BSBMGT516

Facilitate Continuous Improvement

Part A: Plan and lead continuous improvement

1.1 Develop strategies to ensure that team members are actively

encouraged and supported to participate in decision-­‐making processes,
assume responsibility and exercise initiative as appropriate
As one of the many strategies of modern business is to achieve ‘best practice’ policies,
organisations must embrace new management techniques such as quality assurance and
continuous improvement. As continuous improvement is a practice that requires all members of
the organisation to work together to continually improve systems and employee performance to
provide quality products and services, strategic planning will be crucial as a guarantee that all such
objectives are achieved successfully.

The Business Plan

The objectives or goals of an organisation’s strategic plans provide the broad direction for its
operations and activities. Without precise objectives, the organisation does not have any clear
direction, like a ship without its rudder. Strategic plans give the organisation a direction and a
purpose for its existence. It must be a team approach.

Mission statement
The first part of the strategic planning process is to define the organisation’s mission. Senior
management has to explore several possibilities before defining the right mission statement.
Many managers find the common thread of their organisation by asking themselves some
pertinent questions:

What is our business and what should it be?

This question is not as simple as it may sound. For example, if an organisation’s business or
purpose is defined too broadly, the organisation may lack a sense of direction. If too narrowly
defined, the organisation may overlook attractive opportunities. For example, ‘Our business is to
produce a wide range of household products at competitive prices in Australia’.

Who are our customers?

An examination of the needs and characteristics of internal and external customers may provide
the direction for an organisation to take. Many organisations undertake market research to
determine the demographical make--‐up of their customer base. They are then able to determine
their customers’ profiles and buying habits.

Where are we heading?

This question is relevant as it defines the direction the organisation is going to take. Is the
organisation’s share of the market growing or declining? Does it need to diversify or expand? Do
we need quality accreditation to be successful?
What major competitive advantages do we enjoy?
Managers can identify and isolate those factors that give the organisation a strong competitive
advantage.

In what areas of competence do we excel?

Special employee qualities or expertise in providing quality customer service could make the
organisation the industry leader. Do we comply with quality standards?
Within the broad limits of an organisation’s purpose for existence, each chooses its own unique
mission, which can be described in terms of its product and services. Although the purpose of
organisations is generally to provide goods and services to satisfy customer demand, many
organisations operate in different industries to make it happen, such as hospitality (service),
mining (exploration), manufacturing (production), transportation (service), banking and finance
(service), just to mention a few. Together, they satisfy all their customers’ needs in one way or
another in the commercial and industrialised world. Most of these organisations have adopted
‘best practice’ policies.

Strategic plans for continuous improvement

Managers should not develop strategies and objectives in isolation. There should be constant
interaction with stakeholders at different levels in the hierarchy. Plans containing strategies and
objectives should be drawn up and offered for review and improvement. Planning for the
introduction of continuous improvement processes normally takes time to research, consult and
implement.
The activities of managers involved in the planning process can be divided into three stages.

1. Develop corporate strategies for continuous improvement

During the first stage of the planning process, senior management meets to select the strategies
for the organisation. In addition, the responsibilities of each division for meeting these objectives
are broadly outlined. Departmental managers will play an important role during this stage. They
may be called on when senior managers want to make sure that certain strategies are practical in
the adoption of continuous improvement systems in their respective areas. Advice may be
sourced externally at this stage, such as from industry groups or the Australian Quality Council.

2. Develop departmental objectives

Departmental managers play a much more important role during the second stage. First, they
meet with their division managers to develop preliminary strategies and objectives for their
departments. During this process, they will be working under the instructions of their senior
managers. Once several possible strategies have been selected, department managers must draw
up formal action plans and carry them out.
3. Allocate resources
In the third stage, the resources of the organisation are finally allocated. The types and amount of
resources needed for the introduction of continuous improvement systems will usually be in the
form of finance, personnel, plant and machinery. Divisional managers are responsible for drawing
up budgets for their departments. Frequently, the amount of resources allocated will depend not
only on their actual needs but also on their persuasive and political influence within the
organisation.
It is accepted that smaller organisations may have fewer steps in developing the same process and
may also lack the same breadth of skills to implement all activities. Larger, better-­‐resourced
corporations would be in a better position to carry out the full breadth of each stage set out
above. Regardless of size, the same principles apply.

The continuous improvement planning process

The planning process is dissected into five planning steps that can be adapted to all planning
activities at all organisational levels. It is a more specific approach to planning and can be very
useful in the introduction and implementation of continuous improvement (CI) systems. Figure 1
demonstrates the five steps to planning and explanations of each of the five steps are given below.

Establish goals

Perform SWOT
analysis

Develop
strategies

Implement
action plans

Evaluate and
improve

Figure 1: Five steps to planning

Step 1 Establish goals for continuous improvement
Establish a goal or a set of goals. Planning begins with decisions about what the organisation (or
unit within the organisation) wants or needs. Without a clear definition of goals, organisations
spread their resources too broadly. Identifying priorities and being specific about their aims
enables organisations to focus their resources effectively.
Example: Develop continuous improvement (CI) systems to maximise performance and
productivity to meet customer expectations.

Step 2 Perform SWOT analysis

This stage involves doing a SWOT analysis on the strengths, weaknesses, opportunities and threats
the organisation faces. Open lines of communication within the organisation and between its
divisions and departments to provide the information, especially financial and statistical data
necessary for this second stage.

Step 3 Develop strategies

After the SWOT analysis has been performed and it has been determined that advantages
outweigh the disadvantages, relevant strategies must be developed to ensure that set goals are
achieved. Strategies including continuous improvement systems should be discussed by both
senior management and employees to ensure that they can be implemented successfully. They
should agree on a plan of action for reaching the goals.

Step 4 Implement action plans

This is where teamwork is paramount in the implementation of action plans with the approval of
senior management. All barriers should be anticipated and overcome by continuous
communication between all parties involved. Anticipating difficult situations and problems that
are likely to arise may not be easy, but is an essential part of planning. The implementation
process for continuous improvement should be well planned and executed.

Step 5 Evaluate and improve

The final step involves the evaluation and review of the planning process. Did everything go
according to plan? What went wrong? Did everyone understand the CI objective? Were the
strategies practical and implemented well? Was the plan of action carried out successfully? Did we
receive full senior management support and adequate resources? Are operational systems
working well?
These questions must be asked to determine the success or failure of the plan. The performance
of those involved should also be assessed according to the responsibilities assigned. The purpose
of this review is to determine whether any changes or improvements need to be made to the
process. If the planning was sharp and involved all stakeholders, organisational goals set would
certainly be successfully achieved. The lessons learnt can be applied to improve future planning.