Kaizen is a Japanese philosophy that advocates continuous improvement in personal, or professional life which can lead to small, but significant changes over time. Kai means change and Zen means good. It can help both individuals and organisations to enhance efficiency, productivity, and quality. Here are 10 key principles of Kaizen:
Focus on the Customer
The main goal of Kaizen is to provide greater value to the customer by improving products and services. Toyota is one of the world’s leading examples of how the Kaizen philosophy can transform an organisation. In the early 2000s, the company faced a critical challenge to improve customer satisfaction while maintaining high production efficiency. Customers were voicing concerns about long wait times for new cars, which affected their overall experience with the brand.
To address this issue, Toyota gathered data on customer complaints about delivery times and revisited its production processes to identify areas that could be streamlined. Toyota managed to significantly reduce delays in the production process and improve the assembly line’s efficiency by fine-tuning its inventory management system and eliminating the non-value-added activities. Once the new processes were tried, tested and proven to reduce delivery times, Toyota standardised them across all plants to ensure consistent results globally.
This led to increased customer satisfaction and greater brand loyalty due to quicker delivery as many customers appreciated the company’s response to their concerns.
Continuous Improvement
Small, ongoing positive changes lead to significant improvements over time. Continuous Improvement is one of the core principles of Kaizen which focuses on making small, incremental changes that lead to long-term improvements. A great example of this principle in action can be seen in the practices of Canon, a leading global company in imaging and optical products including digital cameras, printers, and copiers. In the early 1990s, Canon wanted to enhance its production processes to improve quality, reduce costs, and boost overall efficiency. The company however realised that making large-scale, radical changes could be disruptive and costly, so it decided to embed a Kaizen-driven culture across all levels of the organisation, focusing on small, incremental changes.
Canon empowered its employees to participate in identifying inefficiencies in their work processes. Every worker, regardless of rank, was encouraged to suggest ways to improve the production process. Canon started organising regular Kaizen meetings where employees could suggest small improvements or changes to improve safety, cut costs, boost efficiency and reduce all forms of waste, including time, materials, and energy. The company also adopted the PDCA cycle (Plan-Do-Check-Act) where employees and teams could:
- Plan – identify areas needing improvement.
- Do – implement small changes in the production process.
- Check – evaluate the results to judge the impact.
- Act – standardise successful improvements and refine unsuccessful ones
As a result of these measures Canon saw a consistent and measurable increase in productivity across its plants. Each small improvement led to larger gains. Over time, Canon was able to improve the quality of its products, which helped it maintain a competitive edge in the market.
Involve Everyone
Everyone in the organisation, from top management to workers on the floor, should be involved in the improvement process. An excellent example of this spirit is 3M, an American multinational known for its innovation and diverse product range. In the late 20th century, 3M recognised the need for innovation to stay competitive in the technology and consumer goods sectors. To tap into the collective knowledge and creativity of its employees across all levels 3M started allowing employees to spend up to 15% of their workweek on projects of their own choosing, unrelated to their primary job responsibilities. This encouraged employees to contribute new ideas and come up with innovative solutions. Managers were trained to recognise and nurture creative ideas, providing resources and support to turn promising concepts into reality. The company established recognition programs to reward employees whose ideas led to successful innovations. This not only motivated employees but also reinforced the importance of continuous improvement and creative problem-solving.
This led to a consistent flow of new and improved products. One notable success was the development of the Post-it Note, which originated from an employee’s side project during the 15% Time. This small idea, initially considered a minor innovation, became one of 3M’s most iconic products and a testament to the power of involving everyone in the innovation process. 3M managed to boost the morale and job satisfaction of the employees leading to increased engagement and productivity. This culture of continuous improvement and innovation helped 3M maintain its competitive edge in various industries, from healthcare to electronics.
Take Action
Instead of waiting for perfection, start implementing improvements immediately and refine them later. One of the compelling examples of this principle is Starbucks which experienced a slowdown in growth, declining performance and customer dissatisfaction the early 2000s. The address these challenges the company adopted a proactive approach to regain and restore its position as a leader in the coffee industry.
Under the leadership of then-CEO Howard Schultz, Starbucks started revamping the store layout, redesigning store interiors, and introducing new equipment to improve the efficiency of the coffee-making process. As a part of the process Starbucks started a new training program for its employees called Barista 101. Employees were trained to better engage with customers and create a more inviting atmosphere.
