by Kevin Duffy, Global Vice President, Kepner-Tregoe and Jens Refflinghaus, Senior Consultant, Kepner-Tregoe, Germany

Organizations over the past decade have invested millions, if not billions, of dollars in continuous improvement programs with the aim of removing waste and, ultimately, cost from their operations. Yet through a lack of consideration to strategic alignment they can end up wasting significant amounts of continuous improvement resources thereby undermining the philosophy and intent of the programs.

A key issue we observe in many organizations today is that their continuous improvement programs have become increasingly disconnected from the organization’s strategy and have evolved as standalone entities focused on efficiencies and cost. They are, therefore, much more focused on the operational context— “doing things right” (better)—rather than on the strategic context—“doing the right things”—which means finding solutions to concerns related to products and markets.

Executives are measured by how effectively their organization’s strategy is executed. And while the increased profits that come from an effective continuous improvement implementation are welcomed, it is rare that an organization can save its way to growth and glory without also enhancing its capabilities to innovate and expand.

To align operational initiatives with strategic goals, continuous improvement must be targeted at areas deemed to be of strategic importance. This is critical to the successful execution of the organization’s strategy.

One size continuous improvement doesn’t fit all parts of the organization. The kind of daily discipline required in a manufacturing environment may be unnecessary, or even destructive, in R&D. There is no arguing that it is important to have discipline in product and service development, but not to the extent that it discourages or crushes creativity in what is a source of competitive advantage for the organization.

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