RESEARCH - Strategy deployment is fundamental to a lean transformation, but managers often struggle to understand its importance amid the day-to-day firefighting. This article will tell you how to make hoshin happen.
Words: Wiebe Nijdam, Director, Lean Management Instituut
It’s a Thursday afternoon at the production facility of a truck manufacturer. The production manager is in his office, catching up on some work. It has been a good day so far, and he is confident that the weekly output requirements will be met. After all, his team leaders have been telling him that production has been running smoothly all week.
Just when he is about to start replying to the 42 unread emails in his inbox, his phone rings. It’s one of his team leaders on the shop floor, saying that there was a problem and that production will be lucky if it makes 50% of the expected output.
In a second, the manager is back in crisis mode, but there is nothing he can do at this stage to solve the problem. It’s too late to make it to 100%. The call with his boss in the US is not going to be pleasant tomorrow.
Does this sound familiar? It does to me, because I used to be that manager! When I was in that role, I learned very soon how problems tend to surface all of a sudden and escalate even faster.
Most of the managers I support as part of my job at Lean Management Instituut are genuinely interested in improving their organizations and show a lot of enthusiasm at the idea of being able to contribute to making their workplace better. However, they find it really hard to move to that next level because they are simply too busy putting out fires.
They are so caught up in the daily process that the prospect of working on something like hoshin kanri (strategy deployment) is too daunting to them, even though they know it has the potential of solving their problems.
The first task often corresponds to daily firefighting, while the real value adding activity is the second one.
Typically, we see managers engaged in firefighting for some 80% of their time. This disproportionate number causes them to dedicate very little time (around 5%) to PDCA-based problem solving, which should instead be treated as a critical element to any job. This of course leaves them with a mere 15% that they can dedicate to adding value to the business, be it by coaching team leaders, reaching out to new customers, or engaging with existing ones.
What we at LMI have realized, working with dozens of organizations in every sector for the past 10 years, is that if you properly deploy practical hoshin kanri, the visual management element of it can be used to bring down the time you need to ensure the business is running smoothly from 80% to 20-30%.
There will then be enough time to consistently apply solid problem solving (from 5 to 15% of the manager’s time), while still being left with a staggering 65% of time that can be used to develop the business.
Unbelievable as it may sound, this situation is possible to achieve by using strategy deployment to create visibility of problems. What any company needs is one clear overview of the processes, through visual management boards at every level of the organization.
Figuring out what is working and what isn’t will make a manager feel in control of the situation again. And this does not need to be a long exercise – it can take a single afternoon, if you start simple.
SIMPLICITY DOES IT
When it comes to strategy deployment, one of the most commonly asked questions is: “Where do I start? Process level? Organizational level?”
The simple answer is that you should start wherever the problems you want to solve are, so long as there is a system for daily accountability in place and the boards are present at every level and communicate with one another across the organization.
If you start at organizational level (as we have in many occasions), you’ll soon see that the value streams become more visible and that what you need to do to improve them becomes much clearer.
The next step is to determine what each department must contribute to the overall system. For example, what does the sales department need to do in order to reach that specific goal?
If you were to start at process level, the same principles would apply. How does a cell contribute to the shipping process, for example?
The work must be translated into individual contributions from each level in the organization or, at process level, from each cell in the production area. This way, gaps will soon become easier to spot, and with them the opportunities for improvement.
Communication among levels remains critically important throughout the system.
WHAT ARE THE DIFFICULTIES?
“Are materials in?” “Are the machines running?” “Are we doing any overtime this evening?” Answering these questions and dealing with daily processes is time-consuming and prevents middle management from effectively acting as the necessary vehicle for top-to-bottom communication. The connection between point kaizen and system kaizen is critical, but really difficult to establish.
But if you make it all visible in a simple, mistake-proof way, then you’ll be able to make progress. And that is when you get to the central part of the system, the A3 – in this sense, this represents the plan to move forward, so it’s no surprise that it sits at the center of the board and at the core of the improvement effort.
In most strategy deployment implementations, visual management and A3 thinking are used separately. What Lean Management Instituut has been able to demonstrate, in years of work and observation, is that the two should be used as part of the same, structured system to identify and solve issues.
HOW IT WORKS
Talking about problems is nearly impossible when they are not visible. With lean we try to solve problems, but in order to do so we need to get topical, and visual management serves that purpose perfectly. It allows you to see the difference that deviation makes at process level – the impact of missing parts, missing people, broken machines, and so on – and how that impacts on the end result.
Problems at process level tend to escalate very quickly. But if you have visibility over what’s not conforming to the norm, you can control it, and this gives you the mental capacity necessary to concentrate on other things.
