Kaizen approach for ESG-focused start-ups

By PRASHANT KUMAR
IIM Kashipur
MBA-2021-23
8920120751
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Today, every organization wishes to improve its brand image in terms of ESG. However, very
few organizations truly understand how to integrate ESG into their business processes. Kaizen
can greatly assist those organizations in implementing ESG. The Kaizen principle will not only
reduce waste but also increase profit for ESG-focused startups with limited resources.

Kaizen is an approach that advocates for never-ending efforts to improve a company's

performance by involving all employees.

The six steps of the Kaizen approach are:

• Identify a potential improvement opportunity

• Investigate new ideas by consulting with employees

• Divide the goal into sub-goals or deliverables

• Plan tasks for each sub-objective without overlapping human and material resources or

timeframes.
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• Test, track progress and modify the schedule.

• Proceed to the next objective

The main point of ESG communication is that being sustainable does not require large
investments. Startups can consider ESG factors when making next investment. However, startups
can improve what they already have without spending much money. Below are the different
kaizen approaches which ESG-focused startups can work on without much investment -

● Choose a simple solution, not the perfect one - Choose a simple solution that startup can
put into action right away. A small change that is successfully implemented will inspire
the firm to make larger changes.
● Maintain a positive attitude - Only by maintaining a positive attitude can a startup foster
the motivation to implement change and strive for a better organizational environment.
Where there is a will, there is always a way. A strong will is fuelled by a positive attitude
and strong hope.
● Creativity before capital - There are two ways to generate ideas for positive change. A
startup can use the money to hire people and invest in new technologies, among other
things, or it can rely on its own creativity. Be economical by keeping track of your
finances throughout the improvement process. Look for ways to save money while
making minor improvements, and then use the money saved to make additional
improvements.
● Don’t let mistakes grow and turn into something uncontrollable and unmanageable.
● Seek the wisdom of ten people rather than the knowledge of one -The more perspectives
employees in startups understand, the closer they can get to the truth. As a result, the
problem and what needs to be done are better understood. Furthermore, the more ideas
received, the easier it is to integrate them and innovate further.
● Seeing the problem as an opportunity - All of company's major issues are actually major
opportunities. Problems are opportunities to contribute value, grow, improve yourself,
contribute ideas, develop your talents, and thus become better, more valuable, earn more,
be more attractive, become stronger, and so on.
● Be data-driven - When it comes to making improvements, startups must be obsessed with
data, dashboards, metrics, and measuring. They must always know what to improve and
on what metrics to base that improvement.

The measures below can be a good way to work on sustainability without incurring any
additional costs or investments for the ESG focused startup-

● When no one is in the office, turn off the lights

● Avoid using tissue paper to dry hands.
● Enable sleep mode on all office laptops and desktops to save electricity when not in use.
● Installing sensors on all of the office's water taps so that only the necessary amount of
water flows out
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● Retaining a portion of profits for CSR

Kaizen method enables employees working in startup striving towards sustainability

through the following ways:

Detailed and clear goals

Kaizen entails making structured and targeted plans. Before proceeding with improvements to
current processes to solve the root problem, consensus is required. Clear goals help to focus
energy on relevant activities and prevent time waste, ensuring that everything runs smoothly.

Improvement

For continuous improvement, there are two main cycles: PDCA and SDCA. The improving cycle
is PDCA, which stands for plan-do-check-act, and the standardising cycle is SDCA, which
stands for standardize-do-check-act. The cycles are repeated indefinitely in order to achieve
small but significant improvements in areas such as cost, quality, and product distribution.

Better engagement

Regardless of their position on the team, all employees participate in decision-making and
performance evaluation. Employees are more active and engaged in achieving simple goals,
which leads to increased morale and job satisfaction. When everyone establishes ground rules for
efficient performance, it promotes self-discipline.

Review & feedback

Because every employee is given the opportunity to contribute. As a result, everyone's feedback
is valuable. Curiosity and questions increase the likelihood of permanently removing growth
barriers.

Recognition

Employees who take a proactive approach to their jobs are more productive and produce
higher-quality results. With Kaizen, performance is constantly monitored, allowing managers to
recognize those who are performing well. This helps to ensure that employees continue to put
forth effort in the future.
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Drawbacks of using kaizen for the ESG-focused startups:

The kaizen principle is slow and its result can be seen in the long run. But today's startups are
competing fiercely, and they need to continuously and quickly improve their processes in order
to stay in the market. If they only use kaizen in their approach, their speed of operation may
suffer.

Conclusion:

The key takeaway from Kaizen principles is that even a 1% improvement is acceptable.
Implementing any kind of positive change starts with the right mindset – between individuals,
teams, and the organization as a whole. However, even if they claim to, not everyone enjoys
change. That should not, however, deter startups from innovating and finding better ways to do
things. A startup must become a beacon of hope, with a Kaizen mindset. Employees and business
partners must be motivated to do the same.

Any startup’s goal should be to progress faster than the environment. Consider what would
happen if Apple stopped improving and releasing new products simply because it is the most
valuable company on the planet. They would undoubtedly fail within a few years.

So, never stop improving.

References

KPMG Six Sigma Document