Saturday, August 1, 2009

Kaizen Your Growth Rate

"Do not trust people. They are capable of greatness."
--Stanislaw Lem

I just attended a great training class on Kaizen management techniques. The management philosophy helps people achieve breakthrough success-- results beyond what they might have thought possible. Kaizen is a Japanese philosophy of continuous improvement that has been used in the Toyota Production System. The philosophy focuses on radically eliminating wasteful work and improving productivity, while maintaining work/life balance.

How does Kaizen work?

By breaking down improvements into many small steps (hundreds or thousands), which are collectively transformative.

While Kaizen is famous for eliminating defects and cutting costs, it also drives growth by improving quality and freeing resources for reinvestment.

For sucessful internet businesses, a Kaizen-type approach of sense and respond is a way of life. Since the costs of product experimentation on the internet are very low, you can continually imporve your value proposition. It might be worth continually asking:
-- What small changes in your products and services could unlock large value for your customers?
-- How do you rapidly and constantly test these changes?
-- How do you make this approach a fundamental part of your business?

I am most grateful to Danaher executives who graciously hosted our training.

6 comments:

  1. Hi Bob, thanks for the blog read. My father has used many of these techniques and taught my sister and I to use them in our life, business, and finances, and it works. The most successful people use it in their daily lives.

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  2. Kizan Story:
    While working at Toyota for almost two years, I often asked LT employees how the Kizan process added value?
    The example they cited was that anyone could stop the production line when a defect was identified. This defect was reviewed, remediated, and change integrated into each following vehicle.

    Whats the cost of customer satisfaction?

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  3. Hi Bob,

    I think there are some misunderstandings here.

    You are right, Kaizen is making improvement in small steps and it is used in improving the processes to manufacture products (or deliver services). This in turn improves quality, saves waste and speads up delivery. However, Kaizen is not something to create innovation or come up with differences in the product. The product or service itself should not change through Kaizen, at least not functionally. I think this is what you are asking with, "What small changes in your product could unlock large value for your customer?" That is NOT what Kaizen is about.

    For that there are other tools you should look at like Production Process Planning (Toyota 3p) or Quality Function Deployment (QFD) or Hoshin. Those are tools to find those Blue Oceans you are talking about.

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  4. Hi anonymous and thanks. You are correct that Kaizen is not literally used for product feature innovation. But I was trying to draw the close parallels in process between Kaizen and Sense and Repsond-style techniques. In both cases breakthroughs are made by:
    -- Disaggregation of work into small steps
    -- Extreme focus on speed of testing
    -- Sharp focus on measurability
    ...an so on. Thanks again for the clarifications and build.

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  5. Great. Two more examples to help.:)

    You can make a culture of Kaizen, where your employees are constantly looking for small improvements, bring them into a pool, then you take the best suggestions and carry them out to improve the production system and employee satisfaction (which helps guarantee better quality).

    Or, you take a part of your production system, where you feel there needs improvement and take a half a day or so, stop production and work with your employees on some of the daily problems they have. You figure out what needs fixing and start doing it. Then you check later if there were positive effects made through the improvements. Ah, another Toyota management tool PDCA. Plan, Do, Check, Act.;-)

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