Continuous improvement is an ongoing effort to better a process, product, an organization or mode of service delivery. Continuous improvement enables the organisation to meet its goals of making profits, lowering expenses and improving innovation and technology The effort is a breakthrough attempt or an incremental measure to better a process, product or even a business according to (Intra & Zahn, (2014). For instance, hiring more qualified personnel in the management of an organization is a continuous improvement act for the betterment of administration of a given organization in the days to come. Other examples include monthly training programs, brain storming sessions with employees, managers included and also customer surveys among other. Measures put in place to implement an ongoing improvement process which includes among others; the Plan-Do-Check-Act (PDCA) and the Deming cycle. Moreover, the six sigma, Lean and the Total Quality Management are among the “most used methods in the actualization of a continuous improvement process” (Intra & Zahn, 2014, pp.582-587)
The main grounds for the need to business strategy change are; when the company outgrows the present business strategy, occurrence of a major change in the both internal and or the external environment according to Rothaermel, (2015). For continuous improvement, it’s very important to review and adjust the business strategies to achieve an adaptable business organization in the dynamic business world. Upon formulation of business strategy, the business organization implements it, and a continuous assessment is done to determine the effectualness of the strategy toward the pre-stated goal; which mostly obviously, is a competitive and profitable business according to Chang, (2016). Competition is a good thing, as it gives us a basis to compare ourselves with other who provide the same service, product or feature. With this in mind, strategies must be updated as it’s a global market and information is everywhere to better up the company. Dynamics are changing every single day with a good example being the taxi industry which has been turned upside down by mobile Apps. The way we used to shop isn’t how we do it now days, with the introduction of online shopping and even home delivery. Having this in mind, a good strategy is the only way for a business to be successful.
A good strategy obviously gives positive results and therefore notable business growth. A business strategy has in it goal statement which is basically what needs be an achievement in a given time in the business venture. When the business goal is achieved, the business growth reaches a plateau stage which is characterized by stagnancy in any further business progress or growth. This, therefore, calls for a change in the business strategy to refocus the business to a higher target. An outgrowth of a business beyond a preset strategy is the main reason as to why the business strategy needs are reviewed or adjusted after some time to realize continual improvement.
An internal change in a business can be in the form of a change to start producing a new product or service delivery. “Discovery of a new way of doing the existing business” (Agrawal, 2016, pp.154-182). An internal change can be the main cause of a complete change of strategy of readjustment. The change in strategy enables the business to focus on implementing the new change by annulling the existing strategies whose relevance to the current business of limited. Business change, for instance, requires the changing business to formulate a completely new strategy which is relevant to the new business venture. The new strategy is helpful in guiding the changed business to adapt to the new business environment according to Dranove et al., (2015)
A notable external change “can lead to change in business strategy” (Carayannis, Sindakis & Walter, 2015, pp.85-104). An external change can be, among many other things, a change in government policy towards business or a certain business. In this case, the change can be increased taxation or ban on some types of business which can lead to an internal change, like a change in business. A prohibition of a commodity produced by a given business will force the company to change its products and start manufacturing different products and or services. Other external changes like rapid depreciation of currency or more impactful competitors can also lead to a business strategy change. According to Carayannis, Sindakis, and Walter, (2015), external changes like labor pool change, or economic changes as well can lead to business strategy change and readjustment.
The continuous improvement process is aimed at improving the quality of the services or products produced by a business organization. As stated earlier, the main types of continuous improvement process are the sigma six, the PDCA, Lean, Kaizen, the 5S, the Hoshin Kanri, Value Stream Mapping, and TIMWOOD. Briefly, the most renowned useful Continuous Improvement processes are the TQM in manufacturing, the sigma six, whose technique is improving quality by correcting error and defects as well as the PDCA.
