Hoshin Kanri

Policy Deployment aka Hoshin Kanri Guest was Robert Stapp of OP-EX Direct Results

Business901 Podcast Transcript

This is a transcript of a podcast that featured Robert Stapp of OP-EX Direct Results Inc. In the 1st session of this 2-part series, Robert discusses Hoshin Kanri aka Policy Deployment. Robert is an executive professional with nineteen years Lean Six Sigma Operation Management experience domestic and internationally. He is a Certified Six Sigma Black Belt (since 1998) and Certified Lean Master™ (CLM) process improvement expert ( since 2005). Robert is an author and speaker for Lean Six Sigma business transformation and quality engineering solutions. As a certified kaizen instructor he has managed, facilitated and been involved in continual improvement his entire career.

Robert is the Founder and President of OP•EX Direct Results Inc. which was established in 2006 as an S-corporation based out of Huntington, Indiana as a performance improvement and management consulting firm which focuses on creating value and delivering results for clients. Operating Excellence™ is a highly advanced and sophisticated system of management sciences, which leverages Lean Six Sigma, Engineering Solutions and Leadership to establish world class performance. OP•EX Direct Results Inc. has served both manufacturing and service industries; such as Health Care, Publishing, Food & Beverage, Automotive Manufacturing, Mining Equipment, Commercial Glass, Printing, Milling & Foundry Operations, and Construction Goods leveraging his experience and knowledge to positively transform entire business enterprises.

Policy Deployment aka Hoshin Kanri

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Product Marketing

Lean Marketing

Joe Dager : Welcome, everyone. This is Joe Dager with Business901. Today on the podcast, I have Robert Stapp of OPEX Direct Results. He is from Huntington, Indiana.

Robert, could you introduce your company, and tell us a little about yourself?

Robert Stapp: I sure can, Joe. But I want to thank you first for having me on. We are based out of Huntington, Indiana. It's about 25 miles southwest of Fort Wayne. We established ourselves back in 1996, and we specifically focused on what we term as operating excellence. Operating excellence is really an advanced and sophisticated system of management sciences. We look to leverage Lean Six Sigma, engineering solutions, and leadership to establish what we call world-class performance. When we look at just Lean and Six Sigma, those aren't the only performance improvement tools that we try to incorporate. We consider ourselves the MMA of performance improvement.

Back in the day, martial arts all began with different styles and methods. Today, we see this mixed martial art that's really transformed a whole business in terms of competitive fighting and all that.

Well, for us, we've seen how Lean and Six Sigma, Theory of Constraints, and other performance improvement tools have been leveraged and used together at the right time in the right way, and it really brings about a strong result, tool-set.

So, for us, we combine that with teaming, or what we call team-based activity, which is really paramount to operating excellence. That is, to engage everyone in the work-force and really approach it as a system, rather than just a tool-set.

Policy Deployment aka Hoshin Kanri

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Joe: Robert I want to talk a little bit about your company's which specializes in policy deployment from what I've look at and it's one of your specialties I believe. Could you explain that a little bit to me?

Robert: Sure. Let's go back and really look at what policy or what's termed as policy deployment. It's really another way of saying Hoshin Kanri. If we look at the word policy, it's really used to convey a set of strategic priorities. So that's where this word policy comes from, as well as the means and methods to achieve them. When you look at policy deployment it's looking to keep all the activities at all levels of a company aligned.

And that's tough to do.

It then takes those activities and systematically explodes the what’s and the when's, the who's and the how's to execute improvement within the entire business enterprise. Let's go back and look at the foundation of policy deployment in terms of this thing called Hoshin Kanri. It's kind of funny if you look at that word. Hoshin means compass or pointing the direction. We're looking at a Japanese word here that was developed over time. It really is what helps deliver or create what's called the operating excellence or the Lean Six Sigma system.

So Hoshin meaning compass or point direction, and Kanri meaning management or control. I don't like to use the word control; it's a bit old style. I like to look at it as just management of people or coaching. So Hoshin points in the direction and then Kanri is coaching or management.

It's really, Joe, this culture to run the business, concentrating on what we call the Vital Few objectives instead of really looking at the contributing many. It is a process to measure and score to see if your workplace is achieving its goals. And like I'd mentioned prior, it really connects and aligns everyone to these measureable strategic outcomes.

Policy Deployment aka Hoshin Kanri

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With that in place, Joe, what you have is a team executing together to achieve the overall outcomes of the business. So we always say, "What does Hoshin enable?“ Well it integrates application of all of the improvement methods to drive results. It helps us establish Kaizen Principles strategies. It controls the means and methods and not just the results. Again, we're focusing on that key criteria or process criteria, and allowing the results to be a benefit, to be the results of focusing on the process.