Starbucks sourced better quality coffee beans and improved the brewing techniques to enhance the flavour and consistency of its coffee. Starbucks also simplified the menu and removed the underperforming items to improve the overall operational efficiency and allow the staff to focus on the high-quality and popular products. The company reviewed its cost structure, renegotiating supplier contracts and optimised the supply chain to reduce costs without compromising quality.
As a result Starbucks was able to streamline its operations, and restore its market position. The improved espresso machines and new brewing techniques played a significant role in regaining customer trust and driving sales.
Eliminate Waste
Identify and reduce or eliminate any process or activity that does not add value to the customer. An example of the Kaizen principle of eliminating waste is Dell Inc. In the early 2000s, Dell faced increasing competition and pressure to maintain profitability while delivering high-quality products at competitive prices.
Dell came up with a Direct-to-Customer sales model, eliminating the need for inventory at retail outlets, by selling computers directly to customers. Dell implemented a Build-to-Order strategy, where computers were assembled only after a customer placed an order. The company worked closely with suppliers to ensure timely delivery of components, reducing the need for excess inventory.
By streamlining its supply chain and production processes, Dell managed to meet customer demands and eliminate waste. The build-to-order model allowed Dell to offer customised products and faster delivery times, improving overall customer satisfaction and loyalty. This also contributed to the company’s ability to offer competitive pricing and maintain profitability. This case study highlights how strategic waste elimination can drive significant improvements in business performance and competitive advantage.
Quality Control
Ensure that processes are well-designed to produce high-quality results consistently. An example of how the Kaizen principle of quality control can be effectively implemented is Motorola. In the late 1980s, Motorola wanted to reduce product defects, maintain its competitive edge and meet customer expectations so it introduced Six Sigma, a data-driven approach to quality control, which became a model for quality management worldwide. Six Sigma methodology focuses on eliminating defects and represents a high standard of quality. Motorola invested in extensive training for its employees, creating a structured programme to develop Six Sigma Green Belts and Black Belts to address quality issues and implement improvements. Motorola applied the DMAIC framework (Define, Measure, Analyse, Improve, and Control) to identify problems, analyse the root cause, implement solutions, and ensure that improvements were sustained over time.
Motorola’s Six Sigma initiative led to a significant reduction in defects. The company achieved the Six Sigma standard. The improvements in quality control resulted in substantial cost savings for Motorola. The focus on quality control led to improved product reliability increased customer satisfaction and loyalty. By reducing defects and variability, the company decreased rework, warranty claims, and customer returns, leading to financial benefits. This earned Motorola widespread recognition as a leader in quality management which became a benchmark for other organisations seeking to improve their quality control processes.
Standardise
Once an improvement is made, standardise it so that it can be repeated and sustained. A well-known example of how standardisation has been used to ensure consistent quality, efficiency, and customer satisfaction is McDonald. As McDonald’s expanded globally, the company faced the challenge of maintaining consistency in its restaurants across thousands of locations worldwide. Each location needed to provide the same level of service, product quality, and operational efficiency to meet customer expectations.
So McDonald developed detailed Standard Operating Procedures (SOPs) to ensure consistency in the preparation of food at all its restaurants. This included instructions for cooking times, ingredient quantities, and assembly processes. This ensured that the taste, texture, and quality of McDonald’s products was the same at all the outlets worldwide. The company standardised the equipment used in its restaurants, such as fryers, grills, and beverage machines. McDonald’s also developed comprehensive training programs for its employees through Hamburger University, its corporate training centre. The objective was that the employees followed standardised procedures and could replicate the same quality of food or service in any location. Thus by standardising its processes, McDonald’s managed to create a repeatable system that delivers uniform products and services regardless of location. By standardising the training and processes, McDonald’s could open more outlets at new locations and train employees quickly. This was critical to the company’s rapid global expansion.
The net result was that McDonald’s could deliver a uniform customer experience globally and its customers knew what to expect. This built trust in the brand. The standardisation led to streamlined operations, reduced variation in processes and faster, more efficient food preparation. This also reduced wait times for customers.
One notable example of standardisation is McDonald’s fries. The company developed a process for peeling, cutting, frying, and seasoning fries, ensuring that they tasted the same in every McDonald’s restaurant worldwide. This process, including exact frying time and oil temperature that guarantees consistent quality.
