By Ken Rosen
[If needed, see our Performance Portfolio intro…and each sector has one descriptive post]
Every MBA student is marinated in the concept of Learning Curves. The concept, quantified in 1936 at Wright-Patterson Air Force Base while building aircraft, asserts a doubling of volume in a process (widgets made, orders processed, etc.), cuts the cost of that process by a fixed percentage. But sad to say, few read the fine print: it only works if you try. Without continuous improvement as a goal, learning curve (or “experience curve”) effects don’t happen. This is the heart of Performance Portfolio Sector 3. (Click here for an introduction to the Performance Portfolio)
Sector 3—internal focus/short to medium term—emphasizes continuous improvement. It drives the question: “Now that you have dedicated resources, how can you optimize their use?” Like the MBA who learns about Learning Curves, but forgets the fine print about needing to try to achieve the efficiency magic, leaders who don’t constantly optimize the use of resources reach goals more slowly (if at all) and at higher cost.
Organizations that matter understand that continuous improvement is just that: continuous. You don’t boil the ocean, but you do figure out which processes help you excel and shine a bright analytical light on those processes to make them more effective and more efficient. You accept that some of the ways to improve don’t exist yet. You may need to gain more experience first or you might even need someone else to invent a better toolset. Either way, organizations that matter understand that Sector 3 excellence starts today…and never stops.
Takeaways:
- Spotlight processes with the greatest impact on your performance.
- Never stop trying to optimize these processes.
- Demand Learning Curve improvements over time—never be satisfied that a critical process is as effective and efficient as it can be.
