Improvement tools: Continuous improvement and innovation

Continuous improvement and innovation, or CI&I, is a process that can be used to drive business improvement and innovation. It has eight steps that help business managers and employees focus on the improvements and innovations that will have the most impact on the goals of the business.

The process has been used by beef, sheep, wool, dairy, cotton and pig business managers in Australia to improve profitability.

There are a range of tools to support CI&I. These are available in the Business improvement toolbox.

The CI&I process is about achieving regular and frequent improvements and innovations that contribute directly to the goals of the business. Figure 1 shows how the returns from CI&I are expected to be higher than from other approaches. The red line shows 'business as usual'. In today’s rapidly changing world if all we do is what we have always done, we are likely to fall behind the game. The purple line shows the stepwise impact that can be expected from occasional improvement. The blue line shows the steady impact that can be expected from continuous improvement. The green line shows the increase in returns that is possible from successful continuous improvement and innovation.

Figure 1 The relative value from continuous improvement and innovation as versus occasional improvement and doing the same as usual.

Figure 2 shows the eight steps of the CI&I process. A brief description of each step and the tools that can be used, are given after Figure 2. For each step, one or more tools can be used depending on the needs of the business.

Figure 2 the eight continuous improvement and innovation process steps

Step 1: Focus

This step is about focusing on the end results that we want. It involves developing outcome-based goals. It is useful to have short, medium and long term goals. Step 1 is also about working out the measures that will be used to track performance.

Tools available for this step:

Target outcomesSMARTT goalsCritical success factors (CSFs) and key performance indicators (KPIs).

Step 2: Explore

This step is about finding ways to achieve the goals that were set in step 1. Where possible it is good to develop a range of options. Using different types of thinking, such as creative thinking, can help to come up with ideas we may not normally think of.

Tools available for this step:

Driver treesRepetitive why techniqueInverse thinkingHow-how diagramsBrainstorming.

Step 3: Select

This step is about selecting the best options from the ones identified in step 2. Just as importantly, it is about putting aside options that are not a high priority. This step also provides predictions about the results to expect from the chosen options.

Tools available for this step:

Impact and influenceEight criteria techniqueGross margin analysisBenefit cost analysis.

Step 4: Design

This step is about designing the action you need to take to successfully implement the options chosen in step 3. It can include setting up small scale trials if needed. Step 4 is also about putting in place measures to track implementation and performance.

Tools available for this step:

Action design toolFive Ws and one HCritical success factors (CSFs) and key performance indicators (KPIs)Force field analysis.

Step 5: Action

This step is about implementing the action you designed in step 4 and tracking performance. It is also about getting regular support to keep motivated and stay on track.

Tools available for this step:

Action design tool - this step uses the design developed in Step 4Five Ws and one H - this step uses the plan developed in step 4Critical success factors (CSFs) and key performance indicators (KPIs) - this step uses the measures developed in earlier steps.

Step 6: Assess

This step is about assessing the results achieved in step 5 with the results that were predicted in step 3. It is also about looking at the overall impact on the goal developed in step 1. Step 6 is also about looking at unexpected things that happened.

Tools available for this step:

SMARTT goal - this step assesses results to the goals developed in earlier stepsCritical success factors (CSFs) and key performance indicators (KPIs) - this step assesses results to the CSFs and KPIs developed in earlier stepsGross margin analysis - this step uses gross margin analysis to assess the results achieved with those that were expectedBenefit cost analysis.

Step 7: Create

As a result of steps 1 to 6, a lot has been learnt and a new situation exists where more improvements may be possible. Step 7 is about asking questions and coming up with ideas for further improvements. Different types of thinking are used in this step to stimulate creativity.

Tools available for this step:

BrainstormingInverse thinkingObservations, questions, ideas and opportunities.

Step 8: Re-focus

Step 8 is about turning one or two of the ideas for further improvement developed in step 7, into specific improvement goals, as was done in step 1.

Tools available for this step:

Target outcomesSMARTT goalsCritical success factors (CSFs) and key performance indicators (KPIs).