The most effective continuous improvement process that can work in the changes above is the PDCA. The PDCA as previously stated is the “Planning, Doing, Checking and then Act” (Gemechu et al., 2015, pp. 35-50). This model has been known to work effectively in the cases of changing business strategies due to the above-explained causes. The model works in implementing changes in a business whereby the process begins with planning for the change. The planning involves analysis to recognize an opportunity and therefore implement the invented change. In the case that the business has outgrown the existing strategy, the management must plan for the change by involving the employees as well of the stakeholders for the invented change; the change of business strategy.
The next step in the PDCA is to do the planned activity. The latter is the implementation of the planned process of change. In the case of a change in the business external or internal environment, the second process of the PDCA model sees the implementation of the planned change “to cope up with the changes in business strategy” (Gemechu et al., 2015, pp. 35-50). Besides, the strategy change due to an overgrown business, the Do process of the PDCA model requires implementation of the newly formulated business strategy for the business. In other words, the Do stage of the PDCA process ensures the implementation of the incorporation of the planned change into the business organization.
The third stage of the PDCA is the check act. In this stage, the employees and the stakeholders review the results of the implemented change comparative to their expectation in the “implementation of the change in the organization” (Gemechu et al., 2015, pp. 35-50). The organization uses benchmarks to analyze the level of success or otherwise in the new strategy. For instance, change in a product produced by a company, leading to the implementation of a new strategy; the effectiveness of the implementation can be checked against the expectation in business returns after a given period. On the other hand, if a company had outgrown its pre-stated business strategy, the effectiveness of the formulation and implementation of the new strategy can be checked against the strategy’s new goals. The “check” stage is very crucial for the PDCA model of the continuous improvement process.
Lastly, the fourth step in dealing with the above-stated causes of business strategy change is the Act stage. This stage is depended on the results of the check stage. If the implemented plan shows negative results in the third stage of the PDCA model, a repeal of the plan is required. Besides, the management should consider another plan and repeat the four stage process. A successful feedback on the implemented plan, therefore, means that the plan should be fully incorporated into the business system as argued out by Babbitt, Norman, and Moen, (2016)
The methods your organisation uses to measure performance.
Performance measurement is the qualitative determination of whether or not an organisation is performing well in its venture. There are several quality measurement systems used today in organisations. These are, among many others; the balanced scorecard, the economic value added method, activity-based costing, and quality management system. The latter are used to evaluate the performance of an organisation to determine the success of the business in its operations.
The scorecard method has been applied widely by most firms in measuring the performance according to DeNisi, and Smith, (2014) The scorecard method determines the performance index of an organisation by analyzing four main key elements of the latter. They include; the financial perspective of the organisation, the customer satisfaction, the internal business perspective, and a growth perspective. The scorecard method analyses the profitability, the risks and or losses as the financial capability in determining the performance of business. Moreover, the balanced scorecard method takes into account the level of customer satisfaction in the determination of the level of success of a certain organsation. The latter includes the number of complaints emanating from the use of a given product by a company, the reported defects of the product or the returned goods. The internal business perspective determines the organisatoion of the firm’s stakeholders, including the employees towards the firm’s common goal. Lastly, the balanced scorecard puts into account the observable growth potential of the organization characterized by the innovativeness and financial considerations.
This method of performance measurement is qualitative and involves the mathematical determination of the financial performance metric of a firm. The latter captures the shareholder value and the overtime with the inclusion of “net operating profit of an organisation less the charge of the opportunity cost of summed capital investment” (Tian, Zhang & Rensel, 2014, p.20). The latter is focused on creating maximum possible shareholder wealth.
EVA = (Net Operating Profit after Taxes) - (Capital X Cost of Capital)
This method of performance determination attempts to define how overhead costs are shared onto products or customers. The effectiveness of business in making a readjustment of allocating overheads and hence making a profit is a measure of its performance due to the always changing business dynamics.
The Total Quality Management system is one of most used in measuring the performance of an organization. The latter measures the long-term business success by analyzing the customer satisfaction on the goods or services offered by a given business form as stated by Dale, (2015). TQM is an effective quality management system, and it's very easy to implement citing to its simplicity compared to other analytical methods of organisation performance measurement like the Economic Value Added.
