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How to streamline a quality improvement program

The basics – Understand the building blocks of a management system

Step 1 – Define Key Goals and Key Activities

Step 2 – Define Standards for Key Activities

Step 3 – Run regular improvement cycles

Step 4 – Manage Risks and Constraints

Plio software reduces the drudgery of running a quality improvement program

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Plio is software to assist quality improvement. It is designed to drastically reduce the amount of administrative drudgery required to run a quality improvement program. It's simple enough and intuitive enough for any quality team member to use as a hands-on tool. It can be set up in the cloud in just a few minutes without specialist technical assistance.

You can happily use the Plio Flywheel Framework and the 4 step implementation process described in this How To Guide, without using the Plio software. It’s a great way to visualise a quality improvement program. However if you use the Plio software to automate the workflows, you can eliminate up to 80% of your administrative workload.

Running a quality improvement program is a bit like washing your clothes – a repetitive, unglamorous task that is nevertheless essential to the health and hygiene of the organization. Almost nobody washes their clothes by hand. All of us now use a washing machine. This frees up our time to do more valuable and fulfilling work.

The same is true with quality improvement. We need the software equivalent of a washing machine. A software system that removes the drudgery of a quality improvement program. It should automate the tedious and repetitive aspects of the job, leaving us free to focus on the higher value-added aspects of the role.A machine that is simple enough to use as a hands-on tool and at the same time simple to install (no specialist consultants or engineers or needed).

This How to Guide explains how to streamline a quality improvement program in 4 steps:

Step 1 How to set Key Goals at the outset which are clear and measurable, to help achieve better outcomes for your organization.

In Step 2, Understand the importance of standardization, showing you how to define standards for your key activities without creating a bureaucracy.

In Step 3, Run regular cycles of continuous improvement, and use the Plio software to minimise the drudgery of administration.

In Step 4,Manage those twin disruptors – Risks and Constraints – which always seem to conspire to interfere with the achievement of your Key Goals.

The basics

What is a management system?

At its most basic, a management system is how leaders in organizations ensure that stuff gets done. If you hold regular staff meetings, then these are part of your management system. If you write Post-it notes and stick them onto your computer screen then this too is part of your management system. Post-it notes may work just fine for a start-up with 3 employees. However, when you need to scale up your team and your operations, you will need a bit more structure.

In the same way that accounting systems evolved and standardized around the double entry bookkeeping concept, management systems have also evolved and standardized. The most widely-adopted approaches are Kaizen (developed in Japan), Lean (developed in the US, from Kaizen principles) and the ISO method, developed by the International Organization for Standardization.

Commonly, management systems are used for managing quality (aka quality management systems, or QMS for short) but they can equally well be used for managing compliance (aka compliance management systems).

The Flywheel Framework

We created the Flywheel Framework to help streamline the management of quality improvement, using continuous improvement principles. This extends the well-known Plan-Do-Study-Act model to add other necessary elements of a more complete management system. The framework is illustrated in the diagram below.


The seven building blocks

Our continuous improvement framework contains 7 building blocks (see below).

The four implementation steps.

When starting a program from scratch, we recommend implementing in four steps :

Step 1 – Define Key Goals and Key Activities
Step 2 – Define Standards for Key Activities
Step 3 – Run regular improvement cycles
Step 4 – Manage Risks and Constraints

We’ve structured this learning guide into four numbered sections, one for each of the four steps. These steps don’t have hard finish points so we advise overlapping them rather than waiting for each to reach 100% completion.

Step 1 - Define your Key Goals and Key Activities

What are Key Goals?

First, a definition:
A Key Goal is an observable and measureable end result, to be achieved by a person or an organization within a given timeframe

A successful implementation of a Business Model Canvas demands clear direction and clear priorities to be set by you and your leadership team. Learning how to define your Key Goals with clarity is something that you’ll need to do very early in your implementation process.

SMART goals

A good technique for setting Key Goals is the SMART technique. This acronym was originally created by business planning practitioner George T. Doran way back in his 1981 paper “There’s a S.M.A.R.T Way”

As you create goals, Doran suggests you apply the following tests to be sure that you are following the SMART approach:

  • What is specific about the goal?
  • Is the goal measurable? (How will you know the goal has been achieved?)
  • Is the goal achievable?
  • Is it relevant to performance expectations or professional development?
  • Is the goal time-bound? (By when will this goal be accomplished?)

Here is a sample Key Goal for Tesla Motors:
"Reduce warranty costs"

Does this meet the SMART criteria? What does "leading" mean? How can everyone on the team be sure that they are working to the same target? This sample goal is too vague to meet Doran’s criteria for a SMART goal.

