Introduction

A Wave of Change and Complexity

COVID-19 brought a wave of change to the world unprecedented since The Great Depression where people’s lives, schooling, business, and society as a whole came to halt. Remote work and school, flexible access to health care providers using telehealth options, supply chain disruptions, and changing customer needs are just a few of the changes experienced. While some of these were introduced abruptly, and others more slowly, the ripple will continue. More recently, return-to-work/hybrid work, employment shortages, and inflation continue to present challenges to organizations and their leaders. Organizations, large and small, public, and private, need to be adaptive to ensure their sustainability. Building and growing a culture of continuous improvement is essential for organizations to be resilient, adaptable, and to create problem solving capabilities.

Complexity has become a norm – such as diverse and interconnected technology platforms, complicated supply chains, multi-faceted customer engagement touchpoints, and complex processes and organizational structures. Understanding the function of a system which consists of numerous diverse interrelated parts makes organizations complex. Complexity has important advantages over its more evident drawbacks, particularly when in dynamic and uncertain environments such as now. A system is more resilient when it has a variety of components or is more complex. An organization that relies on a small number of technologies, goods, and procedures—or that employs personnel with similar backgrounds and viewpoints—does not have many options for responding to unforeseen possibilities and risks, and therefore has limited opportunity for success.

As organizations grow and complexity increases, leaders become less aware of how everything is interconnected. Often, unnecessary complexity is introduced because of this, making it more difficult for leaders and their people to effectively execute their functions. It is critical for leaders to be equipped with the knowledge, skills, and tools to understand and combat complexity within their organizations in order to identify and eliminate obsolete or overly complicated processes. A culture of continuous improvement enables the organization and its leaders to optimize existing operations, as well as develop new offerings without continually raising the overall level of complexity. It is also credited with speeding up and raising the degree of innovation in general. The truth is that complexity is more important for viability and competitiveness in today’s dynamic, unpredictable business environment. A leader who focuses on resilience, adaptability, coordination, and reliability is better prepared to undertake complexity within their organization.

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The Case for Continuous Improvement

A continuous improvement culture has, and remains, a great advantage for organizations across all industries. Simply, continuous improvement is the ongoing improvement or products, services, and processes through incremental improvements (over time) or breakthrough improvements (at once). Organizations who have undergone continuous improvement transformation have seen an increase in operating performance as well as a decrease in employee absences. The primary aim in continuous improvement is employee empowerment aimed at efficiency and growth through product/service innovation, with the advantageous side effect being cost reduction. Continuous improvement is not implemented as a single decision, by a single leader, or in a short timeframe, but is a long-term journey and requires several factors for success, such as:

Vision and Platform
• A clear vision and expectations for how and why continuous improvement strengthens the organization, and why it’s needed in the short-, mid-, and long-term.
Engaged Leadership
• Engaged leaders are vital to help guide continuous improvement efforts. They take ownership and spearhead the efforts, communicate the vision, and get others excited. Leaders set the pace for continuous improvement.
Allocated Resources
• Continuous improvement doesn’t happen by itself, it requires devoted personnel, financial, and other resources. Each organization’s resource needs should be suited to its unique vision, goals, and culture.
Structured Methods
• Excellence is not produced by ad hoc methods but needs intentional critical thinking and problem-solving methods. Continuous improvement requires an organization to commit to the use of structured problem-solving methods that enable people to break large/complex problems into constituent parts and make incremental or breakthrough improvements.
Supporting Infrastructure
• Critical infrastructure elements include project selection criteria and practices, standard tools and templates, project management methods and support, certification standards and processes, and more.

For an organization to remain sustainable, it must continually adapt. Organizations must build a culture of continual improvement to become robust, flexible, and capable of continually solving problems and addressing complexity. We must learn to change and adapt if we want to survive in an uncertain future. Starting your lean journey will help you build an agile and resilient organization that will better prepare you for the future.

