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Enabling Employees to Assure Quality

As a child, I remember vividly playing in my grandfathers workshop that was used to repair and re-tread
used, worn and damaged truck and bus tires. As we ran in and out of the workshop we saw employees
working hard on different processes buffing, loading and unloading, assembling, etc. often waving and
smiling at us as we passed by. My grandfather was a very jovial person and the complete atmosphere
was very happy.
The workshop was very popular in and around the city and known for its quality and customer service.
However, sometimes we would see our grandfather agitated and upset. This would only happen, as we
realized later, when he received a customer complaint about quality, however minor it might be. This to
him was unacceptable and a very painful experience. I think his pain was shared by all the employees in
the workshop. Quality was very personal to him. He expected each person to ensure their work was
perfect, as a way of showing pride in their craft and workmanship. Nobody should be able to find any
problem with your work, he would always say. Pride in the work and ownership of what every employee
did was a huge factor in the success of this small business.
The Shingo Model has embodied this principle as Assure Quality at the Source. If we want to have an
uninterrupted flow of value to our customers, every element in the process has to take ownership and
pride in their work and ensure that work is perfectly done each time.
We recently saw in a large motorcycle manufacturer how ignoring this principle led to serious deterioration
of quality and other negative consequences, such as low morale and infighting between employees. The
organizations management team went on a benchmarking study tour to a strong international plant and
came back with ideas to create Quality Gates as a means of preventing defects from reaching the next
process. These were inspection stations at the end of the lines to check and provide feedback to the
employees about their quality. Contrary to our advice, these gates were established and used to check
parts and provide feedback. The accountability of good quality slowly moved away from the operators to
these quality inspectors. The operators stopped taking ownership of their defects and blamed the quality
gates for any issues. The ownership vanished and defects started to increase. Within a year this practice
was abandoned, but it took a lot more time to re-establish the operators lost pride and ownership.
Putting people and tools on the line to catch defects created by another process is a sign of not showing
respect in the inherent capability of the people to do good work. Instead, management has to spend time
and energy in creating processes that are capable and can catch errors and mistakes by themselves
leading to continuous improvement. Dr. Shigeo Shingo preached these concepts when he talked about
zero quality control. According to Dr. Shingo, we cannot achieve the aim of zero defects until we make
each element of the process capable to produce perfect quality by ensuring the errors and mistakes are
quickly identified and corrected before they lead to defects. His idea of poka-yoke and source checking
are exactly in line with this principle.

In a nutshell, if we want to create excellent quality and therefore value for our clients, we have to
show respect toward our employees and provide them with the capability to do quality work and
ensure perfection every time. They should be able to check their own work and catch the
mistakes and errors as they happen.

What Would Happen If...?

Think for a minute:

What would happen if you went to the supermarket but forgot to pick up the kids from school?

What would happen if you bought a round of drinks in a bar for all but one of your party?

What would happen if you booked your vacation hotel but did not book the flight to get there?

Clearly, in each case you might be embarrassed, frustrated and or an inconvenience to others.
You would probably also incur a lot of waste and excess cost. Indeed, your less than ideal
behaviour would be a big problem.
Now lets think about the work situation:

What would happen if you went on a gemba walk but forgot to talk to local team members at their
workstation or visual management board?

What would happen if you communicated with the day shift but not the night shift about an
important change in your business?

What would happen if you received a flat order profile from your customers but passed on a highly
variable order pattern to your suppliers?

Although we may not realise it when we do these things, the outcome is likely to be pretty much
the same as the first three home-based examples. These less than ideal work behaviours are
caused partly through carelessness, but are probably more likely because we have not been
thinking systemically. Indeed, they almost certainly point to failures to define, design, implement
and sustain effective systems in the organisation, such as leader standard work, communications
and supply chain integration.
So what should we do? Well to start with, we should work to define the key systems within our
organisation and its wider supply chain. Second, we should review how these work from a
technical point of view, but more importantly from a behavioural point of view. Third, we should
prioritise improvement activity by systems based on the importance of the system and how far
your current practices differ from the ideal. Fourth, we should ensure we develop a discipline to
maintain and further improve these systems.
Sounds easy, but these are some of the hard yards on your enterprise excellence journey. Oh, and
if you succeed, you may even learn how to avoid the first three home-based problems!

Beliefs and Systems Drive Behavior

The best decisions are made when there is awareness and knowledge of the different elements of a
system, as well as how these elements are interconnected and what the outputs of the system are.
Systemic thinking is a Shingo Guiding Principle that ties together all other principles. Thinking systemically
improves understanding by learning to see the system as a whole, including elements sometimes called
sub-systems. In reality, most things are connected to something else in an environment that is constantly
A clear example of an integrated and complex system is the human body as it is composed of different
sub-systems such as the digestive, circulatory or nervous systems. Each of these sub-systems performs
a function while being interconnected with the others, and only its synchronized and balanced function
enables the entire integrated system, the human body, to perform perfectly.
Likewise in companies, an integrated system is composed of sub-systems that working together will
enable the organization to achieve its best outcome. Sustainability comes through understanding the
Understanding of the relationships and interconnections of elements of a system makes better decisionmaking possible and creates visibility to improvements. Systemic thinking encourages improvements to be
made on the system as a whole, rather than individual components of the system, which is often where
the ideas for change are initiated.
The Shingo Model itself is an example of systemic thinking. Typically organizations go through a natural
progression of learning to understand how this system works.

Initially, managers understand and use the tools as a way to create improvements in the business.

2. Over time, managers discover that tools are not enough and they begin to see the relationship
between the tools and key systems.
3. Eventually, managers come to understand the principles and systemic thinking becomes complete
when principles, systems and tools are integrated into a perfect system.
Systemic thinking is closely related to the principle of Focus on the Process. Similarly, these two principles
are closely related to key business systems such as goal alignment and gemba walks.
The leadership team of the company defines the strategies and goals in a cyclical and systematic manner.
In order to achieve them successfully, it is necessary to ensure that the whole staff of the organization
understands and are committed. Achieving shared goals requires good data, good analysis and the
discipline to focus on the vital-few.
The related principle of Focus on Process teaches, Good processes make successful people. A regular
and disciplined process of visiting the gemba provides the breadth of understanding required for leaders
and managers to make good decisions. Seeing firsthand the interactions between related sub-systems
helps in diagnosing the difference between actual and ideal behaviors and can reveal whether or not
people are using the right data to manage the business and drive improvements.

The more deeply you understand the Shingo Guiding Principles the more you will come to understand
their connectedness. You will come to see that a few critical systems in your business touch all of these
principles. This is a great example of systemic thinking.

Process Problems: Hidden Treasures, Part

When a company engages its people in problem solving as part of their daily work, they feel more
motivated, they do their jobs better, the organizations performance improves, and a virtuous cycle starts
to turn. Such an approach can tap enormous potential for the company and its customers.
At one auto-parts manufacturer, each employee generates an average of 15 suggestions for improvement
every year. Over a period of 16 years, these suggestions have helped secure major advances that
reached well beyond productivity and into safety and quality.

