The Japanese philosophy of Kaizen holds the answer to business growth.
What is Kaizen?
Kaizen is a word with ancient origin that belongs to the Japanese vocabulary. It is said to have originated from Japanese Samurai, who would persistently practice their kata/fighting techniques (process) and sharpen their sword everyday (product), striving to continuously improve both the process and product.
In Japanese, the word Kaizen is composed of two words: Kai, which means "change" and Zen, which is related to the Oriental theories of the pursuit of perfection and means "good.“ Hence kaizen means to change for the good. This definition has evolved and now commonly means continuous improvement; improving everywhere, everyday & with everyone within your organisation.
The popularity of the word ‘Kaizen’ stems from the manufacturing & automotive industry. Toyota in particular; transforming Kaizen from an everyday Japanese word into a word that describes a cultural shift towards making incremental improvement changes every day.
Kaizen, among other things, was the key to Japan’s competitive success in in the 1980’s, transforming from a place that typically made cheap, poor quality products, to a place regarded as being at the forefront of manufacturing excellence & automation. Quality is decided by the customer, forming an opinion of whether a product/service exceeds or falls short of expectation. The customer should therefore be the focus for continuous improvement, maximising customer value.
With customer views forever changing and expectations rising, companies need to continuously improve to have a chance to compete. With ‘culture eating strategy for breakfast’, the importance of a Kaizen philosophy and the development of a continuous improvement culture really is the key to survival and prosperity in an environment where you need to change before you have to.
The need for Kaizen
In physics, entropy can be described as “a lack of order, predictability or decline in disorder”. The same phenomenon occurs within businesses. If you are not actively improving, aligning resources and moving towards a shared vision, you never just stay still, you are getting worse (and your competitor may be getting better). Another way of looking at this is, if no one managed & enforced the law, would the world move forward in the right direction? Or would it tend towards disorder. Comparing a business with the cultural habits of society, a kaizen culture aligns all employees towards improvement and ensures the business is heading in the right direction
“If you don’t move forward, sooner or later you begin to move backward.” Mikhail Gorbachev
Kaizen can be viewed as the collective mindset of implementing improvements, however small, with the understanding that everyone is responsible for their processes and small improvement cumulate to make large improvements.
Kaizen is about constantly asking; what would my customer not be willing to pay for, if they knew about it? Followed by a sprint like pursuit to eliminate, minimize or isolate any non-value adding (waste) activities.
An important trait of kaizen is that to improve, you must change. The definition of insanity is repeating the same thing and expecting different results. The output of any process is dictated by its inputs in the same way a bodybuilder cannot expect to win Mr Olympia by eating pizza every night. If you don’t change your inputs, you cannot expect a change in your outputs.
The no-brainer thing about kaizen (and change) is that if things change for the worse and the output is adverse, you can simply revert to the original methodology. There really is no harm in experimenting, every experiment provides a valuable lesson and is never a waste of time. Additionally, many good solutions require things to get worse off before they get better.
If you imagine the entirety of your company being contained within a ship, sailing on a sea (the environment – political, social, economic etc). Occasionally, a large wave will hit your ship in the form of a new competitor, a change in legislation, a new technology or an economic recession.
Ships don’t sink because of the water around them. Ships sink because of the water that gets in them. So, create a ship that is watertight and create processes that are capable of dealing with the metaphorical bigger waves that are changes. Focus on the inputs and processes within your company and understand that if you don’t continuously change, you will eventually sink.
Complacency is the enemy of a kaizen culture. Simple changes in technology tomorrow can destroy very capable and resource rich companies that haven’t changed fast enough.
The Law of Compounding
Kaizen is the dedication to making small changes and improvements every day, with the understanding that small changes of improvement made again and again compound to create an outcome much greater than the sum of the improvements made. Additionally, businesses that have very large workforces or produce vast quantities can save huge amounts of money from what may appear to be extremely small improvements.
Kaizen can be applied to almost anything, business, personal life, hobbies etc; the principle remains the same. We often convince ourselves that change is only meaningful if it’s big and recognisable by outsiders, however that is not the case. Many successful companies such as Toyota, McDonald’s & Amazon are proof of kaizens’ power and results.
Incremental improvement for a business is the same things as the mathematical principle of compounding. The power and significance of the mathematical principle of compounding is almost always under-estimated.
For example improving only 1% a day is unlikely to be noticed, but over a year, the improvement is colossal.
If you get one percent better each day for one year, you'll end up thirty-seven times better by the time you’re done.
