Continuous improvement of a firm’s value chains and processes must necessarily follow strategy. That is, a firm’s continuous improvement activities should be guided and informed by the organization’s overall strategy.
Strategy is about choices. It is about deciding where to focus resources to gain leverage and advantage. It is about deciding which activities to pursue and which not to pursue. Until there is strategic clarity, continuous improvement can use valuable resources wastefully and fail to produce real bottom line impact.
Toyota is a classic example of a firm whose continuous improvement actions are guided and informed by its strategy. The philosophy and practices of the Toyota Production System (TPS) is an operational response to Toyota’s strategy for gaining advantage in the marketplace.
Where can your firm gain leverage to begin building an advantage? Asking and answering this question can begin to suggest to outlines of where actions need to focused and taken. This is the beginning of strategizing which can naturally lead on to continuous improvement of those vital areas of focus.
When firms envisage making leaps in performance, there must be some key strength or capability that they are seeking to leverage. This has to go beyond the mere adoption of “best practices”. Thinking strategically can point the way to where those points of leverage might be within a firm.