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‘Power of the compounding effect’ – Through the lens of Kaizen

June 6, 2020

I recently came across an interesting book called ‘Atomic Habits’ on Transformational change, by James Clear. The gist of the book was simple, yet powerful. Some of the key takeaways, though not directly linked to Lean or Kaizen, are still very relevant nevertheless:

1. Over estimation of the power of any single action over small actions over a period of time.

2. The Power of 1% – 1% change on a daily basis will have a compounding effect over a year.

3. ‘Forget Goals’ – Focus on creating the right systems instead.

4. Plateau of latent potential – Change initially takes time and may even seem as if things aren’t moving at first.

These points have a lot of significance both from a personal and organizational standpoint and it reinforces important tenants from a Continuous Improvement perspective. The concept of Kaizen or Continuous Improvement, is one many companies around the world have bought into since its adoption from Japan. However in my experience, even companies that have formal Kaizen or Lean programmes with ample support from the Senior Management, face challenges in successfully making it a part of the company’s culture. ‘Atomic Habits’ gives us food for thought as to why this could be the case.

Most companies make the mistake of hoping that a Kaizen or Lean programme would be a silver bullet that provides immediate results, rather than it being a methodology that should be reflected in the way processes and systems are designed, resulting in incremental improvements that accumulate over time; i.e. ‘The power of 1%’. These concepts should also not be goals in and by themselves, but rather, a way of working; i.e. the culture within the company. For example, most companies measure sales target achievement and profit after tax but do not measure the achievement of continuous Improvement KPIs, which results in a ‘piece meal’ approach to continuous improvement; i.e. lack of adequate focus on creating the right behaviour and system for continuous improvement.

Visible organizational change through continuous improvement also takes time and at times can even seem as if things were worse than they were at the beginning (due to initial resistance to change). It is important therefore to understand that it takes time for dividends to start to come through; i.e. The ‘plateau of latent potential’. This is also referred to as the ‘hockey stick effect’.

The author goes on to state that in order for desirable change to manifest, one needs to make desirable practices easy and less desirable ones harder in comparison. From a Kaizen or Lean perspective, not only should the re engineered processes be more efficient, but what is equally or more important, is that they are easy and intuitive, especially when there is technological change involved. Most improved processes are never practiced the way they were designed to by staff, either because the technology takes time to get accustomed to, or due to even simpler reasons, such as, the PC screens provided for ‘digital paperless processing’ being too small for multi tasking for example, resulting in staff continuing to take printouts instead.

Most importantly though above all, the key to lasting change, both in life and in organizations is perseverance.

From → Lean

2 Comments
  1. Medhani somasinghe permalink

    This 1% u spoken about here is 361 degree isn’t it?
    That extra degree matters and is the u turn of the challenge in any journey .
    Am I right?

    • Yes, it’s about the tiny changes we make over time that create a huge and lasting impact at the end. People keep looking for the ‘big bang’ with fast results which I’d harder to do achieve and sustain.

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