Continuous Improvement Cycle (for HCM and Leaders)

“Change is easy. Improvement is far more difficult” ~ Dr. Ferdinand Porsche

A while back I wrote a piece about the Service-Profit Chain, and how a more strategic approach to Human Capital Management can increase profits.

Recently I went through that same S-P Chain exercise with a client of mine, and a manager at the company asked, “So if I want to use the Service-Profit Chain to improve our company, how do I approach each segment of the ‘chain’ you just showed us?” I couldn’t have asked for a better follow-up question, because just like Dr. Porsche’s quote above, there is a big difference between change and improvement.

I drew a quick sketch on the white board of the Continuous Improvement Cycle, like the one below.  We discussed what Plan-Do-Check-Act means:

  • Plan. Recognize an opportunity and plan a change.
  • Do. Test the change. Carry out a small-scale study.
  • Check. Review the test, analyze the results and identify what you’ve learned.
  • Act. Take action based on what you learned in the study step: If the change did not work, go through the cycle again with a different plan. If you were successful, incorporate what you learned from the test into wider changes. Use what you learned to plan new improvements, beginning the cycle again.

We briefly explored each segment of the Service-Profit Chain, ran it through the PDCA-Cycle, and began to answer questions like:

“What would better look like?  How will we implement a change that leads to ‘better?’  How will we know when we have accomplished our goal?  How do we measure it?  Once we recognize an improvement, when do we circle back and re-evaluate? etc.”

That is when the lightbulb went on…you can imagine how the rest of the meeting went.

While this recent story may seem a little over simplified, it illustrates a big question that leaders need to answer: “If we want to make an improvement, How do we do it?”

As a business leader, you must be able to help your team explore each component of their job, and you must be able to help them take each component through this cycle:

Sometimes I think you must initiate this conversation via Feedback, other times you can use Coaching to guide the conversation.  However, Feedback vs. Coaching is probably better left for another blog at a later date.

If Improvement were a DESTINATION, you could do this once.  BUT, Continuous Improvement is a BUSINESS MODEL.  Consistent, Incremental Improvement…like compounded interest, or graphs to infinity…has a way of taking on a life of its own. Small-Wins bring Confidence, which is followed by Big-Mo, which leads to Exponential Results.

The Continuous Improvement Cycle is nothing new, but most people usually associate it with manufacturing.  A great business principle is not limited by industry, think how powerful this concept can be if applied to Human Capital Management.

In this new Social-Age, we get very excited about what is new.  Sometimes, just mastering a basic-business-fundamental is truly the key to success.  For more reading on this subject click on any of the following links:

Kaizen InstituteToyota Production System, PDCA via ASQ, The Deming Center at Columbia Business School, Walter A. Shewhart