Continuous Quality Improvement (CQI) is a fancy term that describes a way to improve a business over time. CQI is based on a set of principles that encourage ongoing, incremental progress.
Continuous Quality Improvement gained popularity in the 1990s, with car manufacturer Toyota being one of the most notable companies to apply CQI to their work process. CQI has been especially popular in healthcare settings such as hospitals, where it’s been credited with reducing wait times and costs.
Any business can gain from a quality improvement program. If you’re a small business, you’re probably already putting some of the theory into action. Small, flexible teams benefit extremely well from CQI. We'll cover all your burning questions about CQI and go over how to implement it at your business.
Why Should a Small Business Implement CQI?
CQI can help your business stay ahead of any issues and address them before they blow up into major problems, saving you from hiring expensive consultants and advisors. CQI can also help you build a stronger product or service by frequently dealing with glitches and considering any new ideas or opportunities. In general, CQI helps you:
Develop a framework for implementing changes: CQI gives you, your managers and your employees a structure for addressing issues and making changes. It makes improvement a regular, routine part of your workflow so people know exactly what to do and when to do it.
Encourage a culture of improvement: When CQI is part of a company’s culture, managers and employees at all levels know they can contribute to making your business better and are encouraged to do so. If something isn’t going quite right, they work to improve it.
Establish a long-term perspective: With CQI, you know where you want to be in the long term and regularly assess how to get there in the short term. By keeping your company’s vision top of mind, your leaders and employees stay on track more easily.
What Are the Core Principles of Continuous Quality Improvement?
You’ll find that there are different methods of implementing Continuous Quality Improvement in the workplace, with punchy names like Lean, Six Sigma, and the Deming Cycle. Although they go by different names and have different steps, they rely on a core set of fundamentals. In fact, you might already be applying some of these principles to your business. They are:
- Systems perspective: You view all parts of your business as a unified whole to achieve your mission.
- Visionary leadership: You have a vision for the organization and set high expectations for your staff. You take input from all levels.
- Customer-focused: You take into account all aspects of a customer’s experience and how it ultimately contributes to your business’s success.
- Value people: You value your team members and together you recognize and celebrate achievements.
- Use analytics: You assess performance with metrics and benchmarks, which you use to drive your decisions.
- Flexible operations: Your operations are agile and adaptable to change. You can anticipate, prepare for, and recover from disruptions.
- Innovative: You think in the short term and in the long term. You make meaningful changes to your operations and business model.
- Ethics and transparency: You emphasize the importance of using, generating and sharing accurate data and maintaining open communication.
If you want to learn more about the CQI principles, take a look at the Baldrige Excellence Framework, which this list was adapted from. The framework was developed by the US government’s National Institute of Standards and Technology.
How Do I Implement CQI in a Small Business?
How you implement Continuous Quality Improvement in a business depends on many factors, like company size and industry. Here’s an implementation model developed for small- and medium-sized businesses by researchers in the Netherlands.
To show that businesses of all types can use this framework to address root causes and inspire change, we’ve paired each step with a sample case study.
Keep in mind: don’t feel obligated to follow every step to the rule. CQI is a set of guiding principles, not necessarily a set of instructions.
Phase One: Recognition and Preparation for Change
Recognizing an opportunity for improvement in a system is the first step in making a change. Change might be motivated by internal factors, such as a desire to improve project efficiency, and by external factors, such as customer complaints.
Implementing CQI is best done with a top-down approach, starting from company leadership. With your key executives or business partners, develop a vision statement and come up with your business goals and how you’ll achieve them. You're responsible for making CQI part of the organizational culture and committing to the program. Be prepared to address resistance, motivate employees, and help educate managers about CQI and the assessment tools you’re using. Train the best leaders in the company to clearly demonstrate a serious commitment to the process.
