The KAIZEN™ Methodology, a Must for the Best Companies in the World

We spoke to Alberto Bastos, Senior Partner & Managing Director of the Kaizen Institute Western Europe and author of the book “Stat to Action”, who explained us what the KAIZEN™ methodology is, who it is for, its benefits, its evolution and next strategic steps.

1. What is KAIZEN™?

KAIZEN™ is a Japanese word meaning ‘change for the better’ or ‘continuous improvement’. At Kaizen Institute, we understand that this continuous improvement concept extends to how we structure our organisations, so that it is possible to achieve improvements in all areas, involving everyone, every day.

To implement an organisational model that allows for improvement every day, in all areas and involving everyone, it is necessary to develop three types of skills:

1. How to improve what we do every day.

2. How to improve cross-organisational, multi-team processes.

3. How to define and implement breakthrough changes which lead the organisation to evolve in the way it acts and, consequently, in the results it achieves.

After World War II in Japan, companies such as Toyota and Nippondenso, after studying the best practices of the Western world, undertook a systematic improvement of their processes which they called KAIZEN™. As a result, their products were of the highest quality in the 1970s and 1980s, and were recognised throughout the Western world.

When in 1985, Mr. Masaaki Imai published his book ‘KAIZEN™: The Key to Japan’s Competitive Success’, the Western world was eager to learn the secret behind such success. It became a best seller – sought by all CEOs.

In this book, he states that KAIZEN™ is more than a set of improvement tools (methodologies), it is a holistic concept, stating that KAIZEN™ means continuous improvement, and is applicable to our personal life, social life or work life.

KAIZEN™ starts with small incremental improvements, moving from more significant improvements through adopting new paradigms that drive quality, cost and service improvements for the customer. All the way to the implementation of breakthrough ideas that are truly responsible for significant business growth.

The KAIZEN™ methodology, even today, continues to be an essential practice in the world’s benchmark companies.

2. What are your roles within the companies you work with?

With an international team of over 700 people and offices in more than 40 countries, we deliver value and results through our consulting and training services. Our approach is practical, pragmatic and collaborative, working alongside our customers’ teams at the Gemba, in their workplace, whether it is an industrial or office environment. We are where the action takes place and we can see the opportunities first-hand. From day one, the contribution of the teams is key for the success of any transformation, and of course, the key lies in learning by doing and developing KAIZEN™ skills with our customers.

KAIZEN™ can be used in any type of organisation, regardless of the sector. However, the KAIZEN™ principles must be understood and practised, starting with senior management, and later, deploying to the other levels of the organisation.

People often think that the service sector, or functions such as marketing & sales or R&D, are more challenging as the processes are less visible. But, once you understand the KAIZEN™ principles and acquire the experience of implementing the right improvement tools, then you can improve any situation, supported by breakthrough results. Any sector, and any function within any organisation, can achieve the full benefits when they embrace and implement KAIZEN™ paradigms across their enterprise.

3. You work with big companies from very different sectors, from Groupe PSA to Hotel Chocolat and Siemens. What sets you apart from your competitors?

The traditional consultant tends to be a ‘teacher’, i.e. she/he explains the methodology, how it should be followed, and then proposes homework and exercises for reinforcement for the knowledge acquired.

We are not traditional consultants, we are ‘implementers’. We are not just suggesting what to do, we stand by the team when the changes are being implemented, facing any problems that may arise. We are committed to the results, so we do whatever it takes to achieve them.

This modus operandi used by Kaizen Institute was born because after the success of Mr. Imai’s book, many companies in the Western world required his services to implement KAIZEN™.

Mr. Imai would bring in retired engineers from Toyota to carry out the projects. The implementation took place during an intensive week starting on Monday mornings when the CEO set the challenge, for example, the need to improve productivity by 20%.

Faced with the challenge, the KAIZEN™ consultant began to provide instructions to move machines from one place to another, change workstations, define new standards and processes and requiring a multidisciplinary team at their disposal. At the end of the week, all the results generated were presented. It consisted of a consultancy of ‘doing’ and then ‘understanding’ why it was done.

