I am often struck by a remark of W. Edwards Deming that the aim of a system must include plans for the future. As Deming wrote in The New Economics (Massachusetts Institute of Technology, 1994), “A system must have an aim. Without an aim, there is no system. The aim of the system must be clear to everyone in the system. The aim must include plans for the future. The aim is a value judgment.” This remark, it seems to me, goes right to the heart of needing to think about continuous improvement strategically, rather than tactically as a program or initiative to be undertaken.

Many firms undertake improvement initiatives to improve quality or, in the case of lean manufacturing, to increase added value by reducing and eliminating the amount of nonvalue adding activity. The rationale for many of these initiatives is the desire to reduce costs, thereby improving a firm’s profitability. However, high quality and low costs are no guarantee of profits.

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