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"We Do Two Things": Continuous Improvement for Startups

Recently we had lunch with the CEO of a small industrial corporation—let’s call him Ralph. Ralph was a friendly connection, and he seemed like a good lunch companion—though, because he’s in a very different business, we didn’t expect him to say anything that resonated with Code & Quill. That is, until he described his own work as CEO.

“We do two things,” he said, like he’d said it a hundred times before. “We develop new products and we improve our processes. That’s it.”

That seemed unusually tidy for heavy industry. So we asked about his company’s work. “I don’t know a thing about metalworking,” Ralph said. "Not relative to the technicians. No, no—I know the people, I know the company, I know the customers, I know the context. The workers know what they’re doing. But as the leader, I do two things: develop new products and make sure we keep improving our processes. It boils down to those two.”

There’s a reason for his narrow focus. About 10 years ago, when he took over, Ralph’s company was on death’s door. The solution—implemented quickly, then developed over the course of many months—was a continuous improvement program that involved everyone in his company, totaling several hundred employees. Within a few years, Ralph’s company was squarely in the top 5%, where it remains to this day. This is a special accomplishment, since—in industry—innovations happen slower, and success is often a matter of shaving off nickels and dimes. Ralph was quick to share in the credit since, as he explained himself, continuous improvement targets human capital; whether you’re in metalworking or Microsoft, the company only gets better if all of the people working for it get better.

Now we were curious. If this kind of growth and improvement was possible in industry, one of the oldest and most entrenched sectors of the economy, imagine the possibilities for start-ups. Imagine the possibilities for new businesses who do have innovation on their side, who don’t have the same endemic standards and expectations. People are people no matter where they work; it’s just a question of how to improve their work. So this week, we’re going to tell you what continuous improvement is—and why, to a startup or new venture, it might mean the difference between life and death.

 

What It Is, Why Startups

Continuous improvement is very much what its name suggests: a program focused on finding the ways that a company can continue to improve itself indefinitely. More than that, it provides a structure by which the organization can push itself upwards, whether it’s the best of times—when improvements don’t always seem so necessary—or the worst of times, where continuous growth and improvement keep the business from sinking.

Continuous improvement and startups are natural friends. In the first place, startups are small; even with a C-suite or leaders, they’re usually small enough to remain hierarchically flat, which makes it easier for everyone to follow the same mental tracks. Startups usually have a narrow niche or specific product, which helps focus those efforts further. And maybe most importantly, it’s grow-or-die for startups. By virtue of being a start-up, you have to be growing, and fast—and if you’re not, you are descending back to the same nothingness from which the business started. Developing a culture of concerted, non-stop self-improvement acts as an insurance policy against stagnation, which is especially deadly to newer companies.

 

How It Works, in Three Parts

You may have noticed we use the word “culture.” That’s the first part. To define it one way, a culture is a set of shared values. And the “values," in theory, should represent the good you’re trying to do in the world. Imagine you were successful beyond your wildest dreams—why would the world be happy about it? What kind of good vibes are you projecting? The point of a workplace culture is that you can’t broadcast those vibes out if you don’t have them in the first place; for people in your company to broadcast the right vibe, they have to understand and believe in the effect you want to have on the world.

The second part is problem-solving. If we’ve identified what we’re all about, the good we want to do in the world, what are the major problems in front of us? More tellingly, what are the problems that will always need solving in our company? Is it curbing inefficiency? Is it marketing or acquiring new customers? Is it developing new products? Whatever problems you have to solve consistently, you want to develop the expectation of continuous improvement around them, since they represent the tasks you collectively need to master.

The third and final part is sustaining the improvement effort—and remembering to turn it on itself. You have to remember, if you invest in the idea of continuous improvement, that it never, ever stops. That’s the point. This isn’t a weekend retreat or a one-time corporate overhaul; it’s a permanent choice for the direction of the company, something that you will always be doing. Continuous improvement is reflexive, too—you have to continuously improve your improvement system as well. Not only do you have to buy new clothes for this growing child of a company, but you have to teach it how to dress itself, and fashionably. Knowing about your company’s room for improvement is like knowing about fashion; there are plenty of places to look, but it never stops needing attention.

On a day-to-day basis, continuous improvement just looks like regular improvement. Even positive growth caused directly by your CI program won’t seem dramatic at first. But you’ll begin to notice that you reach plateaus, that you improve to a certain point and then flatten out—and this is where your continuous improvement program will shine. When most businesses stop and rest on the plateau, you’ll know to start the whole process over—to set your sights and standards a little higher, then point your people to the next plateau. If this sounds a little boring, just consider that this is how people climb Mount Everest—one camp at a time, until they reach the final section near the summit. These steps won’t seem so boring whenever you can look down and see all of the progress below you.

The ideal, it seems, is to be able to say what Ralph said to us—that he only does two things. Simpler is better, even if the work is sometimes harder. So we work, and when we’re not working, we’re thinking about how to work better. Even if we’re nowhere near the top of this mountain, we look down and see progress, and that makes all the difference looking forward to the next waypoint.

Next week on Ampersand, the Code&Quill blogwe’ll be giving some specific suggestions to make continuous improvement a practical, visible reality in your venture. (Last week, we gave our super-condensed two-step guide to organization, so click here to take a look if you missed it.) If you’d like highlights from the blog, plus brand-new info about upcoming products and promotions, feel free to join our email newsletter at the foot of the page. The newsletter is also where we give first notice when products are back in stock!

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