Continuous Improvement is now being practiced in virtually every industry to varying degrees of success. However, certain companies seem to have Continuous Improvement hard-coded into their DNA. These companies appear to have no close competition and still blazing ahead at the speed of light. How do they do it? What makes them tick? What do they all have in common? This article provides 10 Excellent Continuous Improvement Examples for us all to develop a better understanding of what it takes to create a culture of constant growth and innovation.
Continuous Improvement Examples #1: The Toyota Motor Company
Toyota adopted many of its management practices that we now affectionately term “Lean” from the Ford Motor company, the works of W. Edward Deming, and many other powerful influences of the mid 1900’s. However, Toyota has taken these practices and the application of scientific thinking to new and unimaginable heights, rightfully earning the reputation for being the greatest manufacturing company on earth.
The Toyota Production System (TPS) is founded on two primary concepts:
1) Jidoka, which means to stop the line whenever a problem occurs to immediately address this issue so that no bad products are produced and
2) Just-in-time, which means that each unit of production is made only when the downstream customer or process signals demand for a new unit
All other tools, methods, and principles of TPS stem from these 2 ideals, which Toyota will also admit that it has not perfected. In fact, even Toyota has publicly stated that only 7.5% of everything that it does as a company is value added, calling attention to the fact that even the world’s greatest manufacturer has tons of room for improvement in its quest to eliminate waste.
Continuous Improvement Examples #2: Amazon.com
Amazon is one of the fastest growing companies on the planet, has been for a long time, and for good reason. The company’s founder, Jeff Bezos, is also listed as the wealthiest human being on the planet and is well on course to be the world’s first trillionaire.
Despite the fact that Amazon has come under fire recently for its treatment of employees, especially during the COVID pandemic, you just can’t deny the company’s eCommerce market dominance and showing no signs of slowing down. It doesn’t stop there, Amazon is also quickly closing in on leadership in several other industries such as warehousing, distribution, appliance installation, grocery retail, internet and web services, and so many others.
What’s the secret to Amazon’s Continuous Improvement sauce?
Step 0 in Continuous Improvement is to become crystal clear on what you’re trying to accomplish. This has to originate from the CEO and be projected down into every decision, especially hiring, firing, and compensation, throughout the organization. Amazon places an undeniable focus on continuously improving the customer and employee experience. In the company’s fulfillment centers, they apply popular CI methods with an emphasis on team-based kaizen events. Jeff Bezos is famous for requiring executives to prepare 6 page memos for meetings, of which powerpoint decks are strictly prohibited. These memos are then read in silence by meeting participants and before being discussed. This practice reinforces the behavior of fully thinking through the ideas to be discussed and concisely presenting them in as few as 6 pages. It also requires everyone else involved to fully read the document at the start of each meeting, which as you can imagine, cuts down on confusion caused by people coming into the meeting unprepared.
Continuous Improvement Examples #3: Google
Google is known to be one of the most innovative companies on the planet. Famous for it’s work environment that encourages play and creativity, Google employees believe that they are practicing “Continuous Improvement at breakneck speed.” While most companies think of CI as a set of principles for driving internal process improvement (or process innovation), Google applies a set of tools and methods for driving rapid product innovation as well.
The backbone of Google’s Continuous Improvement system is what it calls OKR (Objectives and Key Results), which help to align the organization behind a common vision and measures of success. This system gets every employee to commit to a set of measurable improvement objectives that support the organization’s broader mission, which is “to organize the world’s information and make it universally accessible and useful.”
Over the past 20 or so years, Google has grown to a 60,000-employee global technology giant and household name. Employees believe that the culture of continuous innovation is incredible. Projects are managed to strict deadlines; and the moment one project wraps up, the feature goes live and the team is immediately swept up into the next project. Continuous Improvement is all about speed and acceleration. Google backs this up by granting employees paid time during work hours to create and drive further improvement in the company or product. Google has shown us all what it looks like to relentlessly pursue a constant purpose “at breakneck speed.”
Continuous Improvement Examples #4: Danaher
Danaher is an innovation company that builds and acquires technologies, operating mainly in the healthcare device manufacturing and service industry. The company has done an incredible job at making Continuous Improvement, via the Danaher Business System (DBS), central to the way it does business. The company’s Continuous Improvement model focuses on systematically driving Leadership, Lean, and Growth. Danaher believes that these three factors gives the company the greatest competitive advantage in both short and long-term operations. The DBS tagline “Common Sense Vigorously Applied,” points to the relentless pursuit the company takes to achieve it’s performance goals via simplified means.
Being a publicly traded company, Danaher’s ultimate priority, as openly stated, is to maximize shareholder value. They have grown dramatically over the years through both internal innovation and acquisition. Success of their Continuous Improvement culture is based on margin growth and the effective integration of DBS into new acquisitions. The DBS uses a team-based kaizen approach to Continuous Improvement.
