Continuous Improvement – The Kaizen Way

Summary

• The Lean Model of continuous incremental improvement has proven to be effective vs episodic, large-scale improvement projects.
• Lean focuses on Eliminating Waste vs optimizing existing processes. The goal is to create more value at less cost and improved delivery cycle times.
• Software teams can leverage lean principles to deliver meaningful improvement to their delivery capabilities.

Lean Foundations of Continuous Improvement

The word “Kaizen” means “improvement” in Japanese. Kaizen is a model of improvement from Lean that focuses on continuous improvement through small, incremental changes. The idea is that even small changes can lead to significant improvements over time. Kaizen is one of the five core Lean Principles:

• Define Value from the Customer’s Perspective
• Identify and Map the Value Stream
• Eliminate Waste and Create Flow
• Establish Pull Systems
• Pursue Perfection through Kaizen

No matter what type of business you are in: Software Development, Manufacturing, Healthcare, Financial Services … “business as usual” is a recipe for oblivion, or as Deming put it: “… change is not mandatory, neither is survival”. The shift from product delivery via big projects with long lead times to incremental delivery using small teams and short cycles is well established across most industries. Nonetheless,  many organizations struggle to make good on the promises of agile delivery, namely accelerated delivery cycles, higher quality, and the flexibility to handle changing priorities. The primary focus of any business must be on creation of value for their customers. Every process, decision, and change must be viewed through the lens of customer value. Whereas specific product capabilities or services will vary by business, delivery predictability, cost, lead time, quality and reliability are all things of value in the eyes of customers. Thus, continuous improvement activities must have a measurable impact on these dimensions of service or product delivery.

The Heart of Lean: Eliminating Waste

Eliminating waste and improving flow are central principles in the Lean continuous improvement methodology, both of which significantly enhance customer value by reducing delays, improving quality, and lowering costs. That’s a pretty good definition of value:

Value = Lower Costs + Higher Quality + Faster Delivery

Taiichi Ohno, the father of the Toyota Production System, put it more succinctly:

All we are doing is looking at the time from the moment the customer gives us an order to the point where we collect the cash. We reduce that time by removing all non-value-added waste.

By focusing on creating smooth, waste-free processes (value streams), organizations can  provide products or services that meet or exceed customer needs.

In Lean methodology, “waste” refers to any activity or process that doesn’t add value to the customer, while “flow” represents the smooth and continuous movement of work through a system. Essentially, “flow” is the ideal state achieved by actively removing “waste”.

By mapping out the steps from where the customer places an order for a product or service to the point where the product or service is delivered, you can see the value-adding steps and the non-value-adding steps.  In software development, common types of waste include excess inventory (partially done features), overproduction (features no-one will use), waiting (queueing delays), defects (causing re-work and removing capacity from value creation), and any unnecessary processing steps that provide no direct value. By eliminating these sources of waste, organizations can streamline processes and focus more resources on activities that directly contribute to customer value.

Removal of waste enables uninterrupted flow and has several direct benefits for customers:

• Faster Delivery Times: With improved flow, organizations can complete tasks more quickly and consistently, resulting in faster turnaround times for customers. Whether it’s a product ordered online or a service request, efficient flow means customers receive what they need sooner, enhancing satisfaction and building trust.
• Reduced Costs: Waste drives up costs—whether through excess materials, processing steps, re-work to fix defects, or resources that don’t contribute to the final product or service. By reducing or eliminating waste, organizations can lower production or service costs, often passing these savings on to customers. Competitive pricing without sacrificing quality is a direct benefit to customers and can improve customer loyalty.
• Better Resource Allocation: When waste is eliminated, resources (including time, labor, and materials) can be better allocated to activities that enhance customer value. For instance, rather than dealing with rework or waiting on materials, employees can focus on innovation, customization, or improving customer service. This results in a more customer-focused operation.
• Enhanced Quality: Good flow enables teams to spot and address problems early in the process, minimizing defects and ensuring consistent quality. Quality issues that do arise are caught and fixed sooner, which reduces the likelihood that customers will receive flawed products or services.
• Reliability and Predictability: By streamlining the process and reducing variability, organizations can offer more predictable service or delivery times. Customers appreciate reliability, as it allows them to plan and rely on the organization’s ability to deliver on promises.
• Higher Responsiveness to Customer Needs: Waste reduction frees up capacity, allowing organizations to respond more quickly to changing customer demands. For example, a streamlined supply chain can quickly adjust to shifts in customer preferences or increased demand, enhancing the organization’s agility and responsiveness.

Eliminating waste and improving flow create value by refining processes to be faster, more cost-effective, and more reliable. These Lean principles not only meet customer needs but also anticipate them, providing a level of service that is responsive, efficient, and value-driven. By continuously applying these principles, organizations build lasting customer relationships and remain competitive in an ever-evolving market.

Lean vs. Traditional Improvement Methods

Lean improvement and traditional improvement approaches differ significantly in philosophy, methods, and outcomes. Lean focuses on creating value by systematically reducing waste and optimizing processes to benefit the customer, while traditional approaches often focus on high-level, intermittent changes aimed at increasing productivity or meeting performance metrics. Understanding the distinctions between these two approaches highlights why Lean has become a preferred method for organizations seeking continuous, sustainable improvement.

