Nowadays, in the Agile world, we ask ourselves how to scale up.
Before Agile, Toyota used an approach called Hoshin Kanri to get aligned before start.
This is perhaps an interesting point for us to address?
4. why this session?
4
Nowadays, scaling Agile is in the pipe of Agile Change Agents and some interesting essays are emerging like SAFe, LESS, DaD, etc…
In other hand, discussions on Kanban are climbing in the organization matrix and try to address both Portfolio and Governance.
Beyond Budgeting explains that we need to have Leadership actions and Management processes linked to those Leadership actions.
Purpose of this session is to ask the audience: can be Hoshin Kanri seen as a glue binding all these together in an agile sense making manner?
6. 6
David Hutchins
Total Quality Management
Each individual in an organisation is recognised as being the expert in
their own job
Humans seek recognition
Want to be involved
Motivated by a desire to be recognised as a contributor to the success of
the community to which they belong
Japanese Total Quality Management (TQM) is founded on the principles that each individual in an organisation is recognized as being the expert in their own job, that humans seek recognition
and want to be involved and are motivated by a desire to be recognized as a contributor to the success of the community to which they belong.
7. -Gilles Allain
The overall objective … is to attempt to create an organisation … in
which the collective thinking power and job knowledge of all of these
individuals is galvanised into a programme in which everyone is
working both individually and collectively to work towards making
their organisation the best in its field, both in fact and in the eyes of
its customers, and all other interested parties.
7
David Hutchins
9. 10 principles
1. establish a company motto, quality
policy, and promotion plan
2. devise long term and medium term
management strategy
3. collect & analyze the information
4. plan the targets and means
5. set the control items (kpis) and prepare
the control item list
6. deploy the policy
7. deploy the control items
8. implement the policy plan
9. check the results of implementation
10.prepare the status report for
implementing hohin kanri
9
Plan-Do-Check-Act (PDCA) is the driver of these principles.
10. Organization as a flow
10
Our objective is to build a company as a flow, a company as a pull system.
Here is the junction between Lean Thinking, Kaizen and Agile. An organization as a pull system changes the traditional paradigm of the company organizational iceberg in a system thinking
approach.
Like John Seddon explained at the 1st Lean Kanban Conference in Antwerp (2010): Middle Office is a Buffer, Back Office is a cost centre, everybody should be at the Front.
11. Hoshin Kanri
What is our mission?
Top down and bottom up
Catchball process
PDCA
Less is more
Simple strategy = refined thinking
11
12. 12
What is your True North?
•Related to company culture
•Assets, know-how, strengths
•Customers you serve (or want to serve)
•Market, trends, developments
•What words describe you? Your business?
13. Where to Start?
What is our mission?
Who are we?
What do we do? What makes us special?
Where are we? Where are we going?
13
14. Vision Statements (ex.)
To make people happy
To preserve and improve human life.
No child in our city will go hungry to bed in the evening.
We will be the easiest pharmacy retailer for customers to use.
To constantly improve what is essential to human progress by mastering science and technology.
To be the number 1 athletic company in the world
Undisputed marketplace leadership.
To make the world’s information universally accessible and useful.
14
Disney
Merck
Soup Kitchen
Dow Chemical
CVS Corp.
Nike
Hershey
Google ref. Mark Offenberger
15. True North to Strategy
15
• Focus
• 3,4,5 things to be focused on
• What are the boulders
• Alignment
• Think if you can put all your guns in the same direction
• Quick response
• All business environments change, company activities
must be nimble
16. Value Streams (Focus Areas)
16
• What value streams exist in your business?
• How do we translate the true north to each of these value streams?
• How does the business processes support the value streams?
• How do we simplify the strategy of each value stream?
17. True North and A3 Thinking
17
If we don't know where we're going, we'll never get there…
True North
Strategy A3 Strategy A3 Strategy A3
Baby A3 Baby A3Baby A3
ref. Mark Offenberger
Summarizing the strategy on one piece of paper.
What are my goals? How will I measure myself?
What did we do last year? What went right? What went wrong?
What is this year's strategy?
What's the plan?
What could go wrong? Any worries?
18. 18
• What strategic objectives do we need to achieve this
year?
• How did we do last year?
• What‘s our history?
• What did we do last year?
• What worked and didn‘t work?
• What have we learned?
• What do we need to do to achieve this year‘s strategic
objective?
• How will these actions benefit us?
• What‘s our action plan to achieve these objectives
(who, what, when, where, and how)?
• __________________________
• __________________________
• __________________________
• Are there any unresolved issues?
• Do you need any help with anything?
• Anything bothering you?