Continuous Improvement Examples #5: Haier
Haier is a Chinese appliance manufacturing company that has recently acquired GE Appliances. I mention GE because it made Six Sigma famous in the 1990’s; only to have Six Sigma give way to a management system called Rendanheyi for Haier’s recently acquired division. Rendanheyi is a very customer-focused and market-driven management structure with the objective of removing distance between the worker and the customer. This management structure not only has the potential to help large, sluggish companies perform more like nimble, entrepreneurial ventures, it might also unearth the traditional hierarchical approach, sending layers upon layers of middle managers packing. In fact, Haier has already let go of 10’s of thousands of middle managers using this model.
In the Rendanheyi model, each manufacturing plant operates like fully functional enterprises that serve its local region. On staff at the plant, you not only have the typical plant manager and operations teams, you also have marketing, R&D, sales and all the others that normally operate from a centralized corporate office. This allows local teams to work more collaboratively to design and commercialize products that are in greatest demand for the local market, significantly reducing time for innovation cycles and increasing speed to market; maximizing product-market fit. In today’s age of IoT, Haier has also done a great job of using technology to connect the end-user of their products directly with factory teams via the internet to streamline the feedback and response process. All of this eliminates the need for middle managers who mainly interpret and convey information, much of which loses its context at each unnecessary step as with the famous telephone game.
Continuous Improvement Examples #6: Merck
Merck’s Continuous Improvement story is one of rigorous pursuit of a clearly defined objective, applying the principles of scientific discovery and endless process improvement. Even more impressive about Merck’s approach is their undying belief in making small improvements everyday instead of large “swing for the fence” improvements that you often see with companies attempting Lean or other “big box” Continuous Improvement methodologies. Merck’s mission, as made popular by the book, Good to Great, is to discover, develop and provide innovative products and services that save and improve lives around the world. This mission permeates through the company’s culture and is put into action daily through a structured approach to coaching and constant innovation.
Merck, like many other companies attempting Lean, struggled with backsliding results. Consequently, they chose to simplify their approach to Continuous Improvement by adopting a method more akin to Toyota Kata, where each person in the company is provided with a challenge and target condition aligned with the company’s broader mission, then expected to conduct daily experiments toward the target. This is done with the help of a coach, who is often the person’s immediate manager. This approach drives Continuous Improvement through the natural chain of command instead of support resources.
Continuous Improvement Examples #7: Tesla
Elon Musk and Tesla have certainly made a name for themselves over the past decade or so. Love them or hate them, you definitely cannot deny that this is a company on a mission, along with Elon’s other ventures. Tesla’s mission is to accelerate the world’s transition to sustainable energy; a direction in which Tesla is already moving us toward at warp speed.
Tesla has been a controversial company for many reasons, including the CEO’s quirky personality, the fact that they sent a car into space on a Space X rocket, and that the company doesn’t follow the traditional Continuous Improvement process as applied across other car manufacturers. While companies like Toyota has been very conservative regarding the use of hardware and software technology to run the business, Tesla has done the opposite. They have moved in a direction of “the factory of one” when it comes to its assertive use of technology. This has certainly gotten them in trouble in some cases where technical failures have caused significant delays and back-orders on car deliveries as well as quality issues.
Tesla is in a unique position of insatiable demand for their cars and jobs. Elon has enjoyed the privilege of having some of the world’s most brilliant scientific minds lining up to work for his companies. As such, the companies have a natural bent toward scientific thinking and risk-taking, which often lands them on the leading edge of innovation, and on the receiving end of controversy.
The company practices a rigorous agenda of data-driven experimentation. As an early adopter of technology, their data collection, reporting, alerting, and analysis systems are among some of the best in the industry. This is coupled with industry-leading customer engagement tools such as internet enabled, tablet computers installed in every car to create a direct line of communication with every single driver. This tool and the information it gathers about drivers is priceless for gathering input on the designs of future cars and needs of their customers. It also allows Tesla to push new software updates in near real-time. Add all of this to the fact that Tesla was among the first automotive companies to move away from the massive dealer inventory model and is leading the way on drive-less technology, and you can see why this relatively young upstart has legacy manufacturers struggling to keep up.
Continuous Improvement Examples #8: Apple
Steve Jobs was a driven man who possessed an unrelenting drive for improvement and innovation. While he may not have embodied all aspects of kaizen, his thinking in terms of product quality, market leadership, and supply chain integration were major factors in Apple’s success. A key component in the company’s strategy, which led to its reputation of superior product quality, is vertical integration. Apple has a level of control over its entire supply chain from components, to manufacturing, to distribution, to software development, to retail, that is virtually unmatched. In fact, the company’s extension of vertical integration to dealers was a ground-breaking move that revolutionized its supply chain.