Key Differences

1. Focus on Value vs. Productivity Goals:
   • Lean: At its core, Lean focuses on delivering maximum value to the customer. Every process, decision, and change is viewed through the lens of customer value. Lean emphasizes understanding customer needs and ensuring that all activities directly contribute to fulfilling these needs.
   • Traditional Improvement: Traditional approaches often prioritize productivity and efficiency metrics, like output volume (velocity!), or cost savings, over customer-centered metrics. While these improvements can result in better productivity, they may not always align with what is most valuable to the customer.
2. Continuous vs. Intermittent Improvement:
   • Lean: Lean is inherently a continuous improvement approach, encouraging small, incremental changes on an ongoing basis. This method is known as “Kaizen,” meaning “change for the better.” Lean seeks to foster a culture where employees continuously look for and implement ways to improve their work processes.
   • Traditional Improvement: In contrast, traditional methods often focus on episodic, large-scale improvement projects. These projects may be driven by performance reviews, budget cycles, or specific events rather than a proactive desire to continuously improve. This approach can lead to cycles of improvement followed by stagnation, where processes degrade until the next project begins.
3. Employee Empowerment vs. Top-Down Directives:
   • Lean: Lean actively involves frontline employees in identifying issues and implementing improvements, as they are closest to the work and best positioned to spot inefficiencies. This approach encourages ownership, accountability, and engagement, empowering employees to play a vital role in continuous improvement.
   • Traditional Improvement: Traditional approaches tend to be more top-down, with managers or external consultants analyzing problems and proposing solutions. This method can sometimes overlook frontline insights and reduce employee buy-in, as they may feel that changes are imposed rather than collaboratively developed.
4. Eliminating Waste vs. Optimizing Existing Processes:
   • Lean: Lean focuses on eliminating waste, which can include anything from excess inventory and waiting times to overproduction and defects. By targeting these non-value-added activities, Lean streamlines the process, often resulting in faster, more efficient workflows.
   • Traditional Improvement: Traditional improvement approaches may focus on making existing processes more efficient without fundamentally questioning or overhauling them. This approach can lead to “optimizing waste” rather than eliminating it, resulting in improvements that are often less impactful or sustainable.
5. System Thinking vs. Isolated Improvements:
   • Lean: Lean takes a holistic, system-based view of improvement, recognizing that changes in one part of a process can impact the entire value stream. Value Stream Mapping (VSM), a key Lean tool, helps teams understand how all parts of a process interact, ensuring that improvements benefit the whole system.
   • Traditional Improvement: Traditional approaches may isolate problems, addressing specific symptoms without considering broader, interconnected systems. While this can yield quick fixes, it often fails to resolve underlying issues, leading to recurring problems or unintended consequences elsewhere.

Advantages of Lean over Traditional Approaches

• Customer-Centric: Lean’s emphasis on customer value helps organizations remain agile and responsive to changing customer needs.
• Employee Engagement: Lean empowers employees, fostering a culture of continuous improvement, which can boost morale and lead to innovative solutions.
• Sustainability: Lean’s continuous, waste-focused improvements are more likely to be sustainable, creating long-term efficiency gains rather than temporary productivity boosts.
• Holistic Improvement: By focusing on system-wide improvements, Lean reduces the risk of isolated changes that disrupt other parts of the organization.

While traditional improvement approaches have their benefits, Lean offers a more dynamic, customer-focused, and sustainable way to achieve continuous improvement. By promoting a culture of ongoing, small-scale changes, Lean allows organizations to remain competitive, agile, and efficient, ultimately delivering greater value to both customers and employees.

Continuous Improvement in Software Development

The ultimate outcome of continuous improvement efforts by agile delivery teams must be on creation of increasing value for their customers. This is done by the systematic removal of waste and delay from delivery processes. In Lean, these improvements are pursued continuously using the Kaizen approach. For agile software teams, retrospectives are one of the primary mechanisms for instituting incremental improvement. Retrospectives however they often fail to deliver meaningful improvement due to lack of clear goals, dysfunctional team dynamics, and no real follow-through on improvement actions. These challenges are discussed at length in another article.

Priorities for improvement should include the following goals which are needed to establish a strong foundation for stable and predictable system of delivery:

• Cross-functional teams. They have all the skills needed to deliver working increments of the Product Backlog without dependencies (and associated delays) on other teams.
• Creation of Product Backlogs that represent value. Backlog items and represent valuable increments of the product.
• Established a stable, predictable velocity or throughput – that is they have the ability to forecast and make commitments.

Once they have a reasonably stable delivery system in place, they can baseline their current performance (Cycle Time, Throughput,  Predictability), and then set measurable goals for improvement. Leveraging the retrospective process as a Kaizen model for continuous improvement is elaborated in detail in this article.

Conclusion

Lean principles provide a solid foundation for successful and sustainable improvement. The overarching goal for any organization must be to evolve closer to providing an uninterrupted flow of value at progressively less cost to the customer. This requires continuous improvement by the systematic removal of all sources of waste in order to increase the value-added content of the delivery process. A Kaizen approach to retrospectives enables software teams and organizations to close the gap between desired target performance levels and their current state.