Case study: A small business offers home installation services. They identify one major goal for the year—to grow revenue by 10 percent. To help them reach their goal, they start looking at ways to improve efficiency. Managers notice that it is taking much longer to complete client projects, and workers are consistently falling behind. Client appointments are getting postponed and client feedback is poor.
Management is sure there is room for improvement and decides to implement a quality management process. They communicate to the staff that they want to improve efficiency, and ask the lead supervisor to oversee a pilot program.
Phase Two: Initialization and Development
To kick off the second phase, start with a small pilot program. Look for projects that can be completed relatively quickly, ideally within four months. Identify and train a project manager and allow them to lead the project. The goal is to have a quick win that will generate momentum for the company and act as a model for other teams to follow.
Case study: The company enters Phase Two by walking through the entire customer experience, from booking to final completion. They notice that last-minute bookings are often slotted in and clients are located all over the city, forcing workers to spend a lot of time driving back and forth.
The team decides to address the variable distance workers drive each day, and settle on a three-month pilot program where the city is divided into two zones and staff are assigned one of the zones to work in. The staff are happy with this change, and agree to track how far they drive and follow-up on customer satisfaction.
Phase Three: Continuation and Commitment
In the final phase, your goal is to take what the company has learned and integrate that into the business for the long term.
Sustaining a culture of continuous change is difficult and it’s normal for initiatives to lose momentum. You can combat this by making the CQI process part of your company’s regular operations. Try to check that this approach engages workers throughout their career progression. A committed and accountable team plays a key role in long-term success.
Case study: At the end of the three months, the company gathers the data. They find that staff are indeed driving fewer miles and can get to more clients. They also see a small bump in their revenue. Workers provide feedback that one zone is consistently busier than the other. The company takes these learnings and decides to officially implement the zone strategy but redraw them for a more even distribution.
They include the map in the official training documents and ask their team to regularly give them feedback on how it’s going. They adjust when need be. Meanwhile, they start the cycle over for any additional strategies they identified to reach their revenue goal.
CQI with the PDSA Cycle
An alternative CQI method is the Plan-Do-Study-Act Cycle. This four-step CQI process is similar to the steps outlined above. The methodology is rooted in the scientific method. Like a scientist, you’ll try out new changes and see if the result is a desired improvement to your business.
- Plan: Identify the problem and develop an experiment to test it. Review your current processes and decide what data you will need to collect and take a baseline measurement. Train the appropriate staff and set a timeline for completion.
- Do: Carry out a small experiment and document your progress. Collect data from customer surveys, reviews, self-assessments, and any other indicators of success.
- Study: Evaluate the gathered data and see what changes were accomplished. Learn from your findings and document them.
- Act: Using your findings, decide on what processes or procedures should be officially adopted in the long run. The cycle can begin again, this time with a stronger foundation of knowledge.
CQI Implementation Ideas
CQI is meant to be a framework for initiating changes that make sense to your own business, based on your particular priorities and goals. If you’re not sure where to begin, take a look at these ideas:
- Improve client communication by setting up a website and Facebook page.
- Make running payroll easy with payroll and workers’ comp software like Hourly.
- Track cash flow more accurately with an integrated bookkeeping system.
Tips for Success
Now that you know a lot more about CQI, here are a few quick tips to help you hit the ground running:
- Include all employees in the process. Everyone plays an important role in a small business, so while you might start off with a small CQI team, make sure everyone is participating as early as possible.
- Set deadlines and define what a successful CQI project looks so you know when it’s time to end the initiative and begin a new one.
- Delegate decision-making responsibilities by coaching others and developing their skills. Trust staff members to arrive at their own solutions instead of relying on you for answers.
Resources to Learn More
Remember, just because you’ve implemented CQI doesn’t mean all your problems will be solved. Although CQI provides you with a framework to initiate, implement, and review changes, it’ll take teamwork, creative thinking, and patience to establish a quality improvement process that will evolve and endure over the years.
The Small Business Administration offers programs to support small businesses with improving strategic planning. Contact your local Small Business Development Center to learn more about their free services.
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