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Art Smalley

Art Smalley: Houshin Advice

By Art Smalley, - Last updated: Tuesday, May 21, 2013 - Save & Share - Leave a comment

For a company which is pulling in different directions I think that spending some time establishing and improving their Houshin process will yield significant benefits. The trick like in most things to make sure you get it right or the “tool” will not necessarily make you perform any better. It will require rigor and correct execution of the Plan Do Check Act cycle in order to function as desired. Since there are already some insightful responses posted on this topic I will merely stick to the advice and lessons learned part of the question posed this month by Joel Stanwood.

One mistake that I commonly see made by companies employing the Houshin Kanri process is to naively assume that it equates to a “strategy” for the company.  That is not necessarily the case in reality especially when practitioners focus on metrics such as quality, cost, delivery, productivity, etc. Those are merely metrics which measure operational performance. Furthermore simply listing tactics for operational performance or just listing a bunch of projects to do is not really a coherent strategy either…

A true strategy would ideally stop the company from pulling in different directions and will help make good decisions about the future. In a manufacturing company it should help answer fundamental questions about what products will we create, what markets are we in, what geographies will we operate in etc. These are not simple or trivial questions and you can’t do everything at once since resources are limited in the short term.  What then will you do to maximize value to the customer and to the shareholders or owners of the company?

So in this spirit I recommend taking some time and reflecting upon just what is the strategy (not merely the tactics or the metrics) of the company and what is critical to achieve over the next one, three, and five years, etc.  For example Toyota’s decision to create a Lexus product line and sell it in the high performance segment of the North American market was an excellent strategic decision many years ago. So was the plan to increase overseas production capability. Conversely just implementing lean or measuring performance is not an adequate Houshin or strategy…

A related mistake I often see in Houshin Kanri is to merely have one level of the Houshin deployed. In other words the top of the plan is clear to the executives and senior managers but the rest of the organization is rather confused. The Houshin needs to be cascaded to all levels and parts of the company and this is not as easy as it sounds. It is not simply a communication exercise. For each level and department of the company actual thought has to go into how do we support the Houshin, what are our actions, how will we measure and review them etc. This cascading process can actually take several years to learn depending upon how many levels of the company there are.

Even in a company where I worked that had a reasonably good Houshin Kanri process I was continually amazed and just how poorly the overall plans for the company were understood in certain parts of the organization. For learning purposes I made a point of asking various people in different parts of the organization and listing their responses. Sadly like the children’s game where you whisper in one ear and go around the room what comes out at the other end is often fairly humorous or convoluted. Plan on over communicating your Houshin contents by a factor of five and you will be close to the level that is probably required.

Also on one final note since you are still in functional silos don’t assume that everyone will automatically do what is best for the customer. In a functional silo environment leaders often default to short sighted goals, conflicting action items, and myopic metrics. This will likely be the norm in the early going for quite some time and partly why there is pulling in different directions. It is the role of the most senior leader to use this opportunity to arrive at the best overall strategy, tactical plans, and metrics for overall success. This will represent a true test and learning opportunity for all involved.

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