The performance information collected for any given organization can be used to realize continuous improvement process as depicted by Chang, (2016). For instance, the collected information is crucial for decision making on the right track the firm in question should take. The results of the performance measurement process reveal whether or not the organisation is profitable or not. The information collected on performance is, therefore, important in decision making on the right step to take on an improvement of the organisation. The decision maybe either to change the business, “to change the business strategy among many other managerial decisions” (Chang, J.F, 2016, n.p)
Discovery for opportunities for an organisation is a “chance to make a step in business success” (Goodrich et al., 2013, pp.110-135). The opportunities that come in business operations or discovered should be managed ultimately. There are several ways in which the identified opportunities can be managed which include recording them, prioritization and delegation. An opportunity should be recorded upon identification for a future address. The opportunity should be formulated; how it will be worked out to yield fruitful results. Moreover, the identified opportunities should be addressed in a prioritized manner whereby the most likely profitable opportunity is taken into implementation first according to Worrell Kermeli and Galits, (2013). Thereafter, the first prioritized opportunity should delegate time and resources for implementation onto the firm's system.
According to sources, it’s very important to document the process of implementation of an improvement strategy as well as the emanating outcome. According to Powell et al., (2015). The implemented strategy should be .recorded in the first place and the outcomes of the latter documented thereafter to make sure that the implemented strategy won’t be implemented in that organisation again if it turns out to be “tragic.” On the other hand, the strategy and the results should be documented for repetitive application on different business firms or business if the results are positive as stipulated by Davenport, (2013). Moreover, the documentation is crucial for future reference on the best strategy implementation.
Lateral thinking is a problem solving technique that applies indirect thinking or reasoning to formulate a solution with no step-by-step methodology as captured by Johnston and Bate (2013). Lateral thinking is very common in my work context, business field. Most business problems cannot be solved by a direct thinking technique a business environment has many driving forces to a given problem. This therefore calls for all-round thinking of a given problem before approaching a likely answer. For instance, unfriendly customer is likely to confront you, you have to laterally think well of the best way to handle him or her without being rude of intimidation. For instance, I can get to know what’s the main issue he or she’s pointing out and address that perfectly within the shortest time possible to get him or her off quickly.
The PDCA, as mentioned earlier, is one of the models in continuous improvement process according to Auer, (2015). The first stage involves planning for an indented change in the organization. The involved stakeholder in this stage is the top management as they are the main decision makers in the organization. The second stage is the implementation of the change unto the business. The involved stakeholders in this stage are the entire staff body of the firm. Thirdly, the check stage follows and involves the assessment of the success of the implemented strategy. The involved stakeholders are the quality insurance officers of the origination or an external auditor.
Lastly, the act stage involves a decision making as to whether or not the implemented strategy will be incorporated into the organization depending on whether its value adding or not. The involved stakeholders is the management. Bernal, (2014) elaborates that omission of any of the steps of the PDCA is likely to lead to a failure in the implementation of the strategy. This is because the PDCA model is stepwise and therefore omission will bring about uncertainties in the preceding steps and hence likely failure in the process.
Implementation of any improvement in my organisation is communicated to every stakeholder. This is to avoid bias and doubt on the running of the firm’s activities and therefore enhance focus of the team to realization of the newly implemented strategy as explained by Goetsch, and Davis, (2014). Moreover, the staff were supported to develop their capabilities in the continuous improvement by encouraging them to hold discussions and brainstorm on the changes they want in the organisation. The desired outcome; a better performing organisation has been achieved effectively on implementation of the suggested ideas.
Conclusively, there are many several ways of implementing innovation and continuous improvement. Evidently, it’s very important for any organisation to try to improve its operations continually for more improved products or services on the otherwise changing business world. The business organization should measure their performance time to time to determine their adaptability to business dynamics. The performance index gives a suggestion on the need for continuous improvement and implementation in business operations.
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Worrell, E., Kermeli, K. and Galitsky, C., 2013. Energy Efficiency Improvement and Cost Saving Opportunities for Cement Making An ENERGY STAR® Guide for Energy and Plant Managers.
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