Openness to talking about problems

On the face of it, talking about issues or opportunities rather than problems sounds like a good way to
avoid sounding negative or critical. In practice, though, great problem solving begins with the ability to
acknowledge problems and a willingness to see them without judgment. When an organization treats
problems as bad thingsas mistakes, defects, or failingsbringing them out into the open will make
people uncomfortable. But problems that stay hidden will not get fixed. And problems that go unfixed keep
the organization from reaching its objectives.
Neither attributing blame nor brushing a problem under the carpet is helpful. Organizations that embrace
continuous improvement take the opposite approach. They understand that when a problem is properly
identified, the root cause usually turns out to be not a particular group or individual but an underlying
factor that the organization can address, such as a lack of transparency, poor communication, inadequate
training, or misaligned incentives.
This means that organizations should see problems as something to prize, not bury. Raising and
discussing problems is not just normal but desirable and critical to success. As one lean leader told us,
Problems are gold nuggets we have to search for. Its when we dont have problems that we have a

Willingness to see problems wherever they may

Before you can acknowledge a problem, you have to be aware of it. Identifying problems, particularly
before they grow into a crisis, is a skill that can be learned. In lean thinking, all problems can be attributed
to some form of waste, variability, or overburden. Learning how to spot these factors as they arise is one
of the most important skills leaders and their organizations can develop.
Picture a bank supervisor who takes a call from an irate customer demanding to know what has
happened to the loan she applied for two weeks ago. What should the manager do? Tell the customer her

application is in the system and she should get her decision soon? Track down the application and quietly
expedite it? Or go and find out what is causing the delay and whether it is affecting other applications as
well? Only the third option will enable the manager to bring the problems real causes to light and get the
team involved in identifying and fixing it.
Problems are particularly difficult to see when they are hardwired into the way we do things around here.
For instance, some organizations place a lot of value on certain tasks that their best employees perform in
order to work around uncooperative business partners or cumbersome IT work flows. Yet under closer
examination, many of these tasks turn out to add no value as far as customers are concerned.
Organizations can often achieve significant improvements simply by exploring what is preventing them
from applying current best practices consistently across the entire workforce. Once they reach stable
performance at this level, raising the target creates a new gap to be explored.

Understanding that small problems matter

Most large organizations design their processes to manage big, top-down strategic interventions
reorganizing, migrating to a new IT platform, or outsourcing a process. They have well-honed routines for
handling them: appoint a manager, set objectives, and check progress at regular intervals. If the effort
fails to move in the right direction or at the right speed, leaders intervene. Leaders themselves, having
grown up in this kind of environment, believe that implementing these big strategic projects is central to
their joband perhaps their next promotion as well.
However, this view misses an important truth. Businesses dont stand or fall by big projects alone. Small
problems matter too and are often more critical to great execution. If a project-based approach doesnt
work, what will? In fact, the only way to manage these small, everyday issues is to detect and solve them
as they arise (or even before). That calls for leaders to shift their dominant mind-set from that of knowing
the answers and directing employees to learning from and coaching the people who are closest to the
Solving hundreds of small issues each yearas opposed to managing a dozen big projectsrequires an
organization to develop a more distributed problem-solving capability. Leaders carry the responsibility for
modeling coaching and analytical problem-solving behavior and ensuring it is adopted at all levels of the
organization. It can take years of practice for this way of working to become truly ingrained, but when it
does, organizations see the results year after year.

Process Problems: Hidden Treasures, Part

Most of the leaders we meet pride themselves on their problem-solving ability. But when we watch how
they work, we often see them behaving instinctively rather than following a rigorous problem-solving
approach. All too often they fail to define the real problem, rely on instinct rather than facts, and jump to
conclusions rather than stepping back and asking questions. They fall into the trap of confusing
decisiveness with problem solving and rush into action instead of taking time to reflect.

Why does this happen? Following a systematic problem-solving process takes discipline and patience.
There are no shortcuts, even for leaders with a wealth of experience. An organization that consistently
uses a single, simple problem-solving approach across its entire enterprise can achieve more than just
greater rigor in asking the right questionsit can create a new shared language that helps people build
capabilities more quickly and collaborate across internal boundaries more effectively. But to do so, it will
need to avoid getting caught up in sophisticated problem-solving techniques until it captures all that can
be learned from the simple ones. The main objective is to uncover problems, ask the right questions,
engage everyone in the problem-solving effort, and develop the organizations problem-solving muscles.
An effective process for identifying and solving problems involves five steps:

Define the problem. Clarify what should be happening and what is happening.

Identify root causes. Learn as much as possible about the problem, preferably by observing it as it

Develop a solution. Crafting a good solution rests on distinguishing cause from effect.

Test and refine the solution. The solution must be tested to ensure it has the expected impact. If it
solves only part of the problem, further rounds of the problem-solving process may be needed before
the problem disappears completely.

Adopt new standards. The last step is to incorporate the solution into standards for work, with training
and follow-up to make sure everyone has adopted the new method.

Recognition that observations are often more valuable than data Most organizations are good at gathering
and analyzing financial and accounting data for reporting purposes. The average executive is inundated
with management information on revenues, cost of sales, valuations, variances and volumes. It is of little
or no use for identifying operational problems and uncovering root causes or helping leaders and frontline
teams do their jobs better. Instead, organizations struggle to understand basic questions about their
capacity and level of demand. How many transaction requests did we receive today? What was our
planned capacity? How many transactions did we complete? What was the quality of the work?
Why dont organizations have this information at their fingertips, as they do with financial information?
Probably because they have never asked these questions or understood how the answers could help
them improve the way they work. Once they appreciate how useful the information could be, they tend to
assume that some kind of IT solution must be put in place before they go any further. But the cost and
time involved in application development can be enough to stop the problem-solving effort in its tracks.
There is another way. Taiichi Ohno, the executive often cited as the father of lean manufacturing, noted
that while data is good, facts are more important. When operational data is not routinely available, teams
can often find what they need not by commissioning new reports but simply by observing team members
as they work and talking to them to find out exactly what they are doing and why. Observation and
questioning provide a powerful and immediate source of insights into processes, work flows, capabilities
and frustrations with current ways of working. Teams can typically get the information they need within a
week, sometimes sooner.

From problem solving to continuous improvement Executives are often amazed at the sheer number of
problems their organization is able to identify and fix in the first few months of a lean transformation.
Some wonder whether it can last. But the good news is that in our experience, problem solving is immune
to the law of diminishing returns. Quite the opposite: problems never cease to arise. One company we
know has been on a lean journey for 20 years without seeing any letup in the flow of improvement
opportunities. Year after year it surprises itself by managing to achieve yet another 10 percent increase in
productivity and speed.
Building a problem-solving culture that lasts is not about fixing particular problems but about always
striving to do things better. To help create this kind of environment, leaders must themselves change,
respecting the expertise of the people on their team and finding ways to support them. No longer
pretending to have all the answers, they should focus instead on defining targets, creating a safe
environment for raising problems, ensuring people have enough time for problem solving, and helping
them develop their skills. Adjusting to this change in role can take time for leaders accustomed to being
the team hero. But by learning how to help others participate to the full, they can find a new identity and
an even more powerful way to add value to their organization.

