An entrepreneur faces three major groups of issues in their day-to-day operations. The first are routine matters, those indispensable tasks that allow a business to evolve and function efficiently. The second is the conjuncture, external factors that do not depend on business decisions but significantly influence the company’s life and the development of its business. A successful business depends on how well a company manages its routines and how favorable the conjuncture is to those routines. For example, even if the economic and political environment is favorable and there is demand for our products, if the company is inefficient, that favorable conjuncture won’t be enough to achieve positive business development.
The third major issue is the company’s structure, the elements that differentiate it from other companies. This includes ownership, corporate governance, decision-making, internal policies, work teams, and whether the company is family-owned, public, or private. These aspects are essential for a company to carry out the same business, with the same operational efficiency, in the same conjuncture, while still differentiating itself from competitors. Differentiation occurs mainly in the structure.
The interaction between routines and structure gives rise to processes, meaning how the company, with its particular structure, executes certain routines and adds value. In the interaction between structure and conjuncture are the strategic lines, which aim to transform aspects of the company to increase its capacity to create value in a sustainable way.
So, what are we talking about when we refer to continuous improvement in companies?
Continuous improvement aims to become increasingly efficient in processes but doesn’t necessarily transform the company. It focuses on perfecting what is already done well, seeking to increase efficiency, reduce costs, and improve quality. According to the Kaizen approach, one of the most recognized in this field, continuous improvement is an incremental and constant process involving all levels of the organization. However, this methodology does not address deep structural changes.
And what about strategic lines?
When the same problems frequently arise in a company, they tend to be structural problems, which prevent companies from evolving and creating value. These strategic lines are long-term initiatives designed to address those structural issues and may include organizational restructuring, the implementation of new technologies, expansion into new markets, or a reorientation of corporate strategy.
For example, a company facing repeated issues with customer satisfaction might establish a strategic line to improve its customer service. This could involve a complete overhaul of its processes, staff training, and the implementation of new Customer Relationship Management (CRM) systems. These actions not only solve the immediate problems but also prepare the company for sustained growth and a greater ability to adapt to market changes.
In summary, while continuous improvement focuses on efficiency and perfecting existing processes, strategic lines address structural problems and seek to transform the company to create value in a sustainable, long-term manner.
