5 Must-Know Performance and Process Improvement Methodologies

The right process improvement methodologies can increase efficiency, cut costs, boost business agility, streamline operations, and much much more.

Yet there are quite a few performance tools out there, and not all are created equal—some are adept at assisting employee performance, some optimize process efficiency, and others simplify organizational governance.

Let’s take a look at some of the widely used process improvement tools and see how they can improve performance throughout the organization.

The big 5

Here are a few of the best tools and frameworks that can be used to assess, analyze, and optimize your business processes:

Lean

Lean thinking is a framework derived from the Toyota Production System, a methodology aimed at reducing waste, shortening product development cycles, incremental change, and continual improvement.

This framework incorporates concepts such as Kanban, a scheduling system for just-in-time manufacturing, and Kaizen, a Japanese concept that focuses on gradual and continual enhancements rather than revolutionary change.

This methodology has become quite well-known since it was first introduced by Toyota. 

In recent years, this method was even repopularized and applied to startups by Eric Ries in his book, The Lean Startup.

Like many of the other tools mentioned here, lean can be applied to a wide range of business processes, from software development to manufacturing to supply chain management.

Six Sigma

Six Sigma, developed at Motorola in the 1980s, is a framework designed to maximize process quality by minimizing defects and variability.

The process mirrors the Plan-Do-Study-Act process and has two central methods:

• DMAIC. This method is geared towards improving existing processes. It stands for: define the system, measure key aspects of the current process, analyze the data, improve the current process, and control the future state process. 
• DMADV. This process is aimed at developing new processes. Its stages are: define design goals, measure and identify characteristics critical to quality, analyze to develop and design alternatives, design an improved alternative, verify the design.

Like lean, Six Sigma was originally developed in the manufacturing space, but it too has been applied to a wide range of other business functions and processes. While both lean and Six Sigma have different emphases, some have combined both methods and even developed hybrid approaches such as Lean Six Sigma.

Total quality management (TQM)

Total Quality Management (TQM) is a management system that focuses on customer satisfaction and continual improvement.

There are different versions of this methodology, each with its own set of core principles, but a few common ones include:

• Customer-first
• Constant improvement
• Total employee participation
• Data-driven decisions
• Process-centered

While TQM is a management methodology, it is also built around continual process improvement through ongoing error corrections, policy adjustments, employee training, and data collection. 

Also, like many of the other tools covered here, TQM has its roots in the same philosophies, and Toyota’s Kanban method has even been cited as an example of TQM.

Management by objectives (MBO)

Management by objectives (MBO) takes a high-level approach to performance improvement and focuses more on management practices than on process optimization.

This approach, introduced by Peter Drucker, sets forth clear objectives that are agreed upon by managers and employees. 

The steps in this approach include:

• Creating organizational objectives
• Making those objectives understandable to employees
• Encouraging employee participation in setting their own individual goals
• Tracking progress
• Rewarding accomplishments

MBO does have its limitations, but the tool is not meant to be a “magic bullet” for performance improvement. Instead, it should be utilized with other tools, such as those covered here, to improve organizational communication, engage employees, and enhance vertical relationships within the organization.

Business process modeling (BPM)

Business process modeling (BPM), as the term suggests, maps out processes and represents them visually so that they may be more easily understood and optimized.

There are several types of process models that are applicable to different scenarios.

A simulation model, for instance, may be used to model complex systems, such as supply chains. 

A model of a virtual workflow, on the other hand, may be mapped out with flowcharts, control flow diagrams, or even modern software tools, such as digital adoption platforms (DAPs).

Business process modeling is closely linked to other process improvement methodologies, such as business process management (which also has the acronym BPM), business process reengineering (BPR), and business process design (BPD), among others.

While there are several tools and techniques that fall under these disciplines, they all share the same general approach and the same overarching goals: to model existing processes in order to optimize or redesign them.

Final thoughts

Here, we have looked at a few general approaches to business process improvement and performance improvement. 

Many of today’s most common tools, such as PDCA, PDSA, DMAIC, Kaizen, and Kanban all share the same roots and are part of existing methodologies, such as lean or Six Sigma. 

However, to gain a well-rounded understanding of process improvement methods, it is a good idea to examine approaches that focus not only on processes, but on the role that other business components play in those processes. Management methods, such as TQM, as well as change management theories, such as ADKAR, can offer different angles on the same processes—leading to new insights on how to adjust and improve those processes.