Continuous Improvement
in a Digital Age

In 1859, in The Origin of Species, Darwin pointed out that – “It is not the strongest that survives, nor the most intelligent, but the one most responsive to change”. In fact, constant challenges have enabled the persistent evolution of species. The dynamic alteration brought natural selection, which highlighted the extinction of those unable to adapt, and the appearance of species with differentiated characteristics better prepared for adversities.

In the business world, the ability to reinvent and innovate in the current paradigm is equally essential for the survival of any organization. The data confirms this premise, as only approximately 10% of the companies that were in the Fortune 500 Index in 1955, are still there today. Today’s success does not guarantee its continuity in the future.

The KAIZEN™ methodology emerged after the Second World War, at a time of scarce resources and of a deep crisis within the Japanese economy. The need to make Japanese companies highly efficient and profitable was the country’s priority in the post-war years. By means of investment, the study of American production techniques, and the improvement of the methods employed until then, it was possible to revolutionize the industrial fabric of a country that would later become a world power.

Masaaki Imai – founder of the Kaizen Institute Consulting Group – was one of the great pioneers in the dissemination of the KAIZEN™ methodology which is currently recognized worldwide as an important pillar of the competitive strategy of organizations.

What is continuous improvement?

Since the introduction of the term KAIZEN™ as a systematic approach to business improvement, companies implementing the methodology have continuously delivered superior results.

KAIZEN™ means continuous improvement – changing for the better, every day, in all areas of the company, while engaging all employees – regardless of hierarchical level. It is a concept that can not only be applied at a professional level, in any business, but also at a personal and social level.

This methodology aims to reduce waste and maximize efficiency ranging from production to administrative processes. This requires transparency and openness in management, so that all employees, from operational teams to top management, understand and are involved in the improvement process. Improvement practices generate excellent results, allowing companies to reduce costs, increase productivity, and improve the organizational culture.

Digitalization as an accelerator of business transformation and innovation

Today, we live in different times, although similar in every way. We are witnessing an interesting variability – organizations are born and die every day – some are victims of the speed at which markets develop and evolve, and others arise in response to new challenges.

However, despite the similarity presented, there is one major difference between now and the 1950s which we believe is the most powerful weapon for success. This difference is digitalization – the one that is present in all human interactions and growing fast.

If we analyse the current situation of most industrial companies, we can see that they are following the path of digitalization and implementing Industry 4.0 solutions. In a short period of time, companies began to look at the digital revolution, not as a threat, but as an opportunity to stand out in an increasingly competitive environment.

Despite the fact that the digital transformation of processes and organizations has been one of the strategic priorities of companies in the last decade, it is difficult to measure the impact of the high investments made, which in some cases take years to start generating results.

The digitalization and implementation of new processes and business technologies should not be the goal of the transformation, but rather a vehicle to accelerate it and enhance results that involve:

• Rethinking and redesigning business models
• Improving and innovating the supply of products and customer services
• Redesigning end-to-end processes
• Empowering and motivating employees to unlock their full potential
• Testing and experimenting with new technologies
• Using data and advanced analytics to make better decisions

How does continuous improvement apply to digitalization?

A constant process of adaptation to change, particularly to digitalization, is necessary, as this is what the concept itself entails – continuous improvement. It is through constant search for the latest innovations that it is possible to maximize the efficiency of processes and resources. Operational functions retain their relevance but are now supported by software and technologies that optimize their performance.

In this sense, the concept of digital continuous improvement arises – a structured approach based on improving every day through the support of technologies designed for this purpose – which should be adopted by all organizations in all areas.

Continuous improvement as an accelerator of digital transformation

Digital transformation is only possible when there is already a culture of continuous improvement in the organization, as this is a change that has to be done in a sustained way, based on a process of supporting this change in the organizational culture. The companies that have already adopted the practice of constantly adapting to market developments are the ones that will succeed on the journey towards digital transformation.

It is a long process that requires a high investment, and in order for the results to be worthwhile and resources not to be wasted, it is vital to define a clear transformation strategy, based on the constant improvement and subsequent collaboration of all employees. It is crucial that the latter are involved in the transformation process from the beginning, recognize the need for digitalization, and are motivated.

Optimize and eliminate waste before digitalization

Optimizing and eliminating waste before the digital transformation process begins, is the key enabler where the KAIZEN™ methodology plays an even more paramount role.

Before the introduction of advanced technological solutions, processes must be highly optimized. Streamlining and developing the teams’ ability to continuously improve are the foundations for a solid digital evolution, as only then can the full potential of your investment be visible in the results with little need for deep problem-solving over time.

This methodology seeks to mitigate all activities without added value for the client, thus generating increased productivity, increased flexibility, growth, greater profitability, reduced costs and excellence in service levels.

In short, outstanding companies win in the short-term and thrive in the long-term. This system of learning and continuous improvement becomes a self-sustaining virtuous circle of more engaged workers, trained by more capable leaders, converging into more agile organizations that can make more effective decisions.

Improvement requires continuity, there is no such thing as good enough. The demand changes, people change and so do behaviors. Leaders and organizations must transform the quest for improvement into a habit.