Here’s an example of a Key Goal that does meet the SMART criteria:
"Reduce Tesla Model S warranty costs by 20% by the end of 2020, from $2.5k to $2k per vehicle per annum"

How to set Key Goals in Plio

Key Goals are essential to give direction to your quality improvement program. Tracking progress towards these goals should form the basis for regular review of your quality program.

Plio provides an operational dashboard where you can set up a list of Key Goals in timeline format. List your Key Goals in order of priority. You can add milestones and actions to each of your Key Goals, and track actions through email notifications or through Plio’s work inbox. We recommend that you start off with no more than 10 Key Goals for your quality improvement initiative, to help keep focus on the work. Key Goals should be set in conjunction with senior management.

How to monitor Key Goals

If Key Goals are changed at will and there is no regular review process, then your team will lose confidence in the goal-setting process. If you don’t already have one, you should create a management calendarto bring a more disciplined approach to reviews of your continuous improvement program. The optimum frequency of reviews depends on the type of business. Usually a combination of monthly, quarterly and annual reviews works well.

Step 2. Setting Standards


What are Standards?

A definition: A document that provides rules & guidelines for repeated use, aimed at achieving the optimum outcome of a Key Activity

Now that we’ve set some initial Key Goals, your operational team will need to agree on the best ways of carrying out your Key Activities. The umbrella term that I will use for these ‘best ways’ is Standards.

Standards are an essential tool in systemizing Key Activities to get more predictable results

There is nothing new about Standards. Shipyards in 16th century Venice built ships from standard specifications, which helped them to reduce construction time to just six weeks per ship. Standards are an essential tool in “systemizing” Key Activities to get repeatable results and achieve greater operating efficiency.

Most organizations put too little effort into creating usable Standards. Indeed they are viewed by some as a bureaucratic irritant.

Standards should be viewed as the natural extension of the business design process that we started with the Business Model Canvas, but taking this to the next level of practical detail. I recommend writing one umbrella Standard document for each major process or task within the set of Key Activities you defined in your business model canvas.


When to define Standards (and when not)

Applying Pareto’s Law, 80% of your operational impact will come from focussing on 20% of the processes or tasks within your Key Activities. I advise you not to try to get your team to write Standards for every single business process or task, at least not at the beginning. Focus your efforts on a few key processes and tasks. Focus on those that are giving you the most operational problems.

This advice is very different to the ISO 9001 approach, which requires you to write Standards for the bulk of your processes and tasks. This is very time-consuming and risks ending up with a layer of energy-sapping bureaucracy being applied to your work. Don't do this at the beginning, unless a big customer is forcing you to do it.

Early wins will help you win greater buy-in from your colleagues.

How to write Standards documents

Standards should contain guidelines and also step-by-step procedures (often called standard operating procedures) described in easy-to-read documents.

Standard operating procedures are essentially checklists describing a set of steps for a process or task, kept under strict version control. These procedures need to be kept updated as you learn from experience.

To prepare a Standard document, you’ll need to work through three phases: choosing a format, writing the document, and rolling it out. I’ll explain each of these in turn.

As your create your Standards, you’ll need to store them as controlled collections of documents that can be accessed easily by your team. This could be via a paper-based Operations Manual (also called a Quality Manual) or more conveniently via a cloud-based shared drive e.g. Dropbox. Even better, you could use an online document database e.g. as provided in the Plio Operations app.

Rolling out Standards

Now that you’ve written your Standard, how should you get it out to your team? Sometimes the act of introducing Standards can lead to user resistance, a backlash, or indeed the failure of your entire implementation initiative. To get the most out of your Standards, I recommend that you follow the following sequence of steps when you roll them out:

1. Testing the Standard
2. Review and signoff
3. Training

1. Testing the Standard
Get a selection of people to test your Standard. It’s useful to test with a novice team member who’s relatively new to the team. Experienced team members will be relying on knowledge to get them through, defeating the purpose of the test. Test early, and fix quickly.

2. Review and signoff
Those who actually perform the procedure should give it the thumbs up first, rather than the bosses. External advisors can spot things that you missed, and compare it with industry best practice. Finally, your Standard is ready to submit to your boss for sign-off. Your Standard will carry more authority the higher the position of who signs it!

3. Training
Now you need to train your team to put your Standard into practice. For simpler procedures it may be enough to just post your Standard on the intranet. For more complex procedures you should arrange more formal classes. For new joiners your Standard should become part of the induction process.

Standards help you systematize your business to get more predictable and repeatable results. Once you have a documented set of Standards in place for your Key Activities, then you will have the necessary foundations in place to improve their outputs. How we do this will be explained in the next section of the handbook.