Let that sink in. If you were focused on improving your touch-typing speed, and to start with you could type only 10 words a minute (6 seconds per word – that’s very slow). By improving just 1% per day, by the end of the year you would be typing 370 words a minute and be the fastest touch-typer in the world. Another idea that demonstrates the true power of compounding; if given a piece of paper large enough, if you could fold it 42 times in half, the thickness of your paper would reach from earth to the moon.
Figure 1 shows compounding in graphical form, in the beginning, there is virtually no difference between making a choice that is 1 percent better or 1 percent worse. (In other words, it won't impact you very much today). But as time goes on, these small improvements or deteriorations compound and you suddenly find a very big gap between people who make slightly better decisions daily and those who don’t.
It is so easy to overestimate the importance of one defining moment and underestimate the value of making small improvements on a daily basis. Too often we fall into a trap where we prioritise large expensive, big projects and ambitious shortly lived sprints, over small steps being made every day. Whether it is losing weight, building a business, writing a book, we spend a miniscule amount of time working as hard as possible, putting pressure on ourselves to achieve earth shattering improvements, only to burn out and fall short.
Team Sky Cycling & Marginal Gains
There are many real world examples that demonstrate the power of compounding, but it is hard not to mention Dave Brailsford, head coach for team sky cycling. Before Dave Brailsford, no British cyclist had won the tour de France in its 110 year history.
Dave Brailsford was hired to reshape British cycling, to start winning races. Brailsford was committed to something he referred to as ‘aggregation of marginal gains’, this is exactly what Figure 1 demonstrates; small improvements compounding to create big results.
“The whole principle came from the idea that if you broke down everything you could think of that goes into riding a bike, and then improve it by 1 percent, you will get a significant increase when you put them all together.” Dave Brailsford
What actions did he take?
Simply put, he did anything within his power that could improve the performance of the cyclists, looking at the people themselves, the environment around them and the equipment they used (sometimes called the 3Ms; man, machine & method).
A good visual way to demonstrate how he achieved success can be represented through a fishbone (cause & effect) diagram (see collaborative problem solving insight for more details.)
The solutions he provided to address the problems identified within the fishbone diagram were:
Slow Muscle Recovery- He tested different formulas of massage gels to see which one led to the fastest muscle recovery
Tired Riders – Determined the type of pillow and mattress that led to the best night’s sleep for each rider
Sickness of riders – Taught riders how to properly wash hands, minimising possibility of catching a cold and spreading germs that may reduce the cyclists performance and recovery rates
Type pressures – Numerous tests were completed to find the optimum pressure, not to the nearest PSI like other team but to the nearest 0.1 PSI.
Lack of training data – Biofeedback sensors to monitor each team members response (lactic acid, vo2 max etc ) to different workouts.
Aerodynamic losses – Testing of different clothing fabrics in a wind tunnel, switching to lighter and more aerodynamic indoor racing suits.
Uncomfortable bike seats – Redesigned more ergonomic bike seats
Dust/Dirt on bikes – Painted inside of team bus white so that dust could be seen and removed instead of reducing performance of bikes.
Poor grip on tyres – Tested different materials and rubbed alcohol on tyres for better grip
The impact of each improvement was small but the compounded improvement was huge and the results started to show.
British riders have won the last 6 out of 7 years of the Tour de France, in what is widely regarded as the most successful run in cycling history.
Implement low cost solutions first
Don’t postpone implementation in the pursuit of perfection.
To succeed as a business and gain a competitive advantage, big ‘wonder-like’ investments or plans are not required.
Kaizen doesn’t require large investments, overly complex solutions or magical IT solutions. As stated by W. Edwards Deming; “There is no instant pudding”. You cannot expect the results instantly by taking shortcuts. The principles of Kaizen are founded in creating low cost, smart solutions that are logical and commonly originate from the employees that work on the ‘shop floor’. Through years of consulting experience, the simplest solution is usually the best one and the promise of a solution that solves everything is extremely rare. Often low cost, simple solutions are put on hold or delayed because a longer term, “instant pudding” capital heavy solution will solve the problem.
The problem with postponing low-cost improvements is that by delaying the introduction of them, the potential benefits that would have accumulated are missed and more often than not, the long term project will be cancelled or delayed.
Imperfect improvements are better than postponed perfection. As shown in the law of compounding; small, daily improvements are easier and more beneficial then infrequent ‘step-change’ improvements.
The aggregation of incremental improvements can be viewed as ‘evolution, not revolution’. Doing what you do better and better, adapting to your environment to give yourself a competitive advantage, not a radical change.
