26.01.2016

Innovation vs. continuous improvement to achieve business transformation

Not only must we improve how we do things, but we also must align what we do with what our customers want – and that requires real effort and support whether you are focused on continuous improvement or innovation.

The grand word of transformation is very popular in business circles and two main approaches, continuous improvement and human centred design, are promoted as the key to success for transforming organisations across all industries and all layers of government.

I’ve had several discussions over recent months with clients, colleagues and other associates about what human centred design (HCD) or design thinking (said to be the discipline of innovation) truly means and how it differs from continuous improvement (CI).

As suggested by Idris Mootee in his book “Design Thinking for Strategic Innovation”, HCD is concerned with value creation; this means that an organisation identifies then aligns itself with delivering products and services that meet their current and future customers’ needs, which in turn increases profits. CI is about value capture, which ensures that the organisation delivers seamlessly, leading to cost savings and other efficiencies.

HCD is forward-looking - how should an organisation / process / product work - whereas CI is retrospective - how come it isn’t working and how can we fix it. Simplistically speaking, one could say that HCD ’creates’ and CI ’streamlines’. Both can assist with transforming your business and can also complement each other. Both approaches also have many tools available for achieving valuable insights, which are appropriate for making a wide range of decisions.

Generally speaking, I believe it’s up to each organisation to choose their tools of the trade. The truth is that none of them can work in isolation - the long list of failed innovation or CI programs are testimony to an ’off the shelf’ approach to transforming a business. To make either approach effective, I suggest pairing methodologies and tools which complement one other such as HCD, Lean, Agile, Systems Engineering and Change Management. Also, the organisation has to understand how much support these approaches require from senior levels to be able to truly achieve the desired change. Yes, you should engage customers and your front line staff – try to enable, involve and inspire. However, your efforts are always doomed if you don’t have genuine support from all management levels and if you don’t have a very clear, tangible plan of how you will achieve this transformation.

I’ve come across it many times - senior management is keen to change, but most of the blame for the lack of change is put on the ’doers’ as they are apparently lazy or change resistant / fatigued. From my experience, the truth is closer to the middle layer of management. Pay particular attention to middle management and how much they buy into your idea and how much they will support it and promote it with their staff. This is where the proverbial cookie crumbles!

At the core of it all, the organisation has to want to change and in my experience, this is the single most critical factor that’s always overlooked. An organisation is a group of individuals with different thought processes, desires and goals and we must not assume that their aspirations are fully aligned with their organisation.

Assuming the organisation starts out on their journey to a brighter, more prosperous and sustainable future, I suggest following six step approach:

  1. Find out how “change ready” your organisation truly is – do you REALLY want to succeed at all levels of the organisation and what are your drivers for change? Where are your weak points? Have you tried to fix a certain problem repeatedly? If so, dig deeper and find the root cause for why nothing has changed.
    • Identify the key drivers for your change and how it will impact your operation.
    • You can find out how change ready your organisation is by simply conducting a qualitative survey and interviewing your key influencers regarding the attitudes of staff.
    • If you find yourself in a position where you might not get “the truth” if you investigate the change readiness yourself, engage a trusted, external provider. This phase shouldn’t take much longer than four weeks and you should get presented with a thorough assessment of your current ability to change and the readiness of various divisions.
  2. Creating the future state for your service is best done across functions, disciplines and in collaboration with your customers • It’s paramount to understand what your customers need now and in the future and how you can service these needs. Don’t make the mistake of assuming that you know. Depending on how close you are with your customers, get out there and get talking to them, do a survey, suggest a future state and then get them to give you your opinion. Would it work for them? Where would they see issues?
    • Once you have a good idea of what your customers want from you, collaborate internally. Use your internal expertise in CI and Innovation and focus on what you need to achieve (i.e. what the customers want from you). Brainstorm projects that will get you closer to your goal and prioritise them according to impact and required effort.
  3. Communicate the future state in ways that your executive team will appreciate – be it numbers, a story or a mapped process
    • Everyone in the organisation needs to be clear on the purpose of the change and how every single division contributes. Be realistic regarding the timeframe for analysis and implementation.
  4. Choose an appropriate approach • Select the appropriate tools for the challenge. If you are looking for a ’quantum leap’ continuous improvement may not be appropriate. However, if you think your service is the right one, but it’s underperforming, then CI applies.
    • Combine tools if necessary and ensure that you employ a phased approach with clear deliverables and outputs that will achieve your desired outcomes.
  5. Regularly communicate the progress of the project – recognise staff along the way and be as transparent as you can.
    • Communicate from your employees’ perspective. The simpler and more engaging the message is delivered the better. Why is it good for them? How they are contributing and what opportunities arise from it for them?
  6. Ensure you have the capability to change including resources, support and the human energy – use tools as appropriate. Don’t prioritise the tool over the outcome.

In summary, don’t perform activities for the sake of them – make sure that you have very clear focus and that each one of your projects / activities is focused on bringing you closer to achieving your goals. Another important aspect is to mandate getting the basics right – you know what you have to do make your customers happy. Make it non-negotiable to be aligned with your organisation’s purpose.

Not only must we improve how we do things, but we also must align what we do with what our customers want – and that requires real effort and support whether you are focused on Continuous Improvement or Innovation.

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