Back to: Foundational Continuous Improvement for Leaders
As was mentioned already in our article Getting Started with Continuous Improvement, there are five steps to implementing continuous improvement. In this article, we will discuss the fourth step which is to set targets, track results, and recognize your team for their achievements. Hopefully now that you’ve worked through the first three steps, you and your team have seen some initial success with continuous improvement. The initial excitement of CI can dwindle quickly after the “honeymoon” phase is over. In the same way people avoid hitting the gym and eating healthy even though they know it’s good for them, it easy to become “too busy” or complacent with improvement efforts. Setting targets and tracking results is a good countermeasure for this. It also will allow you to positively reinforce behaviors of improvement with recognition and rewards. This in turn helps spread more excitement around continuous improvement. Let’s break down each of these elements one by one.
Setting Targets
An initial burst of improvement and success can come easily in the right conditions, but how do you continue that success long term? The key is to make sure CI remains top of mind for everyone and is a regular part of how you run your business. To do this, you’ll need to make sure you set CI targets with your team.
What are CI Targets?
Continuous Improvement (CI) targets are goals you set for your team, or individuals on your team, that center on improvement efforts. For example- a very simple one might be to set a goal for each member of your team to complete one improvement project each quarter. Setting a simple goal like this is a great way to keep your team focused on making improvements even though most of their time is spent on performing their core job function. If you set a goal and make it part of your regular discussion and meeting with your team, they are much more likely to keep the initial momentum and continue making improvements.
As you get more advanced, your goals CI goals can become more intricate. Instead of just a generic goal to make any improvement, you can set targets in specific areas. For example, you could set a goal for how many quality improvements you would like to make, or how many non-value add steps you want to eliminate. You could also set targets that tie more directly to making your customer experience better. For example, a great CI target might be to eliminate wait time for your customer and deliver their product faster. As you become more advanced in your CI goals setting, the line between your CI goals and your business goals will begin to blur. Your CI goals will connect directly with, and support, your business goals. They will go hand in hand or in some cases may even be one and the same. When this happens, you’ve achieved a very advanced level of maturity in CI target setting. Done right, setting targets and following through with them will help you sustain your improvement efforts and make it a regular part of your culture versus just another flavor of the month. Below is a model that describes the different maturity levels of CI target setting.
As illustrated in the graphic above, you can think about maturing and growing your targets like the development stages of a tree. To start you CI targets will be simple and small, just like a sprout. Then as you become more proficient and grow, your targets will grow with you and become more advanced just like a tree slowly grows into a seedling, then a sapling, and eventually a mature tree.
Level 1: Sprout. To start out, your continuous improvement goals should be small and simple. Your target should focus on something basic like the number of improvement projects you want to complete in your first month or first year. For example, a good goal to start with might be something like each team member completes one improvement project each quarter.
Level 2: Seedling. Once you establish a rhythm of making improvements and you’re ready for more of a challenge, you can advance to the next maturity level. For most teams, this happens after the first six months to one year of implementing continuous improvement. At this stage you can focus on setting more complex targets that center on the four fundamentals of CI. This would include targets like making fifteen standard work improvements in a year. Another example might be making twenty-five quality improvements in your process over the next twelve months.
Level 3: Sapling. At this stage your CI efforts have taken root with the team and you’ve probably improved some of the low hanging fruit or more obvious improvement opportunities. This typically occurs in the first one to two years. Hopefully not, but you may even be finding it harder to come up with improvement ideas in some areas. Other areas may be untapped and there may be excitement to expand CI into new areas your company. This is the perfect time to make the transition to level three. At this stage of maturity, you begin to connect your CI targets with you business results. Create targets that support and tie into your regular business targets and results. This might looks something like a target of one million dollars in financial benefit resulting from improvements efforts.
Level 4: Mature Tree. To reach the most advanced level of maturity, your targets will not only connect to the four fundamentals and business results, but they will also focus on what’s most important – your customer. At this stage of maturity, improvements are happening regularly and consistently because they have deep roots in your culture. Targets will naturally and smoothly be tied to improving the customer experience. For example, a target may include reducing wait time for the customer at a specific point in the process.
You could tie this in with your annual team goal setting, personal development process, performance reviews… whatever it takes to make it stick as a normal part of your culture.
Tracking Results
Once you set your CI targets, the next step is to establish a good system for tracking results. If there isn’t a good way to quantify and demonstrate the aggregated total of the impact of your improvement efforts, then you and your team can quickly lose steam. Other important stakeholders in your business may also not see the benefits of what you are trying to do. If, however, you can track the results it gives you the ability to tell the story and demonstrate the value your culture of continuous improvement brings to the table. When people see it working, they will want to do it more and it will help you build momentum. Your stakeholders will buy in as well and give you more resources and support.
