Saturday, April 27, 2013

Where to start with Hoshin Kanri (Business Strategy Deployment) in a not-yet-lean company?

This post comes again from participating in the dialogue at by Michael Balle'.

The question of the week is:

Joel Stanwood: Where to start with Hoshin Kanri in a not-yet-lean company?
A mid-sized manufacturing company is finalizing its strategic plan and believes that it is time to begin Hoshin Kanri. The company is not currently operating as a Lean Enterprise -- functional silos create significant amount of waste which results in poor product/service quality and high cost to serve. Additionally, different departments and regions of the company are "pulling in different directions." What advice, resources, and lessons learned can you provide to the managers of this company to successfully organize and deploy Hoshin?

Thanks Joel for your question, I think it is one that many can benefit from. Based on my experiences with various industry I feel that this is a key area that is often discounted, and somehow organizations think through osmosis that the people just somehow know what they should be doing on a daily basis that cascades upward to “something” but not always a defined strategic business plan. I often ask the organizations I visit what their true north is and/or business indicators and to my surprise a common response is the”deer in headlight” look. If they do respond, most have a different interpretation of what it is, and how it pertains to their particular department and their role in it. Most people, unfortunately, react each day and all the standard work they know is to create a “work-around”.
For me personally, I’m not sure there is a specific “secret recipe” that meets the needs of every organization instructing them in a “standardized-linear- or a “cookie cutter” approach, as to when the different aspects of Lean thinking should take place within their journey. Many would like me to wave a wand and I truly wish it was that simple, I do tell them “it is simple, it’s just not easy”. I personally feel that each company has to create what is best for them, translate each business goal and ensure there is buy-in and understanding along the way as to why we are implementing certain tools that allow us to think and do business differently that meets customer need. The more direction you can give your people “vertically and horizontally” across the organization sets people up for success because it creates a line of sight that cascades the business goals from a 500 foot level up (process) to the 50,000 foot level (company true north). So vertically cuts upward to the CEO level to the process level and horizontally cuts across all the functional areas, this thinking is how you begin to bring the directional arrows upward to a true north versus the power point slide we have all seen with arrows going aimlessly in many directions with no rhyme or reason. I tend to call it “seeing through the same lens”. this process can drastically change the way you do business and create an internal infrastructure that fosters the develop of people and their role in the company. When you have these “quote” – silos, you tend to hear the words “we and they” versus “US”, US implies teamwork and direction that allows the value stream from order to customer flow with the best success for value added processes and development of people.
It has been my experience even within Toyota that all functional areas naturally have silos, it was an accepted aspect of our culture because we all had different roles and expertise we were asked to perform. As long as we knew the expectation and tried each day to work towards better processes of our internal and external customers then there was no problem with silos. Where it becomes dysfunctional is when there is an internal competition for blame when something isn’t meeting expectations or a cohesiveness within the silos to find root cause as a group. I jokingly refer to it as the “5 who’s and the root blame”. For example, manufacturing, engineering, accounting, and human resources are all natural silos and have their specific processes that “should” support the greater good of the organization. Again by nature this will happen and this is perfectly acceptable as long as each functional area has a directional goal towards a “true north” or vision that has cascading key performance indicators (KPI’s) such as quality, safety, productivity (delivery), cost, and human resources training and development. (Q, S, P, C, S, HRTD). So if there was business goals such as improve cost by 10% across the organization then I was taught to look at it in the following way at my time at Toyota and also how I try to guide organizations to think in regard to your question above. If this process is explained and rolled out properly with buy-in it avoids the dysfunction described above.
So the process I was taught by my trainers was the plant (TMMK) was given the Hoshin Kanri goals from our North American headquarters which was driven by Japan’s (TMC) goals (KPI’s) for us. Each plant in the U.S. was then given their yearly KPI’s (Q, S, P, C, HRTD); once the plant got those then it began to cascade downward with an understanding within each department how to meet those needs in order to meet the plant needs. I often thought of it or refer to in my sessions as “getting a finger on the pulse” in any area at any time through visualization/visual management of what should be happening versus the current state. More simply put- Plan versus Actual. So if cost was a focus each department looked at their cost and cascaded that downward to each group within that department, so for me that was the Plastics department cascading it down to my headliner group. Once I had the goal for my group I cascaded it downward to the teams within my group and then by process. So to try to visualize this based on how we were taught to cascade the goals in a “catch ball” viewpoint- take a look at the example:
50,000 foot level – Global goals
25,000 foot level – North American goals
10,000 foot level – Plant goals
5,000 foot level – Department goals
2,500 foot level – Group goals
1,000 foot level – Team goals
500 foot level – Process goals
This is what creates the line of sight to the Strategy deployment (Hoshin Kanri) based on what the customer needs us to be and how we raise the bar on ourselves at each of these levels 1-3-5 yrs out. I often ask several questions along the way from the process to the company goals that help me and others “link” themselves to the KPI’s.
1. What is my role in the organization?
2. What is my direct work responsibility with that role?
3. What is my jobs purpose?
4. What are the business goals that guide my jobs purpose?
5. What is the company’s goals (true north) that I’m contributing to?
This is kind of a individual check and balance process to ensure that people understand that they are an integral part of the process that allows the silos to work together as a team understanding how each are a very important piece of the entire pie that creates the recipe for success. If my true north states (an example) – Customer first attitude, with the highest Quality, at the lowest Cost, with the shortest lead-time (P), in the Safest Manner, all while respect all their people (HR). Notice this encompasses all the KPI’s and allows each person in regard to their area (or silo if you prefer that), know where they are in regard to the expectations. If you truly look at the value stream to the order to customer process and align the horizontal and vertical aspects of your organization then its a perfect countermeasure for creating an infrastructure (culture) that breaks down the silo thinking and can truly align the organization if you have the discipline and accountability to focus on processes versus 100% just results. I truly do not believe you have to be totally Lean to implement this thinking, if anything it will begin to guide you to asking specific questions and start to develop problem solvers at each level because processes start to become defined. It is a slow trickle effect that can give you small successes to gain consensus that this is a successful way to think and do business. It’s ALL about people and fostering their ability to think we just have to give them guidance, and coaching daily reminding them of their line of sight to the business goals. Simple huh? :)
Until next time,
Tracey Richardson

