Employee Driven Digital Kaizen: A Better Way To Continuously Improve And Innovate

Amidst each industry's race toward digital transformation, an agenda to improve organizational innovation habits has taken center stage. There are a slew of new innovation tools from low code platforms to Chat GPT enabling organizations to develop efficient workflows and more readily capitalize on innovation ideas. This is indeed a race with high stakes for the company that lags behind the curve and great monetary rewards for the company that bypasses their competition.

Albeit a race, we must not abandon the ideology that exceptional core principles also elevate a company both in the market and in the eyes of those that have devoted their time to your cause, i.e. your staff.

This article examines a lacking innovation process and explores the possibility of one that aligns innovation objectives with an improved work culture and appreciated contributing employees.

What is Digital Kaizen?

To quote a previous article I've written Owning The Numbers for Continuous Improvement, "The name Kaizen means continual improvement. Masaaki based his methodology around 5 key principles: Know your Customer, Let it Flow (Zero Waste), Go to Gemba (the Shop Floor), Empower People, and Be Transparent. The intent was that everyone, from top management to the shop floor, would embody Kaizen principles and build a company culture that never ceased improving. "KAIZEN™ means improvement. Moreover, it means continuing improvement in personal life, home life, social life, and working life. When applied to the workplace KAIZEN™ means continuing improvement involving everyone – managers and workers alike." Masaaki Imai, Founder of Kaizen Institute".

Over the past 30 years, the Kaizen philosophy has given way to several management techniques such as Quality Circles, Total Productive Maintenance, Total Preventative Maintenance, Just-In-Time, and Robotic Process Automation.

More recently, a new technique designed for digital transformation called Digital Kaizen has arisen and gained popularity amongst large corporations who have now begun building in-house platforms that encourage internal and external idea submissions. Employees are incentivized to submit ideas and in some cases build low-code solutions. They are rewarded with career advancement, bonuses, and acknowledgement.

A study was conducted and published on December of 2022 by Duy Dang-Pham, School of Business & Management, RMIT University, Vietnam observing a Human Resource management process and the business model of a company called FPT Software. This study led to the creation of the process model shown below. It leverages dynamics capabilities framework and Digital Kaizen.

The study concluded this method promotes "cross-functional collaboration and shared understanding between organizational stakeholders". It also eluded to other business models and processes potentially emerging as more employees become involved.

My personal conclusion is, however, that the process does not directly involve employees. Rather, it lays out a framework for improved stakeholder collaboration. Thus, this agenda was achieved. The underlying problem of employee involvement in the innovation process is still in question. Past experience shows top-down strategy implementation receives very little employee engagement. Instead, this approach receives a reluctant "let's do enough to get by" employee response.

Why not involve employees in the strategy building process? Instead of forcing something new and unfamiliar upon them, give them ownership and collaborate with them throughout the process.

An Introduction To Employee Driven Digital Kaizen

Originating from a family full of Blue Collar and Entry to Mid level White Collar professionals as well as being a founder and cofounder of several companies - a Web Agency and Startup Studio, a SaaS company, and a Startup Accelerator - has granted me the privilege of observing, through various conversations and interactions, different problems from multiple perspectives that can be solved with the same solution. Ponder on this:

• Venture Capitalists and Corporate Venture Departments lack good deal flow.
• Corporate Innovation Departments need ongoing projects to remain relevant.
• Employees see problems every day and think of solutions, but most don't share ideas with superiors because they don't believe they have their best interest in mind.
• Startup founders endlessly search for product market fit, and most don't find it because they are not close enough to the problem they're solving.
• Corporate buyers source deals externally with a revenue barrier of $100k+ because they have to be sure the sourced business has evolved to know how to solve a market problem well beforehand.
• Startup founders gain corporate buy-in regularly for "almost" solving the problem corporates had in mind.
• Managers know the top reasons for employee turnover rate are Low Pay, Toxic Work Culture, and Lack of Opportunities for Career Advancement.

The solution is evident and overlooked from each perspective. Everyone needs first-hand employee contribution to innovation efforts both corporately and globally. It is the clear solution for change in each situation.

The looming question remains why are Blue Collar and Entry to Mid level White Collar employees being "almost" included in the corporate innovation process when the priority is to solicit their ideas? Secondly, what do employees actually want in exchange for their ideas? Thirdly, are they being incentivized and rewarded enough for contributing innovation that could be a catalyst for a corporation? 