Strategy A3
The point is not the piece of paper. The point is……
Make the strategy simple
Focus on the important few
Tell a compelling story
PDCA
Make the review process simple and obvious
20. 20
1st Level Policy Deployment
X Reduce signal to material receipt X
X Reduce material receipt to assembly complete lead time X
X X Direct material cost X
X X Acq rate effectiveness X
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
1st Level Policy Deployment
X Reduce signal to material receipt X
X Reduce material receipt to assembly complete lead time X
X X Direct material cost X
X X Acq rate effectiveness X
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
1st Level Policy Deployment
X Reduce signal to material receipt X
X Reduce material receipt to assembly complete lead time X
X X Direct material cost X
X X Acq rate effectiveness X
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
1st Level Policy Deployment
X Reduce signal to material receipt X
X Reduce material receipt to assembly complete lead time X
X X Direct material cost X
X X Acq rate effectiveness X
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
1st Level Policy Deployment
X Reduce signal to material receipt X
X Reduce material receipt to assembly complete lead time X
X X Direct material cost X
X X Acq rate effectiveness X
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
1st Level Policy Deployment
X Reduce signal to material receipt X
X Reduce material receipt to assembly complete lead time X
X X Direct material cost X
X X Acq rate effectiveness X
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
1st Level Policy Deployment
X Reduce signal to material receipt X
X Reduce material receipt to assembly complete lead time X
X X Direct material cost X
X X Acq rate effectiveness X
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
1st Level Policy Deployment
X Reduce signal to material receipt X 1 2
X Reduce material receipt to assembly complete lead time X 2 1 2 2
X X Direct material cost X 1
X X Acq rate effectiveness X 1
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
GregB
Todd
JimP
JimH
Herb
Deb
MikeE
6/1/2004 (OIF) Resources - "Who"
31-Dec-04 G = On Time 1 Primary Responsibility
31-Dec-04 Y = Slipping 2 Secondary Responsibility
31-Dec-04 R = Late
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
Timeline -
"When"
1st Level Policy Deployment
X Reduce signal to material receipt X 1 2
X Reduce material receipt to assembly complete lead time X 2 1 2 2
X X Direct material cost X 1
X X Acq rate effectiveness X 1
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
GregB
Todd
JimP
JimH
Herb
Deb
MikeE
6/1/2004 (OIF) Resources - "Who"
31-Dec-04 G = On Time 1 Primary Responsibility
31-Dec-04 Y = Slipping 2 Secondary Responsibility
31-Dec-04 R = Late
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
Timeline -
"When"
1st Level Policy Deployment
X Reduce signal to material receipt X 1 2
X Reduce material receipt to assembly complete lead time X 2 1 2 2
X X Direct material cost X 1
X X Acq rate effectiveness X 1
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
GregB
Todd
JimP
JimH
Herb
Deb
MikeE
6/1/2004 (OIF) Resources - "Who"
31-Dec-04 G = On Time 1 Primary Responsibility
31-Dec-04 Y = Slipping 2 Secondary Responsibility
31-Dec-04 R = Late
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
Timeline -
"When"
1st Level Policy Deployment
X Reduce signal to material receipt X 1 2
X Reduce material receipt to assembly complete lead time X 2 1 2 2
X X Direct material cost X 1
X X Acq rate effectiveness X 1
Reducetimetomarketby3months
Reducematerialcostby7%
Supplierlead-timesto10.5monthsorless(1.5monthreduction)
Reduceto13daysorless(0.5monthreduction)
1%reduction
6%reduction
GregB
Todd
JimP
JimH
Herb
Deb
MikeE
6/1/2004 (OIF) Resources - "Who"
31-Dec-04 G = On Time 1 Primary Responsibility
31-Dec-04 Y = Slipping 2 Secondary Responsibility
31-Dec-04 R = Late
Strategies to Achieve
Objectives - "How"
Annual
Breakthrough
Objectives
- "What"
Deliverables &
Measures -
"How much"
Timeline -
"When"
Catch Ball
Catch Ball
Catch Ball
VP of Sales
Salesman
Purchasing
Manager
Buyer
Supply chain
Shipping
Operator
Vice President Ops
Plant Manager
Production Manager
Teamleader
ref. Mark Offenberger
What is important
Effective discussion on A3s to guarantee alignment between objectives across the organization
Develop communication at all level
Reinforce and consolidate knowledge of the challenges and objectives of others
Requires trust and respect
Alignment is all about
Consensus: find a common way to reach all our objectives
Ask the question upfront instead of waiting for the clash in the execution phase
22. Kaizen to Deploy Strategy
22
Voice of the Business
(Corporate inputs)
Voice of the Customer
(Sales and Marketing inputs)
Voice of Process People
(Process Owner People inputs)
Hoshin Planning
Kaizen
2009 Strategy
- True North
- Value Streams
- Key projects
- Alignment
- Communication
- Review process &
dashboard
Key Key
Process vs People: in Agile we focus more on the people, people gives the AS IS vs process giving the TOBE
23. Using Kaizen to Deploy Strategy
23
Pre-work
During the
Kaizen event
Post Kaizen
Collect all pertinent
information (strat
plans, market
analyses, financial
plans, etc)
Summarize data
Define True North
(brainstorming)
Define value
streams
Create strategic A3
Nemawashi
Define process check
process
Communication
25. 25
Total Quality
GAP Analysis and project-by-project improvement
Deployed at all levels.
Policy Deployment
Development of KPIs and the business-wide
programme
Vision and Mission
Policy Deployment
KPIs redefined and cascaded to all levels
Policy Control (PDCA)
Feedback of results of improvement activities
Hoshin Kanri - the « WHAT IS « TQM- the « HOWTO «
David HutchinsHow it works
27. Purpose of Agile
27
customer
satisfaction
continuous
improvement
self organization
changing
requirements
simplicity
technical
excellence
working itemsiterationssustainable pace
Biz & Dev
working together
motivated
individuals
clear
communication
a consolidated view of the
12 principles
28. why?
๏ Kanban it’s an amazing simple management tool reinforcing transparency.Transparency is a key factor of
agility.
๏ D.Reinersten’s explains that Product Development is a flow and you need to focus on alignment, flow,
feedback loops ,measure cost-of-delay, give place for variability.
๏ Beyond Budgeting explains how to link management processes with leadership action i.e.operations
with strategy.
๏ Agile needs an answer to enabling agility in existing global organizations.
29. so what?
Now if you use the simple « process » of Hoshin Kanri: True North, A3 Thinking, Catchball and Kaizen (i.e. Continuous Improvement) to support the implementation of Beyond Budgeting
principles and you neither scandinavian nor japanese (culture plays a lot!), and you want to have enough diversity (i.e. variability) to support emerging innovation, then I guess we don’t need to
reinvent something new. We just need to inspect-and-adapt the tools we got.