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Michael Balle

Michael Ballé: Strategy starts by grasping the situation on the the shop floor

By Michael Balle, co-author of The Gold Mine and The Lean Manager - Last updated: mardi, mai 14, 2013 - Save & Share - Leave a comment

To be honest, I don’t believe I’ve ever gone into a company saying: OK guys, let’s do your Hoshin Kanri. Most companies have a management-by-objectives system in place, most companies do try hard to define overall goals and break them down into local objectives – and they certainly check performance against targets in order to pay out bonuses (or not). The question, to my mind, would be: what is specific about Hoshin Kanri that does better than ol’ fashioned management-by-objectives?

Leadership is by and large about dictating what needs to be changed and carrying the changes through –hopefully for improved performance. The specificity of lean leadership is doing so by using the PDCA cycle to learn, as opposed to just charge ahead. In this sense, the first step is to grasp the situation before formulating a strategy, which means assessing the need for change from changing business environment conditions and from assessing the current state of human and technical resources (basically, can we achieve the necessary change with who and what we’ve got?).

Hoshin Kanri differs from the usual strategy-making because this assessment doesn’t stem from the strategists’ brilliant insights or top-notch consulting presentations, but from an appreciation of the gemba and real-work conditions. The first step of HK is to set up the control points to be able to measure the system as a whole and not just by its financials.

Rather than start with deployment, I usually get each of the company’s units to come up with a list of ten to twenty operational indicators that reflect the state of its operations, its “control points”. Essentially:
• Safety (lost time accidents and illness)
• Quality (complaints, internal ppm, supplier ppm)
• Productivity (pph, equipment utilization)
• Inventory (turns, days of finished goods, WIP and BOP)
• Suggestions
• Etc.
List and calculation will vary from business to business, but the idea is to get each workplace to converge on similar practical measures that can be understood on the shop-floor even if their aggregation (particularly for productivity measures) is often questionable. These indicators are made for the workplace: they are the essential process based control points that will let us measure the system as a whole.

Then, after a few months of gemba discussion with local managers (plant manager level), and from our assessment of where the market is going, it’s possible to pick the key dimensions to change, and which indicators should be moving, such as, say, reduce quality complaints by half every year. Because of the shop floor discussion, when the top level plan is put together on two to five key indicators, local management is not surprised and usually sees the logic of what needs to be done.

At which state, and this is the second large differentiating feature of HK from traditional strategy deployment, each local manager will be asked to:
1. Specific how much of the overall objective they can contribute by when
2. Present their plan of how they intend to achieve these targets.

In my experience, alignment is not obtained by clarity so much as by repeated muddling through. In real life, everything is open to discussion: how indicators should be measured, what the objectives should be, whether the plans are up to the desired results and so on. And that is the very point. Rather than have once-a-year reviews, the process is ongoing and leads, slowly and often somewhat painfully to a real common understanding that makes sense on the shop floor (the six monthly formal reviews are simply a matter of keeping the beat of change, and wondering whether a change of direction is needed).

In the situation you mention, I’d not pull Hoshin Kanri out of the hat – you’re more likely to create further confusion than anything else, – but, to:
1. Set up a formal schedule or top management gemba walks
2. Start each visit with a list of key shop-floor indicators
3. Discuss grasp the situation and goals at each gemba walk
4. Set up overarching goals in terms of indicator targets
5. Ask operational managers to come up with six-monthly plans
6. Check progress through the gemba walks
7. Do it all over again.

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