When providing consultancy services to a logistics company, our initial assessment identified that in comparison to similar size companies within the same industry, the maintenance costs were abnormally high. By helping their team to work smarter, we uncovered that over 30% of time was attributed to carry out visual inspections of conveyor motors. As the Organisation relied heavily on the operation of their conveyors, the motors were critical pieces of equipment. A longer term solution to fit all motors with sensors to identify abnormal conditions and relay the motors status was drafted. In the short term we decided to fit coloured paper to the outside of each motor casing. When the motor was functioning normally, its fan would spin and blow the coloured paper (like a wind flag), signifying it was operational. When it was faulty, the bright colour of the flag could not be visible and the flag would not be waving in the wind. This very low cost solution saved a vast amount of time associated with identifying what motors were functional or needed repairing.
Paradigms
A paradigm is a model, rule or habit that influences how we interpret a given solution or problem.
Paradigms are formed naturally based on individuals’ past experience and habits, shaping the way we look at problems and solutions. For example before Galileo discovered that the world was round, there was a worldwide paradigm that the world was flat. The same thing occurs within organisations, peoples’ wider thinking is restricted by the ‘we’ve always done it this way’ mentality and ‘you can’t change that’ attitude.
There are countless examples of the breaking of paradigms and disruptive technologies creating step changes in the way a problem is solved. When people think of disruptive technologies they often think of the 21st century, the internet or the world wide web. In reality, disruptive technologies include the discovery of new materials like when metal was first smoldered. The change from transporting heavy items by rolling them on top of logs, to the invention of the wheel. The development of the horse and cart and the introduction of the steam engine. Industries have been transformed by the breaking of paradigms. Without the shift from steam engines to combustion engines, the need for oil & gas wouldn’t exist, an industry worth Trillions. All paradigm shifts occur because of disruptions, disruptions that are unpredictable and can come from seemingly nowhere.
The following example provides an abstract but practical example of breaking paradigms and solving problems in a smarter way.
There was once a father who died, leaving 17 camels as inheritance for his 3 sons. Upon reading the will, the eldest son was given half of the camels, the middle son was given a third of the camels and the youngest was given one-ninth of the 17 camels. As it became apparent that the 17 camels couldn’t be halved, divided by 3 or 9, the three sons started to argue with each other about how they should distribute the camels.
There seemed no solution to the problem, a mental block (paradigm) was preventing the sons from seeing clearly and developing a solution for them all. How would it be possible to split the 17 camels between them?
Spend some time to think through your solution to the problem.
The solution:
Searching for advice, one of the sons visited a friend who owned camels to see if he had any ideas. The friend said, no problem I will donate one of my camels to you, so you now have a total of eighteen.
“The eldest can have 9 camels (half), the middle son can have 6 camels (one-third) and the youngest can have 2 camels (one-ninth), that totals to 17, and I will take the camel I donated back.”
If this is the answer you came to then well done. Sometimes, by looking at a problem in a different way, the solution becomes a lot more obvious.
How to overcome the resistance to change with paradigms?
Individuals that strive to break organisational paradigms are often met with resistance. When Galileo wrote a book that hypothesised that the sun (not the earth) was at the centre of the solar system and that the earth was in fact round and not flat, he was sentenced to a light regimen of penance and imprisonment. The idea that the Earth was not the center of the universe went directly against the teachings of the Catholic Church, as certain passages in the Bible referenced the Earth as being immoveable were taken literally. His strong views broke extremely strong, religious paradigms and were therefore dismissed.
Although you are unlikely to be imprisoned for breaking paradigms at work, ‘out of the box’ thoughts/solutions often do encounter resistance that needs to be recognised and overcome in order to achieve the breakthrough results that follow. Often people will fail to see the bigger picture or will be so accustomed to the way things currently are that they will fail to see the reasons in your new way of working.
The most important aspect of overcoming resistance to change is understanding that it is a highly personal and emotional process. It is not a science.
With that in mind, there are still some steps that can be taken to maximise chances of success. Resistance to change can be viewed as a function of the following factors.
This mathematical representation of change represents the different elements required to help increase the chances of change. Firstly you need to highlight the inadequacies of the current situation and create an urgency to change – bring facts and data to light. Secondly you need to propose a future state and improved situation.
Once the first part of the equation has been satisfied, now in order to address the aspects surrounding security and comfort, the more people adding to the driving force for change, the greater the chance of success, coupled with a support structure that can help manage the change.
Although resistance to change is often viewed as something negative that needs to be fought, it is extremely useful. Resistance helps highlight the negative aspects of the change & knock-on effects that may not have been considered. By on-boarding the person resistant to change, highly effective solutions that provide a more holistic solution can be achieved.
The Lean Paradigm
FlowPlus utilise a wide range of tools and methodologies to identify areas for improvement and create smart, robust solutions. The basis for improvement stems largely from lean principles; reducing waste, maximising customer value and enabling processes to flow. A paradigm is often uncovered in the teaching of lean. People see lean as a ‘head cutting’ exercise, understanding LEAN to stand for
Less Employees Are Needed.
