More than anything, continuous improvement is a mindset. It’s a way of thinking that means accepting that you can always get better at the things that you’re doing.
Once you’ve accepted this first point, the next thing continuous improvement requires is an approach to actually perform continuous improvements on the things you do. This is where systems thinking and all of its tools and mental models come into play.
Learning to Optimize For Outcomes will teach you the tools and mental models you can you to improve the things you’re doing through systems thinking. By regularly applying what you learn here, you can operate your business in a state of continuous improvement that will pay dividends long into the future.
How Does Continuous Improvement Help You Scale?
Every business wants to scale at some point. From early beginnings of a few sales, it’s every business owner’s dream to grow a business that can provide revenue long into the future. It’s also one of the most difficult things for a business to do successfully.
One of the main reasons for this is that entrepreneurs don’t always plan for “the bad stuff” that scales along with the good stuff.
Here’s the truth about scaling. When you scale your business, you’re going to get more of the bad along with the good. If you have a bunch of waste or inefficiencies in your business today and you scale your business, you will grow the waste and inefficiencies along with your sales and revenue.
Oftentimes founders are so excited to scale their business, they don’t first address some of these problems before trying to scale. The big problems you have when you’re a small business are only going to get bigger as you grow unless you address them.
This is where continuous improvement comes in. With continuous improvement, you are always working on making things better. You’re always solving the most important problems in your business, improving your effectiveness and efficiency.
This means that as you start to scale your business, you will have made your biggest problems smaller (or even non-existent!) which means they won’t scale so big in the future. This means more time doing good things for your business and less time reworking your processes due to problems and waste.
Using Continuous Improvement to Improve your People Management
When it comes to managing employees in your business, continuous improvement is a task that pays dividends. Making better experiences for your employees and contractors will keep them happier longer which will keep their motivation higher and keep them around for longer.
One way to think about applying continuous improvement to improve the experience of your people is to start regular check-ins with them. These could be once a month or once a quarter.
Meet with your employees and talk to them about what’s not working well. They will be able to give you a good pulse on where you can improve areas of your business without having to do a huge analysis effort. Encourage them to talk about things that are happening that are causing them the most grief.
Armed with this new information, you can now put together a game plan on how to address these issues. It’s important that you make improvements and don’t just listen to your people complain. If time goes on and they’ve given you lots of feedback but nothing ever improves, eventually they will quit giving you real feedback.
How to Solve Problems with Continuous Improvement
By its nature, if you are continuously improving, you are continuously solving problems. All of your problem-solving mental models and tools will help you with continuous improvement.
Continuous improvement should play a part in your general problem-solving strategy for your business in that doing continuous improvement should surface the most critical problems that your business should be solving.
You’ll do this by having a good system for uncovering, prioritizing, and fixing problems. Doing this proactively vs. reactively will help you get ahead of time-wasting interruptions down the road.
Tools such as the FMEA (Failure Modes and Effects Analysis), 5 whys, 6-3-5 brainstorming, and process mapping will help you uncover and solve problems in your systems.
Technology That Can Help You Continuously Improve Your Business
Continuous improvement requires a way to track the changes that you make over time. It’s important to understand the impact that the things you’re doing to improve have on your business.
One of the easiest ways to do this is to set up a few metrics in Excel or Google Sheets and track some basic stats over time. For example, if you were trying new social media channels to increase the visibility of your business and brand, you could set up a worksheet and put a few weekly stats in it: How many posts you made for the week, how many likes you got, how many new followers, etc.
Tracking a few basic stats will help you see your improvements over time.
While I used a social media example, this same approach can be used for any system within your business. Identify a few metrics related to that system and start tracking them in a worksheet. Make changes and see your improvements affect your system over several weeks/months.
Another piece of technology that would be helpful for continuous improvement is a project management application. This includes software like Asana, Basecamp, Jira, Trello, and others (there are tons of these out there) that give you the ability to track, prioritize, and manage projects.
You can set up a project for each of your improvement initiatives. This can also help you manage your priorities with all of the work you have and want to do.
How to Get Started with Continuous Improvement
Whether you’re new to continuous improvement or just starting your business, you can start implementing continuous improvement in your business with a few easy steps.
First, define your core systems in your business. How do you let the masses know you’re a business? How do you convert leads to sales? Once you have sold a product, how do you deliver that product to your Customer? How do you keep track of money coming in and going out?
These are systems that every business should have. Add more that are unique to your business or industry.
With a list of systems, identify which system has the most opportunity for improvement. There are a few different ways to think about this. You can ask yourself a few questions to help view this from different angles.
Which systems in your business take the most amount of time? Which systems cost your business the most money to operate? Of all the “problems” your business has had in the last several months, which system had the most of those problems? Which systems are you missing that would be of the biggest benefit to your business?
Answering these questions will surface the likely candidates for continuous improvements.
Once you’ve identified a system to work on (either an existing system that needs to be adjusted or a new system that needs to be built), get to work on what’s needed to make improvements to the system.
Be sure that you measure a baseline metric that helps you understand the health of the system. If you’re building a new system, you won’t have this part.
Once you make a change to the system, you can record new metrics and compare them to the baseline to understand the impact your changes had on your system. Make additional adjustments as needed.
Once you’ve gone through a round of improvements, start the process over again from the beginning. Look again at all the systems in your business and pick the one that is the biggest problem in your business. A new system and problem will be on top as the “most important” system and problem to address.
Continue this cycle as often as possible, improving existing systems and adding new systems to your business.
One thing to be careful of with your continuous improvement efforts – as systems get better and better, it will require more work to see smaller and smaller improvements. This is an application of the Pareto Principle or 80/20. The first time you work to improve a system, you will get big gains with minimal effort. Each additional pass at improving that system (without significant changes or time) will “usually” see slightly smaller gains and slightly more effort.
This isn’t to say don’t do it. It’s the whole point of continuous improvement is that you always are looking to improve, but you want to be careful about putting in a lot of effort for a little gain.
Also note that improving one system usually doesn’t improve other systems, so there’s always a system that needs improvement that will give you a good return.
If you’re looking for a more in-depth process to follow for improving your systems, check out my book on Amazon.com (Outside the US click here) which will guide you through the process that I developed over a 20-year corporate career, improving systems across all areas of business in many industries.
If you’re looking for extra guidance on how to apply this or other tools in your business, you can book a 15 minute call with me for $95 here.
If you have a bigger need, please email me and we can discuss how I can best help you Optimize for Outcomes.