The alignment of strategic goals in an organization can be frustrating for some organizations. Leadership is thinking in one direction, mid-level managers are running in another direction, and production is trying their best to appease both sides. It can be a frustrating and wasteful situation for all. The process of Hoshin Kanri aligns strategic goals up and down the organization and ensures everyone is working in precisely the same direction.

Take time and watch this informative video!

https://youtu.be/wJGGfkvmjtU

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The concept of Hoshin Kanri provides clarity and focus to an organization, by aligning strategic goals through all levels of an organization. It creates an organic flow of information which runs through an organization, where goals run down from management, through the mid-level operation to the production floor. In return, the flow reverses and the production floors provides resulting actionable data flowing up through mid-level operations to management, thus providing alignment.

Taking the first step of implementing Hoshin Kanri begins with developing long-range strategic goals for the organization. A good rule of thumb is to limit the strategic goals applied to five or less to be truly effective. It also allows the focus of energy and resources on what efforts are most important to the organization. Remember, if everything is important, then nothing is important. They should also be either evolutionary or revolutionary. Evolutionary is incremental achievements through continuous improvement. Revolutionary is all about taking big strides, making breakthrough changes with dramatic scope. Both types of goals are crucial to the life of an organization.

The next step would be to develop the tactics for implementing the goals identified. This step is the purview of middle management operations. They are the experts at implementing and allocating resources. There should be a respectable period of thoughtful back and forth between management and mid-level management to ensure goals are clearly understood and that there is a strong alignment between tactics and goals. Over time, tactics can be adjusted and should be, as things changes. Results must be measured and calibrated.

In the final stage, production operations at the supervisory and team levels work out the details on strategy and clearly understand the strategic goals. This is where the action takes place and success will be measured. Management and leaders must stay connected with actions being implemented, mainly through Gemba walks and monitoring of production data flowing up from the production floor.

The flow created with Hoshin Kanri closes loops and ensures focus, clarity and highly efficient operations. It allows organizations to be agile and flex to changing situations in an efficient manner.

Learn more about Hoshin Kanri and download a template

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Hoshin Kanri is a process used in strategic planning in which goals are communicated throughout the company and then put into action. This method of strategic planning originated from post-war Japan, but has since spread to the U.S. and around the world. Translated from Japanese, Hoshin Kanri means “compass management.” The individual words “hoshin” and “kanri” mean direction and administration.

It requires a strategic vision in order to succeed. From there, strategic objectives need to be defined, with goals being written for a year-long time frame. Leadership needs to avoid picking too many goals in order to stay focused on what is important. The biggest goals then need to be broken down into smaller goals, on a weekly and monthly basis, and then implemented so that everyone, from management to the factory floor, is in agreement on what needs to be accomplished.

The goals should be reviewed on a monthly basis, with a larger annual review at the end of the year. Performance measurement is also a key part of the process. Hoshin Kanri is a top-down approach, with the goals being mandated by management and the implementation being performed by employees.

Systems need to be in place to ensure that objectives from senior management are effectively communicated all the way down the chain of command. A catchball system is often used in order to aid in the execution of the strategic plan. A catchball system seeks to get opinions of both managers and employees through meetings and interactions in order to ensure the bidirectional flow of goals, feedback, and other information throughout the organization.

Organizations that use Hoshin Kanri often follow a Think, Plan, Implement, and Review process, which is comparable to W. Edwards Deming’s Plan Do Check Act cycle.’ This is because Deming played a role in the spreading of quality control principles that influenced the development of Hoshin Kanri.

Learn more about Hoshin Kanri and download a template

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• Quiet, relaxing, and peaceful; eating delectable food; dining at fine restaurants and get to do whatever they freaking want.
• They hate the holidays because they are stuck with in-laws that drive them crazy and they’re tired of hearing from their senile uncle about how life was when they were young 100 years ago.

Now, let’s contrast that with what my holidays are like:

• Wild, crazy, and full of stress – not because I’m wild or crazy, but because my wife and I are raising a household of 9 kids, ranging from 17 years to 5 years old. Yeah, wild, I know. And definitely not relaxing one bit. Not at all. But, it’s my family and I wouldn’t have it any other way. Love them all so much.

Regardless of how you celebrated your holidays, I hope it was a rich one – rich with loved ones, friends, relatives and that as you look back on your 2014, you are proud of what you’ve accomplished and that you take a moment to think about the people you’ve influenced for good. I know you have. And good job for doing so.

As I’ve done my own inventory of 2014, I want to highlight several articles that many readers have told me has affected them positively and helped them become more valuable to their employer.

• How to use SIPOC in your relationships.
• What a Coffee Cup taught me about Poka-Yoke and Error-Proofing
• 5 Whys in Customer Development
• Kaizen for Shaving Your Face
• 9 Emotions Only Kaizen Leaders Understand
• Using Kano Model in finding Product Market Fit
• Nike Application of Hoshin Kanri
• What is PDCA and PDSA?
• How to Eliminate Delays in any business process
• Impact of Language in Lean
• Why do we wait and what can we do about it?
• Why Cycle Time in Service Operations Should be a Priority

The year of 2014 was an epic year for Shmula in terms of interviews I completed with thought leaders in Lean Manufacturing, Lean Startup, and Design Thinking. I want to highlight several:

• Interview with Jason Yip: In Software Engineering Respect for People is Trusting that People are Capable of Their Own Improvement
• Jeff Liker, The Toyota Way, and Unintended Consequences
• Dan Markovitz Interview: How the Shop Floor is Connected to the Customer via the Office and Why Lean Matters to White Collar Workers
• Virtual Kanban Board: Interview with Chris Hefley of LeanKit
• Kanban for Creative Knowledge Work: Interview with David J Anderson
• Lean Sales and Marketing with Brent Wahba
• Lean IT Transformation: An Interview with Cecil Dijoux
• Lean UX Process and Principles: An Interview with Jeff Gothelf
• Art Smalley Interview: Difference between the Toyota Production System and Lean as Practiced in America and Why He Shakes His Head in Confusion
• Improving Healthcare with Lean: An Interview with Mark Graban
• Interview with Matthew May on Elegance, Subtraction, and Lean
• Interview with Matt Long on the Herman Miller Performance System
• Lean-Lite versus Lean-Deep: Interview with Michel Baudin
• Shmula Podcast: Eric Ries Lean Startup Interview
• Lean Logistics and Supply Chain Interview with LeanCor CEO Robert Martichenko
• Lean Publishing Interview with Peter Armstrong
• Kanbanize Visual Kanban Software and Why Managing WIP Matters
• Michael Balle Interview on Lead with Respect
• Bob Emiliani on Lean Leadership, Real Lean, and Fake Lean
• Why Deming: Interview with Keith Sparkjoy Cofounder of Pluralsight
• Laura Busche Interview on Lean Branding: Using Lean Principles to Create Dynamic Brands that Convert
• Lean Content Management: Interview with Michael Jones, Head of Content at eBay
• Interview with Kaizen Institute CEO Jon Miller
• Salesforce App Exchange, Lean, Wear Initiative: Interview with Daniel Debow
• High Performance Organization Model and Lean: Interview with Jonathan Escobar Marin
• Lean Healthcare: How to Engage Employees in Lean at the Nebraska Methodist Health System

