Continuous Improvement as a System to Successfully Implement Business Strategy

A bad strategy is the best way to ensure business failure. But why do robust and well-defined strategies not come to fruition in most companies?

A few years ago, Fortune magazine stated that 9 out of 10 companies fail to implement their strategies. Some data can give us a little light on why:

• Lack of strategic focus: 85% of company managers devote less than an hour a month to strategic topics, while living in the maelstrom of day-to-day issues and emergencies
• Lack of alignment of the entire organization, often motivated by ignorance of the company’s global strategy (95% of people in companies do not know the strategy). This leads to actions with opposing effects and, in many cases, fierce struggles between departments
• Lack of urgency and focus on action. Most action plans derived from a strategic plan have a quarterly focus and do not motivate the organization, which sees this evolution as slow and, in many cases, tedious
• Most companies do not have a structure to evaluate and monitor the strategic implementation and continuous monitoring of actions

If the main problem is the implementation of the strategy and not its definition, how can the organization execute the appropriate plans, so it can follow the defined paths?

The first thing is to establish those paths. From the strategy, we must get down to the level of departments and processes and, then tasks, improvements and new paths to create.

Through the Hoshin Kanri methodology for deploying a strategy, each hierarchical level sets the lower level, so concrete action plans can be carried out to achieve the strategic objectives.

We go down to the lowest level in a participatory way and, more importantly, for objectives. Each group process, unit and department establishes what it needs and how it will achieve the objectives that have been set for it. But the most important thing is that it assumes, on its own, a commitment to comply with the plan, with the participation of the persons in their charge.

So far nothing new, because as we know, taking responsibility is one thing and execution is a very different one. And this is where the key really is. If clear action plans, with known indicators and agreed objectives, exist, why is it so complicated to carry them out?

The answer is clear: people in the organization are focused on solving emergencies and day-to-day problems, and there is no system of management that obliges them to systematically review whether they are following the marked course. Forcing the execution of plans within set deadlines motivates them towards the new path because they perceive it as positive for them in their day-to-day experiences, enabling them to ensure that all functions move in the same direction with all the necessary resources and tools available at all levels.

The key is to make the strategy happen and to review it on a monthly or quarterly basis. To make it something we execute day by day in our work, that is monitored daily or weekly to ensure that we are still moving in the right direction and, when we are not, to launch actions or improvement projects to correct it.

A continuous improvement system throughout the company must be born from standardizing processes and tasks, objectifying the value contribution in each of them, the systematic elimination of waste and the involvement and commitment of all people in the organization. Because they must know what their functions are and contribute to the strategy, deploying visual management at all levels (in departments and processes), and the indicators and objectives, which, when aligned, will lead us to success.

On that basis, we must add a communication system, based on daily or weekly meetings at group level, or in units that ensure anomaly detection. Daily, biweekly or monthly forums must focus on the systematic improvement of processes (especially interdepartmental processes) and above all, action plans must be continuously monitored to assure us that the objectives we set at the beginning are being fulfilled at all levels. In this way, we can also establish, in our company, habits that give our organization key values – a positive spirit, a focus on results and a sense of urgency.

In short, the application of continuous improvement at all levels of the company and its processes in a very transversal way, and with the total involvement of all people allows for a firm course of navigation, without too much turbulence, towards a strategic destination.

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