First, let it be said that I am a fan of continuous improvement. In any organization, the goal of getting better and better at what you do is important. Eliminating variations and errors, reducing work or tasks that have little or no value is exceptionally important. However, what I want to understand is whether or not most firms have the ability to constantly reinvent themselves as well.
If you think hard about the logical conclusion of a complete focus on continuous improvement, you'll end up with the fact that every firm in an industry is racing to eliminate waste and cost from products and processes. However, only one firm is going to be the excellence leader, and everyone else is playing catch up at best, and is falling farther and farther behind at worst. Need an example? Think about the real "low cost" big box stores. Wal-Mart has destroyed most of its competition by a single minded focus on lowest cost. Kmart and others are completely irrelevant as competitors. Only the Dollar Store chains, which serve a specific niche, remain as competitors in that space. However, Wal-Mart has jettisoned everything else. Remember how they used to talk about all of their products that were Made in America? Gone. All other strategies have fallen by the wayside to the god of low cost in this case.
Well, if continuous improvement is a good thing but not likely to be differentiable, where should you focus your creative energy? I think firms should have a team that's responsible for continuous reinvention. Rather than asking "what can we do better" we need a team asking "what should we be doing?" Given how quickly tastes change and technology changes, we ought to be constantly re-evaluating our business and strategy. Yet too frequently we lock into one long term strategy as if the world and our competitors and clients won't ever change. Rather than have change forced upon you when you least expect it, why not constantly ask the question - what should we be doing differently?