Hoshin Kanri: Translating Big Vision from Strategy to


Part 1: Hoshin Kanri - Concept Origins

Prior to World War II, the U.S. share of the world export market was approximately 30%. In the
aftermath of World War II that share grew to more than 70% - a result of a generally healthy and
educated workforce, as well as a U.S. infrastructure that remained largely untouched by the war.
In contrast, many European and Asian nations were left to deal with infrastructure devastation
and human tragedy alike, often with less educated workforces using antiquated equipment.
Given that context, American manufacturers were generally able to sell all that they were able to
manufacture, whether that produced was of superior, average, or inferior quality. It is simple, but
inaccurate to assume especially when basking in the afterglow of World War II victory that
American superiority was responsible for this growth in market share and consequent relative

Relatively unnoticed was the role played by instruction in and active spread of quality control
methods in American industry during World War II by such luminaries as W. Edwards Deming
and Joseph M. Juran, as well as other, usually uncredited individuals. Those methods proved
fundamental to, for example, production of superior quality military equipment such as tanks.
This is not, of course, intended to imply that quality control methods were solely responsible for
allied victory in World War II, but only that these were an important factor.
After World War II, many of those Americans trained in quality control methods (women) left
the workforce and returned to the home. Over the next decades, many of the lessons learned were
lost. This was one of at least two things happening concurrently with the other being that the
same quality gurus largely responsible for teaching quality methods to approximately 30,000
members of Americas World War II workforce began out of empathy for the plight of the
Japanese people to teach those same methods in Japan, with the belief that those methods could
significantly aid the long climb Japan would need to make from the devastation of World War II.
What Deming, Juran and others found in Japan was a highly talented, highly motivated
collection of business and engineering leaders who embraced these methods with near tent
revival zeal, and who not only widely and expertly adapted and deployed these methods, but
who added new and highly pragmatic approaches. This was done with the sort of efficiency that
extreme resource scarcity can motivate, augmented by the effectiveness that dedication to
precision births. Just as Deming, Juran, Armand Feigenbaum, Philip Crosby, H. James
Harrington, Walter Shewhart and other American quality luminaries wielded significant
influence, a new constellation of Japanese quality stars arose, the names and developments of
whom have been and remain integral to contemporary expressions of quality in its many forms
that include, but are not limited to, lean enterprise methods and six sigma individuals such as
Shigeo Shingo and single minute exchange of die (SMED or quick changeover); Taiichi Ohno
and the Toyota Production System (TPS) that resides at the heart of the lean manufacturing
movement; Masaaki Imai and kaizen (continuous improvement); Kauro Ishikawa and cause-andeffect diagrams; Yoji Akao and quality function deployment; Genichi Taguchi and robust product
design; Noriaki Kano and the customer needs model; and hoshin kanri the development of
which is not attributed to any single individual, but rather the first use of the term appears to
have originated at Japans Bridgestone Tire company in 1965 (Watson, 2003).
This combination of zeal, expertise, methodological innovation and application, and relentless
pursuit of perfection began to have an effect on the American share of the world export market
one that was scarcely noticed until American manufacturers surrendered consumer electronics
and automotive markets to Japanese manufacturers victims not only of Japanese drive and
ingenuity, but of their own arrogance and a sense that it was impossible for anyone else to outperform, out-create, or out-innovate American enterprises. The result of this was that by 1990 the
U.S. share of the world export market had fallen to its pre-World War II level of about 30%.
Today that share ranges between 10% and 15%, and the U.S. has become the worlds greatest
debtor nation.
Much has been and continues to be written about the Japanese miracle, though some of the
sheen has dimmed as Japans economy like many others has struggled in recent years. Still,
books such as World Class Manufacturing by Schonberger (1986), Kaizen by Imai (1986), The

Machine that Changed the World by Jones, Womack and Roos (1990), and numerous others have
had significant impact on the way many global enterprises do business. This is especially so in
select sectors such as the automotive industry that have embraced lean philosophies and
methodologies. Increasingly this is also seen in such sectors as healthcare and banking.
While each of the strategies and methods cited provide value to enterprises using them, we will
focus primarily on hoshin kanri, which is essentially an organizing framework that directs
enterprise-wide attention to corporate purpose, aligns priorities with local plans, integrates these
into daily management and activities, and facilitates enterprise learning and enculturation
through routine review (Witcher and Butterworth, 2000).
Part 2: Hoshin Kanri A Valuable Concept
Roots of Hoshin Kanri may be traced to at least A Book of Five Rings written in 1645 by
Miyamoto Musashi (Harris, 1982). This book, the essence of which is captured by the word
heiho or strategy, was a resource intended to provide instruction to samurai warriors, including
instruction in what is perhaps the quintessential samurai skill kendo, or precision
swordsmanship. Relative to kendo, A Book of Five Rings, asserts that those thoroughly
conversant with strategy will recognize the intentions of their enemies and through preparation
and recognition will have many opportunities to cultivate and execute strategies capable of
thwarting the objectives of their adversaries and positioning themselves to be victorious.
Like heiho, the word hoshin is comprised of two Chinese characters: ho which means method
or form, and shin, which is often translated as shiny metal the glint from the spear that leads
the way (Lee and Dale, 1998) or, in a more contemporary form, an aim. When assembled, the
word hoshin and can be taken to mean a methodology for strategic direction setting. The word
kanri is commonly interpreted as management so that hoshin kanri becomes management of
the strategic direction setting process. Given this interpretation, in the West, hoshin kanri is
commonly referred to as either policy deployment or strategy deployment or often by the East
/ West hybrid term that we will henceforth use: hoshin planning.
Generally speaking, a given hoshin is mission and vision critical to an enterprise and is stated in
terms of a goal or objective that is, a policy or a strategy that is intended to elevate associated
business processes and outcomes to a target performance level. The underlying structure of
hoshin planning implies that it can be applied at essentially any level of the enterprise, ranging
from senior executive level to the day-to-day operational level.
Often, a high level (senior executive) hoshin is of such foundational importance to the enterprise
that failure to attain or fulfill it within an appropriate timeframe will place the organization at
risk. As such, a high level hoshin can be thought of as representing big (enterprise) vision.
Organizations that practice enterprise level hoshin planning ordinarily have a limited number of
hoshins typically three to five that must be realized within a specified time span that, in the
West, will ordinarily range from one to five years, with specified mileposts and periodic stage
gate reviews along the way.