I’m very much looking forward to a great 2015. For now, I wish you a very Happy New Year and a wonderful 2015. May you accomplish your dreams and may you become your best self this upcoming year. And, as always, thank you very much for your attention and in choosing to spend some of your time reading Shmula.com – thank you from the bottom of my heart.

The post Shmula’s Best of 2014 appeared first on 6sigma.

In this interview, I introduce you to Jonathan Escobar Marin. He is a Lean practitioner and leader whose background in consumer packaged goods and healthcare gives him a unique perspective on the role of Lean in the workforce. His experience studying with Toyota also gives him an added depth of Lean that makes him successful in what he does. In this interview, you’ll learn some of the following:

• What was the most fundamental part of his education during his Benchmarking study with Toyota
• Why the phrase “Human Resources” doesn’t capture the true depth and value of people
• What is Jonathan’s involvement in the High Performance Organization Model – and what does HPO exactly mean?
• Why Respect for People should be the primary thread in any Lean transformation
• Why Jonathan believes that Lean is a journey in human development – and what does he mean by that?

We thank Jonathan for taking the time to speak with us today. Enjoy the interview and learn more about Jonathan immediately after. And feel free to read our other Lean Leadership Interviews.

You have an amazing and broad background. Can you please tell my audience about yourself and your current work with Hartmann Group?

I’ve been studying lean management and the Toyota way for more than 12 years now.

I am Global Leader of Lean Management for the Hartmann Group, where we are currently working on two model lean transformations (one in Barcelona and one in Germany) and facilitating the understanding of core lean values and principles as a first step of a rollout towards becoming a lean enterprise with a strong network of operations.

For the past five years I have led different lean transformations as Production Manager and Lean Referent at Hartmann, and previously as Operations Leader at Procter & Gamble. During my time with the company, P&G did a benchmark with Toyota and I was fortunate enough to have the chance to study, put in practice and understand at Gemba the essence of the Toyota Way.

Prior to that, I held different positions applying lean principles in areas like engineering and product and process development in different sectors and work environments.

I am Postgraduate Director and Associate Lecturer for Project and Operations Management at the Polytechnic University of Catalonia.I also work closely with the team of the Instituto Lean Mangement in Spain (member of the Lean Global Network), from which I constantly learn.

You’ve mentioned to me that while you were at Procter & Gamble, you participated in a Benchmarking effort with Toyota. Tell us about that experience and what did you learn?

To study and understand in depth the essence of the Toyota Way was extremely educational and enriching. However, I must say that the real learning came from the dialogues, discussions and experimentations that took place at our own Gemba, where we worked hard to understand what continuous improvement and respect for people really mean.

First of all, we learned to move from an approach whereby we applied the engineers’ methods and tools and assumed everything would be great (using and tracking the tools as our business goal) to one in which we worked on our understanding of how customer satisfaction and business results are achieved (by developing ourselves to become leaders who are worthy of developing the people they lead).

Then we worked with the front-line to understand and learn the spirit of the Toyota Business Practice, which is based around the way of learning by solving problems, and to kaizen it to our Gemba and make it the heart of our business.

After several PDCA cycles, this practice became a powerful vehicle that we could use to accelerate knowledge creation at all levels of the organization. It also turned out to be the compass of our Hoshin at front-line level: an individual and team-wide learning system fed by daily practices performed in a very consistent manner, with the aim to learn and grow by solving customer problems, improving customer satisfaction, and delivering business results.

It might sound trite, but learning to value people was a fundamental part of the process. We started to walk the respect for people talk and to build relationships based on trust in order to develop our associates to their full potential. This required the nurturing of our ability to grow them by challenging them and, at the same time, helping them to operate and improve their workplaces every day, every shift. Our learning system was instrumental to this, and the smiles of our customers and stakeholders our common and driving purpose at Gemba.

The end result? We were all able – the front-line remarkably leading this trend to dramatically increase our ability to see things through, to unearth problems, and to take the initiative to experiment, learn, build skills and drive PDCA all the way through to the A’. The Improvement of results at SQDC was just the consequence. Our goal was to continuously find solutions that lead to the improvement of customer satisfaction by building the capabilities of our people.

One of your passions is enabling human resource development organically in high-performing organizations (HPO). Can you tell us what you mean?

Of course. But first, I believe it is important we stop using the term human resource development. It would be better to call it human self-actualization development. We must stop considering people just as another asset in a company.

With this clear in mind, enabling human self-actualization organically in a HPO means to connect the value creation for customers with the value of continuous people growth.

In a HPO this visible link becomes, at all levels, the centerpiece of the approach to building organizational capabilities and supporting strategies to realize the potential of all the employees, through the continuous development of self-sufficiency in problem solving, teamwork, creativity and leadership skills.

In companies like Toyota and Procter & Gamble, tapping into human potential to deliver superior value to customers is the core of the organizational culture.

However, as Greek philosopher Parmenides said, nothing comes from nothing. To ensure that this core value grows organically, the organization must make it the essence of its leadership development efforts with all company activities (like career development, performance improvement reviews, company policies, organizational processes, management’s decisions, and corporate strategies) supporting this principle regardless of the business division, location or environment in which the company operates.

Leadership development is indeed critical. The new-hires of today are the leaders of tomorrow, and it is a leader’s responsibility to develop the next generation of those who will lead. Leaders should be mentors and teachers to their associates and represent a role model and the expression of a company culture that lives and breathes lean principles.

