The business world is dynamic, and companies always strive for better performance to gain competitive advantages. Hence, we can see many improvement strategies and initiatives to boost the quality and reduce the cost and delivery time.
There are lot of methodologies used by businesses to improve their processes, such as Six Sigma, Lean Management, TRIZ, Theory of Constraints and many more. These methodologies have similarities in solving critical issues by using specific protocols.
We can group the methodologies into two different strategies of improvement; incremental improvement and breakthrough improvement. However, the similarity of these two strategies is to increase the bottom-line results of the businesses.
In this article, we will discuss the differences between these two strategies in detail from the aspect of the effect, cost of implementation, pace and other factors.
First, we need to understand the difference between incremental and breakthrough improvements.
Definition of Incremental Improvement
Incremental improvement strategies tend to compound, similar to how compound interest works. These little advances tend to accelerate with time. In the second part of the twentieth century, Japanese automakers utilized continuous improvement techniques to build up massive cash reserves on top of good reputations for quality.
It isn’t just beneficial in the corporate world. Thanks to incremental improvements, the Great Britain cycling team went from being also-rans to capturing seven out of ten gold medals at the 2008 Olympics. It’s why any financial advisor will tell their customers to start saving for retirement as soon as possible; modest measures build up quickly.
Lean Management is one of the incremental improvement strategy’s methodology.
Benefits and Drawbacks of Incremental Improvement
The main objective in incremental improvement is continuous momentum. This strategy will generate the results but also have certain drawbacks.
Better buy-in from the operation team.
Since incremental improvement requires teamwork, the change is expected to be accepted readily since the operation team is also involved in problem-solving.
Incremental improvement requires commitment and discipline.
Many incremental improvements rely on involvement within the organization, such as Kaizen Event, Gemba Walk and 5S activity. Commitment and discipline is the key success factor of this strategy.
Longer time to deliver the results.
The incremental improvement is a gradual improvement with an expected 5-15% improvement for each stage. Hence, the business is expected to achieve the significant result in later compared to the breakthrough improvement strategy,
Definition of Breakthrough Improvement
Breakthroughs rely on the word “break” in their name. Major disruptions frequently occur when something (such as people’s patience with current affairs) cracks. It requires a level of risk acceptance not required for incremental improvements. Because of its result-oriented approach and desire for significant gains, breakthrough improvement stimulates creativity.
It is commonly accepted that a breakthrough improvement of 70% or more will be achieved.
This stretch goal may be challenging
Six Sigma is one of the breakthrough improvement strategy’s methodology.
Benefits and Drawbacks of Breakthrough Improvement
Compared to incremental improvement methods, breakthrough improvement is intended to produce significant outcomes. This will assist your company, but it will also have certain disadvantages.
New procedures and products can be delivered faster than incremental improvements.
New approaches, technology, creativity, and significant change focus on breakthrough improvement. Exponential advancements in product and process design will focus on substantial improvement.
Breakthrough improvement requires more extended time and more resources.
Many projects aimed at achieving breakthrough improvements will take longer to complete and require more technological and financial resources. However, the level of progress that can be reached should make this strategy worthwhile.
Greater risk.
Incremental improvement is based on incrementally improving present processes one at a time. If adopted, breakthrough advances incur more significant risk and hardship if they do not work out as expected.
Final Thought of Incremental and Breakthrough Improvement Strategy
People will be motivated and empowered to create ongoing and incremental improvements in their processes if they work in a culture of continuous improvement.
You may want to make more significant improvements at times. Gains of more than 70% will be achieved through breakthrough improvement. However, keep in mind that these initiatives will take more time and resources and pose a more significant risk.
A business with a change and improvement culture will have a mix of incremental and breakthrough projects.