Value creation is the main goal of any business. Managers should make decisions in order to maximize the value of their company, using minimal resources.
Many organizations utilize Lean management strategies to prioritize customer interests and enable workers to improve processes. Instead of the optimization of separate processes, Lean thinking focuses on processes alignment and continuous improvement.
Recently, we were discussing a popular and widely-used Lean model: Plan–Do–Check–Act (PDCA). This simple, effective and inexpensive improvement cycle can be applied at any management level for problem-solving cases.
Toyota created a similar but slightly modified model for innovation and design solutions. We believe this model, called Investigate–Design–Execute–Adjust (IDEA), is an improvement on the PDCA cycle.
But is there a big difference between the PCDA model and the IDEA model? Let’s explore each.
The Four Steps of the PDCA Continuous Improvement Cycle
- Plan the changes.
- Do your plan.
- Check the results.
- Act and implement the best initiatives.
In the first step of PDCA, you set your goals, identify and analyze the problem, identify the cause of the problem, decide on a change you want to execute, and then Plan how to implement and manage your change program in practice. Do is the second step, where you execute your plan, preferably on a small-scale. In the third step, you analyze the results, or Check whether or not the set goals were reached and the methods used were effective. In the fourth step, you Act on a larger scale, implementing the most effective changes or improve your plan if the results diverge from your goals. Then you repeat the process from the first step with your new knowledge.
The Four Steps of the IDEA Continuous Improvement Cycle
Investigate the situation and find the information needed to identify, define and analyze the problem. Before gathering data, you should set process improvement goals that are compatible with company goals and then clarify any factors that may impede their execution. In many cases, organizations receive information about current problems from their customers. When the problems are spelled out, they can be analyzed and their causes can be found. The causes may range from outright mistakes, to a misunderstanding of customer needs, to disruptive innovations.
Design a solution. Brainstorm a number of solutions and chose one (or a few) that will allow you to achieve your goals. Get stockholders involved in your work, since they not only have to be on your side but can also generate innovative solutions. Do not forget about your customers, who not only inform you of problems but also might suggest ways to fix them. If a problem is not in your competence, talk to other company specialists or outsource the problem to experts. Look for the best solution, even if you are not sure a solution actually exists.
Execute your plan, preferably on a small-scale. In this stage you test whether your solution works. This stage works better if it is possible to test your plan on a part of the business. Create your own key performance indicators (KPIs) so you can measure your results.
Adjust your operations after studying the results of the execution. After conducting an experiment, verify whether or not the results correspond to the desired effect and ensure the methods used satisfy you. Identify quick wins. If your solutions perform well, you can expand your practice on a larger scale or to other practices and standardize your efficient solutions. If the results are negative, the improvements or changes in your plan should be done. Also, check whether or not your KPIs conform to your requirements and adjust them if needed.
Breaking Down The Two Models
When both models are broken down into sub-tasks, they may seem nearly identical:
Is this truly the case?
Let us look closer at some stages of the cycles in order to understand whether or not they are alike, studying each step through the lens of IT management.
When we deal with IT projects, information changes faster than it does with manufacturing operation processes or scientific problem solving. The pace of our age is accelerating; new truths appear every second, and many more become obsolete. Traditional ways of doing business do not work anymore. Constant information gathering and analyzing have become an important part of successful companies. Consequently, the Investigate stage of the IDEA model is greatly useful for IT projects and services.
Within the Investigate stage, we have a sequence:
- Set the goals.
- Identify the problem.
- Collect the information.
- Analyze the information.
- Identify the cause of the problem.
For rapid, regular and tangible results, I recommend appending a cycle to the sequence:
- Identify key gaps.
- Collect the information.
- Analyze the information.
- Identify the cause of the gaps.
To have a full picture of a business environment, research the company’s inner operational processes. Market research and analysis must also be done systematically because changes in business ecosystem are so rapid, problems and gaps which appear suddenly can have great influence on all of the organization’s work.
In the PCDA model, there is no emphasis on a thorough investigation of the business environment or constant information gathering and analysis. In addition, the Design stage is a distinct part of the IDEA model but only a subpart of the Plan stage in the PDCA model.
We draft strategic options and KPIs in the IDEA model, as well as create a maturity model. This is very important in IT. Maturity assessments allow an understanding of the baseline, from which further development will progress and necessary changes are performed if the maturity level is lower than needed.
Brainstorming, working with stockholders on the vision of the company, working with the managers on the strategy, and asking customers about possible solutions are all parts of the Design process.
Thus, in the IDEA model, we generate ideas and not just predictions (as we do in the PDCA approach). As shown above, the IDEA method is an improvement over the PDCA model in the information gathering and analyzing, as well as in the designing of a solution.
I also feel the IDEA model improves upon the first steps of the PCDA method under certain practical conditions. If the problem is known and understood, you can start with planning. If the problem is known but not clearly stated, you have to identify the problem to address during the Plan phase in the PCDA approach. However, if the problem is unknown, you have to Investigate before you are able to identify it.
In our technological era, we encounter many unknown problems and the IDEA model is best suited for solving them. Including additional cycles in the Investigate stage can facilitate adaptation to the speed of changes.
Is there a difference between the PCDA and IDEA models?
So, yes, there really is a big difference between these two approaches after all.
The IDEA model is better adjusted to the time in which we live and work, and to the specific needs of IT projects.