Lean is in fact not that, it is almost the polar opposite, it is about growth, positive thinking & collaboration– seeing problems as opportunities to improve. A Lean organisation is one that is efficient at using its resources to deliver value to the customer, striving to continuously improve and work smarter instead of harder. Launching growth initiatives while also driving lean improvements is the perfect symbiotic match. By using lean principles to deliver increased customer value, demand will increase, and the spare capacity captured through lean initiatives will allow for growth. This is far from the original paradigm of lean as head cutting.
Lean is about elegance. It is about creating a system (value chain) that can provide an elegant solution (value) to the end customer, while expending optimal effort (flow). Lean encompasses our ambition to help clients work smarter.
The purpose of lean is to increase value to the customer. The starting and endpoint for lean is value. Lessons on having a customer focus can be learnt from Amazon. Founder Jeff Bezos frames it in terms of being a “customer obsession, figuring out what they want, what's important to them.”
Amazon do sell products but deep down they are a data company. Every opportunity to interact with the customer is another opportunity to collect data. Thousands of metrics including clickstreams, provide an insider view of where customers click, how long they spend, which sites users come from, how they visually interpret information on a page etc. This collection of data allows them to categorise customers in a scarily detailed way, predicting products we are likely to want, yet feel spontaneous to ourselves.
This ‘obsession’ with customers has only taken this level of granularity in recent years, however it epitomises the level of customer focus that a highly successful lean company requires. As Darwin stated ‘It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change’, responsive to customer trends & patterns.
Examples of paradigm breaking
It was the 1968 Olympics in Mexico and the high jump event was underway. Three men had just cleared the bar & up next was Dick Fosbury. Dick approached the high jump mat and, using his wrong foot, powered himself into the air, arching his back and clearing the bar. No one had ever seen a technique like this before as the straddle technique had been the norm for over 20 years. Dick Fosbury shattered the paradigm and within a few hours was a gold medalist, clearing 2.24m in the high jump and redefining what people thought was humanly possible.
Past running shoes rely on the thinking that the less amount of rubber on the sole, the lighter and higher performing the shoe will be.
In stark contrast to previous running shoes, Nike Vaporflly? utilises ingenious material selection, inspired form the aerospace industry. Combining a thick foam sole that is highly elastic and lightweight, with a high rigidity carbon fiber inner plate that provides stability, a superior result is realised. This combination of clever materials results in a shoe that feels soft, springy and also rigid, minimizing any losses in energy transfer between the runner and the ground. For that reason, the alphafly version of this shoe was banned in 2020, providing an unfair advantage and claimed to improve running performance by an estimated 4%.
Henry Ford once said; “If I had asked people what they wanted; they would have said faster horses.”’. At a time where the need for cars never existed, peoples’ paradigms had been broken, the previous fastest mode of transport (horse & cart) was no longer. The step change in innovation coupled with Henry Fords’ ability to produce cars at an un-heard of rate meant that cars went from being produced by craftsmen with a lead time of a matter of months, to a mass-produced item, where 7,000 could be made each day.
Prior to the introduction of app based taxi services such as Uber & Lyft, customers were willing to: wait excessively long times, pay only with cash, be unclear about the taxis time of arrival & pay a hefty premium for the service. Uber broke peoples paradigm in 2015 by making taxis much more affordable, user-focused & simple.
The result has caused a major decrease in traditional taxi companies throughout cities like New York, London & Paris.
The watch industry has undergone multiple paradigm shifts. In the 1970s and early 1980s a colossal paradigm shift occurred. Quartz watches provided a superior means of timekeeping and caused a huge decline in the swiss watch industry. All the hard work, R&D and previous market conditions were flipped on their head, as a brand new product entered. The majority of the worlds watch production shifted to Asian countries. This paradigm shift was completely unexpected and looked like the end for swiss watch manufacturers.
After an initial shock in demand, some of the main Swiss watch manufacturers; IWC, Omega, Rolex, to mention a few, carried on making watches and the demand has since been consistently rising. The ownership of a watch became much more than a means to tell the time, watches became symbols of luxury, craftsmanship and art. For those reasons, the Swiss watch industry is booming today. Even though a paradigm shift occurred in technology, so also did a paradigm shift in peoples perception of watches.
Now things are very different again, a new market has developed with smart watches. In 2019 Apple sold more apple watches than the whole swiss watch industry. New technology is constantly shaping the wristwatch sector, what is the next shift going to be?
To read on please follow the link: https://www.flowplus.co.uk/kaizen