Apple is a visionary company that has been able to predict what customers will want in the future as opposed to relying on surveys and market research like most companies. This turns the traditional model of “listen to your customer” on its head. Steve Jobs famously said, “You can’t just ask customers what they want and then try to give that to them. By the time you get it to build, they’ll want something new.” Apple sees that there are certain immutable truths in human nature such as the need for ever greater quality, beauty, speed, convenience, and self-expression. They take these values and marry them with the latest and greatest in consumer hardware and software technology and create masterpieces.
Apple’s success has made it one of the world’s most valuable companies in recent years. Even if other tech companies could compete with Apple on the science, its practically impossible to compete on the creativity and artistry that the company incorporates into it’s products. Albert Einstein once said that creativity is more important than knowledge. Apple shows us everyday why this is absolutely true. This company also shows us that there is a powerful creative element in Continuous Improvement that is often overlooked. Beyond the tools and methods that are relatively easy to copy, there are also components of drive, habit, and creativity that makes every company’s journey unique.
Continuous Improvement Examples #9: Fastcap
Fastcap has done an incredible job of translating the highly developed, and arguably over-engineered approaches to Continuous Improvement into five simple practices called 2-Second Lean, which include:
1) Know the 8 wastes
2) 3S (sort, sweep, standardize)
3) 2-Second improvement every day
4) Engaging daily morning meeting
5) Record the 2-second improvements in short video format
After trying the traditional approaches to Lean and CI with marginal and nonsustaining results, Paul Akers, Founder of Fastcap and author of best-selling book, 2-Second Lean, decided that the small 20-employee company could reap the intended gains from Continuous Improvement without all the confusion and complexity.
The secret, according to Paul, is to start with a simple daily meeting. The core of the daily meeting is to grow and develop people into world-class problem-solvers. The company also gives people an hour each day to work on 3S, which is where the 8 wastes are reduced through making small (2-Second) improvements. This is a significant investment in not only the improvement of processes, but the growth and development of the people making the improvements. The mantra for eliminating waste and making improvement is “fix what bugs you”. As it turns out, the 8 wastes all tend to bug people, making the skill of “seeing waste” more intuitive.
Lastly, something that sets Paul’s and Fastcap’s work apart, aside from the fun, engaging, and simple method, is the use of quick, low production videos to share small improvements. This is a powerful tool for capturing and distributing a visual record for before and after improvement examples. These videos serve as a source of inspiration for the internal team and broader lean community.
Continuous Improvement Examples #10: Disney
The focus on customer experience and attention to detail is undeniable at Disney. This level of excellence does not happen by accident. It’s also not the result of one personal micro-managing this experience into existence. Walt Disney was no doubt a brilliant human being and a visionary who saw a world that no one else could see, which has become a staple in lives around the world. Disney’s mission is to entertain, inform and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds and innovative technologies that make ours the world’s premier entertainment company. The relentless pursuit of this mission leaves guests with an experience that can be described as nothing short of magic.
Disney’s approach to Continuous Improvement is founded on Deming’s PDCA (Plan, Do, Check, Act) cycle with a twist. The version applied at the company looks more like this:
Measure – track results quantitatively and qualitatively
Act – pilot the idea to solve problems or advance the mission
Re-measure – validate that the solution produced the desired output
Implement – fully implement the solution after a successful pilot
Share / Celebrate – as you might imagine, Disney knows how to celebrate success. Improvements are celebrated in real-time and at annual conferences where innovators are recognized for their great contributions
Disney also applies Visual Management and Leader Standard Work methods to assemble an amazing team and advance a culture of improvement and progress toward the company’s mission.
In practically all of these examples, the relentless culture of Continuous Improvement emanated from the very top of the company with the founder. Most of these companies are still run by their original founder, who actively drives the CI mindset throughout the enterprise, making it a priority that goes beyond short-term cost cutting and one-off projects. In some cases, these leaders even provide employees with paid time everyday to create and execute improvements that often propel the company forward in unimaginable ways. Even the companies that are no longer run by their original founders have taken great care to select leadership who worked closely with the founder or mirror their great passion for the pursuit of excellence. The other key element that they all share is that everyone should be engaged in the process of Continuous Improvement everyday. These companies are fortunate to have leaders who have provided crystal clear sense of purpose for the organization. They also embody a sense of urgency that tomorrow needs to be made better than today and all have a role to play. However, CI and operational excellence is not some divine birth right. Nor is it practical to think that all other companies can and should copy the management system that worked well for one company. It is a capability and a habit that must be developed with time. This post has provided 10 excellent Continuous Improvement examples for you to understand what makes them all great. Will your journey begin here?