Those of us in the northern hemisphere can relate to a hoshin as an organizational north star or
true north, whereas those of us in the southern hemisphere may think of a hoshin in relation to
the Southern Cross: hoshins are intended to aid enterprise navigation and alignment by riveting
collective enterprise focus on their attainment.
At the enterprise level, hoshin planning begins with big vision that is progressively unfolded
by cascading the various hoshins from one level of the enterprise to the next to the next and so
on beginning with the executive level and ending with the operational level. Thus, from one
level to the next to the next until the bottom of the waterfall an increasingly detailed scheme
emerges. In this way hoshin planning begins with strategy or policy, is progressively transformed
into plan, that is progressively executed, leading to full strategy / policy implementation. Hoshin
planning beginning at the operations level is executed in like manner, but with generally less farreaching strategic implications and nearer-term fulfillment needs. In its high-level incarnation
hoshin planning is highly strategic and focused on breakthrough improvement (Witcher, 2003)
whereas at the operations level it is ordinarily on more incremental, continuous improvement
(Hutchins, 2008).
We can conclude that a key benefit of hoshin planning is its ability to create consensus (Watson,
2003) and facilitate enterprise alignment through significant workforce participation (Kondo,
1998) that requires extensive communication that is both lateral and multi-level in nature. Such
communication assures that each individual involved in the hoshin planning process is
conversant with the big goals and objectives or hoshins of those both immediately before them
(their direct supervisor) and immediately following them (their direct reports) as well usually
with those of their immediate colleagues. This occurs because their own hoshins and related
activities are driven by hoshins received from their direct supervisor and in turn inform the
hoshins and related activities of their direct reports so that all involved in the process are familiar
with three or more levels. This communication process is fundamentally a negotiated dialogue
that is often referred to as catchball (Tennant and Roberts, 2001) and connects the planners
and the doers (Sussland, 2002). Successful hoshin planning implementation is often associated
with complementary and skilled use of effective performance management and measurement
approaches such as the balanced scorecard (Kaplan and Norton, 1996; Witcher and Chau, 2007).
Together these approaches provide an exceptional means of rationally applying management of
objectives as developed by the father of modern strategic management Peter Drucker
(Greenwood, 1981).
The value of hoshin planning, as with most approaches, is bounded by the value and timeliness
of the strategy or policy being deployed, not to mention the quality of the plan as it unfolds
through the organization. Figure 1 provides a view of the larger context within which hoshin
planning typically occurs. Although hoshin planning may begin at any level of an organization
and cascade downward through relevant other levels until sufficient execution is attained, we
will provide the high level view that emerges by beginning at the senior executive level (CEO) of
the enterprise.
To explain Figure 1 we use the increasingly common scenario wherein organizations must
produce not only acceptable financial performance and impacts to satisfy key stakeholders, but
also socially equitable and environmentally sensitive performance and impacts are demanded by

citizens and regulatory agencies if not indeed by our own consciences. Prior to examining
Figure 1 we note that it is nave to expect such positive end of the pipe triple bottom line
(Elkington, 1997) performance and impacts without formulation of relevant into the pipe triple
top line strategy (McDonough and Braungart, 2002).

Figure 1. Hoshin planning from an enterprise perspective.

Examining Figure 1 from left-to-right we see that most enterprises have clearly defined purpose,
mission and vision. The function of enterprise strategy and governance is to serve this purpose,
vision and mission. Contemporary enterprises increasingly strive to be economically sound,
socially equitable, and ecologically sensitive and hence formulate their strategy accordingly, with
many organizations also needing to incorporate other context driven strategy elements such as
being aggressively innovative in order to compete or to remain or become relevant in the
marketplace. Although a typical organization will have numerous strategies, the Pareto Principle
(Juran, 2005) of separating the vital few (strategies) from the trivial many suggests that a
few of these will be primary that is hoshins that populate the vital few, while the others will
be relatively less important and will constitute the trivial many. Given the growth of triple top
line approaches, and the importance of innovation, many organizations may have one or two
hoshins that emerge from each of these categories.
Once executive level hoshins are determined, those executives will communicate these what to
priorities on to the subsequent organizational level. Those responsible at the next level are
provided with these hoshins or whats generally with little to no guidance as to how to fulfill

these: determination of how is up to those at that level as is the selection of which hoshins are
relevant to their span of influence. Those responsible at this next level will then determine the
relevant how to elements and these become the hoshins or whats that are cascaded to the
following level.
This process continues, with the hoshins or whats at one level translated into hows at the next
level until the plan is fully elaborated, transforming in the process from big vision to
execution. Relative to Figure 1, this process begins with strategy at the executive level seen on
the left side of the Figure, and is unfolded through various levels with people doing the
unfolding through progressive translation of whats into hows into whats into hows as
represented by the center portion of Figure 1, ultimately delivering performance and impacts
along the way as seen in the rightmost box of Figure 1. The mechanisms of the transformation
are portrayed in the center portion of Figure 1: people, processes, partnerships, principles,
practices, policies, and whatever other resources might be deployed / applied.
It is important to note that this is a living or cyclical process in that performance and impacts
resulting from hoshin implementation are intended to provide both insight into recent enterprise
performance and foresight into future enterprise priorities. Of course it is also important for the
organization to be externally aware so that future priorities might be influenced by new, pending
or likely legislation; by technological changes; by economic cycles; by emerging megatrends; or
by other things not herein cited, but yet highly relevant to the enterprises competitive landscape.
Seen in this context, hoshin planning can be regarded as analogous to application of Demings
Plan-Do-Study-Act (PDSA) Cycle at the enterprise level or, indeed, at whatever level hoshin
planning is practiced (Moen and Norman, 2010).
Part 3: Hoshin Planning Applied
Illuminating examples of hoshin planning use by Western enterprises are abundant and readily
available. For that reason, they are only briefly mentioned herein accompanied by references
where implementation details can be found. It would be erroneous to presume that hoshin
planning is equally well implemented in all areas of a given enterprise, nevertheless, those cited
are ones that have made fortuitous use of the method. In such instances, it is clear that enterprisewide transparency has been a critical success factor: when the workforce understands corporate
mission, vision and purpose they can better manage their own priorities and activities and
appropriately adjust in order to better align these with enterprise goals especially enterpriselevel hoshins (Witcher and Chau, 2007).
Perhaps best known for use of hoshin planning among Western organizations are Xerox
Corporation (Witcher and Butterworth, 1999) and Hewlett-Packard (Witcher and Butterworth,
2000). Of course, hoshin planning use has around the globe, with the initial apostles of hoshin
planning commonly being global enterprises that have first experienced positive domestic
results. As but a single example among many, we point to Nissan Corporation and successful use
of hoshin planning in their South African plant (Witcher, Chau and Harding, 2008). Numerous
early examples of transfer of hoshin planning and other significant Japanese management
innovations can be found in, e.g., Kano (1993) and Lillrank (1995).

Climbing the Hoshin Planning Ladder: Nuts and Bolts Facilitation

Figure 1 presents a contextual view of hoshin plannings fit in the larger enterprise perspective,
but does little to aid implementation, and it is to implementation that we now turn. Although
implementation can and usually is challenging, it can be fruitfully approached through a
relatively concrete, almost algorithmic means. Given that the primary consumers of this
contribution will have little or no experience with hoshin planning, our focus is on providing
such an algorithmic, step-by-step approach. We begin by examining Figure 2 which provides an
adaptation of a commonly used depiction of the hoshin planning process.

Figure 2. The hoshin planning process.

We see in Figure 2 that executive/senior leadership and management is responsible for the
formation and communication of big vision and objectives to the following management tier,
mid-level management, which in turn explicitly translates these into their strategy while also
identifying and developing requisite resources that will be needed for deployment. This
communication, represented by the red two-way arrow connecting vision and objectives to
strategy and resources is a negotiated dialogue wherein explicit goals are set. In turn, mid-level
management communicates their strategy and distributes resources to hoshin implementation
teams that are responsible for determining precisely how and in what time horizon execution will
take place. Negotiated dialogue or catchball between mid-level management and the
implementation teams represented by the red two-way arrow between strategy and resources

and activities and execution horizon identifies and agrees upon the measures by which success or
failure of a hoshin implementation is assessed. Similarly, executive/senior leadership and
management review implementation team proposals to determine whether these are sufficiently
aligned with vision and objectives and, of course, are sufficiently aggressive to meet
strategic/competition critical needs.
As a final note on Figure 2, the red arrowheads of varying size positioned on the hoshin planning
cycle (that is, the outer circle of Figure 2) are intended to indicate two things: that hoshin
planning is in fact cyclical, and further that the time horizons generally differ. The large red
arrowhead on the right of Figure 2 indicates that executive/senior leadership and management
often address longer horizons of three to five years, middle managers address shorter horizons of
one to three years as indicated by the medium red arrowhead at the base of Figure 2, and
implementation teams routinely attend to activities with horizons of one year or less as signified
by the small red arrowhead on the left side of Figure 2.
Figure 3 provides a commonly used hoshin planning tool that is referred to as an X-matrix.

