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Do you lead a perfect organization? If so, you have a big problem. No organization on the planet is perfect if it has people in it. If a leader is content with a comfortable status quo, his or her competitor who is committed to kaizen will leave that comfortable, status-quo company in the dust.

Kaizen, which is Japanese for continuous incremental improvement, is a business philosophy about working practices and efficiency that lead to ongoing improvements in productivity or performance. Every organization can benefit by adopting a culture of kaizen in which every employee is inculcated with a corporate culture of continuous improvement and therefore encouraged and rewarded to better their performance each day.

I have the joy of managing a department at the University of Alaska Fairbanks that has wonderful people in it and that is, thankfully, not perfect. While kaizen is laudable, my team and I don’t subscribe to a complete culture of kaizen. Our battle cry is “Innovate or Die.” Nicholas Negroponte, who co-founded the world-famous MIT Media Lab, once stated: “Incrementalism (kaizen) is innovation’s worst enemy.” I spent many a sleepless night thinking about that quote, trying to figure out what he meant. It didn’t compute with what I learned in graduate school until I realized that if we are spending all of our time trying to make our organization a little better, we are de facto spending no time looking for world-class breakthroughs. Improve or destroy and build? The siren’s call of 2009 is almost inevitably the latter. For a more complete discussion on these concepts, read Tom Peters’ book, “Re-imagine: Business Excellence in a Disruptive Age” (2003).

In truth, organizational leaders should foster a culture with a little kaizen, then spend the bulk of their energy encouraging and fostering fast failures, which lead to breakthrough innovation. For example, at the end of every term, I ask each of my faculty members “What did you do differently in your courses this past semester?” A few years ago when I asked Paul Robinson this question about his Principles of Accounting courses, he lit up like the Cheshire Cat and told me he started having his students play Monopoly in class. After Paul picked my jaw off the floor, he explained how much faster students learn accounting when they apply the text book’s accounting principles to actual journal/ledger/financial statement entries generated by their Monopoly game moves. That is not kaizen — it is innovation at its best.

If your employees aren’t coming to you with the organization’s problems, you have a bigger problem, and I suspect you might be the biggest part of that problem. Are people in your staff encouraged to offer suggestions? Can they gripe? Do you listen with the intent to understand, or do you immediately jump in their comments to defend and justify?

Make it safe for employees to dump on you, so you learn what can be improved or destroyed and rebuilt better. Make more time in staff meetings for the staff to talk while you listen and less time for them to listen to you. Take time every week to practice the art of MBWA — management by wandering around. You will be amazed at what you discover.

Recognize and celebrate your organization’s radical intrapreneurs and be glad they are not working for your competition. Encourage and celebrate the sowing of fast failures, and you will reap great breakthroughs. Kaizen adds value, but innovation multiplies value to an organization. Recognize that your organization will never be perfect, so never rest upon your laurels. Today’s laurels are tomorrow’s compost. Great leaders don’t run perfect organizations; they run organizations that occasionally bleed as they stay on the cutting edge.

As Tom Peters once said, “If you aren’t getting better than your competition is getting better, then you are getting worse.”