Nowadays, it is not done exactly this way, but first we explain why we must change, and what the new paradigm to be implemented is, but we continue to utilise intensive KAIZEN™ events for the implementation with the participation of the entire internal team. The results achieved are the sum of the work and ideas of everyone in the team and driven and facilitated by the consultant.

4. How has Coronavirus affected you?

As we are an implementation consultancy, COVID-19 made it difficult for us to carry out our business as usual. Just like our customers, we had to adapt and quickly move to a virtual delivery format. We developed and refined our methodologies, so that we could conduct improvement workshops with multidisciplinary teams digitally.

Indeed, in many cases, we showed what KAIZEN™ is all about. For some customers who were already very advanced in the digital field, it was possible to improve their processes even more and achieve results quickly. Even for customers who traditionally made improvements in their physical processes, the crisis had accelerated the focus on continuous improvement in their digital processes.

We often make the mistake of thinking that a digitised process does not require improvement, however, when a process is automated, if we do not simplify it and remove the existing waste, we will be automating what does not add value.

A crisis often forces us to mitigate and manage risks quickly, and with COVID-19, the survival instinct of many organisations kicked-in. This pandemic has surely highlighted the need to ponder on our practices within a company: how efficient, effective and flexible are we really? Companies that have implemented a KAIZEN™ business system were more prepared for such a crisis.

This crisis is nothing new considering what we have seen in the past. Toyota Motor Corporation showed this to the world during the 70s oil crisis and during the subsequent recessions.

Most companies can generate profits during a boom stage, but very few can sustain them in a recession. The simultaneous flexibility and stability of the KAIZEN™ approach helps companies survive during the most challenging stages of economic cycles and thrive during troubled periods.

Adapting to the ‘new normal’ requires companies to be innovative with products, processes and even the way they lead their people. However, this must be driven by reconnecting with the new needs of customers. Continuously communicating with customers to better understand their new needs is the starting point for implementing KAIZEN™ in this new situation.

A crisis can be an important opportunity to create the ‘new normal’ that can dictate the future of the company. Successful companies will have the stability, flexibility and ability to go through a crisis such as COVID-19 and come out with strength and resilience; not only surviving but excelling during these difficult times.

5. What will be the new challenges for Kaizen Institute?

Over the last decades, Kaizen Institute has positioned itself as a global benchmark in Operational Excellence, our present and future challenge is to follow this same path in the Growth areas. This means applying KAIZEN™ to the innovation and product development processes, to the marketing and sales processes, all the way to the improvement of the strategy formulation and execution process.

With the publication of the book ‘Strat to Action’, before the pandemic, we started to feel the momentum in this area, positioning ourselves on more strategic levels. The reality is that we are not new to the subject, and we carry a lot of experience, but the market identifies us so substantially with industry and operational excellence that it is a challenge for us to have similar recognition in this area of growth excellence.

We know that to achieve the results we are aiming for, it is necessary to start with a clear strategy visible to senior management, and this is what we have been doing.

Trusting in the success of this methodology, we applied it internally throughout Kaizen, getting people committed and involved with these goals through the Strat to Action strategic deployment process, making the action plan complete at the point of impact.

6. What do companies need to invest in to adapt to the needs from the near future?

We are experiencing the biggest technology boom in history. There are so many technological and digital offers that companies are having difficulty in deciding which is the best use of the tools available.

Improving the business model continues to be key for which it is essential to support and take advantage of technological advances, but it is a mistake to think that investment in technology and/or digitisation alone will lead to a company’s success.

Technology and digitisation are the support of efficient processes of a business model, but we cannot make the mistake of doing it the other way around. First, we must improve our processes and create a profitable business, and only then use technology and digital tools to support these processes to be even more efficient and effective.

On the other hand, society’s concern for sustainability should not remain just an intention or an opinion. The EU has made a commitment through the European Green Pact to become climate neutral by 2050. This goal will only be achieved if all actors in the economy take part, commitment and action.

The corporate mesh plays a key role in achieving this horizon for which companies must define and implement KAIZEN™ projects aiming at the reduction of water consumption, greater incorporation of recycled materials, improvement of the energy efficiency of processes, use of clean energies and reduction of energy and material waste.

For this to be possible, it is necessary to ensure that we have a structured process with proven methodologies that allow through the involvement of everyone to achieve results, which in this case will contribute to common wellbeing.