Figure 3. Hoshin planning X-matrix.

Revealed in Figure 3 are executive/senior leadership and management breakthrough objectives
(hoshins) at the bottom of the X-matrix, in relation to which are nearer-term objectives on the left
side of the graph, with the relative strength of the relationships in the lower right hand corner of
the graph. Near-term objectives are in turn related to executive and senior leadership and

management priorities that are reflected by dedicated resources as revealed at the top of the Xmatrix, with the strength of relationships between the two provided in the upper-left corner of the
X-matrix. Associated with dedicated resources are specific targeted outcomes that form the right
side of the X where the relationships between priorities and targeted improvements and
innovations are depicted in the upper-right corner of the X-matrix. Finally, we see on the extreme
right side of the X-matrix specific efforts associated with specific implementation teams and
team members. The relationships (correlations) cited in the four corners of the X-matrix are often
symbolized as being strong, moderate, weak, or in some instances as an empty cell indicating
no relationship between specific elements. Other context-driven elements may be added to the Xmatrix as needed.
As a second useful aid in hoshin planning implementation we cite the A3 tool (Chakravorty,
2009) where A3 refers to the size of paper commonly used, that is, 11 inches by 17 inches or
twice the size of standard US-letter format paper. A3 document content is often populated by
steps associated with the plan-do-study-act or PDSA cycle, though we here recommend a
modified PDSA cycle similar to the one provided in Figure 4 that is subsequently described.

Figure 4. Plan-Do-Study-Act (PDSA) Cycle modified to include standardization and gainholding.

Due to Walter A. Shewhart and popularized by Dr. W. Edwards Deming, the PDSA cycle is also
referred to as the Deming Wheel or, more commonly, as the PDCA cycle where the word

check rather than study was used by Dr. Deming until later in his life. Toyota and many
other companies make routine use of the PDSA cycle relative not only to hoshin planning, but as
a general use problem-solving tool, including often in an A3 format (Shook, 2009).
Whether provided in an A3 or other format, the (modified) PDSA cycle of Figure 4 may be
described as follows:
As with any journey on which one embarks, it is prudent to fully understand where the journey
originates, that is, to assess the current or baseline conditions, including current performance
levels and the root causes of inadequate performance (Doggett, 2005). Use of PDSA implies
there is a gap between current and aspirational performance and generally the decision has
been made to pursue an incremental approach to improvement. Relevant to hoshin planning, it is
appropriate to note that while executive and senior leadership and management hoshins
correspond to big vision, as hoshin planning cascades strategy through the enterprise, that at
each successive level strategy transforms more and more into tactics which these increasingly
corresponding to incremental change: PDSA cycles in whatever format are useful for anyone,
at all levels.
Once the current situation has been assessed the individual or team preparing the PDSA/A3 will
identify planned beneficial changes that address to the process or system under consideration as
well as the goal or target performance level resulting from those changes. This is followed by
doing (implementing) the planned changes potentially on a limited or pilot scale since
changes may not prove sufficiently beneficial to warrant full-scale implementation. The status of
the changed process or system will then be assessed or studied (that is, checked) to document
its new performance capability and whether the gap between prior performance and the goal or
targeted performance has been adequately addressed. If the gap has been adequately addressed,
the changes will be standardized and fully documented with the purpose of making the solution
resulting from the changes a more portable one, at which point the solution will be fully
implemented and process control established that ensure that benefits of the changes are
In noting that use of PDSA is typically cyclical, the individual or team responsible for the
specific PDSA will likely engage in another round of planning, ad infinitum until the
performance of the process or system in question is sufficient. We further note that while PDSA
ordinarily pursues a series of incremental improvement that, collectively, yield large-scale
improvement, use of PDSA does not preclude attainment of breakthrough improvement on any
given iteration.
Hoshin kanri is known by many names, including policy deployment, strategy deployment, and
hoshin planning. Originating in Japan, the primary intention of hoshin planning is to translate
strategy into actions that ultimately yield relevant performance and impacts. A number of tools
and methods are available to support this process, but it is critical not to place undue focus on the
tools, numerous variations and adaptations of which can be found. Equally, it is important not to

fall in love with a given strategy and to recognize that there is no perfect strategy only better
and worse ones; relevant, less relevant, and irrelevant ones.
Hoshin planning has been successfully used in many organizations, among them Bridgestone
Tire where hoshin planning originated Toyota, Nissan, Hewlett-Packard, and Xerox.
Although it is a highly structured strategic planning and deployment process, hoshin planning is
versatile and can be of value to organizations in any business sector, including yours.

KPIs are Dead, Long Live the KBIs!

Project succeeded?
About a year ago, the head of logistics and purchasing asked me to carry out some observations on the floor. Their
new ERP system had been implemented about two years ago, and he wanted to know where knowledge was still
lacking so he could use the information as input for a training plan. So off I went to talk to some of the employees. I
asked an employee to tell me exactly what she did while she was working on something, a bit like TV-chef Jeroen
Meus. "And now I change this printer to the correct printer ... This has been wrong in the system for a long time." She
felt no regrets to report the issue and get it solved once and for all, instead she solved the problem herself on a daily
basis. And she was certainly not the only one I noticed doing this during my observations. The employees certainly
knew what the final output should be, but they were less concerned about how it should be achieved, or even how
efficiently it should be achieved. Is this the behavior and the consequent results you want to achieve as an

Do you manage your culture or does your culture manage you?

The implementation of a certain tool may bring about on-time and on-budget performance, but
the tool must also be used efficiently once it has been implemented. It is all very well to have
nice tools; however, it is the behavior of leaders and employees that will determine the final
results. An insight from the Shingo Model explains it beautifully: Only via ideal behavior we
can achieve ideal results. If we want to have a 100% safe environment, we want to see the staff
talk to each other if they see unsafe behavior. Do you want to achieve a culture of continuous
improvement? If you do, you should look for new items to constantly place on the improvement
board, and you should see tips and tricks shared spontaneously. As leaders, we want to set a good
example; and if a leader sees inefficient behavior among his/her employees, he/she must speak to
them about this in the correct manner. But how do we get the ideal behavior that we want to see
in our organization?
The only thing of real importance that leaders do is to create and manage culture. If you
do not manage culture, it manages you, and you may not even be aware of the extent to which this is happening.