If organizations do not systematically focus on improving the way they operate and do business, they will gradually lose ground to competitors until they become obsolete. Take Blockbuster for example who became obsolete, while Netflix thrived due to a lack of customer focus and value, rigidity in business model, and lack of innovation. Blockbuster began as the video renting hub, where movie consumers could bring home the experience of the theater. Blockbuster was different from other video rental stores since it gave customers access to thousands of VHS tapes using its contemporary, computerized check-out method. Netflix was founded and made successful due to its focus on customer needs, and willingness to adapt and innovate – all aspects of an improvement-minded culture. Netflix improved upon Blockbuster’s business model by providing customers with subscriptions rather than charging per movie rental, eliminating the need for bothersome late penalties. It continued to improve its business model as it eliminated the need for physical DVDs in general and moved entirely to an ecommerce business and is now the top streaming service in the U.S.

Yet, if continuous improvement is embraced and applied to all aspects of an organization, improvement will happen a little bit every day, or at least every week. What makes this particularly impactful is that the outcomes compound.

Therefore, if it is sustained for a long enough amount of time, and theoretically never ends, the difference will be tremendous. Competitors will find it extremely tough to catch up, products and services will be on the leading edge, talent will be retained, and the culture will be adaptable and resilient to continued change and complexity.

Advantages of Continuous Improvement

Some of the more common advantages for organizations to adopt continuous improvement include:

• Savings on expenses
• Less waste (time, resources, money)
• Enhanced operational effectiveness
• Reduced capital requirements and inventory levels
• Improved customer satisfaction and engagement
• Better knowledge exchange and organizational learning
• Improved product/service quality
• Reduced feedback loop and time to value creation
• Increased employee engagement and culture

Several of these benefits contribute significantly to an organization’s bottom line, and most leaders are aware that continuous improvement drives these results. However, when done correctly and with the right infrastructure in place, continual improvement is far more vital for your organization’s long-term performance and value creation than pure cost and efficiency improvements.

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Leadership Response

As organizations are continually faced with rapid change and complexity, its leaders need to be equipped with the proper skill set to guide the business towards success. Some of these vital skills include:

• Establishing a Vision
o The leadership vision is the capacity to focus on the most crucial elements of oneself or one’s business, such as what one wants to accomplish and the kind of leader one aspires to be. Your vision might include the knowledge from your past, pressing issues in the present, and goals for the future.

• Getting Others to Follow
o As a leader your best practice is to lead by example. Be the most prepared and have the highest standards. Setting the example will help motivate your team to follow. Getting others to follow you first requires them to trust you. This requires both emotional intelligence and trust which can be built by leading authentically and transparently through your actions.

• Developing Others
o Coaching is a relational activity that aids and supports people as they develop their skills and learn, resulting in improved performance and desirable outcomes that are in line with predefined objectives and goals. Leaders who effectively coach their staff, either individually or in teams, report positive outcomes. Coaching can take more time than other ways of teaching, growing, or helping your workers deal with stress and change in the near term, but it pays off in the long run. It is considered as one of the top strategies for enhancing employee performance.

• Managing performance
o Performance management is a continuous process in which you as a leader work with your team o collaborate, plan, and evaluate everyone’s job outcomes, future objectives, and development needs. Clear expectations are set, performance is monitored, and feedback is given by leaders. Individual results support team objectives and corporate objectives.

• Communication
o Strong communication skills help those in a leadership position because they are responsible for inspiring and motivating those around them. Without such skills, a leader would not be listened to or respected by others. Communication skills help leaders clearly define the goals of team members. It also helps understand team members’ roles, it also aids in resolving disputes, and problem solving. An open and positive relationship between leaders and their teams is fostered by effective communication skills, and this improves output and efficiency.

• Decision-making
o Not everyone is born with the capacity for decision making. Sometimes this skill must be developed, and leadership coaching is an excellent method for doing so. The ideal coach will push you, encourage new ideas, motivate you to learn new abilities, and support long-lasting behavioral changes.

Regardless of the level your role is in an organization, next-level leadership must continually be developed. The Performance-Minded Leadership program builds the critical capabilities needed in our future leaders.

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Executive summary