More Facts that Businesses and Individuals need to know about Maximising Productivity

  • More Facts that Businesses and Individuals need to know about Maximising Productivity

    More Facts that Businesses and Individuals need to know about Maximising Productivity

    What you will learn:

     

    Maximising productivity is a key issue for individuals as well as businesses. Identifying and implementing small, incremental improvements is the key to improving organisational as well as personal productivity and performance. Comparison of James Clear’s research into habits with the approach commonly associated with Japanese industry known as “kaizen” provides useful insight into this subject.

     

    New Sam Wilko Advisory Blog by Peter Wilkinson

    Maximising productivity is a key issue for businesses as well as individuals. In my previous blog I explored some of the drivers of workforce productivity and proposed a means by which business owners and/or senior executives can kick-start the process of productivity improvement for their organisations.

     

    The obvious question then arises: how much “bang for my buck” will I achieve? No responsible person in business sensibly disregards Return on Investment when allocating time and money to improving the business. This type of thinking though, tends to lead one down the path of making “big bang” changes, with high-profile Change Programs and associated time pressures creating anxiousness around seeing benefits flowing through to the “bottom line” as quickly as possible.

     

    An alternative and more effective method for achieving sustainable improvement in productivity is based on progressively and systematically implementing incremental changes to the business. To illustrate this approach I will draw upon the work of James Clear, a writer with a simple goal: to share practical ideas and proven research that helps individuals to master habits, optimise performance and take control of personal health and happiness.

     

    James’ recent article titled “This Coach Improved Every Tiny Thing by 1 Percent and Here’s What Happened” illustrates what can be achieved with focused, incremental change. He draws upon the example of Dave Brailsford, who as General Manager and Performance Director for British Professional Cycling Team Sky, led a performance improvement process based on the concept of “aggregation of marginal gains”. By optimising many things, including items you might expect as well as performance improvements in tiny areas that were overlooked by almost everyone else, the Team implemented a 5-year strategy to win the Tour de France. (For those familiar with cycling, you may recall Bradley Wiggins’ victory a mere 3 years after Brailsford commenced the incremental improvement process.) The diagram below illustrates the principle of “aggregation of marginal gains”, noting that the principle equally applies in aggregating losses.

    with acknowledgement to James Clear

    with acknowledgement to James Clear

    The process implemented at Team Sky echoes the approach known as “kaizen” which was applied with spectacular success in rebuilding Japanese industry in the aftermath of the Second World War. The word “kaizen” simply means “good change” and is most commonly associated with oft-emulated practices implemented by Toyota. Kaizen is a daily process, the purpose of which goes beyond simple productivity improvement. It is also a process that, when done correctly, humanizes the workplace, eliminates overly hard work (“muri”) and teaches individuals how to perform experiments on their work using the scientific method and how to learn to spot and eliminate waste in business processes. In all, the process suggests a humanized approach to workers and to increasing productivity. While Kaizen (at Toyota) usually delivers small improvements, the culture of continual aligned small improvements and standardisation yields large results in the form of compound productivity improvement. Kaizen methodology includes making changes and monitoring results, then adjusting (the Plan-Do-Check-Act process commonly associated with Total Quality Management). Large-scale pre-planning and extensive project scheduling are replaced by smaller experiments, which can be rapidly adapted as new improvements are suggested. The principles of “kaizen” continue to form the basis of contemporary “Lean” improvement programs.

     

    James Clear relates the Team Sky story to our individual tendency to overestimate the importance of one defining moment and underestimate the value of making better decisions on a daily basis. Almost every habit that we have — good or bad — is the result of many small decisions over time. And yet, we easily forget this when we want to make a change. “Kaizen” represents the Japanese method of mitigating this tendency in an organisational environment – with great success over a long period of time.

     

    Both “kaizen” and the approach implemented at Team Sky have one key prerequisite: a willingness to spend time and effort in developing a DEEP understanding of how an existing process works – or does not work – prior to making changes. This understanding enables changes to be made in such a way that the “new and improved” process works (and can be measured and therefore objectively verified to work) more effectively as well as more efficiently than before. My question of interest is: are we willing to make this commitment to understanding our businesses, particularly in the Transport, Construction and Technical Services sectors?

     

    Has this article been helpful? Do you know of examples where systematic “incremental” improvements have yielded superior performance in Transport, Construction or Technical Services businesses? Please comment below or send me an email. I am always excited to hear from people making it happen!

    Peter Wilkinson

    BE (Mech), MBA

     

    Website: www.samwilkoadvisory.com

    Email: peter@samwilkoadvisory.com

    Linked-In: http://au.linkedin.com/in/samwilkoadvisory/

    Comments (1)

    • As an accountant and tax advisor we could not agree with Peter’s thoughts on this approach especially for small to medium sized firms. It goes back to the old 80/20 rule were 20% of your processes produce 80% of your problems. Our firm took itself through a “lean” process where we reviewed our processes and engagement with clients and found two key simple process improvements that significantly increased our turnaround timeframes as well as reducing simple errrors.

      Reply

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