Professor Edgar Schein of the MIT Sloan School of Management, MIT Leadership
Key Behavior Indicators: 5 steps in the right direction
Step 1: The very first question you must ask as a leader is: what culture do you want in your
organization? The desired culture is a collection of all the desired behaviors you want to see,
from the CEO to an operator.
Step 2: Translate the ideal behavior so it is relevant to the entire organization. Co-creation is a
success factor: involve managers and employees in the decision-making process. Communicate
about the kind of behavior you expect within your organization and work with the employees to
determine how this ideal behavior translates into their daily tasks within the department/team.
People can only be expected to display this desired behavior if they really understand what is
expected from them.
Step 3: While measuring results, also measure the ideal behavior that you want to see.
Performance is often measured using KPIs, for example, growth in market share, customer
satisfaction, turnover, etc. We find it perfectly logical to implement the ideal process from a
blueprint and to measure the performance using performance indicators. But do we also find it
logical to do the same for the most basic element of our organization, our culture? Of course, it is
very important to measure results and to monitor KPIs, but is it also important to monitor how
our behavior is evolving in the right direction. For example, it is possible that zero safety
incidents occurred at a particular production site in the past year; but if no safety inspections
have been carried out, or preventive measures taken to ensure safety (or even increase safety),
this historical figure has no predictive value. It is certainly very interesting to know the extent of
any savings that have been made as a result of the implementation of improvement ideas, but
how many of these ideas were initiated by employees? Besides the usual KPIs, we should also
have KBIs key behavior indicators. These should be used to see the extent to which the
behavior we want to see in the organization is already present. An additional advantage of these
indicators is that they often have a leading characterthey are a predictor of future
Step 4: Visualize these measurement points
As a result of our intention to visualize, our success rate increases from 4% to 40%. Visualizing
makes it clear what is important. Hang a white board with the measurement points on the wall in
all departments; take the measurement points to existing platforms, such as the daily start-up
meeting or weekly/monthly performance meetings. The KBIs are signposts showing the way to
the ideal behavior that will achieve the ideal results. So it is very important that they belong on
your balanced scorecard.
Step 5: Go to the gemba
A presence on the floor is important, but simply being present is not enough. Now the ideal
behavior is known, a gemba walk no longer has to be an unstructured walk around. Look and

observe whether you perceive the ideal behavior, and try to find out whether there is a difference
between the current behavior and the desired behavior. Your gemba walk is actually a
manifestation of your belief and subsequent behaviorthat value is created on the floor and that
managers should spend a significant amount of their time walking around observing, asking
questions and appreciating.
Do you know what behavior you want to see in your organization already? Do your employees
already know it? Gandhi said, "Be the change you want to see in the world." We can start with,
"Know the change you want to see in your organization."

Medical Taylorism: An Article that Does a Huge

Disservice to Needed Healthcare Transformation
By Dr. Patricia Gabow and Ken Snyder

The article, Medical Taylorism,[1][1] by Pamela Hartzband, M.D. and Jerome Groopman,
M.D., in the New England Journal of Medicine, reflects a major misunderstanding of the
principles and practice of the Toyota Production System, or Lean as it is often called.
Specifically, the article appears to conflate poor implementation with the underlying principles.
Several commentators, including many from the Lean community, have weighed in on this
debate, but more needs to be said given healthcares need for transformation and the powerful
solution that Lean offers in this transformation.
Doctors Hartzband and Groopman are feeling pain due to their experiences. We sympathize with
their pain. Too often, whether in healthcare or other settings, we see poor implementations of
Lean. These poor implementations are almost always due to failure to follow the principles of
operational excellence.
In this discussion about Lean in healthcare, there are some specific principles that deserve
emphasis. In citing these principles, we will adopt the terminology used in the Shingo

Seek Perfection

Respect Every Individual

Control Quality at the Source

Embrace Scientific Thinking

Create Constancy of Purpose

It is unfortunate that many who implement Lean seem to forget these core principles. It is hard to imagine
any set of principles which would more closely align with the needs of healthcare and commitment to the
populations well-being than these principles.
Seek Perfection

American healthcare is in dire need for transformation. American healthcare has significant
issues with cost, waste, access/coverage, quality, disparity, geographic variation, and employee
burnout. These issues affect everyoneevery American business and their employees. All of us.
These problems cannot be ignored. These problems cannot be fixed by merely wishing for
improvement. Nor will these problems be solved solely by government actions. Individual
healthcare systems must transform the way they deliver care. This requires a robust and
disciplined approach that uses the talents of the entire workforceexactly what Lean does.
Perfection is an aspiration not likely to be achieved but the pursuit of which creates a mindset
and culture of continuous improvement. The realization of what is possible is only limited by the
paradigms through which we see and understand the world.[3][3]
Womack, Jones, and Roos first adopted the term Lean to describe manufacturing systems that are
based on the principles employed in the Toyota Production System. Quoting them, Lean is
lean because it uses less of everything compared with mass production half the human effort
in the factory, half the manufacturing space, half the investment in tools, half the engineering
hours to develop a new product in half the time. Also, it requires keeping far less than half the
inventory on site, results in many fewer defects, and produces a greater and ever growing variety
of products.[4][4] We use Lean in the meaning that was intended when it was first coined.
Unfortunately, lean[5][5] has subsequently been misused, abused, and confused, as appears to
be the case in Doctors Hartzbands and Groopmans experience.
Toyota captures the essence of this principle in their slogan used for their Lexus automobile line
The Relentless Pursuit of Perfection a pursuit worthy of healthcare. Through its Lean
transformation, Denver Health made substantial progress in addressing the problem afflicting
American healthcare. In the most important metric of all, lives saved, Denver Health estimates
that 247 people walked out of the hospital in 2011 that otherwise may not have survived in other
healthcare institutions. This was a reflection of the fact that in 2011 Denver Health achieved the

lowest observed-to-expected mortality rate of all the hospitals in the University Healthsystem
Consortium.[6][6] The pursuit of perfection saves lives.
Respect Every Individual
Respect for everyone is foundational for Lean. For those in healthcare this respect encompasses
the patients, their families, the employees at every level of the healthcare organization, the
suppliers, the communities, and the nation. As Toyota states, We build people, before we build
cars.[7][7] Hardly the motto of a stopwatch approach as Hartzband and Groopman see it.
Many people, even those with only a little exposure to Lean, know that Lean in healthcare is
about removing waste from the patients perspective. Waste creates useless work, waste impairs
quality, waste adds chaos to the work environment, and waste adds costs. Healthcare is filled
with wastes from waiting, wastes due to defects in the healthcare process, and wastes related to
unused/misused human talent. Waste in providing healthcare is not beneficial. In the correct
application of an improvement process, every employee from the physician to the housekeeper
becomes a problem solver that removes waste.
What is often not known is that Toyotas philosophy of removing waste is tightly tied to respect
for people. Respect must become something that is deeply felt for and by every person in an
organization. When people feel respected, they give far more than their handsthey give their
minds and hearts as well.[8][8] The people become the problem solvers.
When Denver Health launched its Lean journey, this relationship of waste and disrespect was
clearly and often articulated. We quoted two sayings of Toyota leadership on waste, and added
two sayings of our own:
Toyota Leadership:

Waste is disrespectful of humanity because it squanders scarce resources.

Waste is disrespectful of individuals because it asks them to do work with no value.

Denver Health:

Waste is disrespectful of patients by asking them to endure processes with no value.

