A recent blog on the Harvard Business Review caught our attention as it seemed to suggest that continuous improvement has had its day.  Surely not?  Whilst the author stops short of suggesting abandoning continuous improvement in favour of step change innovation, we felt there were more fundamental questions raised about the approach to business strategies and long term plans.

You can read the original article here, and below you can find our take on it.

Assuming you have to make a choice, the choice between continuous improvement and step change innovation largely depends on where you are starting from.  If you have a world-class product or service, continuous improvement really is the only way to keep edging your product or service forward against the competition until the replacement comes along in due course.  This is simply because the big gains have already happened to elevate your product or service to world-class levels.  On the other hand, if your product or service isn’t world-class, or worse, sub-standard, the only option is to look for step changes, else risk being left in the wilderness while your competition marches forward, leaving you in the uncomfortable position of having to hard-sell and discount.

The reference to the Japanese automotive industry’s recent quality problems is also interesting but flawed.  Using Toyota as an example, the quality issues there are still relatively small in comparison to those experienced by many other automotive manufacturers.  The issues happened to be magnified due to the volume and variety of cars affected – the result of component and system sharing across model lines – and an over-hyped media response, primarily in the US at a time when the domestic automotive manufacturers were recovering from Chapter 11 bankruptcy and the financial crisis.  This isn’t to say Toyota is perfect.  Yes, they make generally reliable and well built cars, but in just about every other area they are decidedly average, lacking that ‘big bang’ to catapult them to the top of the excitement charts.  Contrast this with Apple who are continually making huge leaps in all sorts of market segments and who clearly have innovation at the heart of what they do.  This has of course led to their own issues that a continuous improvement regime may have identified before the customers did – we’re thinking here of the iPhone 4 signal problems and the alleged iPad 3 overheating reports.

So where are we going with this article?  Well, the key point here is that there is no substitute to having a properly thought through, well planned and defined strategy for your business, products and services.  How much of continuous improvement or step change innovation you apply largely depends on what your strategy demands and where your business is in relation to your competitors.  There clearly is room for both continuous improvement and step change innovation, which when boiled down to it, are just a collection of tools to be applied as the business sees fit.  As the old saying goes, it’s a bad workman that blames his tools, so rather than look for the next big ‘toolbox’ and at the same time throw out all the others, concentrate on intelligent, careful and correct use of the tools you have, which themselves will develop over time.  Until you can truly say you have mastered and exhausted these tools, this will show a far more effective use of precious time and money to deliver greater strides in quality.