it's not lean, it's agile at scale.. the hoshin kanri way

It's not Lean, it's Agile at scale... the Hoshin Kanri way

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who am I?

Senior Lean Agile Coach Senior Scrum Coach & Trainer

Agile Management Catalyst father, brother & son

ORES, SAP UK, Kingfisher, Euroclear Group, GDF Suez Europe, AXA Group, Invivo, CTIE, atHome, Accenture, Touring Assurances, Cloudwatt, Swingmobility, Lumension Security, Wemanity…

Apologies

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๏ It’s not about a tool

๏ It’s not about metrics

๏ It’s not a research

๏ It’s an inspiration

why this session?

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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?

strategic approach to continuous improvement

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David Hutchins

Total Quality ManagementEach 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.

-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.

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David Hutchins

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HOSHINKAN

RI

means Direction

refers to Focus

refers to Alignment

means Reason

There are several translations of Hoshin Kanri. This is my favorite!

10 principles1. 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

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Plan-Do-Check-Act (PDCA) is the driver of these principles.

Organization as a flow

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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.

Hoshin Kanri What is our mission? Top down and bottom up Catchball process PDCA Less is more Simple strategy = refined thinking

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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?

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?

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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.

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Disney

Merck

Soup Kitchen

Dow Chemical

CVS Corp.

Nike

Hershey

Google ref. Mark Offenberger

True North to Strategy

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• 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

Value Streams (Focus Areas)

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• 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?

True North and A3 Thinking

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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?

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• 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

Deploying the Strategy - Catchball

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1st Level Policy DeploymentX Reduce signal to material receipt XX Reduce material receipt to assembly complete lead time XX X Direct material cost X

X X Acq rate effectiveness X

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Strategies to Achieve Objectives - "How"

Annual Breakthrough

Objectives - "What"

Deliverables &Measures - "How much"



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Annual Breakthrough

Objectives - "What"




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Annual Breakthrough

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Annual Breakthrough

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Annual Breakthrough

Objectives - "What"


1st Level Policy DeploymentX 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

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Gre

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Todd

Jim

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H

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Deb

Mik

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6/1/2004 (OIF) Resources - "Who"31-Dec-04 G = On Time 1 Primary Responsibility31-Dec-04 Y = Slipping 2 Secondary Responsibility31-Dec-04 R = Late


Annual Breakthrough

Objectives - "What"

Deliverables &Measures -

"How much"

Timeline - "When"


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Gre

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Annual Breakthrough

Objectives - "What"


"How much"

Timeline - "When"


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Annual Breakthrough

Objectives - "What"


"How much"

Timeline - "When"


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t by

3 m

onth

s

Red

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eria

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Gre

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Todd

Jim

P

Jim

H

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Annual Breakthrough

Objectives - "What"


"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

Deploying the strategy

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Review A3

Action plan A3

Action plan A3

Kaizen to Deploy Strategy

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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

Using Kaizen to Deploy Strategy

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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

Global Strategic Deployment

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Corp.Division

FunctionVOB

Function

VOC

Business Processes

# 1

# 2

# 3

# …

Function Function Function

VOP

Functional Execution

Strategic Execution

VOB: voice-of-the-business VOC: voice-of-the-customer VOP: voice-of-the-process people

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Total Quality GAP Analysis and project-by-project improvement

Deployed at all levels.

Policy Deployment Development of KPIs and the business-wide

programmeVision 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 « HOW TO «

David HutchinsHow it works

an the Agile Factor?

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Purpose of Agile

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customer satisfaction

continuous improvement self organization changing

requirements simplicity

technical excellenceworking itemsiterationssustainable pace

Biz & Dev working together

motivated individuals

clear communication

a consolidated view of the 12 principles

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.

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.

The last words

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I have be paid 40 years for my hands. Nobody asked me!

But for the same price my brain was free.Retired from Bombardier

it's not lean, it's agile at scale.. the hoshin kanri way

Leadership & Management