We are starting a weekly series on different business philosophies or rules that have helped businesses and non-business organisations from around the world to improve their operational capabilities and efficiencies and get better returns on investment.
Today, we will talk about KAIZEN, the Japanese philosophy of regular and continuous improvement that allows businesses to weed out inefficiencies, improve productivity and become viable corporations.
The word KAIZEN is derived from two words: Kai which means change and Zen which means for the better.
This philosophy was first espoused in Japan during World War II and became famous globally 3 decades ago after a book by Masaaki Imai called ‘Kaizen: The Key to Japan’s Competitive Success’. A key element of success is its adoption by various companies. For instance, Toyota’s ‘The Toyota Way’ is based on this business philosophy.
Even though it is a Japanese principle, it was taken up by companies from around the world to become global corporations.
There are five fundamental principles of Kaizen. These five principles are:
- Know Your Customer
- Let it Flow
- Go to Gemba
- Empower People, and
- Be Transparent
We’ll talk about this in some detail below.
#1 Know Your Customer
The essence of this principle is to create customer value.
The idea is to find out what is in the interest of the customer so the organisation or the vendor can enhance the customer experience while dealing with them. The focus is on getting customers the solution they want.
#2 Let it Flow
The concept of Let It Flow derives from the zero waste policy.
This means that everybody in the organisation focuses on creating value and eliminating waste.
Anyone from a services company may think that this philosophy does not apply to them as much as it does to say, a manufacturing company.
Nothing can be further from the truth as service organisations end up wasting more resources since the waste it is not clearly apparent.
For example, if a service organisation has got a few employees doing a job that it can be done in half the time with the use of new technology, then they are in effect wasting time as a resource, which is the most valuable input for any service organisation.
#3 Go to Gemba
Go to Gemba refers to you working where the value is being created. It means following the action.
In the real world, this means that instead of spending time working in an area or on a task that is not giving results instead go and do a task or perform an activity that is going to give better results.
#4 Empower People
This principle of KAIZEN is about showing the way for teams and people in teams to get the best output from themselves.
This is about setting goals for the teams, creating systems and giving them the necessary tools to achieve those goals.
#5 Be Transparent
The final principle of Kaizen is ‘Be Transparent’.
It talks about working with real data. It deals with performance and improvements that are tangible and visible.
This is a very critical component of any organisation that is not able to put a monetary number on any activity. This is again especially true for service industries or departments and units that do not produce a specific product that can be given a price and backtracked to allocate a price or cost for each activity.
For example, when we work with our clients, many of them do not have any idea how much waste is happening in their organisation simply because they are following an outdated mode of working.
For example, a company that does not have to have a strong digital marketing team can simply outsource the bulk of the work to digital marketing businesses like ours that give them the same or even better results at lower prices. In one instance, we had unsuccessfully pitched to an organisation that dealt with car rentals for our SEO and Social Media Management services. They had liked the idea but the fact that they had already hired a couple of resources made them not go ahead with us. You will be surprised to know that they now have a much larger team doing the same stuff we had proposed at a cost that is five times the price we had quoted.
If the organisation had realised that they are spending a significantly more amount of money to get the same results that could have been theirs at a quarter of the price, they may have thought otherwise about it.
Practical KAIZEN – The PDCA Path
On a practical side if you want to apply KAIZEN to your organization, then you need to:
- Be ready to make a change in how you normally function, and
- Have your team buy into the process
All improvements will follow a format called the Plan-Do-Check-Act format (PDCA for short).
PLAN
Under Plan, you and your team map out the changes that you want to see and communicate it across teams so that everybody knows what is expected as an end result
DO
The Do portion talks about implementing the best solution to the problem you are trying to solve.
Please keep in mind that you will definitely have more than two to three solutions to every problem. The idea is to find out the best one. The way to do that is with the next step in the PDCA path – the Check.
CHECK
In the Check step, you and your team evaluate the solution after it has been implemented to see if it has given the results you want.
If you have more than one solution, you check out each and every one in detail after implementing each of them. At the end of it, you will be able to identify the best solution to the problem.
ACT
The last stage of PDCA is Act where you think if the solution should become the new standard or if it needs more changes to make it better.
Also, please keep in mind the KAIZEN for a product line and KAIZEN for a process have to be different.
As you may have guessed by now, the KAIZEN approach is too vast to be covered in one post, no matter how long it is. We recommend that you visit www.kaizen.com where you get to read about it in more detail – how it came to be and how it works, etc.
For any business consultancy questions on how to improve your productivity or reduce any operational waste, or if you simply want to understand how to market your products better, please call us on +91 8800 596 502 or email us at [email protected]. You can also browse our site for any other services that you may need such as digital marketing, SEO, social media management and so on. All our solutions are customized so you don’t waste your most valuable resource: money.
Thanks for reading.
This post originally appeared on our earlier website: ihusresearch.com