Leaders who grow by building other leaders and living lean values is fundamental to placing the development of human self-actualization at the heart of any organization.

Continuing, tell us about your view on Human Resource development during lean journeys?

Lean is a journey of human development, fueled by learning systems that aim to create the knowledge required to deliver superior customer value and performance in all areas.

I strongly believe that one of the main outcomes of a lean journey is the achievement of the flexibility, responsiveness and adaptability that are needed to cope with ever-changing business conditions and evolving customer requirements. How well these business capabilities are mastered mainly depends on how people are developed all the way down to the front-line.

In this sense, the first and the largest source of waste that a lean journey should try to eliminate is the under-utilization and under-development of people’s minds and skills.

Every value-driven initiative that is not tried out by an associate at Gemba represents the worst form of inventory and the worst expression of disrespect for that individual, not to mention the highest threat to the sustainability of the business.

People growth comes with action: experimenting, testing, reflecting, learning and building the ability to solve problems, to coordinate teamwork, to prioritize on the workplace and to improve the value-creating workflow. During this process, leaders grow, too, in their ability to mentor, to develop skills, to communicate, to share knowledge (Yokoten), and to eliminate barriers to organizational excellence. 

A related question: what role does Human Resources play in a lean journey?

The primary role of HR is to build organizational capabilities that enable the creation of a workplace where human development takes place every day, in all sites and at all levels.

These organizational capabilities include recruitment, on-boarding, career development, succession planning, organizational design, leadership development, business development, rewards & recognition, communication policies, succession management, and so on.

Let’s focus on one of the above capabilities as an example. At a recent Lean Global Network conference, a former Toyota executive shared his experience going through the on-boarding process at Toyota Japan: he spent the first three months making cars to understand what real value added work is, and the following three months selling cars to understand customer expectations. Only then did he join his team where he was assigned a problem to solve. His boss mentored him throughout the process by asking the right questions and by encouraging him to dig deeper at every step to find his own answers and finally identify the root cause of the problem.

In this specific example, the role of HR in a lean journey should be to ensure that this process takes place for every leader in the company, regardless of the department, the business division, the region or the circumstances of the moment.

The same idea applies to any other capability listed above. The key responsibility of the HR Department is to build capabilities to ensure that each department in the company has the competencies necessary to develop the processes that support the establishment of core lean values.

Neither Toyota nor Procter & Gamble do this perfectly, but both organizations have been working hard and with determination (in the Toyota Institute since 2002 and with the P&G HPO-IWS framework since 1990 respectively) to reach this ideal state.

Going back to your work at Hartmann. For those not familiar with Hartmann, it is a global conglomerate that manufactures products for incontinence, infection, and wound management. You’re in the business of simultaneously serving the needs of healthcare workers and patients. How do you balance the needs of both customer types?

Our mission is to enhance the patient’s well-being. And we strongly believe we have a responsibility to make sure that every-day work to enhance patient well-being is as efficient and cost-effective as possible.

For us it is a privilege to have healthcare workers, particularly those at the front-line, as our partners in this. They know better than anyone else what patient well-being means and what the barriers (in the form of waste) are that they need to overcome if they are to successfully contribute to enhancing it. All we have to do is listening to them, working and learning with them to create innovative all-in solutions – user-friendly products and fit-for-purpose services.

We don’t need to think about ads or marketing campaigns to reach out to our customers; that’s not our business. All we have to do is to build active and collaborative human networks to understand the needs of patients and healthcare partners, and consistently deliver high-quality products and highly performing solutions that fulfill that need. For most of our products and solutions, the moments of truth happen at healthcare facilities, when our ability to contribute to excellent patient care is actually put to the test.

Tell us about your training and facilitation approach for the Hartmann front line workers? How is it going?

It all starts with understanding, together and at Gemba, the customer problems we are trying to solve and making sure that leadership realizes that the only way for them to add value is by supporting front-line individuals and teams in their problem solving activities.

My facilitation approach aims to create the internal self-sufficiency that is necessary to build the organizational structure and competencies supporting front-line staff in creating value.

It is purpose driven (I always try to build consensus on why we are not fully fulfilling customer expectations) and led by the core lean values that I have learned from Toyota:

• Challenging our long-term vision and what we know/do as a basis for value creation;
• Continuous improvement, always driving innovation and evolution through daily improvements at all levels;
• Go and see where the value is actually created to grasp the facts first-hand and make, by consensus, the right decisions for our customers;
• Respect others by taking responsibility for problem solving where value is created, leveraging diversity and building relationships based on trust;
• Injecting joy in the act of making something together, unlocking people’s desire to take initiative and grow, thereby maximizing individual and team performance to satisfy our customers.

These values guide our dialogues at Gemba, the place where the work and situations to balance the JIT and Jidoka pillars we are building, create the challenges that take the creativity and courage of our people at the front-line to new heights, encouraging them to achieve our desired condition.

As we construct these two pillars, we are challenged to find, frame and solve problems and develop new capabilities. We can use tools to create the knowledge that will unlock our ability to improve the work every day by learning together at Gemba to make the right decisions for our customers and stakeholders.

How is it going?

Front-line teams are showing us that we have a great opportunity to maximize value creation at our Gemba, and that we all are taking part in an exciting learning journey in which the acquisition and deployment of new capabilities will result in better outcomes for our customers and for everybody in the business.

In this sense, what front-line teams are accomplishing goes far beyond the improvements they are delivering in terms of Safety, Quality, Delivery, Cost and Value creation.

They are setting the example: improving themselves first, and then helping to transform the mindset and the work dynamics of others, not only in manufacturing but also in the supporting functions – even at corporate level.

They are encouraging the organization to remove the barriers preventing them from improving the work that our customers value. And they are taking full responsibility for strengthening their skills and challenging their own abilities to improve themselves, so that they can in turn improve the value they deliver.

It is remarkable that their work has engaged an entire multinational with 25 manufacturing plants and more than 10,000 employees and convinced the entire organization to commit to going down the lean path.

Back to Human Resources. Now, HR is in the business of supporting the various lines of businesses. I’ve observed that Lean hasn’t been adopted in HR as it has in other lines of businesses. Why do you think that is? Are there opportunities for Lean in HR?