Step 3 - Run regular improvement cycles


What is continuous improvement?

In the Flywheel Framework, we represent Key Activities (your key processes and procedures) as a circular continuous improvement process, moving through the stages of Plan-Do-Study-Act.

This 4-step process is known as the Deming Cycle, named after its original creator W. Edwards Deming.

This effort can take the form of incremental improvements over time or breakthrough improvements, or a combination of both. Before implementing a continuous improvement approach you need to have at least some Standards in place to provide a base reference point for your Key Activities.

Continuous improvement has its original roots in the work of Walter Shewhart, the father of statistical quality control, who worked at the Bell Telephone Laboratories in New Jersey in the 1920s and 1930s. His main focus was finding ways to improve the quality and reliability of telephone transmission systems. These were expensive to fix when they failed in the field, so it was worth putting in a lot of effort to make sure they didn't fail.

Continuous improvement stems from acknowledging that we make mistakes. All organizations make mistakes, but not all learn from them. Why not? Often, mistakes and problems are often seen as evidence of lack of competence and therefore something to be ashamed of, and concealed.

This natural human tendency needs to be turned on its head. Problems are an opportunity to learn. Indeed, they are the best source of learning to improve our future performance. This mindset needs to be communicated from the top and reinforced across your organization.

Problems are the best source of learning to improve future operating performance

One well-known company which has a deep-rooted commitment to continuous improvement is Amazon. CEO Jeff Bezos is a big fan of the flywheel analogy, as described in Brad Stone’s book “The Everything Store”.

“Bezos and his lieutenants sketched their own virtuous circle, which they believed powered their business. It went something like this: Lower prices led to more customer visits. More customers increased the volume of sales and attracted more commission-paying third party sellers to the site. That allowed Amazon to get more out of fixed costs like the fulfilment centres and servers needed to run the web site. This greater efficiency then enabled it to lower prices further. Feed any part of this flywheel, they reasoned, and it should accelerate the loop.

Amazon executives were elated… they felt that after five years they finally understood their business. But when Warren Jenson asked Bezos if he should put the flywheel into presentations to analysts, Bezos asked him not to. For now, he considered it the secret sauce”.

To learn how to implement continuous improvement, let’s zoom in to the next level of detail to show the two boxes that sit at the top of the Flywheel Framework. These are Nonconformities and Potential Gains. Let’s look at each of these in turn.




Nonconformities: a definition –
a deviation from a documented Standard or from a specification or expectation

Failure is something that happens in all our organizations. Sometimes the consequences of failure may be trivial – for example, a scratch on the paint of a new car prior to delivery to the customer.

In the jargon of management systems, everyday failures are called Nonconformities. Despite its bureaucratic connotation this is actually a very useful term because it illustrates the crucial link between failures and documented Standards. A Nonconformity is a failure to conform to a previously defined Standard or product specification.


Treatment of a problem without proper diagnosis is malpractice

Sometimes failures may be deadly – a faulty speed sensor in an aircraft leads the pilot to make wrong decisions and the plane crashes into the ocean. Whether trivial or deadly, the most profound difference between a high and low performing organization is how they react to these failures.

If you are going to learn from failure and embed that learning in the organization, then you need a disciplined failure response process. This process must include a proper diagnosis of any Nonconformity before we go ahead and treat it.For critical or major Nonconformities, we suggest the following 7 steps:

1. Record the Nonconformity, and identify with a unique ID
2. Assign the task of root cause analysis to a nominated person
3. Analyse the root cause of the Nonconformity
 - Easier said than done, there may be multiple causes
   - “The Five Whys” is one good technique to get to a root cause
4. Put in place one or more corrective or preventative actions
5. Monitor the progress & completion of those actions
6. Completed actions need to be verified as effective (or not)
7. Once verified, the Nonconformity can be closed and the relevant standard(s) updated

This last step – the updating of the Standard – is crucial to lock in your improvements & reduce the likelihood of recurrence. This is why, in the Key Activities Flywheel, we draw a grey arrow linking the Act segment of the continuous improvement cycle to the Standards box below it.

For some, the instinctive response to the Nonconformity concept is “this seems like a lot of bureaucracy!”. It’s true that if you apply this process to every failure, no matter how small, you will build a bureaucracy. To avoid this fate, we recommend two specific tactics:

Tactic 1

Applying Pareto’s Law, 80% or more of the operational impact will come from 20% of fewer of your Nonconformities. For those less critical Nonconformities, a lighter-weight process (comprising just steps 1, 4 and 7 from our previous 7 step process) should be used instead.