7 Steps of Employee Driven Digital Kaizen

Employees need to be involved in four key areas:

• The Problem Discovery - They are closest to problems. Their suggestions should be prioritized.
• The Solution Suggestion - They work with the problem area daily and are most likely to know the best solution.
• The Execution Plan - They will be more likely to engage with a solution created by them. They need environments where they feel it's safe to innovate because they do not feel exploited. This environment is cultivated by granting them true ownership and just rewards.
• The Collaborative Implementation - Bringing your own solution to life is in itself fulfilling. It's much more fulfilling to bring a solution to life alongside your team. It's even better when accompanied by an adequate reward and recognition.

This is, in essence, how team building works. A sports team is involved in every part of the process leading up to a competitive event from watching game footage to additional practices to contributing to new plays to competing in the game. Their collaborative involvement instills pride in team achievements.

Consider the following seven step innovation process - Employee Driven Digital Kaizen - I've designed while exploring these thoughts. It involves employees at every point including contributing to corporate venture objectives. The process is mapped out and supported with points three of my own ventures can currently facilitate and support.

Step 1: Daily Employee Driven Idea Reports and Employee Owned Projects using Circle View

• Employees routinely report potential improvement projects using Circleview.App , a goal and performance management tool.
• Managers daily acknowledge, evaluate priorities, and assign improvement projects.
• Daily lean meetings focus on projects owned by employees.

Step 2: Prioritize High Impact Projects Requiring High Effort for Later using Circle View

• Managers assess whether a project should be brought to all managers attention (has cross-functional impact) and would require more resources to carry out.
• Managers also determine whether an internal project idea may have commercialization potential and maintains a record of the employee that originally made the suggestion.

Step 3: Monthly Large Project Discovery Manager Meetings using Circle View

• Managers meet monthly to discuss and plan high priority projects that align with strategic objectives and were put on hold to plan and allocate resources accordingly.
• Ownership of the large projects are assigned to one or several employees.
• Managers brainstorm about projects with commercial potential, decide which idea(s) to submit to corporate, then invite the original suggester to collaborate with them in writing a proposal which includes technical and digital aspects.

Step 4: Large Project(s) Development and Implementation Begin using Circle View

• Resources are allocated to the necessary departments to carry out large projects.
• They are displayed on the shop floor and clearly show direct alignment to strategic goals.
• Progress is also displayed during regular (daily) lean meetings.

(Learn more about effectively running lean meetings in my previous article titled, "Daily Lean Management – How To Make Your Business Run Like A Well-Oiled Machine".)

Step 5: Employee Acknowledgement for All Project Suggestions

• The originator of projects of every size need a notable (monetary) reward and should be acknowledged both before their peers and company wide.

Step 6: Suggesters Incentivized With Founder Equity To Participate In Commercializing A Product with Corporate and Startup ROI Accelerator Support

• With corporate's approval and backing of the new commercial worthy product, offer the idea originator equity and a significant raise to innovate alongside corporate and a founding team of their choosing.
• Startup ROI , a startup accelerator, can assist the corporation in product market validation, recruiting a founding team, training and advising the team, and launching the product in the commercial market.
• Konnectic Energy Web Agency & Startup Studio can work alongside Startup ROI, the founding team, and the corporation to develop the new digital product leveraging lean methodologies.

Step 7: Pilot and Test the Commercial Product at Several Company Locations and Then Launch It In the Market with Startup ROI Accelerator support

• Run a successful internal pilot and launch the new product with company wide support. (Involve the staff in the success of the product produced by them and let them contribute to its launch readiness.)

Conclusion

This has been a high level view of an employee driven innovation process. Full implementation involves the buy-in of stakeholders across multiple departments. Although, this method can be implemented on smaller scales and further customized to fit specific workflows.

For example, an individual company location can get employees engaged in strategic goal contribution through goal transparency, employee ownership of key metrics, and by operating according to employee driven project suggestions.

(Learn more about implementing this in my previous article titled, "A Practical Guide To Implementing Goal Transparency & Employee Empowerment".

Another example of smaller scale implementation is if corporate venture departments sourced deals from internal employee driven projects requiring larger budget allocation and requested permission for the employees contributing the suggested ideas be apart of the founding teams.

In any case, I'd love to hear your takeaways from this innovation method. Drop a comment or message me directly.

Interested in Circle View (A Goal & Performance Management Tool) - kiara@circleview.app

Interested in Konnectic Energy - admin@konnecticenergy.com

Interested in Startup ROI Accelerator - vip@startuproi.com