To put it simply, I think there are two main reasons for the gap we see in the adoption of lean thinking in HR, which – we should remember – also represent tremendous opportunities:

• The belief, spread by certain harmful consulting practices, that lean is a toolkit that comes straight from a catalogue and can be used to cut manufacturing costs by reducing headcount. This has obviously prevented HR departments from thinking about adopting, or even being interested in, lean thinking and practices;

• The fact that in too many companies the function of the HR department is limited to responding to administrative questions, following procedures and manuals, and forcing people to comply with highly bureaucratic systems (also treating them like just any other asset in the company).

However, both problems quickly evaporate as you bring real lean thinking to HR and people in the department start to experience for themselves the potential of the lean in helping them take responsibility for supporting the human self-actualization development function in the business.

A harmonious fusion of lean and HR begins with working together to develop the department’s internal capability to eliminate waste from its processes. This means getting rid of any activity that prevents the HR function from utilizing all of their time and capabilities to support the company in its attempt to attract, build, and retain a high-quality workforce and to develop a professional, healthy and safe working environment characterized by trust.

Bringing together lean and HR also requires aligning HR policies and daily management practices with the unique purpose of enabling flow in the development of each of the associates within the company.

This translates into lining up organizational policies, practices, processes and systems to eliminate any barrier that might prevent individuals from becoming responsible for their own development and/or prevent leaders from mentoring the self-actualization of each of the associates (their most important job).

And believe me, when this alignment and understanding are finally established, a never-ending journey of discovery and learning, driven by the pursuit of flow, begins.

You heard me¦ flow!

When HR gets involved, they gain experience at Gemba and quickly learn that flow in value creation is only possible by achieving flow in people development. The common goal of leaders and associates, with the support of HR, is that the development of flow never stops. By interrupting flow I mean that at any point in the process the work of a person does not contribute to learning new skills, developing capabilities, and tapping into one’s truest potential.

Breaking the creation of flow results in the waste of people’s time and intelligence, which is the highest form of disrespect.

However, every time this happens we are also given a great opportunity to strengthen our internal capabilities for problem solving, with HR intimately involved in working with leaders and associates to understand what was behind the interruption of flow. This entails finding, framing and solving the root cause of a problem and learning together to ensure that no interruption happens again. This is also the best time to see and understand together the ambiguities in the process, the underlying values and assumptions or specific viruses present in the organizational culture.

Lean can unleash the potential of people working in HR, which in turn can help to leverage internal capabilities to build a workplace that:

• challenges individuals to act and think in a lean way;
• stimulates people’s intellect with assignments that call for a response that is currently beyond their capabilities;
• takes responsibilities for responding to pull when it comes to learning;
• offers jobs that let people progress and grow every day through problem solving and continuous improvement.

Thank you Jonathan. Is there anything you’d like to share with my audience?

First, I would like to thank you for the work you do to share the stories and opinions of people who are as madly in love with lean as I am.

I do have a final thought. Lean is not a program you implement. It isn’t a type of business. It is not a job. It is not a responsibility or a business model. Lean is way of living. When you love and respect lean, your life is all about learning it, practicing it, reflecting on it, and teaching it. You could never imagine living without it.

For those in your audience who share this respect and love for real lean, I am always happy to discuss more on Twitter (I am @JEscobarMarin) and on LinkedIn through my personal page and that of the HPO Global Alliance Group.

About Jonathan Escobar

I am an Industrial Organization Engineer and Master in Production Engineering.

I have been working in Hartmann for more than two years, initially with the challenge (and the privilege) to lead, as a Production Manager and Lean Referent, the lean transformation at our manufacturing plant in Mataró, Barcelona. Earlier this year, I also started to coach a leadership team in Germany to facilitate the lean transformation in one of our main manufacturing sites there.

What we achieved in Mataró – increased value delivery through front-line development in self-sufficiency, teamwork and innovation capabilities – inspired Hartmann’s top management and last month I started to facilitate the global transformation of our group, assuming the role of Global Leader of Lean Management.

I am now responsible for the promotion and development of lean principles and practices across the multinational. I also help people to understand the core lean values and principles across an initial network of 20 sites and related corporate functions and management systems.

Prior to working at Hartmann, I was an Operations Leader at Procter & Gamble. During my time there, P&G undertook a benchmark with Toyota, which gave me the opportunity to study, experiment, practice and understand the essence of the Toyota Way.

Before working for Procter & Gamble, for eight years I held different positions bringing lean principles to engineering and product and process development environments in different sectors.

I am Postgraduate Director and Associate Lecturer for Project and Operations Management at the Polytechnic University of Catalonia. I work closely with the team of the Instituto Lean Mangement in Spain (member of the Lean Global Network), from which I constantly learn.

I am co-founder of the High-Performance Organization Global Alliance. For the last four years, I have been studying the holistic framework and organizational development that enables human self-actualization development organically in High-Performing Organizations.

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The post High Performance Organization Model and Lean: Interview with Jonathan Escobar Marin appeared first on 6sigma.

In today’s interview, we present Brent Wahba. He is an influential voice in Lean and a recognized expert in Lean as applied to Sales processes. In this interview, you’ll learn the following:

• Why explaining Lean for Sales and Marketing will be fairly easy to explain to a Lean guy on the shop floor.
• What are the 3 types of sales process in sales and marketing and why Lean must be tailored to each one.
• Why it actually makes sense to begin your Lean journey by applying Lean principles in Sales and Marketing, versus the tradition application on the manufacturing floor.
• What Respect for People looks like in a Sales organization?

We thank Brent for taking the time to speak with us. We have much to learn from his expertise. Enjoy the interview and learn more about Brent after the interview below. And if you wish to contact him to help you in your organization, his contact information can be found after the interview. And be sure to read our other interviews in the Lean Leadership Series.

Thanks for taking the time to speak with me. Could you please introduce yourself and your work to my readers?

Thanks, Pete. This is quite a pleasure – I love your website. I have had a really interesting career up to this point. I started in R&D at GM, worked in and managed almost every organizational function, and eventually led a global systems business at Delphi. I was fortunate enough to be able to study and apply Lean, Six Sigma, and several other problem solving methodologies along the way, and this led me to my current work as president of a consulting network, Strategy Science Inc., where we help clients learn to improve Sales & Marketing, Product Development, and Strategy on their own.