Saturday, April 20, 2013

How do we see deviations as a starting point for "Lean" improvements in a non manufacturing environment, and not put pressure on the workers or an add on feel?

My latest post comes again from (Michael Balle's site), you can take a look at other answers to this month's question which was:

“In a Lean environment we want to be able to see deviations as a starting point for improvement. This requires a transparency that in office environments is often seen as ‘increasing pressure on the workers’. What are your thoughts on this? What is a good way to find the causes of this mental model and how can we deal with it?”--

My answer:

It’s funny (it’s really not), no matter where I go to teach or what industry I’m in, there is always several folks in the group that define Lean as “less employees are needed“; this is a joke of course, but is it?   Art refers to it as something , I’ve heard many different types of analogies in my tenure as a trainer, I always ask why do we have to call it anything?  Is it necessary, could that be part of the program that labels get formed based on misunderstandings of intent? Who can really say!   To me it boils down to an essence – failure of purpose.  I think before any industry or functional area attempts to learn Lean Thinking, you must first gain the mutual trust and respect Pascal refers to.   In some of my past posts and even in the classroom or at the gemba I refer to this as the “what-how-why” model. What am I doing, how will it be done, and why is it important?   Whether you are in an office environment, manufacturing, engineering or accounting failure to properly create the “mental model” we desire is the culprit.   I think an office environment tends to be less linear and often tagged as more difficult, but when you think about it I ask 3 questions-
1. Where you work are there people?
2. Where you work are there processes that create outputs?
3. Where you were do you have problems?

If you answer yes to these then I truly believe that purpose can be translated correctly where the misunderstanding diminishes and solid mental models can be created through mutual trust and respect and utilizing the power of your people’s ability to think.  That can easily be solved by giving them the capability to seeing abnormality to standard and explaining why they need that.
I enjoyed Jeff’s example, sometimes they are the best way to tell a story about an experience so I will share a very unorthodox “lean type” example with you that was my very first lesson as a trainer outside of my manufacturing world at Toyota right after I left my Group Leader role.   I was asked to come back to Toyota a few months later to join a project they were working on involving the local school system in the county.   This project came about from hundreds of individuals calling in to our Human Resources department at TMMK asking where could they “learn” the skills that it takes to get through Toyota’s hiring process (some were not meeting the expectation and were frustrated they couldn’t get hired).   So a long story short the TMMK plant spoke with the local Superintendent of the school system discussing with them that the competencies TMMK looked for were perhaps not being taught any where so either you had the experience, or initiative to learn or not (it was pass or fail).  So they though, why not try to embed this in our schools to teach our young children these competencies employers are looking for.   Toyota looked for 5 competencies in their hiring process they were:
1.  Teamwork
2.  Personal Initiative
3.  Listening Skills
4.  Problem Solving
5.  Leadership qualities

