Results

All businesses have areas of inefficiency, and could profit from improvement and structural change, from the disgruntled mailroom guy, to manufacturing waste, to accounting error. The Japanese, as especially personified by the management and employees of Mitsubishi, have a philosophy of kaizen: continuous small improvement of anything that can be improved in a business: from cleaning a workspace to converting a paper system to an electronic one.

It is a good philosophy, and it works. Mitsubishi is one of the world’s most successful companies, and other companies have begun to take notice. Hundreds of other businesses sit in on management training sessions at Mitsubishi, in order to get a taste of the kaizen dynamic.

In order for kaizen to work well, however, “improvement” must be quantified. A company of any size can very easily get so caught up in small details that important ones get overlooked, especially when management egos are involved. It was said in the 1990s that Bill Gates’ net worth was so immense, that he could drop a wad of bills totaling $500.00 and it would not be worth his time to bend down and pick it up.

If you see a hundred dollar bill on the ground, of course your first instinct is to pick it up. But what if it costs five hundred dollars to do so? Or five-thousand? The small problems that you want to solve are the ones that are cheap and easy to solve, not the ones that will consume vast amounts of your company’s resources in the process.

To prevent this from happening, it is important to have clear business goals and clear project goals to help ensure everyone knows what sort of expenditure (talent, time, technology) to apply to what specific issues. Identify clear metrics so it is obvious what the Return on Investment (ROI) will be before you start. This will prevent waste and keep your business focused on what it does best.

Friday, October 19th, 2007 Both comments and pings are currently closed.

By Haley January Eckels