Tips for Lean Managers

Kaizen vs. Kaikaku

By Jon Miller Updated on March 3rd, 2020

While kaizen has been in the English language management vocabulary for a couple of decades, kaikaku is a relative newcomer. Kaizen in its various forms has been very common among Japanese companies for a long-time, kaikaku has been less common. Kaikaku, or specifically transforming the operational model towards the Toyota Production System, has gained popularity in recent years as news of Toyota’s worldwide success has led more companies to re-examine the Toyota model and undertake kaikaku.

Kaizen means “improvement” and is used broadly to refer to continuous improvement that follows the philosophy of genchi gembutsu (go see, hands-on, fact based improvement). There are many ways that you can do kaizen, including kaizen events, jishuken, technical improvements in both processes and equipment, as well as simple improvement ideas of the “everyone everyday” type. The kaizen process applies equally well to any process. Kaizen means “change good” and by definition, must be an improvement over the current condition.

Kaikaku means “transformation” or “reform” and implies a redesign of business processes that is radical and reaches across an entire organization. On a local scale, kaizen activity may result in a kaikaku if a drastic change is made. In general a kaikaku is something that is planned more carefully over a longer period of time, while kaizen can be planned and executed in days or weeks. A “kaikaku” may not always have a positive outcome, since “reforms” or “transformations” may in fact fail.

Both kaizen and kaikaku are essential strategies. Without a culture of kaizen, a kaikaku can not succeed. Successful long-term transformations require a series of short-term successes, the engagement of everyone in the organization and a bias towards practical local improvement. In the worst case kaikaku can be a top-down reform that does not take into consideration the local realities, resulting in surface-level improvement or no improvement, as seen by Japan Post’s struggling kaikaku effort.

Likewise without kaikaku, kaizen can be just a series of incremental improvements that do not align with the long-term direction of the business or deliver bottom-line results. Kaizen without kaikaku may lack a re-imagining of what is possible through new technologies, new operational models or new lines of business, and may be insufficient for long-term survival. Kaizen is always an improvement, but without kaikaku it is not be enough.

It’s not either innovation or process. It’s both. But large, complex, holistic messages are not as easy to sell to the fad-driven management audience as are the one-note sambas such as “innovation” or “maverick” or “Lean”. So we fragment the discussion and return to the bits we’ve missed at a later decade. I suppose we have to leave some pickings for the next generation of consultants and management gurus, yet unborn.

  1. Major B V Naik

    November 7, 2006 - 2:41 am

    Dear Sir,
    I am an ex-Army officer who is in the field of ISO 9001 auditing as a Lead auditor. I am interested in learning about as many aspects of quality so that through my auditing I can add value. With regards
    Major B V Naik

  2. Jon Miller

    November 10, 2006 - 7:48 am

    Hello Major Naik,
    We do not have as much information on quality specifically as we do on kaizen. Perhaps you can visit the website or the website for more information.

  3. Alex Zolotov

    November 16, 2006 - 2:17 pm

    Dear Jon,
    First, thank you for your weblog. It is very interesting and provides a lot of unique information about TPS and Kaizen.
    This particular article reminds me that TOC was designed exactly as you presented the kaikaku. Was not it? The kaizens in the areas, which are away from the bottleneck will not make The Goal close. Therefore, what do you think about the similarities and differences in the kaikaku and TOC?
    Thank you,
    Alex Zolotov

  4. Jon Miller

    November 16, 2006 - 6:53 pm

    Hi Alex,
    I am not much of an expert on TOC but I do not think of it as analogous to kaikaku.
    The main idea here is that to have kaikaku (transformational change) you need the foundation of kaizen (mindset of continuous improvement) and that local kaizens without a high-level “image” is not good good enough.
    I think TOC is a way of thinking about where to apply improvement, and in that sense can apply to either kaikaku or kaizen.


    June 7, 2011 - 12:42 pm


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