I am also on the Lean Enterprise Institute Faculty where I teach Lean Sales & Marketing, regularly contribute to the LEI Lean Post, and have published a book titled The Fluff Cycle on solving Sales & Marketing problems. When I am not in airports, I love to do volunteer start-up / small business mentoring through SCORE.

You’re a recognized expert in Lean as applied to the Sales function. If you were speaking to someone on a manufacturing floor that was also a practitioner of Lean, how would you explain what you do to that person? Which areas would you both have in common?

That is a great question and one that I get asked a lot. At its core, Lean is Lean – no matter what value stream you support. It is all about engaging everybody, every day in solving problems, adding more value, utilizing fewer resources, and ultimately achieving the organization’s purpose through helping customers achieve their own purpose. Whether it is on the factory floor or during a sales call, we all have to improve our work while changing the way we think and act.

The difference comes in the type of work we each perform, and I help Sales & Marketing organizations become more efficient and effective at understanding customer needs (stated and latent, technical and emotional), aligning corporate strategies to those needs, providing useful information to the organization so they can create valuable and competitive solutions for those needs, communicating those solutions back to customers, and then facilitating the trial, buying decision, purchase, delivery, and feedback processes to satisfy those customers now, and encouraging them to repeat their purchases and say good things to other potential customers later. Sales & Marketing processes span the entire timeline from a customer’s first exposure to a need, desire, problem, or brand to basically the end of when they could possibly influence anyone else to buy from you.

Sales is a process. Does Lean work the same way on a sales process as it does on a manufacturing process? What are some differences?

One of the biggest mistakes organizations make in trying to implement Lean within Sales & Marketing is by just thinking about it as a transactional, production-like process or a Sales Factory. This seems to be a recurring problem as I unfortunately recall the very unsuccessful push for Engineering Factories at the beginning of Lean Product Development.

Yes, there are many elements of Sales or Marketing processes that are repetitive in nature like processing sales orders, creating e-mail campaigns, or editing and broadcasting commercials, and these types of processes do benefit greatly from what we have learned in Lean Manufacturing. BUT, we also know that there are different complexities in Sales & Marketing work and some very different types of processes. First of all, Sales & Marketing does not output one type of work for one type of customer like manufacturing a toaster.

In addition to serving end, paying customers, we also serve Operations, Engineering, R&D, Strategy, Purchasing, Service, etc. with critical information that they all need for their own processes. As we know from Lean Product Development, these learning processes, like market research for instance, are managed as variable learning cycles rather than standardized, step-by-step, always-get-the-same-output value streams.

Secondly, a large part of Sales & Marketing work is geared towards influencing both external and internal customers to change their behavior. Nobody woke up one day and out of the blue needed an iPhone, but rather they were educated and influenced over time to desire one because they were valuable. And no doubt Steve Jobs was influenced through many formal and informal processes to decide to put Apple’s resources behind creating the iPhone in the first place.

There is a lot of science behind influence processes that unfortunately doesn’t always align with our common lean thinking. For instance we have learned that websites need a certain amount of webpage friction (slowing the reader down) to maximize customer action and conversion. We also know that the human brain rewards itself during the hunting process of buying something and thus there can be tremendous value in the journey. If we just blindly pursued the leanest possible website or shortest possible buying experience, we could be losing sales.

So the fact that we have 3 types of processes in Sales & Marketing makes applying Lean more challenging, but also more interesting. There is a lot of opportunity for breakthrough improvement.

If given the chance for a lean transformation in one part of a company and the sales function, what is a good argument to begin in sales?

Starting a lean transformation in Sales & Marketing often makes a lot of sense. Most of us were taught to start in Manufacturing because it is close to the customer and easier to demonstrate a quick success. Unfortunately, Operations doesn’t often have the bandwidth to complete their day jobs, perform improvement work, and then try to push Lean upstream into other functions like Sales or Product Development. No matter how lean the Ops folks get, they still receive hard to manufacture product designs from Engineering, uneven order schedules form Sales, and don’t have a clear definition of what customers truly value from Marketing.

If we start our lean journey in Sales & Marketing, however, we not only improve our own work, but our improvements immediately lead to less waste in the other functions thus giving them more capacity to perform their own improvement work. Sales & Marketing also typically has a better view of what needs to change strategically and that is very critical to aligning the transformation with the business’ needs. It is not talked about much, but there is actually a lot of waste in applying Lean across an enterprise, and we can do a much better job if we put in a little more upfront analysis and planning.

One of the pillars of the Toyota Production System is Respect for People. Within the context of Lean Sales, how is Respect for People put into practice? Do you have some examples that might resonate with my audience?

In Psychology there is a theory of intrinsic motivation called the Self-Determination Theory that not only aligns well with TPS’ Respect for People, but is also very helpful on the social side of problem solving within Sales & Marketing organizations.

The three key elements are basically:

1. people need to feel autonomous in their jobs that they own both how to perform and improve their work
2. people need to feel like they are recognized as experts in their trades, and
3. people belong and contribute to a larger group with a worthy purpose. When we use this model along with our more conventional Lean tools, we get much better results than a simple process improvement approach.

One example was with a client that wanted to do Lean in Sales because management didn’t think revenue was high enough and Sales just needed to get on board with Lean to fix that. Sales was definitely not getting much respect. By not assuming that the problems were only Sales-specific issues, and engaging the salespeople themselves in holistic problem solving, however, the improvement team determined that the root cause problems were actually confusing strategic directions from above, a lack of the right portfolio of products to sell, and salesperson fear of having to meet with customers who had overdue deliveries.

Sure there were many little improvements that Sales could and did make, but by eliminating the blaming and then fixing the real problems, the Sales group learned that Lean really could help them solve the entire system’s problems and they felt much more respected.

Another client had a sales manager with poor results, a bad attitude, and no apparent desire to learn Lean. Rather than threaten or punish him, however, this client decided to use Strategy Deployment (Hoshin Kanri) to engage him in sales planning, PDCA, and problem solving. He was shown more respect in that he was now part of a scientific goal setting process (catch ball) rather than just being handed impossible targets. His attitude and results turned around very quickly.

On a related note, when the central office coaches come in to enlighten Sales & Marketing about Lean and use a lot of manufacturing analogies and Lego simulations, it almost always ends badly. Sales & Marketing need to be engaged by solving their own problems and not disrespected because they don’t naturally draw a direct correlation between a running production line and preparing a quote or meeting with customers.