Waste is disrespectful of taxpayers by asking them to use their money for processes with no

This key concept of respect for people is also manifested in the Lean tool set which is robust but
simple to understand and use. An example would be a spaghetti diagram. One does not need a
college degree to understand a spaghetti diagram! Tools such as these enable every employee,

from housekeeper to physician, to be a problem solver. The tools democratize problem solving.
What is more respectful than democratizing work?
We agree with Doctors Hartzband and Groopman when they write, When it comes to medicine, man
must be first, not the system. However, if the system is wasteful, every person suffers the consequences
and no person is respected. It is unfortunate that their lean experience appears to have ignored this
foundational principle of respect for every individual.

Control Quality at the Source

Every physician, healthcare worker, or patient wants quality healthcare. Unfortunately, our
current healthcare system cannot guarantee quality. A recent article dramatically illustrates this
by determining there are approximately 251,000 deaths in American hospitals every year due to
medical errors making it the third leading cause of death.[9][10] Thus, an approach that fosters
quality at the source is critically important.
Perfect quality can only be achieved when every element of work is done right the first time. If
an error should occur, it must be detected and corrected at the point and time of its
The improvement approach taught by Dr. Shigeo Shingo to control quality at the source is often
referred to as pokayoke[11][12] or error-proofing. Truly controlling quality at the source in
healthcare would involve a focus on preventive care and population health. It certainly would
involve more of a discussion about public health policies. We need to focus both on how to
prevent health issues from occurring and how to treat health issues after they have occurred.
Application of this principle in the process of caring for someone who is ill is exemplified in the
Lean concept of stopping the line. Healthcare uses this in many places including time outs
for a procedure in which if some part of the process is not rightwrong patient, wrong
procedure, or wrong equipment the process is stopped. It is also part of a computerized order
entry in which a drug and its dosage are checked by an algorithm and by a pharmacist stopping
the wrong medication or drug dosage from reaching a patient.
The experience at Denver Health is instructive in a common corollary to this principle that is,
that quality saves money. This corollary emphasizes that when quality in healthcare is controlled
earlier in the process, not only does healthcare improve, but also tremendous cost savings are
During the Denver Health Lean journey, the system achieved remarkable quality outcomes in
preventive care and management of chronic and acute disease.[12][13] Approximately 80% of all
children were fully immunized, over 70% of patients with high blood pressure had their blood
pressure controlled, and hospital-observed expected mortality was less than one every year.[13]

[14] These are amazing accomplishments for any healthcare system, but even more impressive

for one that cares for a highly vulnerable population.

During this same period the system achieved approximately $195 million of hard financial
benefit through reduced costs, increased productivity, and improved revenue cycle processes.[14]

Embrace Scientific Thinking

Innovation and improvement are the consequence of repeated cycles of experimentation, direct
observation and learning. A relentless and systematic exploration of new ideas, including
failures, enables us to constantly refine our understanding of reality.[15][16]
Doctors Hartzband and Groopman write, We believe that the standardization integral to
Taylorism and the Toyota manufacturing process cannot be applied to many vital aspects of
medicine. Once again, this statement comes from a misunderstanding of the principles of
improvement. If processes are random, it is not possible to assess what is working and what is
not working. The Toyota Way states, Standardized tasks and processes are the foundation for
kaizen. In a correct improvement process, which embraces the scientific method, standards are
the control. Without standards, then what can physicians test to make healthcare better?
We praise Doctors Hartzband and Groopman for recognizing some of the contributions of
standards. As they state, To be sure, certain aspects of medicine have benefited from Taylors
principles. Strict adherence to standardized protocols has reduced hospital-acquired infections,
and timely care of patients with stroke or myocardial infarction has saved lives.
Many people, particularly those who are not directly involved in healthcare, may think that
standardization is present throughout all of healthcare delivery. This is far from the case. There is
variation within an organization, within a discipline, and across geographies. In the more than
400 rapid improvement events at Denver Health, the most common insight of the teams at the
end of these week-long events was, We have no standard work. As physicians, we must not
confuse standardizing a process to create a baseline from which to judge outcome, with the
inability to respond to patient differences or patients choices.
Standards empower the scientific method. Lean exemplifies the scientific method which
demands that experiments be based on a hypothesis that compares an idea against a control. The
Lean tools also embrace the experimentation part of the scientific method. Anyone who has
participated in a rapid improvement event has seen how critical it is to have rapid experiments to
test the solutions which move the process from the current state to the target state. Also Lean
communication follows a scientific model. Any healthcare professional who has submitted an
abstract to a scientific meeting or a scientific journal realizes the abstract mimics perfectly the
Lean tool of A3 in which it articulates the reason for action, the current state, the target state, the
gaps between the two, the solution approach, and the rapid experiments.[16][17]
One particularly impressive and life-saving example of the power of standard work in healthcare
was a Denver Heath rapid improvement event that focused on deep venous thrombosis (blood

clots in the legs) which is a potentially life threatening post-operative complication.[17][18] This
complication can be substantially prevented by appropriate anticoagulation. At Denver Health,
the occurrence rate significantly exceeded the national benchmark. There was no standard
approach to post-operative anticoagulation surgeons, orthopedists, obstetricians all had
different approaches. Many committees failed to solve the problem. A four-day rapid
improvement event involved five physicians, a nurse, and a pharmacist using Lean tools to tackle
this problem. One standard approach emerged and was implemented. This reduced the rate of
post-operative deep venous thrombosis to at or below the benchmark. In addition, the
standardization prevented misuse of expensive drugs, saving $15,000 per month.
These examples demonstrate that a correct implementation of an improvement process embraces
the scientific method, and leads to improvements in the care provided.
Create Constancy of Purpose
An unwavering clarity of why the organization exists, where it is going, and how it will get
there enables people to align their actions, as well as to innovate, adapt, and take risks with
greater confidence.[18][19]
Too often, lean methods are applied for the sole purpose of reducing costs. It is, after all, a
process that results in the elimination of waste so, of course, costs are reduced. However, we
suggest that the reduction of costs cannot be the driving purpose in healthcare. The true north for
any healthcare organization must be a noble and inspiring purpose, important, and a stretch.
Unfortunately, Doctors Hartzband and Groopman paint a picture where healthcare is sacrificed
for the sake of efficiency. The need felt by Doctors Hartzband and Groopman to write such an
article suggest either no true north was articulated or communicated throughout the organization;
or it was not noble, important, and a stretch. An appropriate, well-communicated true north will
be embraced by the healthcare workforce, including physicians, and will create a constancy of
purpose and bring continuous improvement to the goal.
At Denver Health, the true north cause, which inspired everyone in the Lean transformation, was
to create a mature culture committed to reducing waste to perfect the patients experience and
become a model for the nation.
We encourage readers to look at the impressive results that a correctly understood and
implemented Lean journey can have on patient care quality, costs, and employee engagement.
There are well-documented examples at Thedacare,[19][20] Virginia Mason,[20][21] and Denver
Health[21][22] to name a few.

