Years ago, Jon Katzenbach told me that the greatest challenge that change agents face is changing their ideas about change. The Japanese term for continuous improvement is kaizen (改善) and was probably introduced when Edgar McVoy convinced Lowell Mellen to join him in Japan to properly install the Training Within Industry (TWI) programs in 1951. It is most widely associated with the Toyota Production System (TPS), a major precursor of the more generic “lean manufacturing.” Taiichi Ohno, Shigeo Shingo and Eiji Toyoda developed the system between 1948 and 1975.
Here is an excerpt from an article written by Ron Ashkenas for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.
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Six Sigma, Kaizen, Lean, and other variations on continuous improvement can be hazardous to your organization’s health. While it may be heresy to say this, recent evidence from Japan and elsewhere suggests that it’s time to question these methods.
Admittedly, continuous improvement once powered Japan’s economy. Japanese manufacturers in the 1950s had a reputation for poor quality, but through a culture of analytical and systematic change Japan was able to go from worst to first. Starting in the 1970s, the country’s ability to create low-cost, quality products helped them dominate key industries, such as automobiles, telecommunications, and consumer electronics. To compete with this miraculous turnaround, Western companies, starting with Motorola, began to adopt Japanese methods. Now, almost every large Western company, and many smaller ones, advocate for continuous improvement.
But what’s happened in Japan? In the past year Japan’s major electronics firms have lost an aggregated $21 billion and have been routinely displaced by competitors from China, South Korea, and elsewhere. As Fujio Ando, senior managing director at Chibagin Asset Management suggests, “Japan’s consumer electronics industry is facing defeat. “Similarly, Japan’s automobile industry has been plagued by a series of embarrassing quality problems and recalls, and has lost market share to companies from South Korea and even (gasp!) the United States.
Looking beyond Japan, iconic six sigma companies in the United States, such as Motorola and GE, have struggled in recent years to be innovation leaders. 3M, which invested heavily in continuous improvement, had to loosen its sigma methodology in order to increase the flow of innovation. As innovation thinker Vijay Govindarajan says, “The more you hardwire a company on total quality management, [the more] it is going to hurt breakthrough innovation. The mindset that is needed, the capabilities that are needed, the metrics that are needed, the whole culture that is needed for discontinuous innovation, are fundamentally different.”
So should we abandon continuous improvement? Absolutely not! It has created tremendous value and still drives competitive advantage in many companies and industries. But perhaps it’s time to nuance our approach in the following ways:
[Here is the first of three suggested modifications. To read the complete article, please click here.]
Customize how and where continuous improvement is applied. One size of continuous improvement doesn’t fit all parts of the organization. The kind of rigor required in a manufacturing environment may be unnecessary, or even destructive, in a research or design shop. Sure it’s important to inject discipline into product and service development, but not so much that it discourages creativity.
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