Research shows that deficiencies in, for example, training and working methods in an organization can account for 10-30% of an entire company's turnover. These are figures that employers need to take seriously, especially if competitiveness and organizational development are high on the agenda. In this post, you can read more about why strategic improvement work is an important piece of the puzzle for an organization that wants to become more efficient and why you should never start an improvement initiative without a strategy.
Why should organizations prioritize and invest in improvement?
There can be several reasons why an organization needs improvement. It can be anything from slow or inadequate workflows or digital tools to shortcomings in the work environment or social aspects of everyday work. The common denominator for all types of improvement work can be expressed as an effort to improve the whole or certain parts of the business so that the whole becomes more efficient.
In an improvement work it is important to identify the concrete deficiencies that exist in the organization. However, in order for the improvement initiative to gain full force, it is even more important to get to the bottom of what is actually being affected. The relationship can be described as an iceberg. The tip of the iceberg could be, for example, that you have a poorly functioning internal system that several employees work with on a daily basis. The lower part of the iceberg is the indirect consequences that the poor system results in. For example, you may lose resources in the form of time, production rate or delivery delays - problems that in turn have negative effects on the business's finances, number of orders or even loss of market status.
The answer to the question of why improvement work is so important is simply that the business should be as efficient as possible, both in terms of workflows and resources. When we talk about flow efficiency, we mean how much of the total time is value-creating from a customer perspective - that is, if you invest in the right things. Resource efficiency, on the other hand, describes how you allocate resources and assets in your business, and whether you do it in the right way. Both perspectives are important, but flow efficiency must be prioritized.
For example, did you know that it's more common than you might think for teams to work in silos and for the whole organization to be forgotten? This means that the different parts of an organization are pulling in different directions, which can lead to a major loss of resources or a deterioration in cooperation.
CANEA has 30 years of experience in improvement work and we offer many comprehensive training courses in several areas, for over 4000 people each year.
What is the cost of not work on improvement activities?
The question that responsible managers or team leaders should ask themselves is what is the cost of not working on their improvement work? Is there any reason why you don't want an organization that continuously works for development and improvement? An organization that embraces improvement initiatives is likely to be more successful than its competitors. The answer to the all-too-common position of "we can't afford to invest in our improvement efforts" simply becomes the counter question - can you afford not to invest in your improvement efforts? Should one of your biggest competitors invest and get further ahead in their development - then it is easy to be hindsighted.
On the other hand, it can be difficult to measure and calculate the exact cost of quality deficiencies. But continuously pursuing and prioritizing improvement initiatives is a relatively simple measure that significantly minimizes the risk of defects. When workflows and processes do not work, are slow or have longer interruptions than planned, the cost is significant in terms of both human and financial resources. Statistics show that this type of failure can cost as much as 10-30% of an entire organization's turnover.
Regardless of which industry you are in, and regardless of the size of the business, everything indicates that it costs more to not work on improving and developing processes and procedures than to do so.
Enabling the success of improvement efforts
A characteristic of improvement work is that you will encounter challenges and obstacles along the way. It is therefore crucial that you have a strategic plan for the improvement initiative from the outset. No two organizations are the same, which means that the concept used to achieve the desired result must also be tailored to your specific circumstances.
Following strategic concepts and methods for improvement makes it easier for everyone involved to understand the purpose of the work and how the organization can work together to achieve the overall objectives. A key to success here is to implement the improvement piece by piece, at a pace that promotes both learning and adaptation. This gives the whole organization better structure and a more stable foundation. If you also learn to quantify consequences, it will be much easier for you to make decisions about what your organization requires in the future.
Successful improvement work requires training, but also IT support to help your organization digitize, implement and monitor strategies. Our comprehensive business system CANEA ONE can help you do just that, as well as strengthen your competitiveness and improve your profitability. Read more about CANEA ONE here!
