The Virtuous Cycle of Improvement

One way of thinking about modern knowledge workers and teams of knowledge workers is to acknowledge that they have not one, but three important jobs:

  1. Delivering end customer value
  2. Improving: as a team and as individuals
  3. Contributing to the larger organization

This contrasts with the industrial era model, where workers were treated as cogs in a machine: focusing on the first task of doing the work, while managers took responsibility for the latter two items. As a hangover from this model we have had many attempts to mandate individual improvement by way of development plans, annual reviews and KPIs, but these have largely proven ill-suited to cope with the dynamics and demands of the modern workplace. They also place undo emphasis on the individual over the team, which inhibits collaboration.

This post is mainly about point 2, how setting up and sustaining a virtuous cycle of improvement at the team level cultivates both team and individual improvement, leading to a win-win-win: better for individuals, better for teams, and ultimately better for the larger organisation.

A virtuous cycle sustains improvement efforts and generates Surplus Slack

Note: The term virtuous cycle comes from systems thinking expression for a reinforcing feedback loop with positive effects: going round and round the loop repeatedly makes things better and better.

A. It all starts with Slack

Clearly, in order to learn and improve, we need to set aside some time. We call this relatively free time useful slack.

The point of slack time is that it affords the autonomy to individuals and teams to use it as they see fit. They are trusted to use it wisely.

I once had an over-scheduled boss who said that if she had any spare time she’d probably use it to just sit on the beach staring at the waves, rather than use it for learning and improvement. I took this as an indication that my boss was feeling burned out (a very common modern malaise). Under those circumstances crises tend to get handled in a very reactive manner, resulting in inferior outcomes and high stress.

The alternative to over-scheduling is to reserve some time for discretionary use. In practice this means understanding your capacity for work at both the individual and team level, and limiting the influx of work to leave some slack time. This is very healthy, but involves saying “no” to stakeholders in a suitably diplomatic fashion.

Occasionally some of the slack gets used to handle crises, but mainly it must be available for learning, experimenting, team-building, helping others, and as down-time to recover from periods of intense work.

Slack time must be actively protected to prevent it from being sucked up by urgent delivery matters, and otherwise used as buffer for when things take longer than estimated. This is easier to do when a little time is set aside more frequently rather than saving up big blocks (which then get used up as buffer). If I reserve a bit of slack time every day, and occasionally lose it to deal with a crisis it’s no big deal — I’ll have more tomorrow. On the other hand, if I schedule a week of slack every quarter, there is every chance that it will disappear if a project is running late.

A great practice is to schedule slack time first thing in the morning, when you are feeling fresh and undistracted. An example: at Fastcap, home of Paul Akers’ 2 Second Lean, every day begins with one hour set aside exclusively for everyone to improve whatever bugs them. The explicit goal is for everyone in the company to make a two second process improvement every day.

Another great time for improvements is straight after lunch when energies are otherwise flagging.

B. Learn and Experiment

The next step in kicking off the cycle of improvement is to invest some of your slack to learn and experiment. Some of this may be personal learning — learning new methods and techniques to improve at your work or just keep up with your field — but much can be directed to improving as a team.

Three important areas of focus for teams are:

  1. Troubleshooting problems: what’s slowing you down as a team?
  2. Cross-skilling: not only does learning skills outside your speciality make your team more flexible and responsive, it helps everyone to better understand and appreciate each others’ craft. Here’s a short video about cross-skilling at Pixar.
  3. Automation of repeated routine tasks.

In the case of trouble-shooting you may come up with ideas that won’t necessarily work. That’s when it’s time to invest some slack in performing a low-cost experiment. If it works out, great. If not, you’ve eliminated an option — still a very good outcome.

C. Local Improvement

When learnings and experiments pay-off the effect will be local improvement: roughly speaking, the team can now perform a similar amount of work in less time. [If the effect is to raise quality, this will also save time in the longer run, by reducing re-work.]

Please note that for now, this improvement is only local. It doesn’t automatically contribute to the bottom line of the organization because we haven’t used it to save money or increase profits. This is important.

D. Surplus Slack — don’t waste it!

How great is that time saving?! To the extent that it is repeatable, the team can now perform equivalent work in less time and even more slack is available.

The critical point is to not make the diabolical mistake of reflexively taking on more of the same work, or (worse) cutting head count.

Taking on more of the same work — regardless of what your KPIs say — may not be what the larger organisation needs. For example, if your team is producing widgets and the next team along can only handle what you already deliver, simply pushing out more will pile up increasing amounts of inventory. Worse, the market for widgets may already be saturated.

Cutting headcount in response to innovation is straight-up crazy: it will have a chilling effect on any further innovation.

Another possibility — slacking off after making an improvement — may be an understandable and temporary effect of the need to recover from over-work and burn-out.

A greater concern is if the organisational culture rewards improvement with more work or down-sizing. In these circumstances it will be impossible to set-up and sustain an ongoing improvement cycle until the underlying cultural issues of trust, autonomy and security are addressed.

There are three productive uses of this surplus slack:

  1. Reinvestment in further learning and improvement
  2. Contributing at a higher level in the organisation (paying it forward)
  3. Doing more work, if and only if your team is at a major local bottleneck

Which option you take depends on sense-making (awareness of what’s going on) and judgement, explored in Scaling improvement.

E. Celebrate

Woohoo! We got better.

Successful improvements should be celebrated: this provides psychological reinforcement to keep learning and experimenting.

F. Re-invest

Increasing the amount of slack time available to the team acts as an even more powerful incentive to keep learning and improving than a one-off celebration, super-charging the virtuous cycle of improvement.

This move doesn’t directly cut costs or raise revenue, but it does increase morale and staff engagement, and leads to further compounding effects in the longer term.

Which takes us back to the start of the virtuous cycle.


Setting up the cycle of improvement requires slack time and trust in teams and individuals.

A key tenet of knowledge work is that it is the people doing the work who are best equipped to improve their processes as well as individual skills. [External parties like managers, coaches and facilitators can sometimes assist in this process, but the invisible and complex nature of knowledge work means that comparatively speaking, outsiders will lack local context.]

Continuous improvement means making continuous attempts to improve, some of which pay off. Successful initiatives result in roughly similar work being accomplished in less time, without sacrificing quality. This frees up additional slack.

This additional slack time should lead to a one-off celebration and some re-investment in further improvement, with the remainder contributed to the next level of the organization. Only in the case where the team is situated at a major bottleneck should they undertake more of the same work.

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