Technovation 21 (2001) 67–77 www.elsevier.com/locate/technovation An evolutionary model of continuous improvement behaviour John Bessant * , Sarah Caffyn , Maeve Gallagher Centre for Research in Innovation Management, University of Brighton, Village Way, Falmer, Brighton BN1 9PH, UK Received 3 November 1999; received in revised form 8 January 2000; accepted 24 March 2000 Abstract In today’s complex and turbulent environments the need for continuous improvements in products and processes is widely recognised. But the mechanisms whereby such a continual stream of innovation can be achieved are often less clearly identified. One option is to mobilise a high proportion of the workforce in a process of sustained incremental problem-solving, but experience with this approach suggests that successfully doing so is far from simple. Although many programmes for ‘kaizen’ or ‘continuous improvement’ based on employee involvement are started, the failure rate is high. This paper reports on extensive case-study based research exploring how high involvement in continuous improvement can be built and sustained as an organisational capability. It argues that this phenomenon needs to be viewed as a cluster of behavioural changes which establish innovation routines in the enterprise, and presents a reference model for assessment of progress in the evolution of such capability.  2000 Elsevier Science Ltd. All rights reserved. Keywords: Continuous improvement; Kaizen; Incremental innovation; Employee involvement; Innovation routines 1. Resource based strategy Much current thinking on strategy concerns what is often termed the ‘resource-based’ model, in which com- petitive advantage is seen as coming from the particular bundle of tangible and intangible assets to which a firm has access (Kay, 1993; Teece and Pisano, 1994). Accumulating these assets is seen as a key task in stra- tegic management, and the ‘core competence’ of the enterprise is essentially the outcome of this process (Pavitt, 1990; Prahalad and Hamel, 1994). The more firm-specific and difficult to copy these resources are, the more likely it is that sustainable competitive advan- tage can be built and maintained. Resources come in various shapes and sizes but can be grouped into tangible assets — buildings, plant, equipment, etc. — and intangible assets. This latter group is made up of knowledge assets — what an enterprise knows about (its core technologies, its market knowledge, etc.) — and behavioural patterns — how it organises and operates. The important feature here is * Corresponding author. Tel.: + 44-1273-642184; fax: + 44-1273- 685896. E-mail address: j.bessant@brighton.ac.uk (J. Bessant). 0166-4972/01/$ - see front matter  2000 Elsevier Science Ltd. All rights reserved. PII:S0166-4972(00)00023-7 that, unlike tangible assets, they are difficult to acquire and copy because they are often the product of extended learning processes. This makes them highly firm specific and a much stronger source of potential competitive (Teece, 1998). As a UK manager put it, “…there is no other source of competitive advantage! Others can copy our investment, technology and scale — but NOT the quality of our people…” 1 In other words, what makes a firm competitive is not so much the equipment, location, buildings, etc. which it possesses (since anyone with deep enough pockets can duplicate this resource position) but what it knows about and how it behaves. A firm like 3M owes its competitive position to deep knowledge (around the fields of coatings and related technologies) which it has built up over nearly a century and to ways of working which are parti- cular to the organisation (such as the encouragement of ‘bootlegging’) which give it the ability to introduce new products on a sustained basis. Both these sets of attri- butes — the knowledge base and the behaviour pat- terns — the ‘culture’ or ‘way we do things around 1 Managing Director, British Chrome and Steel, cited in ‘Partner- ships with people’, Department of Trade and Industry, London, 1998.