How to Setup Your Tracking
The simplest way to start tracking is to use Microsoft Excel or Google Sheets or some other spreadsheet application. Use the spreadsheet to keep track of a standard set of metrics for each project or improvement completed by your team. Below is a list of 7 metrics to start:
1- # of Quality Improvements. This is a count of the number enhancements to process or product quality that were made. This includes both the introduction of new quality steps into a process as well as enhancements to already existing quality checks. If a change was made that is going to improve the quality of the product or service given, or that will help with the detection and elimination of quality errors and defects, then it should be counted as quality improvement.
2- # of Customer Experience Improvements. This count should include any improvement that makes customer service or customer experience better. If you change something that will make customers happier and more satisfied, then it should be counted. This metric in particular can be very subjective, but remember the point is to focus everyone’s attention on the customer and adding value for them. If a case can be made that value to the customer has been added, then that should be enough to include it. Often times teams will make improvements that make their lives easier, but have no tangible impact to the customer. This metric will help you balance that and make sure you don’t lose focus.
3- # of Non-Value Added Steps Eliminated. This is a popular one that many people love- eliminating steps from the process to make it simpler, easier, and faster. Anytime you make an improvement by eliminating steps from a process, count each step eliminated as part of this metric. It may not be much for each individual project, but over time you’ll be amazed how it all adds up. Over the course of a year, you could potentially eliminate hundreds or even thousands of steps across your organization.
4- # of Total Improvements. This is a count of the total number of improvements made across all categories of improvement. Whether it’s a quality improvement, customer service improvement, or steps eliminated, they should all add up to a combined total for this metric. This is the most high level and broad metric for showcasing the results of your improvement efforts.
5- Hours of Time saved. Often times when you eliminate non-value added steps from a process you end up cutting time out of the process as well. In other scenarios, rather than eliminating a step you might find a way to cut time and complete the step faster. Time Saved is the total of all the time you and your team will save through your improvements. For this metric, it is recommended to annualize the total. This means you not only count the time saved from completing the process one time, but you also try to estimate how much time you will save over the course of a year: Hours saved from one repetition X the # of times this will be repeated in a full year = Hours of Time Saved.
6- Financial benefit. This is the combined total amount of cost savings and revenue generation resulting from your improvements. When calculating cost savings, be sure to only count actual savings that will be recognized. This is often referred to as “hard savings”. For example, if you are able to eliminate a material from the production process, and therefore stop ordering the materials, you save some actual money on your bottom line- this is hard savings. A different example might be that you end up not needing to hire for a budgeted position due to improvements made to the process. By not hiring additional staff to run the process, you are saving that budget money- hard savings you can see on the bottom line. Another type of cost savings is called “soft savings”. This is where you hypothetically could be saving money, but it won’t be something concrete you can expect to see on the bottom line. One mistake people sometimes make with this is applying a wage to time saved and counting that as cost savings, even though you aren’t actually eliminating any people or wages. While it’s true people are saving time, they usually fill that time with other things, and you end up still paying them the same- no change to the bottom line even though you made an improvement. Be careful to make sure you measure this in a way that aligns with your organizational standards. It often helps to have your company’s finance team help you determine the criteria for this and how to calculate it for your company. This metric should also be annualized just like the time saved metric above. This means you should not only count financial benefit from one iteration of the process, but rather you should estimate the financial benefit over the course of a year that will come from repeated iterations. One easy way to do this is to estimate how much financial benefit there will be in one week and then extrapolate that out for a full year: Financial Benefit in One Week X 52 Weeks = Annualized Financial Benefit.
In several of these metrics there is going to be some subjectivity into how you count them, and that’s ok. Err on the side of counting more improvements vs less. In some cases one improvement might overlap across several of these metrics, for example something that improves quality and the customer experience at the same time. You should count them in both categories. At the end of the day you want to create momentum, positivity, and excitement around continuous improvement. You won’t be able to do that by nit-picking every little thing and overcomplicating the tracking of metrics. Keep it simple, celebrate the win, and keep going. I once worked at a company that scrutinized financial benefit so heavily that no body wanted to do any improvement projects because it wasn’t worth it. Don’t be like that, make it a pleasant experience and people will want to do it more.
Here is a tracking dashboard you can download and use to track these metrics for your team / company.
Recognition
One of the most important things you can do to help build momentum and excitement for continuous improvement is to recognize people for their efforts. Positive reinforcement is an excellent way to keep people motivated. And luckily for you, there are many ways to do that. The most important thing to remember is that you should get to know each of your team members and how they enjoy being recognized. That way you can tailor the recognition for specifically what they like.
In Front of Team Recognition
This is one of the easiest ways to recognize a team member. When they have completed an improvement or finished a CI certification, recognize them in front of their peers. Have them stand and be recognized at a team get together or company meeting. Let the team know what they did and why it is so amazing. For many people, this makes them feel good and appreciated. It helps them to feel like they accomplished something important which is very engaging for most people. And the nice thing is, it doesn’t cost anything to do it. This will also encourage other members of the team to want to get involved and make improvements of their own as well.