We believe that understanding the Lean principles coupled with an implementation which
utilizes Lean tools offers healthcare an opportunity to improve quality, lower costs, empower all
the workforce, and ultimately enable better health for all Americans.
About the Authors
Dr. Patricia Gabow, MD, MACP, is an academic nephrologist, physician administrator,
contributor to national health policy, and senior adviser to Simpler Consulting. During her tenure
as CEO of Denver Health, a large integrated public healthcare system, Denver Health started its
Lean transformation in 2007, and received the Shingo Bronze Medallion in 2012.
Ken Snyder is the Executive Director of the Shingo Institute, Home of the Shingo Prize, and the
Executive Dean of the Jon M. Huntsman School of Business at Utah State University. Based on
the work of Dr. Shigeo Shingo, one of the key developers of the Toyota Production System, the
Shingo Prize is an internationally recognized standard of operational excellence

The Principle of Flow and Pull

Too often the principle of flow and pull is seen as applicable only in a manufacturing
environment. In fact, the principle can be applied in many different ways. Experiencing the
"Matatu" bus service in Nairobi. It really got me thinking about the principle of flow and pull.
The system is very different from than in Sydney, which has a very similar population size to
Niarobi. In Sydney, buses are on a fixed timetable, readily available to look up on various travel
apps and published at each bus stop. Buses are frequent and you can even track your buss
real-time location on your phone. Like most big cities they are more frequent at peak hours, but
despite this, are often full during these hours and relatively empty off peak.
So is this a good example of pull and flow? At one level, buses are pulled through at peak times
to match customer demand based on historical demand patterns. Flow is dramatically improved

through the use of dedicated bus lanes. Car drivers watch enviously from the queue of their
stationary vehicles as buses shoot down the near empty bus lane. Occasionally frustration takes
over better judgement, and a quick burst down the bus lane provides the thrill of movement and
the often-illusionary progress as you are forced to wait to be allowed back into your lane a few
hundred meters further on. If you are really lucky you also avoid the fine.
So there is some pull and certainly better flow for the buses than for the cars. Outside of peak
times, the bus system is definitely more push than pull, with fixed timetables pushing out buses
regardless of actual demand.
The system has recently gone cashless, which saves a huge amount of time in collection and
counting of cash, and generally works very well. All you need to do is make sure you buy an
electronic card and keep it charged up with virtual cash and all is well. That is unless you are a
new visitor to the city and unfamiliar with the bus drivers inability to accept cash. I recently
witnessed an incident with a tourist family trying to board a bus. English was not their first
language, and the driver struggled to explain that just giving him more and more money would
not work.
A couple of passengers tried to help even by offering to use our cards, but you can only use
them once on each journey. So after a lot of shouting and gesticulating from the driver, they
eventually gave up and will hopefully be able to have a great laugh about the whole experience
once they get homewhich will hopefully not be by bus. So the electronic payment is intended
to improve flow, and generally does, but it was pushed on to the customers, many of whom
would still prefer to use cash.
Now back to Nairobi. There are no timetables, few marked bus stops out of the main central
boarding points, and you struggle to track your buss location on your phone. The buses are
small and take about 20 people - sitting down. I boarded a bus and took a seat. Luckily I knew it
was the right bus because I had a guide. Also there was a very helpful man with a sign who
stood on the pavement saying where the bus was going and encouraging passersby to catch it.
After five minutes, I wondered what time we would set off. My helpful guide shrugged his
"It depends," he said. I decided to practice the five whys and get to the root cause of why we
had been waiting. Well, says my guide, "the bus is not full."
Eventually my root-cause analysis revealed we would not leave until every seat was occupied.
Now other passengers started to join in and promote the virtues of the bus by shouting
enthusiastically out the windows to anyone showing the slightest interest. We quickly had every
seat full and were off.
A conductor came to collect our fare and asked where we wanted to be dropped off. We picked
a well-known building on the bus route a short walk from our hotel and paid a fraction of a
Sydney bus fare. It was cash only and calculated based on how far we traveled. The

atmosphere on the bus was fantastic. It was a tight fit, and it was impossible not to get to know
your fellow passengers. Sydney buses tend to be silent with people buried in their phones and
not knowing where to look. We had a great laugh on the Matutu with everyone sharing a smile
and enjoying the experience.
So is the Matatu a push or a pull system? In one respect it's definitely batch and queue with
customers waiting for the full bus or "batch" to be completed before the journey can start. My
initial reaction was that this is not a lean system but on reflection I realized it has its advantages.

Its top customer value is cost and it certainly delivers on this by only travelling when full
utilization is very high and cost per journey is very low.

Fewer buses are needed in the fleet, saving on capital and maintenance costs.

At peak times the wait time is very short as buses fill quickly.

In off-peak times there are fewer buses driving around empty and are only pulled through
based on demand.

So whilst the departure and arrival time may be a little more uncertain than the Sydney system,
overall the Matatu provides a great solution that minimizes cost and provides customer flow with
on-demand pull. "Kenyan time" has a bit more flexibility than Sydney time, but then it only takes
one accident in Sydney for the whole timetable to get disrupted.
We need to ensure that we design our flow and pull systems to maximize customer value.
Different customers value different things, and we must be careful not to try to impose one-sizefits-all in our systems design. Both the Matatu system and Sydney system work well in different
contexts and both have elements of flow and pull.

When the Cook Spends More Time in the

Boardroom than the Kitchen

Some time ago, a colleague was giving training in operational excellence to an audience mostly filled with
high-level managers. Imagine how excited he must have been.
Truly giving his best, and pretty confident of getting his message across, he surely wasnt expecting to
stumble upon this mail from one of them the next morning:

Thank you for the training given yesterday. Ive noticed youve put a time slot in my agenda to visit our
production plant on Thursday to go & see how things were progressing.
What was it exactly you were talking about and is it possible to reschedule our meeting within a month
from now? That would better suit the agendas. Thanks.

Shocked, he wondered:

Was I not clear enough?

Were people sleeping during my training?

Perhaps, he thought, encouraging management to see the reality on the ground was going to be
considered easy and not something to do only when the time was right.
His story made me think of those cooking shows that seem to be everywhere on television. I always think
its a fun place out there in the kitchen. Thats where the mealthe valuecomes together. It strikes me
that a restaurant resembles an office space, and a cook seems to have mastered the essence of creating
value for the customer, basically delivering a really fine meal.
Management on the other hand seems to spend time in the boardroom talking about the added value for
the organization. However, are we really creating value for the customer then, or are we spending too
much time on gathering data, creating numerous reports with over-abundant KPIs, frustrating our
colleagues or discussing results somewhere too far away from reality?

So my next question would be: Why do we do it?

Lets perhaps go back to a powerful yet extremely simple approach to managing organizations. It relies on
1) common sense and is 2) low-cost. These two phrases always get everyones attention.
Masaaki Imai, a founding father of kaizen, is to be sought after for this. Kaizen basically means
continuous, incremental improvement involving all managers and workers. He argues that every time you
get promoted you get further away from reality. By the time you are CEO, you are the most clueless
person in your organization.
He continues by saying the more you go up the ladder, the less you might seem to know about the
problems going on. Contradictorily, decisions are taken on that level where there is little to no knowledge
of the real problems.
As managers we think we can prevent this by relying on numbers, and this is where the trap lies. Only if
we go to the gemba (real place, where it happens) we are able to accurately interpret the numbers.

Give yourself some time, dont be too busy to go to the kitchen of your company, observe and ask why
as many times as you can to understand better whats cooking there. It is the place where work gets done
and the only place where value can be added to business processes:

Solve the problem at hand

Prevent it from recurrence

It will result in better quality, delivery and lower costs. Youll be surprised how much it contributes to the
value delivered to the customer.