Tactic 2

Streamline the management of Nonconformities with a software tool that tracks ownership, achievement and verification of actions. We provide such a tool as part of the Plio Operations app (


Potential Gains

Definition: an identified opportunity for an improvement to a process or task. Effectively the opposite of a Nonconformity (which is an identified problem in a process or task)

The concept of marginal gains is a hot topic in management. It started in the field of elite sport with the idea that if you break down a big goal into small parts you can improve on each of them, and this will deliver a big improvement when you put them all together.

The idea sounds simple, but how do exactly do you go about implement a marginal gains approach in an organization? The answer is that we can treat a marginal gain (we will call it a Potential Gain) almost exactly like we treat a Nonconformity with a very similar 7 step process:

1. Record the Potential Gain, and identify with a unique ID
2. Assign the task of Potential Gain analysis
3. Analyse the nature of the Potential Gain
4. Put in place one or more actions
5. Monitor the progress & completion of those actions
6. Completed actions need to be verified as effective (or not)
7. Once verified, the Potential Gain can be closed, the relevant Standard(s) updated and the relevant people trained to lock in the identified improvements to Processes and Tasks.

As you make progress your quality improvement program, you will identify more and more Nonconformities and Potential Gains. You should harness these problems and opportunities as the key drivers for the Plan part of your Plan-Do-Study-Act cycles.

This relationship explains why we show a grey arrow linking the Nonconformities and Potential Gains sections at the top of Flywheel Framework, feeding into the central continuous improvement circle below.


Dynamics of the Flywheel

Imagine that the continuous improvement circle that we’ve just been describing is a huge, heavy flywheel. At the beginning it’s hard to turn the flywheel, but with every repeated turn the flywheel starts to move a bit faster and builds up momentum. A millimetre per second, then a centimetre per second, then a whole revolution per second. Suddenly the flywheel seems to be doing the work for you. You’re not pushing any harder, but the flywheel is going faster and faster. There was no single push that caused it to go this fast, just the accumulation of effort applied in a single direction.

Momentum is built by hundreds of small efforts applied in the same direction

Jim Collins describes the flywheel effect in high-performing companies he identified in his book “From Good to Great”. “There was no single defining action, no grand program, but a cumulative step-by-step process that led to superior and sometimes spectacular results”.

The Flywheel Framework – with its emphasis on setting Standards and tracking Nonconformities - might be viewed by some as micromanagement. Nothing could be further from the truth. When your team can follow a simple, logical and repeatable operational framework, work will get done in well-organized efforts without your explicit personal direction.

Giving people a simple, logical & repeatable operational framework is the antidote to micromanagement


Now that we’ve described some of the key aspects of continuous improvement, it’s time to move on to the final step in our framework – managing Risks and Constraints.

Step 4 - Manage the twin disruptors - Risk & Constraints


The twin disruptors

Even if your team is smart and learns quickly from its mistakes, the path to successful implementation of your business model rarely runs smoothly. Risks and Constraints are the twin disruptors that will hit you when you least expect them. They will conspire to slow down the production of your outputs and hinder the achievement of your Key Goals.

Risk can be defined as:
The effect of uncertainty on one or more Key Activities, impacting on the achievement of Outputs and Key Goals

A Constraint can be defined as:
any Resource whose capacity is less than the demand placed on it, limiting the output of one or more Key Activities


Dealing with Risks

Your organization might have the best-designed Key Activities in the industry, but if these fail to take account of Risks, then your performance will be compromised – sometimes catastrophically. For example, you may be dependent on one Key Partner to supply a critical component. The Key Partner operates a single factory that is suddenly destroyed by a fire. Your entire production is halted until you can find a replacement source of supply.

You can use shocks to the system to develop strength

Dealing effectively with Risks is challenging because you are making judgements about scenarios that may or may not happen in the future. The starting point for risk analysis is to analyse the previous history of incidents, either from past records or from managers’ memories. Another tactic is to look at publicly available Risk registers, such as those compiled by local and central government.

A structured approach to managing Risks is essential if we are to sustain our improvements in the performance of processes and build a stronger business.