Let’s discuss Lean culture. What does a lean culture look like and feel like in a sales organization?

Cultures change based on shared problem solving, but there are also different sub-cultures within different functions – even across Sales and Marketing. What Lean Culture emerges thus depends on what specific problems an organization faces and how they eventually solve those problems.

Overall, however, I would say that a lean sales organization is more scientific, more engaged in problem solving, and seeks to understand and improve the bigger organizational and market-wide systems they are part of. When I say scientific, I mean across many disciplines including buyer psychology, strategy, problem solving, and Complex Adaptive Systems which helps describe how markets and organizations change in unpredictable ways. Also, many people talk about the discipline aspect of Lean, but I have found that it is much easier to let discipline naturally emerge from a problem solving culture than try to force it at the beginning especially in Sales & Marketing.

Generally, can you share how some of the better known aspects of Lean looks like in the context of Lean Sales? For example, Poka-Yoke, Kanban, Andon in Lean for Sales? Do you have specific examples of each that you could share?

The typical Lean Manufacturing tools definitely have their place in transactional sales processes, but I generally avoid teaching a lot of tools until the team has identified a specific problem that any particular method could help resolve. A critical part of becoming expert problem solvers is wrestling with problems to gain better insight, rather than just reaching for a book or finding a benchmark example to copy.

For example, we only introduced Strategy Deployment at Delphi for sales planning and managing the pipeline with PDCA after my team thoroughly defined that we needed a more efficient way to manage both our portfolio and our limited resource salesforce (illustrative example not real data):

I also have a client in healthcare management that was having trouble aligning capacity with demand. Operations would typically learn about a new contract with only 2 weeks lead time to start, but it required 6 months to hire and train the registered nurses they needed to staff Operations. The solution (along with value stream mapping Operations and creating standard work) was a joint planning / PDCA / visual controls board that showed contract status and potential impact (illustrative example not real data):

What is so nice about their tool is that it embeds many lean tool concepts, yet it was their own solution. Creation and ownership of tools is often a very effective means of driving more engagement.

If we were to identify the 7 wastes in Sales, what would they be? Do you have specific examples Transportation, Inventory, Motion, Waiting, Overproduction, Overprocessing, and Defects in Lean Sales?

Everybody has their favorite 8th or 9th waste, so let me start with mine. The biggest waste of all is a non-value producing strategy because it means that the entire organization, no matter how efficient, is headed in the wrong direction and taking their customers, suppliers, and stakeholders with them. It is a major root cause for many of the other wastes.

As far as the other 8 go (I include Underutilized People as #8), they are so ubiquitous that it doesn’t make a lot sense to try to change them just give Sales & Marketing-specific examples so they make more sense:

In working with sales organizations, what is their receptiveness to lean principles? Is there resistance? If so, what are the main reasons for resistance?

In my experience, there is little resistance to the actual Lean principles, but resistance does form strongly over time because of the way Lean is introduced or informally observed. Typically, Sales is the last part of the organization to start any lean projects and that gives them a lot of time to hear about many examples that don’t really apply to them. They fear that Lean is going to turn them into Japanese-speaking robots, which of course couldn’t be further from the truth, and we’ve already talked about the dangers of trying to create a Sales Factory to solve the wrong type of problem.

But if we start our Lean discussion around the things that really matter to Sales & Marketing practitioners and achieving their goals solving customer problems, creating products and services that customers want to buy, making their own work and selling lives easier, and improving their interface with other parts of the organization, the acceptance is very high.

In the sales world, there are many well-known and accepted selling methodologies like Sandler, SPIN, and Consultative Selling that are nothing more than standardized sales processes with integrated learning loops. This is exactly what Lean creates for Sales & Marketing, but it is a custom solution to a company’s particular problems which results in even more efficiency and effectiveness. In my travels, I meet many Sales & Marketing practitioners that are already lean by their nature and thought processes and don’t even know it yet.

Given a typical sales funnel, can you share how someone with a lean worldview would view that funnel?

I am oversimplifying here, but most organizations look at two major problems in their funnels:

1. trying to cram more prospects into the mouth – with hopes that more customers will come out the other end, and
2. trying to prevent more potential customers from leaking out along the way to conversion. Somehow it becomes Sales’ job to manage those customers through that funnel like they are cattle or something.

A Lean view would provide a more holistic, enterprise-wide solution. We would better understand how our unique capabilities could provide more value to the right customers, only pursue those right customers, and create a constant learning process along the strategy / product development / selling / delivery / service path so we fine-tune our value while simultaneously educating and influencing our customers.

When we get to the end of something that looks more like a pipe than a funnel, there would be many fewer surprises so we would have much higher confidence and less unevenness in what our production requirements are going to be, and know what elements of value have the most leverage for customer satisfaction and repeat purchase. And when we get really good at understanding the technical and emotional attributes of customer value, our customers become our salespeople and help spread the word for us. This is called flipping the funnel in the social media world.

Let’s suppose Lean for Sales can actually make the sales process more efficient. But can Lean help the sales function generate more sales? Can applying Lean in Sales help to increase conversions? How?

Definitely! There are two major parts to this. First of all, if we better understand what customers value, we will develop better products, services, and operational capabilities that provide that value. This will naturally lead to higher sales. Also, within the selling process we will be providing more valuable information to those customers at the right time, place, format, and quantity to help them make better buying decisions that include our offerings. Secondly, only after we understand value can we understand waste, and can thus can target our efforts towards the activities that really do lead to more sales.

The department store magnate, John Wanamaker, famously stated Half the money I spend on advertising is wasted; the trouble is I don’t know which half, but I think he was wildly optimistic. I, as much as anybody, love those entertaining Super Bowl commercials, but the trouble is that the vast majority don’t lead to higher sales or even better brand perception. There is a ton of waste in just promotion and advertising – we need to leverage that science of Consumer Psychology along with our Lean concepts so that we don’t just streamline our waste.

How do you know if Lean for Sales is adding value to the firm? Can you share some results from your prior work perhaps a before and after would be instructive.