There were several discussions about gaps in certain aspects of our education system (soft skills or what I call the people side).  So a partnership formed with TMMK and the local county school system, they agreed to send 25 teachers to our quality circle training course. (Yep, I know what you are thinking- me too back then).  At that time the course discussed Meeting Facilitation, PDCA, and A3.   I will have to admit when I thought about teaching The Toyota Production system “thinking” in school systems, at that time in my career, I was like “what??? how will this work”?.   I struggled with making the translation myself much less teach it, this was in 1999.  After the Quality Circle class the teachers came out of there with a “deer in the headlight” look and very confused as to the “purpose” as to why they were asked to learn this.   I’m summarizing for the sake of a 3 year story for me, but needless to say we (Toyota-TMMK) thought if we just thought the teachers how to problem solve and conduct a meeting, then these skills could be transferred to the students, thus eliminating our gap in the community in the future.  Easy, huh?  How do you think it went?  Well various things were “assumed”, (that is what happens when failure of purpose is overlooked).  Some of the people in the school system immediately thought Toyota was trying to come in and “run” the school, some assumed we were in there to recruit little future “Toyota’ites”, as I reflect back on it all its a classic example of going into someone’s environment trying to make change without an understanding of why it is important and linking it to what they do and engaging them in a way that a threatening tone doesn't evolve.
Recognizing that we had a gap in understanding we had to “re-group”, it didn't mean we gave up, we just went it from a different approach/angle, we watched, we learned, we listened, and understood their viewpoints before we discussed our own, we were trying to build mutual trust and respect  relationship with a group of individuals that didn't see the gap in the same way we did.  They had standards based on the state of KY they needed to meet and we couldn't come in as “non-educators” and tell them how to teach people ”soft skills”.  This process of “nemawashi” – buy-in took several months.  We decided to work with a smaller group and both sides ”listened and learned” simultaneously.  This was a priceless experience for me as I reflect back 14 years ago to how it made me see this “lean translation process” differently.

In short, I worked with teachers for 3 years, we “enhanced” their curriculum embedding problem solving and people skills that engaged the students to think about their work, but just a bit differently than they were used to.  We assessed their progress as we would folks going through the hiring process, it was amazing to see the parallel.   I /We built relationships with the students, teachers, principals, and administrators in the KY Department of Education.   As time went on progress was being seen, to Pascal’s point and Jeff’s I believe we were starting to have the capability to visualize aspects in the classroom based on student performance and learning, they were becoming measurable, the word started to spread quickly that TPS works in schools and our children were learning to their need similar to just in time, we were learning how to differentiate instruction based on student differences (leveling) versus teach to a norm all based on these competencies Toyota looked for in employees noted above.  It was coming together and to our surprise we got a million dollar federal grant (with the help of Toyota) to spread this activity across the state.  It was a 3 year grant.   So we were effecting the classroom, teaching styles, school and central office processes- similar to a parallel of roles cascading in an organization meeting a customer need.   We introduced Hoshin thinking and cascaded that downward, it was amazing to be a part of it and watch the light bulbs come on because we figured out a way to come into a world that was so much different than manufacturing but translate it so people understood the purpose of children learning to think differently.   It had nothing to do with Toyota at this point, we were enhancing the knowledge of children regardless of what they were interested in being in life.  This was huge!

By the end of the 3 years as I traveled across the state of KY from grades 1-12 and even secondary schools, I had embedded myself into the school “culture” that many educators didn’t know that I wasn’t a teacher, that was when I knew I was part of the team and I had become a servant leader to them with my purpose being to engage them by listening, gaining buy-in, understanding their processes, and determining how to teach in a way that fostered development and learning for the greater good of our customer , which was the student, not Toyota’s hiring process (that was a potential outcome but not our first purpose now).  Toyota was giving back to the community and state and to this day I am still friends with several educators I trained to assist me in this program that was called QUEST – (Quest for Useful Employment Skills for Tomorrow).  This program later evolved to the Center for Quality People and Organizations (CQPO) where I worked with Mike Hoseus, the executive director today, where we further developed programs that enhanced the teachers ability to translate people or soft skills, problem solving and teamwork to our students giving them a greater chance to perform in our ever-changing world today, to this day it still is in existence in certain schools and some teachers went down as pioneers of change, I was blessed to be a part of something so evolutionary, and to think that in the beginning it was a very rough road with major resistance.
When I saw this question posted this past week, it took me back to this time because in its own way it describes the exact thing that we all deal with, and if you pause, think, listen, and explain the “what-how-and why” we are embracing change, then I believe your odds are much better for success when your people understand purpose.   My time in this program proved to me that Lean thinking can be translated in an area I personally thought (at the time) was going to be virtually impossible.   Again, Toyota proved to me that they taught me how to do things I didn’t think I was capable of, this has been my MO since I left- its been a never ending learning curve to answer this question above.   I will always continue to “listen, lead and learn”, and always gain buy-in and trust, its amazing what you can accomplish!  I will never forget it to say the least.

I hope this wasn't too far off base in answering the question, to me it translates if you can answer the 3 questions above, you just have to focus on the people side.   I always say the “people side” of lean will always trump the “tool side”, people and fostering their development and understanding will create long term sustainability and growth.  Focus on your people folks!  As Sakichi Toyoda states in the Toyota Way 2001 internal book - “People are the most important asset in your organization and they are the determinant of the rise and fall of it”.   So remove the pressure buy explaining why your change or initiative is important no matter what you call it.   I promise you it will work!
Tracey Richardson