So here are the steps to practical strategy deployment:
1.Translate your organizational challenges into practical plans for the organization
A few years ago, I was contacted from a manager running 15 factories across the continent of South America, from Mexico to Argentina. His problem was to convey the corporate message and goals to each of the sites. We sat together and started discussing how we could achieve this, knowing that sending an email and hoping the right behavior would come out of it would not cut it.
We started with a two-day event at factory level, during which all the relevant data was gathered. This was a big “aha moment” for many in the organization as they finally saw what they had to focus their efforts on.
2. Make sure we deploy the right improvements for each value stream
3.The real progress is made at process level
During this phase you might notice that the group finds it difficul to define countermeasures; consequently, the need for problem solving training might arise.
The key to the success of the implementation of hoshin kanri is keeping visual management boards as simple as possible, with the red and green system.
No information has to be searched for; it should be all there at all times, readily available and easy to spot.
Over the years, we have seen this system succeed in several working environments, from factories to government agencies.
Of course, accepting to engage in strategy deployment can seem counterintuitive at first. In appearance, the fixed rhythm and repetitive actions that hoshin kanri calls for could stifle creativity. “You are giving me more things to do and asking me to dedicate time to this every day, even though I’m already extremely busy,” a manager might think. On the shop floor, a team leader might in turn think: “We are already behind schedule? What’s this nonsense now?”
However, in the longer term strategy deployment will help a manager and the entire organization to solve more problems, which means of course less fire-fighting. And isn’t fire-fighting the cause of many of the emails filling up your inbox and of many of the calls you receive every day?
As many organizations establish KPIs at corporate level and try to cascade them down the levels of the business, A3 is the only tool available to managers to gain visibility and know what to focus on.
Take safety as an example. If a company’s KPI calls for the reduction in the number of injuries, it’s necessary to drive the right behaviors at process level in order to prevent further accidents from occurring.
This is not possible unless the root causes of the accidents are identified and proper countermeasures put in place (by using A3s, which will tell you how many accidents have occurred and why).
Are people wearing safety gear? Are the right precautions in place? Those are the kind of questions you want to ask standing by the visual management boards. That’s where the data is.
HOW CHANGE HAPPENS
Let’s go back to the example I shared at the beginning. If a manager worries about a late shipment, or about production not being able to meet demand at a specific point in time, that level of stress can quickly become unbearable.
The manager’s boss, too, will suffer from that uncertainty, which translates of course into even more emails sent the poor manager’s way.
But establishing a solid and reliable system for daily accountability and problem solving can quickly turn things around. Starting at the lowest level and putting in place a structure whereby team leaders can immediately spot a problem as soon as it happens (green/red; working/not-working; conforming/non-conforming) has the power to transform an organization.
In a daily management scenario, managers can quickly ensure things are working properly, and that gives them more time to coach their team and focus on advancing the business, as opposed to barely keeping it afloat.
As a result, communication improves and the level of stress drops. They are still going to have to chase people, but meeting goals and solving problems will become concerted efforts. In organizations that successfully implement strategy deployment, as soon as an operator highlights an issue, that issue stops being the operator’s and becomes the team’s prerogative.
Operators and team leaders will have a better understanding of their work, and feel in control again. Managers, in turn, will learn to be better coaches; they will enable teamwork and spend time on the overall improvement of the organization.
Setting up this system of mutual support and effective communication (with guidance coming from the top and problems identified at the bottom line) takes time, and it will be difficult to convince people of its value at first. But once those boards are in place - and A3s become part of the daily life of a business at every level - they become an invaluable tool to a manager’s coaching.
While getting buy-in might take time, proving that the system works can happen very quickly: in just a couple of days, a manager can have a good idea of where to go next.
This exercise will tell you what you need to change in the monthly measures if you want to achieve your annual goals, what you need to change in the weekly measures if you want to achieve your monthly goals, and so on. It’s root cause analysis brought to every step of the process.
Before you know it, attending these meetings will become a routine, and not going will feel awkward. Before you know it, going straight into your office without walking through production and by the boards will leave with the impression that something is not right.
Wiebe Nijdam is Director at the Lean Management Instituut in the Netherlands, responsible for training and for the development of educational material. With a background in education and engineering, Wiebe has been applying lean principles and methods since 2001, when he worked in the automotive industry. He trained in lean in the United States and is a former factory director at a truck and trailer manufacturer. Wiebe has led several lean implementations at different levels and departments. With a keen interest in training management in lean management and lean leadership principles in organizations where lean is recognized as a systematical approach for continuous improvement, Wiebe is supporting companies around the world as they progress on their lean journeys.