How the PDCA cycle can improve your business
The last article of our marketing research stages review series. To check all the previous stages, click here to find a list of our articles. Today, we will speak about the conclusive step of research for launching a new business or product on the market – the implementation of the PDCA methodology.
So, going through all the steps of preparing a business or product for the first launch, we stopped at the testing strategies stage. It is a crucial stage to accomplish, and it can give a clear knowledge of your system’s flaws. But, as we mentioned in the previous article, such tests are required to be regular even when everything is launched and working. And such repeat should be systematized. Here, the PDCA methodology can help you.
What is PDCA?
PDCA cycle, also known as the Deming cycle, is an iterative method for the constant tracing, fixing, and improving the processes in any sphere of human activity. But, we are, primarily interested in business and management utility. PDCA is an acronym for “Plan-Do-Check-Act” and was formulated in the 1950s by the US scientist William Deming, as a looped problem-solving methodology for reorganizing enterprises. The aim of PDCA is to make the processes better with each further step.
The PDCA model contains 4 stages:
- Plan — stage for creating a master scheme with defining goals, resources, strengths, and weaknesses. During this step, you analyze the problem and figure out how to solve it step by step. Depending on resources and conditions, you build the plan, which you think theoretically will 100% work. Technically, for the fresh business, the go-to-market preparations and the research, that we described in our previous articles, are the first “plan” stage of the first PDCA iteration.
- Do (or Execute) — on this stage, you test your “perfect plan” for the first time, and get the outcome. This is the preliminary testing stage. Test your plans, ideas, and thoughts on a small-scale test ground.
- Check — after the completed trial launch, analyze the results, find out which mechanisms worked well and which didn’t, and what is most important, find out why. An adequate evaluation of your mistakes and successes will help you to formulate the “perfect plan 2.0”.
- Act (or Adjust) — finally, the time for action. Implement your tried-and-tested new plan. At this point, the first iteration of the PDCA cycle ends. If everything is fine and dandy, works like a clock – the problem is fixed. If not, because you didn’t take something into account, doesn’t matter deliberately or not, the cycle repeats with amended conditions.
At the first sight, the PDCA methodology looks simple and pretty obvious. Plan something, try it, and if it didn’t work – rethink it, try again, and repeat until it works as you planned. And with multiple iterations, it might be seen as a loop trap. But in fact, things, ideally, will look like this:
Every next PDCA cycle begins on a higher point of the Quality scale than the previous, hence, the value of “Quality” increases eventually. And if changes made in one cycle can seem insignificant, in summary, the whole system transforms considerably. In the better way, if you do everything right. 🙂
When should you use the PDCA model?
In fact, the second, “Do” step in the PDCA method, as we mentioned, is the test stage. Despite what we said in the previous paragraph, nobody forbids returning one step back even after a successful cycle. Hence, the PDCA model will be very useful for testing different solutions to the same problem. Basically, for A/B and Multivariate testing.
Also, like natural selection, the PDCA cycle development of your processes allows you to avoid the implementation of obviously false solutions and keep only the useful solutions in the process.
PDCA is not a universal method for solving issues. It is a tool for tracking processes and steering them in the right direction. And what is the greatest thing about PDCA – it can be applied almost in any business of any industry.
Besides the business processes – production procedures, provisioning, and sales processes – the PDCA cycle can help to implement organizational and corporate culture processes. A simple example – the check-in list in your office can be implemented in various ways: by force, “because the boss is a tyrant”; or by substantiating the benefits of mild discipline principles.
Disadvantages of the PDCA
But nothing is perfect in this world, as well as PDCA is not flawless. Despite the simplicity and universality, this method is pretty hard to follow continuously. It divides the improvement process into numerous small steps, which slows down the whole process and can be unsuitable for urgent projects and concerns.
Also, the PDCA model implies the constant rhythm of work, with ongoing small changes, and, often, without big breakthroughs. Basically, sometimes it may seem worthless to the participants. Because people tend to seek significant accomplishments. So, the monotone process of improvement by child steps requires strong commitment and inspiring leadership, to keep the process long enough to see some noticeable changes.
Continuous improvement with PDCA
In its essence, PDCA is a concept of situation management. First, you define the situation and set goals, test various approaches, analyze the outcome and adjust your behavior before finally continuing to move forward taking only the most efficient solutions. If your team or organization cannot integrate PDCA directly, this methodology still offers a guiding principle that helps to understand how to approach any situation you may encounter in your business. While being simple, PDCA still requires ensuring severity and perfect control of the methodology so that you can really benefit from it. The promotion of PDCA in businesses and organizations, as well as its successful development, will help your colleagues develop a system of views that promotes critical thinking and problem-solving.
“Marketing research” series:
- Exploratory research
- Study your market
- Competitive analysis
- Define your customer – Create a buyer persona
- Formulate the unique value proposition
- Define communication channels with a potential client
- Define your marketing strategy
- Test your product and strategy
- Implement PDCA methodology (you are here now)