Economist’s View: Hal Varian: Kaizen, That Continuous Improvement Strategy

Here is a good lean piece from an unlikely source: an economist!

Hal Varian (via the the “Economist’s View” Blog) writes:

Remember when Japanese manufacturing techniques were all the rage? You could hardly read the business press without encountering mention of “lean manufacturing,” “just-in-time inventory systems” and “total quality management.” You don’t hear much about these ideas anymore, but not because they are no longer in fashion. Quite the reverse is true…

It’s nice to hear that the lean trend hasn’t subsided!

He continues, writing about “kaizen” (continuous improvement):

But it is simple to run a controlled experiment with a Web page. Amazon can show a different page layout to every hundredth visitor and determine in a few days whether the new design increases sales. Similarly, a search engine can run a controlled experiment to try out a new tweak to its search algorithm… On the Web, continuous improvement really is continuous. …

Given a performance measure, be it clicks, revenue or something entirely different, a disciplined process of experimentation and evaluation can lead to rapid improvements. The easier it is to experiment and the larger the number of users, the quicker this process can work. …

He continues to write about how the “old media,” such as the Wall St. Journal, don’t understand this about their web pages. I’ve seen what Varian talks about on Amazon.com…. one day the layout of the product pages is different and I think “OK, I like that change” and it goes back to the way it used to be.

I’ve also read previously about how this “kaizen” is by no means accidental. The experiments are carefully controlled and monitored “DOE” (Design of Experiments) exercises where multiple factors can be evaluated using these methods. Cool stuff.

p.s. For any of you think I’m a huge geek for blogging on Valentines’ Day, I’m on the road with a client site, which is unfortunate on a day like today!

About LeanBlog.org: Mark Graban is a consultant, author, and speaker in the “lean healthcare” methodology, focused on improving quality and patient safety, improving access, reducing costs, and fully engaging healthcare professionals. He is also the Chief Improvement Officer for KaiNexus.