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How Lean is Transforming Companies – The Role of Kaizen

7 minutes, 42 seconds read

What you will learn:

  • How Kaizen drives Lean practices
  • The potential benefits of adopting Kaizen
  • How Kaizen is used in the field
  • How Kaizen increases productivity
  • Using Kaizen to put the focus back on the customer
  • Ways Kaizen increases competitive advantage
  • How Kaizen nurtures an engaged, proactive workforce
  • Using Kaizen to encourage local decision making and initiative
  • How Kaizen improves information flow 
  • Ways to use Kaizen to improve teamwork
  • How Kaizen leads to better creativity

The Challenge

In 2010 a Compensation Data Manufacturing survey found that 69.7 percent of manufacturing companies were using Lean manufacturing practices. Ever since it entered the global business lexicon in the 1980s thanks to its tremendous results in Toyota’s automobile factories, Lean has captured the world by storm and fired the imaginations of managers at every level of competence.

But there’s a slightly less well-known term that describes a key practice for driving Lean: Kaizen.

Kaizen is a Japanese term often translated as “continuous improvement” and is an entire process that is problem-solving and people oriented. It is both an action plan and a philosophy, a set of general guidelines, and an aspirational way of life.

But what is its appeal? And what can a company gain by adopting Kaizen as a way of life?

The Opportunity 

Companies that invest time and effort into studying and promoting it to their workforce reap a large number of benefits that can only come from assiduously absorbing its tenets into daily work. And it’s more than just increasing quality and reducing waste. When properly implemented, Kaizen can bring positive results in various ways to every level of your organization.

Here are its most important benefits:

  • Kaizen puts the focus back on the customer
  • Kaizen increases competitive advantage
  • Kaizen nurtures an engaged, proactive workforce
  • Kaizen encourages local decision making and initiative
  • Kaizen lets information flow smoothly
  • Kaizen radically improves teamwork
  • Kaizen leads to better creativity
  • Kaizen boosts productivity

Experience from the Field

The 1973 oil crisis and the following global recession impacted countless countries, and companies. While the Toyota Motor  Co. was impacted, it had  higher  profits compared  to other  companies in  the years following  the recession.  This discrepancy between Toyota and other companies made many curious about what  Toyota was  doing differently. Now we know that Lean was transforming the company’s automotive production.

Kaizen—or continuous improvement—is one of the foundational pillars of the Toyota Production System, and a foundation of Lean management. By constantly looking for waste to eliminate, companies like Toyota encourage problem-finding as the first step to creating solutions.

How to Make This Work for You

An ongoing focus on continuous improvement has massive implications, all of which ultimately translate to growing your bottom line. Here are some of the ways you win with Kaizen.

Kaizen Increases Your Productivity

As with any organization, an increase in productivity helps the business increase bottom line revenue.

According to Gallup, disengaged employees in the U.S. cost companies $450-550 billion in lost productivity per year. Any improvement in productivity helps prevent this loss.

Except, how do you track your productivity? While there is no direct “productivity scorecard” you can download that will lay out the KPIs you need to monitor, here are several suggested metrics you may want to track on a monthly basis. These KPIs will tell you if your productivity is increasing:

  • Number of improvement suggestions submitted by workers
  • Number of improvement suggestions implemented
  • Number of improvement initiatives completed
  • Average time to complete improvement initiatives

Who cares about productivity in a bureaucratic organization where red tape is the norm? Or in a company where workers get no incentive to deliver excellent work in the least amount of time? The answer is: no one.

But in an enlightened organization that has seen the powers of information sharing and the effects that empowering a workforce can give them? The answer is: everyone.

Kaizen Puts the Focus Back on the Customer

Kaizen refocuses your thinking back on the primary reason you’re in business: to serve the customer. By constantly looking to improve your products, you produce higher quality output that consumes less waste and contains less flaws. Of course, the result is outstanding products that please the customer.

That focus however means systems and processes are constantly being improved upon. There is no status quo when you’re always thinking about what will make the customer happy. Thus:

  • Every action is undertaken with a view toward meeting customer expectations regarding product quality.
  • Every customer interaction is placed under the lens to see how these interactions can be made more valuable.
  • Every worker comprehends what the higher goals are, what their role is in reaching that goal of customer satisfaction.

Kaizen Increases Your Competitive Advantage

The improvement in product is one reason why Kaizen contributes to your competitive advantage. All the progress made to lower costs and eliminate waste result in higher quality products that are produced at a faster pace and blow the competition out of the water.

But the other thing to note is that Kaizen’s unrelenting continuous development of workers’ competencies, idea management, and operational process improvement all up-level your workforce, creating the kind of long-term value that the world’s best companies possess.

Kaizen Nurtures an Engaged, Proactive Workforce

According to a Jobvite study, 82% of employees are continuously looking for opportunities elsewhere. And from a Gallop study, 70% of U.S. workers are disengaged from their workday.  Yet companies that claim they have a Kaizen culture can boast of a workforce that is deeply engaged with their work. Why is that?

Because the companies that have effectively adapted its tenets have empowered employees at every level to make proactive changes where necessary. By valuing people and working to develop their potential, you nudge them toward better engagement with their work. And the great thing about employee engagement is that workers tend to be more satisfied with their jobs.

Kaizen Encourages Local Decision Making & Initiative

When Kaizen is applied through a consistent program, it helps employees think differently about their roles and their work. It’s about building a culture where every worker is empowered to suggest or directly implement any improvement to the way things are done.

Thus, employees have a direct impact on processes and how they are optimized. If they spot waste on a production line, they have the power to report it and directly change it. Initiative and decision making are rewarded and encouraged.

When you give employees the tools and the opportunity to change things for the better, you can bet they will. Kaizen makes this behavior a natural way of thinking and behaving.

Kaizen Lets the Information Flow Smoothly

Here’s the thing about a corporate culture where you’re all looking to improve the way the company does things: that shared purpose builds collaboration and trust. And where there is trust, information tends to break free of individual silos.

Since you’re all after the common goal of improving processes and products, you’re more open to sharing information with your colleagues that may help with their work. The common goal is elevated above whatever advantages you may get from holding onto information.

Kaizen Radically Improves Teamwork

Furthermore, when the information your company needs to get the job done is freely shared among your engaged workforce, this results in improved teamwork at all levels. Employees will come together despite differences in order to solve problems.

Kaizen Leads to Better Creativity

One of the biggest reasons why Kaizen improves the creativity of the entire organization is because it forces you to look at processes from a solutions perspective.

What are you trying to solve? What pains are the customers experiencing? How can you build something that answers those pain points exactly? Answering these questions head on allows you to solve problems continuously.


As you can see, there are plenty of benefits to Kaizen, but achieving those results depends on a plan for implementing your Kaizen projects. The first step is ensuring a fully supportive leadership team encourages frontline workers to identify problems. Next, those workers need tools to test for and implement solutions. Through continuous, ongoing education, you can transform your frontline into high-performing waste-busters.

Next Steps

Now that you’ve seen the benefits of adopting Kaizen within your company, it’s time to do a little more research on tools and best practices to implement Kaizen and how it can help you. Continuous improvement also means constantly being willing to learn.

For More Information:

Kaizen Institute: Definition of Kaizen

Five Reasons to Implement Kaizen in Non-manufacturing

Quality-One: Introduction to Kaizen

Impact of Kaizen on Firm’s Competitive Advantage in a Japanese Owned Company in Malaysia

Kaizen: Gaining the Full Benefits of Continuous Improvement

Why is Kaizen So Important for Businesses

What Continuous Improvement Is (and How to Use It)

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