We can't forget though, it really emphasizes frequent reviews up and down the organization and everyone's role. Earlier we had talked about this thing called Catch Ball.

It doesn't just with pitching ideas and discussions back and forth, but it is a continuous Plan-Do-Check-Act cycle that says, "I understand what I'm accountable and responsible for. I understand what goals I'm trying to achieve and I'm focusing on the process. Then I have to review what I'm doing with the entire organization to make sure I'm completely aligned every day.“ So it really connects that daily activity throughout the organization as well.

Joe: I think it's always interesting; people look at quarterly goals and annual goals. But relating that back to a daily management system and into an executable system for them to use, is difficult sometime. Do you do that for them? I'm use to going in at eight o'clock, having a cup of coffee, looking at my to-do list. Then I get the phone call. My to-do list goes over to the side and you start executing your day. Then you come back at noon and look at your to-do list!

Robert: That's the beauty of this. Quite simply what you're describing there is what we finds ourselves, a lot of us doing, its fire fighting. Because we look at what's immediately happening and we say "Whoa, wait a minute! I need to take care of this right now, right here." Well, there are some things, Joe that you have to do that with, right. There are emergency situations, that are part of the variability of a business, and it’s going to

Policy Deployment aka Hoshin Kanri

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happen. But it should not be the primary focus. And that's what happens too many times is those emergencies begin to become the norm instead of the emergency.

When we look at policy deployment at the Hoshin Kanri process, there is thing called Phase I. It's called strategic planning, where a company sets its vision. They develop this three to five year breakthrough, and then they determine what's called the annual vital few priorities and metrics - what we have talked about in this podcast as KPI's.

And then, there is the Phase-II that you were alluding to, it's called the execution or what we call the “heart of the process”. And that's where you take these priorities and these metrics and you roll them up and down the organization, and you develop plans to manage and to execute towards achieving those goals.

So, first, you have to display and communicate and monitor those metrics. And we like to say that, it needs to be done daily. It's not something that you are just going to look at once a month or once a year. No. You have to look at these things daily, because you are managing the process now; you are not managing the results.

Then you get into identifying your opportunities and implementing your improvements, and then you can have your regular review process at a stated frequency, whether it's a monthly or quarterly review. But again, it gets back to this Plan-Do-Check-Act cycle, Joe. If you allow yourself to have every now and then some of those emergency situations, not the norm - that's, OK, you are going to have them -you need to protect your customer. But you need to also protect them in the long run by maintaining the integrity of that Plan-DoCheck-Act cycle, that system that you put in place called Hoshin, called policy deployment, where you are managing the process and not reacting to the result.

Joe: I see that. I go back to the Steven Covey and his "Seven Habits," he later came out with “The Four Disciplines of Execution” in the 90's, we all have some sort of day timer or a

Policy Deployment aka Hoshin Kanri

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calendar. We have these different processes we go through. But then, we separate our daily action plan from the project planning. We manage that project plan and, maybe, the Plan-Do-Check-Act cycle and do that with the Hoshin thing that you are talking about.

But there are some of us that are good at it and there are some of us that aren't. And there are some people that get a lot of things accomplished without being a part of this type of structure that you are talking about. How do you reel them into structure the people that are doers, as you always would call them, and implementers, but don't necessarily fit into the system?

Robert: They are always part of the operation, and thank goodness for those people, right. They are the folks that are out there, like you said, they are doing. And in essence, they are working to this operating excellence format. They are out there engaging Gemba. They are studying the process and making changes happen. That's why we call them doers. But they also at times, not so much in negative but it happens, is that they lack the ability to fully communicate throughout the enterprise. They become this individual. And what we are trying to do is pull everyone together as a team and not have these pockets of excellence. It's all about the team. It's all about the business as a whole achieving their goal, not necessarily just a few people.

So once they understand that they are a valuable piece of the team, which they already know that. But they have to understand that their value doesn't just lie in that doing process but helping and enabling others to do as well, and that is this full concept of effective communication. And that comes through when you have these frequent reviews of your policy deployment. And that's how you can get these doers solid and engaged in that process, and then they begin to communicate the "how" that they were able to achieve it.

Policy Deployment aka Hoshin Kanri

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And then what's really neat is that they are spreading their intellectual capital through the entire business and other people can learn how to do at the same level as they are, you know, achieve that level. And again, it's this really sophisticated system of management practices and leadership and tool use that encompasses what we are terming as operating excellence, and then using your Hoshin Kanri or your policy deployment to manage to that level.

Joe: When I saw the Hoshin, I have always seen where it’s broken apart and there are really two categories. There is like a business fundamental plan and then a breakthrough performance plan. Do you agree with that? Can you explain the difference there?