Use Data and Facts
Base decisions on data and analysis, not assumptions or guesswork. A classic example of this Kaizen principle is General Electric (GE) which embraced data-driven decision-making to improve its processes, reduce defects, and enhance overall operational efficiency. In the early 1990s, GE led by its CEO Jack Welch decided to use data and statistical analysis to reduce defects and inefficiencies in its performance, quality and operations.
GE adopted the Six Sigma methodology, which emphasises data and facts to identify the root causes of defects, reduce process variation, improve product quality, and eliminate waste using the DMAIC (Define, Measure, Analyse, Improve, and Control) framework. Instead of relying on assumptions, GE used real-time data to identify problems in its processes, such as bottlenecks, quality issues, and customer complaints.
By using data to identify and eliminate defects, GE managed to achieve a 99.99966% defect-free rate, reducing defects to fewer than 3.4 per million opportunities. By using data to target inefficiencies and streamline processes, the company was able to reduce waste across its businesses and save around $12 billion over five years.
Empower Employees
Encourage workers to take ownership of processes and contribute ideas for improvement. An example of how empowering employees can lead to exceptional customer service and operational success is Ritz-Carlton, a global leader in luxury hospitality. The hotel chain has given its employees the authority to solve problems and take decisions on the spot. Every hotel employee from housekeepers to managers is empowered to spend up to $2,000 per guest, per incident, to resolve any customer issue or enhance their experience without needing the management approval. This ensures that employees can address problems in real-time and create memorable experiences for guests. Every new employee undergoes a rigorous orientation programme called “Day 21”, where they learn the company’s Gold Standards and the importance of guest satisfaction. Employees are taught how to handle complaints, solve problems, and use their discretion to exceed guest expectations. Employees are trained to take ownership of guest issues and ensure immediate recovery if and when a problem arises. If a guest is dissatisfied, staff members are empowered to fix the problem, whether by upgrading a room, providing a free meal, or offering a special experience, ensuring no guest leaves unsatisfied. Ritz-Carlton has a strong culture of recognising and rewarding employees who go above and beyond for guests.
Ritz-Carlton’s consistent service has strengthened its brand image as a leader in luxury hospitality. The hotel chain is known for providing personalised, unforgettable experiences, largely due to its empowered employees. This leads to higher levels of customer satisfaction and loyalty. Even the employees feel trusted and valued, which leads to lower turnover and higher engagement.
Sustain a Long-term Perspective
Improvement should be a never-ending process, with long-term goals in mind rather than short-term fixes. An excellent example of how a long-term perspective can drive corporate sustainability and growth is Tesla, the electric vehicle (EV) and clean energy company founded by Elon Musk. In the early 2000s, when the automotive industry was heavily reliant on fossil fuels, Tesla envisioned a future where electric cars would replace internal combustion engine vehicles, reducing global dependence on fossil fuels and lowering carbon emissions.
Tesla’s long-term strategy revolved around developing EVs that could outperform traditional gas-powered vehicles. Starting with the Roadster in 2008, followed by the Model S and Model X, Tesla set out to make electric cars desirable by prioritising performance, design, and range, rather than just fuel efficiency. Tesla invested heavily in research and development of lithium-ion battery technology, which is crucial to the success of EVs. The company focused on reducing costs, and ensuring that its products were both affordable and practical for the mass market. To support its long-term vision, Tesla built large-scale Gigafactories to make electric vehicles more affordable in the long run.
The result is that Tesla has become the world leader in electric vehicles, pushing the entire auto industry toward electrification. By 2021, Tesla had delivered over 1 million vehicles worldwide. Tesla’s innovations in battery technology resulted in EVs with longer ranges, lower costs, and faster charging times. Tesla’s Gigafactories in Shanghai and Berlin have enabled the company to meet the global demand for EVs and batteries and scale up production while reducing costs.
By doing so, Tesla encouraged other automakers to develop electric vehicles, believing that the overall growth of the EV market was more important than short-term competitive advantage. The overall impact is that Tesla’s long-term perspective has influenced the entire automotive industry. Major automakers like Volkswagen, GM, and Ford have accelerated their plans for electrification, investing billions in EV production.
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Conclusion
Kaizen’s principles are a testament to how small, deliberate actions can generate big results over time. By embedding these values into daily practices, individuals and businesses alike can experience transformative improvements that stand the test of time.