Framed Certificate for Completing Coursework
If any members of your team are working through the CIU training courses and getting certified, this is another opportunity for recognition. Print out their certificate of completion, put it in a nice frame and give it to them in front of an audience. Share all the work they had to do to complete the coursework and earn the certification. Take a picture of them being awarded their certificate and share it with the team or on the company intranet. Others may see it and take interest in the coursework as well. Perhaps they will display their certificate proudly at their desk or in their home office.
Spinning Wheel Prizes
If you have the budget for it, small prizes will go a long way for recognition. People love getting little prizes such as: restaurant gift cards, movie tickets, amazon gift cards, books, t shirts, hats, Visa gift cards, free desserts, etc. It doesn’t have to be anything huge, just a little something to say thank you or we appreciate your efforts in making improvements. One way to make a little more fun is to purchase a spinning wheel like the one linked here: Spinning Prize Wheel.
You can label the wheel with whatever prizes you want and then have your team members spin for a prize when they finish an improvement project. Many people love this, and it adds an element of fun to your continuous improvement culture. For remote team members you can still spin for them or use an online version like the one linked here: Online Spinning Prize Wheel, and then send the gift to them. They will be very grateful!
Bonuses
If you have an even larger budget, you might want to consider offering a bonus for improvement efforts. This could be a standard bonus that is the same for any improvement or it could be based on the amount of financial benefit the improvement generates. For example, a standard bonus you might consider is a flat $50 or $100 dollars for any process improvement submitted that meets your set criteria. A small bonus like this could be good for both large and small improvements regardless of the quantifiable impact it may have. Another approach might be to offer a larger bonus in instances where a significant financial benefit results from the improvement. A bonus of $1,000 or $5,000 for a project that results in $100,000 in financial benefit might be a good option as well. An alternative to a standard bonus amount is a tiered system based on the overall financial benefit. For example, it could be % based where the bonus is 1% of the total financial benefit. It could also be a set amount for different tiers of financial benefit. Smaller bonuses for smaller financial benefit that get larger as the total benefit increases. Many people are motivated by money and will appreciate having this as an option. It can however pose some challenges as well, so make sure you work with your finance and HR teams to ensure your program is in alignment with your company culture. At the end of the day, a large bonus can be a great motivator to get people engaged in continuous improvement work.
CI Showcase
If you’re a part of a larger company or have many offices with employees spread around in various locations, then a CI showcase might be a fun and engaging way to recognize people. A CI Showcase is an event where you bring together people from various locations/offices to feature improvements they have made and how they have integrated continuous improvement into their culture. This could be a virtual showcase where people give short presentations on their improvements and are recognized for their efforts. Or, even more fun, it could also be an in person event that includes live demos, an exhibit hall, awards gala, etc. The more fun you make it, the more rewarding and motivating it will be for your team members.
There is also a hidden benefit to having people/teams share their improvements with others- it helps with change management. Improvements usually involve some sort of change, which can typically be hard for people. When you have them present the change to others it forces those involved to consider the benefits of the change, which helps them become more bought in to the change. Ultimately it will lead to a greater sustainment of the changes and results that are achieved through the improvement. From this perspective, a CI Showcase is more than just a fun recognition event, it is also an important tool in your change management arsenal.
CI Awards
Another great way to recognize your team members is with CI Awards. There are so many ways this can be done, and it can include anything from small stickers to fancy trophies. One fun idea is to make buttons or pins that you give out as prizes/awards for completing improvements. It is fairly easy to create your own custom buttons, and you can make different one’s that team members collect. They can display them on lanyards or little bulletin boards on their desks. Some team members will be very engaged by something like this and will do everything they can to collect the most pins or to get the full collection of buttons… which means they will complete more improvements to earn them. Another fun idea is to purchase miniature football helmets that people keep at their workstations or desks. Then each time they complete an improvement they get a special sticker to stick onto their helmet. This is a fun visual way to recognize people and may even create a little competition amongst team members to fill up their helmet with stickers first.
For something more substantial and perhaps more traditional, a plaque or trophy is a great reward. You could have a trophy for the best improvement of the year. You could also have awards for different categories, such as best quality improvement or biggest time saver. You could make it like your very own continuous improvement grammy awards. Many people will love competing and trying to win the awards, which will drive more improvements.
As has been outlined above, there are numerous ways to recognize your employees for continuous improvement efforts. Pick the one’s that fit best with your culture or make up your own. The important thing is that you positively reinforce the behavior you want to see. When you do that, it will help establish continuous improvement as an important part of your culture, which will improve your results and make CI more fun for your people.