them with commitment and enthusiasm, and – most importantly – pull together in the same direction towards a vision.”

Certainly the continuous improvement concept has reaped dividends for Bosch. The company found a way of annually prioritising its strategic goals and this consideration of strategy in the process improvements helped them achieve an internal cost reduction, while the costs of labour, energy and materials increased by 20 per cent over the same period. This had clear benefits to the overall profitability of Bosch. Despite the global economic downturn, it helped to maintain jobs and increase customer satisfaction by 15 per cent to an incredible 97 per cent-satisfaction rating over the last five years.

This consistent alignment of all Bosch’s activities with their strategy and their excellent business results led to its Bamberg plant being recognised as a double prize winner in 2011, and again as a double prize winner and the overall winner of the European Foundation for Quality Management (EFQM) Excellence Award in 2012.

In both years they won the prize in the area of “leading with vision, inspiration and integrity” for consistent strategy development and deployment, and in 2011 the prize for “Managing with Processes” for excellent lean management.

Recognition indeed for continuous improvement and Achieving Excellence and with a vision, a process that can be adopted by large and small organisations.

• Dave Bradley is chief executive, Quality Scotland qualityscotland.co.uk

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