PDCA

What it means

PDCA is a continuous improvement cycle of four steps: Plan, Do, Check, Act. It is associated with W. Edwards Deming and is therefore sometimes called the Deming cycle. It underpins quality management systems as well as the lean and kaizen methods.

In the Plan step the problem or goal is defined, the current state established and a change proposed. Do means trying the change, ideally on a small scale. In Check the results are compared with the plan, and in Act a successful change is adopted as the standard, or the cycle starts again with a different hypothesis.

The strength of PDCA lies in repetition. Instead of one big reform, the company takes a series of small, tested steps. Each round builds on what the previous one taught, so the process improves gradually and with less risk.

How it works in practice

When improving how we work with clients we use PDCA, for example to shorten the monthly close. First we measure how many days it takes and where the waiting happens using a process map, then we try a change, such as an earlier deadline for documents, and assess the result after two months.

We formulate the goal in the Plan step as SMART so that it can be checked objectively in the Check step. We measure with indicators agreed in advance, such as days to close or the number of correcting entries.

If a change does not work, in the Act step we do not look for someone to blame but go back to root cause analysis. A failed round is also a result: it shows the hypothesis was wrong and saves the company from rolling out a bad solution across the organisation.

What to watch out for

The step most often skipped is Check. The company introduces a change, but nobody measures whether it had the expected effect. Without measurement PDCA becomes mere planning and doing, and the organisation does not learn from its mistakes.

The second problem is trying to change too much at once. If several things change in one round, it is impossible to tell which change produced the result. Smaller steps are slower on paper but faster in practice, because they do not have to be undone.