Within the Flywheel Framework, Risks are placed adjacent to Standards. A Standard that is put in place for a Key Activity needs to take account of Risks impacting on that activity. Within the Flywheel framework, these are the recommended steps for managing your Risks:

1. Identify the Risk to be analysed, giving it a name

2. Carry out initial categorisation (minor, major, critical)

3. For major and critical Risks carry out risk scoring:
a. Assess probability of event occurring
b. Assess impact if event occurs
c. Calculate a Risk score using a risk scoring matrix

4. Evaluate costs and benefits of different Risk treatment options

5. Implement preferred Risk treatment option:
a. Define a set of corrective and/or preventative actions
b. Recalculate a target Risk score after treatment
c. Monitor implementation progress

Managing Risks in the Plio Operations app

Each Risk should be recorded in a Risk register, together with its related preventative actions. Risks with the highest scores should be dealt with first. You can maintain your Risk register manually in a spreadsheet (an example Excel template can be downloaded from Better still, the Plio Operations app provides a handy tool for managing and scoring Risks, integrating with your Business Model Canvas.

Dealing with Constraints

Constraint: a definition –
any Resource whose capacity is less than the demand placed on it, limiting the output of a process

In 1984, Eli Goldratt formulated his Theory of Constraints (called ToC for short) as part of an effort to help his consulting firm’s clients improve productivity in their manufacturing operations. His concept is equally applicable to services businesses. Goldratt’s starting point is that an organization is always limited in achieving one or more of its goals by a very small number of bottlenecks which he called Constraints. There is always at least one key Constraint which is affecting the rate of production of outputs i.e. products and/or services. If you can identify the Constraint and remove it then you can increase the production of outputs with very little extra cost, or even no cost at all.

Managers should seek to balance the flow of product through the system by removing the currently-active Constraint. For example, if there is a heat treatment oven that is acting as the critical bottleneck in a production line, then simply run this machine for longer each day by reorganising your shift rotas e.g. by keeping the machine running through lunch breaks.

Managers must find their critical bottleneck (not always easy!) and then zero in on it to find ways to relieve the Constraint. When a Key Resource acting as a Constraint is unavailable for even an hour, the true opportunity costs can be huge. That is because each minute of downtime at a Constraint translates into lost throughput for the entire production system. Process and system throughput cannot be increased until the bottleneck is removed.

An hour lost at a bottleneck is an hour
out of the entire system

How can you deal with the key Constraints in your business? We recommend that you follow a structured step-by-step approach:

1. Identify the Constraint (the bottleneck in the system)
2. Decide how to exploit the Constraint (e.g reorganizing shift rotas)
3. Subordinate every other operational decision to Step 2 decisions (i.e. make Step 2 the top priority)
4. Elevate the Constraint to a higher level (to increase throughput)
5. Find the next Constraint (there will always be at least one)

Constraints act to limit the flow of Outputs. That’s why I’ve drawn an arrow between the Constraints box at the bottom right of the Key Activities Flywheel and the flow of Outputs. Constraints act as friction at the heart of your business. They reduce the flow of products or services to customers. They act against the efficient Plan-Do-Check-Act flow of Key Activities. They make it much harder to get a flywheel effect moving, and to keep it moving.

The Plan-Do-Check-Act improvement process works best when you work in parallel to identify and remove your key Constraints.


Applying Goldratt’s Theory of Constraints can bring one more big benefit – simplification of the implementation challenge. By identifying and then removing the one or two active Constraints that are acting as current bottlenecks in the total system, organizations can achieve significantly faster progress towards their Key Goals.

First of all focus on finding the active Constraint that is impacting on your operational throughput the most. When you find this Constraint, create an improved process for that specific Key Activity and its related tasks, and write this up as a new Standard. Record Nonconformities and Potential Gains that arise from your operating experience with that Key Activity and then act on them.

Instead of delaying your continuous improvement program until you have defined Standards for all of your Key Activities, you can get started on improving things right away. Once you’ve figured out how to reduce or eliminate your first active Constraint, you can move on to identify the next active Constraint, and so on.

Early wins will help you win greater buy-in from your colleagues.

If you fail to focus on Constraints, you can soon lose momentum in your efforts to improve processes. Instead of the progress in performance you are expecting, you will merely introduce a layer of bureaucracy, sapping your firm’s energy and reducing your productivity.


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Use Plio software to take the drudgery out of managing a quality improvement program. Plio acts as a virtual assistant, notifying team members of upcoming deadlines and overdue actions. It provides a convenient database structure for storing your key quality records.

At Plio, we’ve brought together an extensive set of skills in user interface design and in cloud software design, development and operations. We’ve created software that’s simple and reliable enough for any quality or compliance team to use as a hands-on tool. Software and can be set up a quality manager or mentor in just a few minutes without specialist technical assistance.

Sometimes it can be hard to engage the CEO in lending the necessary support to a quality program. Plio gives CEOs a high level view of the organization, based on the widely-used Strategyzer Business Model Canvas. This helps them to visualize the key elements of a quality program in a wider context, linking in to their top-level priorities.

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