Everybody wants to measure sales $s (and yes, there are examples of how Lean helped grow sales by 30 100%), but that just proves my point that most organizations aren’t looking at how Lean helps entire enterprises perform as interrelated systems. If we have horrible products that we can’t deliver to save our lives, then getting more efficient at selling isn’t going to help our long-term growth or even the short-term bottom line – we are just going to get better and faster at alienating customers.

Sure we all want more sales, but rarely are our problems so simple that tweaking a value stream or adding some tools is going to make a significant or lasting difference. Success in any part of Lean comes from identifying and solving the most critical organization-wide problems and then continuing to find the next organizational bottleneck.

When Delphi was spun-off from General Motors, we had a very pressing need to diversify our customer and market bases. We knew our GM business was going to decrease, so we had to find a way to offset it before we could even consider growth. In my product lines we started by approaching many, many potential customers and we essentially got nowhere despite a lot of hard work. As we applied Lean, overhauled our strategy, targeted specific markets and customers, developed customer-specific value propositions, and then developed new products / services / global lean manufacturing capabilities to implement those value propositions, we quickly gained traction reducing our development and quotation lead times by 50 and 80%, and capturing 10 of 10 target customers in 7 of 7 target markets.

It was almost too good to be true. Oh, and we did it with 25% fewer resources and 1 less management layer. But these were our specific problems and solutions your results may vary.

So the proof comes when a company identifies their particular bottlenecks and then solves them. Some other examples include: 30% reduction in new business analysis lead time, implementing an enterprise-wide Voice-of-the-Customer process to capture customer feedback at every point of contact to better understand total lifetime value, and increasing company-wide capacity utilization by 10% by just better-aligning selling with manufacturing site allocation. Greater sales will eventually come from all these improvements, but in a complex business system there rarely is a quick way to reliably measure only the sales $ effects of any particular actions there are too many other uncontrollable variables and simultaneous changes.

How can someone learn more if they want to begin applying lean to their sales process?

I would be a horrible salesperson if I didn’t take this opportunity to promote my book, The Fluff Cycle, or my classes and Lean Post articles at the Lean Enterprise Institute. And I would also be a horrible guest if I ddidn’t plug Shmula.com’s focus on customer experience a huge part of what Lean can offer to the Sales & Marketing world. Case studies are always interesting, but I caution people to remember that those are particular solutions to some other organization’s particular problems and chances are fairly low that they apply directly to you. The very best way to learn is to experiment, sometimes fail, and then experiment again and again.

Any final words you’d like to share with my audience?

In my 20+ years of Lean, my best advice comes from observing the small % of companies that are truly successful and sustain their progress. The one thing that sets them apart is that they don’t do Lean, in the conventional textbook / somebody else’s model & tools approach, but rather they regularly solve important problems, with their own solutions, to advance their business. The goal should never be to become lean, but rather to become a better business no matter what methods you need to use to get there. When companies do this, Lean naturally emerges from within the organization, and they end up spending far less effort on a better, company-specific solution. One great example can be found here in my article Are We Doing Lean All Wrong? [1. http://www.lean.org/LeanPost/Posting.cfm?LeanPostId=231]

Thank you very much, Pete, this truly has been a pleasure!

About Brent Wahba

Brent Wahba learned how to apply Lean and Sigma by spending over 20 years in the automotive industry in a variety of leadership and technical positions at the Delphi Corporation. While there, he headed global product lines, led the creation and implementation of sales & marketing strategies, managed R&D and new product development organizations, and optimized operations all while developing new applications of continuous improvement methodologies. Today he writes, gives talks, teaches classes, and consults on many topics including Adaptive Strategic Planning, Product Development Process & Culture Change, and Sales & Marketing Problem Solving. His latest work includes the book The Fluff Cycle (And How To End It By Solving REAL Sales & Marketing Problems). Brent is currently the President of the Strategy Science consulting network, and is also on the faculty of the Lean Enterprise Institute where he teaches Lean Sales & Marketing. When he is not travelling around the world, he can be found giving volunteer start-up business mentoring near his home in Dallas, Texas.

Brent holds a BS in Electrical Engineering from the University of Rochester, an MS in Materials Science and Engineering from the Rochester Institute of Technology, an MBA from the University of Rochester, and has authored 10 patents.

He can be contacted at brentwahba@strategyscienceinc.com or 585.315.7051

Be sure to check out our other interviews in the Lean Leadership Series:

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The video below will explain more. Then, you can download the free template below the video by clicking on the link.

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The purpose of the Hoshin Kanri X Matrix Template for Lean Policy Deployment is to develop and implement plans that are both strategic, tactical, and coordinated across people across the organization. The X-Matrix also ensures there is ownership at all levels and accountability; this approach to strategic planning also encourages organizational learning, faster course corrections, and cross departmental coordination. Hoshin means “shining metal pointing direction” – in other words, it’s a compass that points to True North.

The value in the X-Matrix used in Hoshin Kanri is in the interaction between the sections. The interaction between sections will lead to better decision making. What I’m about to show is one way to do Hoshin planning – there are other ways, but what I’m about to demonstrate is pretty standard.

Now let’s go through each of the sections of the X-Matrix Hoshin Kanri Template.

0. Anatomy of the Hoshin Kanri X Matrix

In what follows, I’ll go through each of the main sections of the Hoshin Kanri X Template and how to complete it.

1. Complete the Breakthrough Objectives

Lean is fundamentally long-term thinking. Hoshin Kanri enforces this by first looking at objectives that are 3-5 years out. There can only be a few of them. In our example below, we show a few. Note that these examples are sanitized and do not represent any specific company or organization.

2. Annual Objectives

Then, we identify a few short-term (usually within 1 year) objectives that align or nests under each of the longer-term breakthrough objectives. In our example, we entered 3 short-term objectives and each of them are aligned with each of the long-term objectives. We note the alignment with a dot.

3. Annual Improvement Opportunities and Priorities

Next, we want to list the specific annual, short-term improvement opportunities. Each of the improvement opportunities should align with an annual objective and each annual objective should align with a 3-5 year breakthrough objective. Do you see the interaction, alignment, and nesting in this type of strategic planning?

In our example below, the annual improvement opportunity of “Parts Spend Reduction” is aligned to reduce “SCM spend by 10%”.

4. Measure, Metrics, Targets to Improve in Hoshin Kanri X-Matrix

Next up is completing the specific metrics we will use to measure each of the short-term initiatives, that are aligned to annual priorities, which are aligned to breakthrough objectives. Are you seeing the alignment? The nesting? The interaction?

