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Kaizen process: 5 steps for radical transformations in your business

The famed Kaizen methodology lets you rapidly boost efficiency

9-minute read

Making major changes in your business can take a surprisingly long time. But it doesn’t have to be that way. A famed methodology called Kaizen promises radical transformations in your company in days or weeks, not months or years.

Developed by Toyota as part of its legendary system of operational efficiency, known as the “Toyota Way,” Kaizen means “change for the better” in Japanese. The idea is to bring together teams from across the business to break paradigms and completely rethink processes, all in a highly compressed timeframe.

“We’re not just tweaking the process with Kaizen,” says Patrick Choquette, an industrial engineer and Senior Business Advisor with BDC’s Advisory Services who advises entrepreneurs on operational efficiency.

We’re doing a small controlled revolution to reach another level in terms of performance to excel in providing value to customers.

What is the Kaizen process?

“We’re doing a small controlled revolution to reach another level in terms of performance to excel in providing value to customers. We’re not just trying to fix a problem. We’re doing a blank-page design of a new process where that problem doesn’t exist anymore,” Choquette says.

Kaizen can be used to rapidly and dramatically transform complex processes involving multiple departments. A typical “Kaizen blitz” may span as little as several days or a week of intense brainstorming, followed by a few weeks to implement solutions.

Choquette cautions that Kaizen isn’t meant to take the place of the more usual process of continuous improvement, which involves small daily changes to increase efficiency and solve problems.

“Continuous improvement is extremely important, but there’s a limit to how much you can improve doing those little baby steps,” Choquette says. “Sometimes you need to entirely reconsider what you do.”

Kaizen can also be applied when no obvious issues exist. “There’s a saying: If you have no problem, that’s a very big problem,” Choquette says. “Things can always be improved. Once you’ve met a target, you should change the target and make it tougher.”

What does Kaizen mean?

How to implement Kaizen: The 5 phases of Kaizen

Kaizen involves five steps, sometimes called “phases.”

1. Clarify the mandate

The first phase is for your company’s leadership to create a team representing all areas of the business and give them a clear mandate to improve a process. The mandate should:

  • explain what the problem is and why it’s a problem
  • provide supporting data
  • set a target for improvement

For example, a source of waste could be that employees spend a lot of time walking to the printer to get documents. The target could be to eliminate the printing of documents.

“With continuous improvement, you might move the printer closer to employees to reduce waste, and this could be an incremental improvement-type solution,” Choquette says. “The Kaizen approach is to ask, ‘How can I completely remove the need for printing?’”

An unclear mandate is the most common reason for Kaizen exercises to fail. “You need to make sure that the time of participants is well invested,” Choquette says. “Ambiguous expectations or focus are sure to doom the process.”

A facilitator should be chosen who can encourage free-ranging, out-of-the-box discussion and creative ideas about how to disrupt paradigms. “A good facilitator is going to be a mentor and will never resort to telling the Kaizen team, ‘This is what you need to do,’” Choquette says. “Instead, they should give the team carte blanche to create a new process to meet the mandate.”

There should be a lot of aha moments and jaw-dropping every 10 minutes.

2. Understand the current process

The next step is to thoroughly understand the current process, including what makes it flawed. “Build a consensus on where the process is failing and the key things that need to change in the new process,” Choquette says.

This step should draw heavily on the three pillars of lean thinking:

i. Go and see

It’s crucial to go into your plant or office and observe first-hand how work is actually done (not how you think it’s being done or how it’s supposed to be done). This act of physically walking the facility is called a Gemba walk. The goal is to identify the eight types of waste—effort that adds costs without adding value for customers.

“There should be a lot of aha moments and jaw-dropping every 10 minutes when we calculate the total delay and manpower required to do the job,” Choquette says. “A good facilitator is going to use the Kaizen process to show all the waste and demonstrate to the team that there's a need for significant change.”

ii. Ask why

You should ask employees why processes or tasks are done the way they’re done. This may involve root cause analysis to determine underlying reasons for challenges and Pareto analysis to decide which problem areas to focus on to maximize impacts of improvement efforts.

iii. Involve your team

Show respect for employees by involving them in the reflections, planning changes and implementation. This helps ensure buy-in and creates a cultural shift in your team toward awareness of what is value-added.

It should be along the lines of: ‘It takes us three weeks to do this; we want to be able to do it in 72 hours. And let’s even think about how we can do it in 20 minutes.

3. Create the new standard process

Now the team is ready to design a new process to radically improve efficiency. “It should be along the lines of: ‘It takes us three weeks to do this; we want to be able to do it in 72 hours. And let’s even think about how we can do it in 20 minutes,’” Choquette says.

“They’re all going to say, ‘That’s totally crazy. We can’t do that. If you want us to do this, here’s what we would need.’ Aha, now they’re starting to break paradigms.”

Choquette says the new process should follow seven principles that are part of the “Toyota Way.”

7 principles of the “Toyota Way”

  1. Continuous flow: Businesses should aim for a continuous, efficient flow of activities, material and information.
  2. Pull: Match production levels to customer demand.
  3. Load balancing: Level out workload between resources.
  4. Focus on quality: Foster a quality-focused culture by prioritizing quality management and problem solving.
  5. Standardize tasks: Adopt and document repeatable methods and encourage continual improvement of standards.
  6. Use visual controls: Make vital information easy to see and understand with simple visual cues. This principle also includes implementing the 5S method of cleaning up workspaces.
  7. Implement proven technology: Use reliable, tested technology that supports your employees, the above principles and lean thinking.

Kaizen vs. traditional process improvement

4. Create an action plan

The Kaizen team is now ready to create an action plan to implement the new process. The plan should include a list of initiatives, who is responsible for each one, a timeline and key performance indicators (KPIs).

KPIs should be included for both the implementation process and the targeted results.

For example, an action step may be to digitize invoices and eliminate the need for printing and mailing invoices.

Process metrics could include milestones such as researching software options, buying the software, implementing it and training employees.

Result metrics could include invoice processing time and cost, erroneous payment rates and invoice exception rates.

5. Implement action items

Plan to implement action initiatives quickly—over the space of several days or weeks, and no more than three months at most. “Implementation should be a blitz or it loses its flavour,” Choquette says. Team buy-in is especially critical in phase five in order to ensure smooth and rapid implementation.

Implementation can include trials to test ideas, see what works and make low-cost mistakes for the sake of learning. It’s vital to recognize that some steps will inevitably fail and that your team has permission to fail as they learn.

“It’ll never be perfect from the get-go,” Choquette says. “Teams need to be allowed to fail because that is part of the process. That’s how we learn.”

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