The Power of Kaizen

 

 Lean Nation,

I want to wish everyone a happy new year. Hopefully, 2024 was a good year for your personally and professionally and 2025 will be even better!

As promised from the previous blog, this month's topic is a continuation of a 4-part series that was spawned from a LinkedIn posting on failing transformational efforts. For your reference, the link to the posting is here. (2) Post | LinkedIn    Recall, in this posting the writer suggested that Agile and Change Management efforts are finished within industry. There are several thousand comments arguing for and against the hypothesis. 

Also recall, I received an article with the hypothesis being that 98% of the organizations that embark on continuous improvement journeys completely abandon their efforts within 18 months. I do not have any data to support or refute this hypothesis either, but I do not think it is a coincidence that several people are writing about this topic. 

I can confirm, from my consulting practice of nearly 20 years, that many organizations start off strong and then reduce or even completely eliminate their efforts over time. This is frequently in light of the fact that they realized significant benefit from their initial improvement efforts. So why is this the case?

The most common problems organizations make when embarking on a continuous improvement journey are listed below:

1) Do not waste the first six months of your improvement efforts

2) Failure to monitor the breadth and depth of change

3) Failure to get everyone involved

4) Eliminate two systems as soon as possible

In my last blog, I discussed how organizations frequently squander the first six to nine months of their efforts. At this point, it is often too difficult to regain momentum and the transformational effort fails. You can re-read that blog here:  

https://breakthroughhorizonsltd.blogspot.com/2024/12/breakthrough-highlights-why-do.html

In this blog,  I’d like to talk about the second most common reason continuous improvement efforts fail, that being failure by leadership to monitor the breadth and depth of change. By depth I mean repeated improvement efforts in the same area to create transformational change in performance and culture. By breadth, I mean the number of core processes that are changing within the organization  at the same time. Upfront, I will tell you organizations that launch enterprise-wide change at the same time always fail. Organizations simply cannot manage that much change simultaneously, 

 

Whys is it important to manage the breadth and depth of change? Changing too fast leads to failed efforts in sustaining improvement and changing too slow leads to complacency and oftentimes an inability to change culture.  So what should an organization do?

The best practice is for organizations to adapt an aggressive pace of change. There are different statistics on what an aggressive pace of change implies, but a number to consider is to run improvement teams at a pace of N over 20 annually, where N= the number of FTEs in your organization. In practice this would imply the following:

Number of organizational full-time equivalents = 1500.

Aggressive pace of change = 1500 /20 or 75 improvement projects per year.

Assuming a team of eight staff, this pace it would take you about 2.5 years to get every FTE engaged in improvement project.   It is possible to run at a more aggressive pace but does increase the difficulty in sustaining improvements when the organization has that much change in flight at the same time.

Getting each staff member engaged in active improvement over a 2.5-year period of time will require 7.5 to eight years to get everyone on three improvement projects.    It is at the 3-improvement project number that you will see a significant shift in organizational culture. Organizations with 3-year strategic planning horizons and quarterly guidance numbers have a challenging time maintaining any pace of change.

Most organizations want enterprise-wide improvement in a year to eighteen months. While I hate to be the bearer of unwelcome news, this is simply not realistic. I will hedge this statement by letting you know you do need to wait a year to 18 months for results, you should expect meaningful results in a quarter. It is the gap between meaningful results and enterprise change that must be managed effectively by leadership.

It is not a surprise that 98% of organizations completely abandon their improvement efforts within 18 months. The question is why? In the first blog in this series, I wrote that many organizations skip the infrastructure creation steps and move directly to improvement. In this blog, I am inferring that organizations do not have a plan to manage the breadth and depth of change, leading to substandard improvement results and/ or failure to change the organizational culture.

Are you managing your pace of change? Is ii too aggressive or too slow? Evaluate your pace of change and adjust each year to optimize your results in creating transformational improvement in performance and culture. Do not quit your improvement efforts at the 12-to-18-month point, ADJUST! Is the pace of change a contributor of poor results?

 

Lean Blessings,

Ron

Ron Bercaw, President, and Sensei

Breakthrough Horizons

www.breakthroughhorizons.com    

LinkedIN: https://www.linkedin.com/in/ron-bercaw-882a0a8/