In our example below, the annual priority of “Parts Spend Reduction” is measured by the “TTI” or target to improve of “reduce parts cost per unit vs new parts of x%”.

5. Teams and Ownership and X-Matrix Hoshin Accountability

Of course none of this planning matters unless there is ownership and accountability. So, in the last section, you are able to complete the x matrix template by filling in the names of the accountable and responsible people for each project, metric, and objective.

6. Hoshin Kanri X Matrix Video Tutorial

7. X Matrix Hoshin Kanri Template Download

If you’d like to give it a shot or use this template in your own strategic planning, we provide a FREE download. Just click the button below and off you go.

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But, wait, real quick here’s a picture of my waiting in the lobby – that’s my water bottle and notebook on the table. . .and, as a side note, the day I was at the Nike Campus, Kobe Bryant was in the cafeteria hanging out. I didn’t get a picture with him, but I could have thrown my bowl of Thai Noodles at him – he was that close.

Reputation Management to Innovation Opportunity

Nike’s manufacturing footprint is huge. As of this writing, they have manufacturing contracts with over 785 factories, across India, Vietnam, Philippines, and South America. And, over the years Nike has been criticized for its lack of oversight of its manufacturers. Initially, they approached the problem as a way to manage reputation. But, now they are seeing their oversight and relationship with contract manufacturers as an opportunity to innovate.

But innovation isn’t in a vacuum. Innovation at Nike must be within the context of (a) serving the athlete, (b) grows the company, and (c) delivers inspiration. While you won’t see Lean lingo, the context matters. This is effectively Nike’s “True North” if we were to speak in terms of Hoshin Kanri.

Nike has 2 overarching goals in their strategy:

1. Make Today Better
2. Design the Future

Pretty simple and can easily be remembered by all employees. Under these two main pillars in their strategy, Lean begins to take context.

Design the Future: Nike Lean Manufacturing

Nike has determined that their finished goods manufacturing is where they have the largest impact on people and the environment. Within that context, they want to be a catalyst for positive change. Consider these numbers:

• 785 Contract Manufacturers
• Over 1 Million factory workers
• More than 500,000 unique products

Those numbers are staggering and humbling at the same time.

Factory Sourcing

Quality begins at Factory Sourcing – that is, the process a contract manufacturer has to enter in order to be selected as a Nike manufacturing partner. The sourcing process is more rigorous than it was and Nike has improved the quality of the manufacturing partner and the time it takes to select a partner.

In terms of time it takes to become a partner, it now takes Nike 152 days versus 246 days. That means it takes Nike 38% less time evaluating a manufacturing partner. This is a massive improvement.

In terms of quality, Nike has increased its requirements but doesn’t leave the partner hanging dry – Nike actually spends time and energy and resources helping the contract manufacturing partner reach Nike’s new standards. As of this writing, Nike has 0 manufacturers in Gold, 1 manufacturer in Silver, 535 in Bronze, 156 manufacturers in Yellow, 77 contract manufacturers in Red. As you can see, Nike’s bar of excellence is high and Nike actively not only audits its manufacturing partners, but also helps them improve [1. http://www.nikeresponsibility.com/report/content/chapter/targets-and-performance].

Manufacturing Excellence

According to Nike, in order to design the future, Lean Manufacturing must be part of the solution for them. In their words,

Lean manufacturing has been a hallmark of our approach with factories and is the foundation of how we advance sustainable manufacturing. Lean manufacturing is a business system and continuous improvement philosophy that aims to deliver the highest-quality product while eliminating waste, including lost time and material. At Nike, we also believe lean can empower workers and teams. The success of the lean approach depends on the implementation of physical changes to production processes, increased leadership capabilities and the development of an empowered workforce. Lean manufacturing seeks to engage the minds of those closest to the work to solve the problems that prevent them from delivering quality product on time, every time.

As we all know, people are at the heart of any operation. Nike has spent a lot of energy in training and upskilling their contract manufacturers in Lean. From their perspective, Lean helps their people in the following ways:

• Leadership: factory leaders use Lean to drive business performance
• People: workers are engaged and enabled to drive business success through continuous improvement
• Process: factory processes are predictable and agile in response to customer demand

And, they believe that

The lean approach also seeks to engage the minds of those closest to the work to solve the problems that prevent them from delivering quality product on time, every time.

In fact, they use Jeffrey Liker’s model found in his book “Toyota Culture, the Heart and Soul of the Toyota Way” as an example of how they need to align people and strategy and lean in their training.

I have to say that this is the aspect of the Lean deployment that impresses me the most. Why? Most organizations will start Lean primarily in the Daily Management section of the model and it stays there. Most of us know this as Shop Floor Management, or even the Toyota Floor Management Development System as I know it.

But at Nike, they go deeper and higher and more broadly. In their words, this is how training is done in order to help their people – notice the level of Lean Six Sigma Training conducted [2. http://www.nikebiz.com/crreport/content/workers-and-factories/3-9-1-our-approach.php?cat=hr]:

The curriculum contains 10 modules that each focus on a key area of the Culture of Empowerment Model. Each module is designed to share HRM best practices related to lean manufacturing, and contains interactive exercises that allow factory managers to assess their current state and identify improvement opportunities in areas including recruiting, selection, employee development, performance management, worker-management communication and retention.

The curriculum also contains instruction and exercises on lean problem solving and planning tools including PDCA (plan, do, check, act) and A3 reports, which facilitates knowledge sharing and collaboration in a concise document. These tools are used throughout the capacity building to define follow-up projects that factory managers implement after completing the training.

And, they also take temperature checks with their people, to see if the Lean deployment is meeting their needs. In a survey conducted by an outside firm, the results seem promising and Nike has also take this data from survey results to help further improve their people operations:

And, as with most organizations that are focused on continually improving, Nike is doing that and hold themselves accountable. As of this writing, here is their assessment of their Lean journey so far:

In conclusion, I applaud Nike’s commitment to making Lean Manufacturing part of their strategy. Notice that Lean is not an end in itself, but is an aid to further progress toward meeting the Nike promise and achieving their goals  and strategy.

Here’s an older video of their fulfillment and distribution operations – a part of their supply chain. Keep in mind, this is before they started their Lean Journey. It’s interesting nonetheless.

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