Kaizen vs. Innovation – Key Differences Between the Two

Level: Beginner

What you will learn:

• How to define innovation, and understand how it can support Kaizen
• The value of continuous improvement over breakthrough innovations
• How to measure innovation
• The right time for radical process improvements
• How to build a team that innovates

Innovation in business is exciting. It’s about making leaps and bounds that distinguish a company apart from its competitors in a breathtaking way — at least, that’s the way many people think of innovation.

In truth, not all innovation is earth-shattering. Many innovative ideas in business are small, but they drive forward a new and improved way of performing. If a company encourages small innovations on an ongoing basis, then it has paved the path for driving larger breakthroughs … and established a Kaizen culture.

Defining Innovation versus Kaizen

Fundamentally, innovation simply means new. Innovation can be a new idea, a new methodology, or entirely new way of doing business. While it’s tempting to think of innovation solely in terms of entirely new breakthroughs, innovation also can refer to incremental changes. Innovation can — and should — build upon things that have already been done.

Kaizen comes from the Japanese words “kai”, meaning “change,” and “zen,” meaning “good.” It’s popularly translated as meaning “continuous improvement” or “small incremental improvements.” and is used in regards to any area of a company.

Where these two ideas complement one another is that Kaizen lays out an action plan for innovation by providing steps for solving problems and empowering workforces to use them.

The Value of Small Changes versus Big Breakthroughs

It’s easy to fall in the trap of believing that that large-scale innovation is wholly preferable to continuous improvement. The common argument goes: Why settle for 1% daily improvement when we could gain 1,000% from a big innovation?

However, Kaizen lays the groundwork that encourages radical innovation. An organization that focuses on daily improvement is putting in place the mindsets and processes necessary to recognize and act on innovation. Kaizen encourages healthy habits such as curiosity, problem-solving, persistence, challenging the status quo, and workforce engagement.

There is another, measurable reason to encourage daily improvement over breakthrough innovation. While a breakthrough improvement sounds very promising, it pales versus the results of compounded daily gains.

How to Measure Innovation

Continuous improvement depends on a steady flow of incoming ideas. If you’ve created a Kaizen culture, then you can expect a steady flow of incoming ideas. Of course, the only way to gauge your effectiveness is to measure incoming ideas, and track them over time to ensure your workers are truly engaged in improvement.

However, the number of ideas coming in is not a solid metric for measuring the impact of innovation  — and it is critically important to put metrics in place to gauge the effectiveness of an innovation and its impact on the organization.

Metrics will vary depending on the area of the organization in which you’re innovating. They might include:

• ROI metrics, which address resource investments and financial returns. These metrics help recognize and justify the value of an innovative initiative and the organization’s overall investment in innovation.
• Organizational capability metrics, focusing on the infrastructure and process of innovation, can help projects build repeatable approaches to innovation.
• Leadership metrics focus on the behaviors that senior managers must exhibit to support an organization’s culture of innovation.

Once relevant metrics are in place, it is important to regularly check in to analyze how the innovation is meeting project goals. The PDCA cycle (Plan, Do, Check, Adjust) is a Lean tool that can be used to drive progress and gauge success. Here’s how each step works:

• Plan: Set your target and establish the key performance indicators that allow you to measure your plan’s success. Make sure that the objectives you set are SMART (specific, measurable, achievable, relevant, time-bound).
• Do: Execute the measures you’ve defined.
• Check: While your plan is in motion, verify the process performance and results. This is where your metrics come into play. You can apply a dashboard report to help you track and follow-up on the process performance.
• Adjust: It’s important to standardize your successes, learn from the project failures and identify gaps for your next plan.

Radical Process Improvements

Once a Kaizen culture has laid the groundwork for innovation to flourish, it becomes more achievable to successfully implement a breakthrough innovation or large-scale transformations.

Unlike Kaizen, which focuses on incremental changes, Kaikaku describes a process where an entire organization focuses on a radical process transformation. This might include, for example, transforming a complete production line including machinery, layout and people (through training) to improve processes.

Kaizen aims to improve the way things are done. Kaikaku drives an organization to totally rethink the way things are done. In fact, the first step of implementing a Kaizen culture within an organization is itself a Kaikaku event: it’s a way of completely rethinking how things are done. Once that radical transformation has occurred, it can be fine-tuned over time with continuous improvement processes.

Building a Team that Innovates

Whether you’re currently focused on sweeping innovation or continuous daily improvements (or, preferably, both), it’s important to develop your people to look for ways to drive company improvements forward. If you want to support a culture of innovation, work to encourage the following habits:

1. 1. Responsible Risk-taking. New is risky, but a workforce that is allowed to take some risks and encounter some failures is gaining knowledge that can drive future successes.
   2. Empowered input. By rewarding initiative and decision-making, your workforce and leaders are encouraged to change things for the better.
   3. Addressing challenges. When a problem arises, does your workforce look for solutions or look to management? When your team is focused on searching for problems, they’re always actively looking for solutions.
   4. Experimentation. Not every innovation will pan out the first time it’s implemented. By encouraging experimentation and measuring progress, ideas can be fine-tuned over time.
   5. Ongoing discussions. Teams that talk about the improvements they’re exploring, and who share lessons learned, are guiding future progress.

Next Steps

For More Information:

How Kaizen is Transforming Companies – The Role of Kaizen

The Complete Guide to Innovation Metrics: How to Measure Innovation for Business Growth

Why Breakthrough Innovation is Overrated (and What You Should Do Instead)

Call to Action:

Click here to learn more about Continuous Improvement.