Robert: Well, sure. The fundamental plan, when you look at the goals that you set aside to achieve, or what's called the strategic objectives - the vital few. The other piece of it is that you have to execute to achieve it. It does me no good to set up a set of metrics to achieve a plan and then never execute it. So we have these strategic objectives that we look to achieve.

We have our improvement priorities. We have key activities. And the key activities are what you are talking about, the breakthroughs, the things that really change or move the needle on the dial. And then, we have the KPI or the key process indicators that help us look at what direction that needle is moving, whether it's a negative reaction or a positive reaction to the activities that we are engaged in. And if we can tie that back to our overall strategic objectives that's the full cycle.

So again, starting off with the full plan, you have the priorities that you set aside that you want to get accomplished. You have the activities that you choose to change in a positive direction, those objectives, and then you measure it and manage it with your key process indicators, and then you tie that back to: Are we achieving our overall objectives? So again, I always look at it as a cycle, Joe.

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Joe: Sure. I mean because it continuously renewed, continuous improvement that you are making. And as you do it, you should be setting your bar up higher and higher each time.

Robert: Exactly.

Joe: I look at a system wide improvement, the pocket of excellence I think of the doers and implementers out there. I think that was a great way to term them, because it’s trying to bottle up what they do really well sometimes, instinctively, to be successful.

Documenting that is the difficult part. It is getting that process down for someone to be able to handle. When I go into a place, I see a lot of companies leaving that doer, that implementer, kind of run on its own, do his thing and they leave him freewheel. The average or poor performers they have control over. And everybody wants to be that other guy over there. So they all expect freewheeling to be the process that really works.

Do you find that true or not?

Robert: I see that at times, yes. There are two different things. I see that where they will allow the doers, the freewheelers, as you had stated, to be out there like islands trying their best to achieve at a level that the company or the business desires. And then on the other side, I see where a business spends a lot of its time managing this ambiguous environment, where you have a lot of people doing a lot of things, but no one is doing it very well. There is one tool that's part of the arsenal that can bring all of that together. And you can bring into the mix and find the best way to do something and then have everyone execute to that, and it’s called Standard Work Practices. And it's the best way to take all this variability that you are going to normally find with people. That's just who we are. We are not robots. We are people.

Policy Deployment aka Hoshin Kanri

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But, if you give us a standard to work towards, a set of instructions, let say, to do something. There is still going to be some variability on how you and I might execute against those standard instructions, Joe, but we are at least going to be following a pattern. And that's what important is that we are following a standard pattern that's set aside and has been determined by the business as the best way.

Now, it doesn't mean that it's always going to be the best way, because we are about continual improvement. And that's the beauty of it is that once everyone is executing towards a known standard, then the ability to capture a better way is much easier, it is much more evident to see a better a way, and so we can change that standard and catch and deliver the next best way.

So to me, using the Standard Work Practice, stabilizing your work processes, organizing them, and monitoring them is what we call Best Practice Foundation. And that is the first thing that you need to do along with work place organization that is part of the whole 5S methodology.

Those are the tools that you can use to bring an organization together, and to what we call operating excellence - it’s kind of herding cats at first. It's kind of difficult. But once you get everything together and people are executing to those known standards, then you start to see some acceleration in the process and you start seeing some good outputs.

Joe: I want to wrap this up now. I appreciate your time and all your expertise that you offered. Tell me how someone can get a hold of you if they are interested.

Robert: Contact me directly, that number is 260-366-4504. I can also be reached through email at results@opexdirect.com which is all one word. And we also have a web address where people can get free downloads, and they can sign up for classes that we have where we teach and certify in these processes at our OP-EX Institute. They can find that at www.opexdirect.com.

Policy Deployment aka Hoshin Kanri

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Joseph T. Dager Lean Six Sigma Black Belt

Ph: 260-438-0411

Fax: 260-818-2022

Email: jtdager@business901.com Web/Blog: http://www.business901.com Twitter: @business901 What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe's ability to combine his expertise with "out of the box" thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with." James R.

Joe Dager is President of Business901, a progressive company providing direction in areas such as Lean Marketing, Product Marketing, Product Launches and Re-Launches. As a Lean Six Sigma Black Belt and a certified coach of the Duct Tape Marketing Consulting organization, Business901 provides and implements marketing, project and performance planning methodologies in small businesses. The simplicity of a single flexible model will create clarity for your staff and as a result better execution. My goal is to allow you spend your time on the need versus the plan.

An example of how we may work: Business901 could start with a consulting style utilizing an individual from your organization or a virtual assistance that is well versed in our principles. We have capabilities to plug virtually any marketing function into your process immediately. As proficiencies develop, Business901 moves into a coach’s role supporting the process as needed. The goal of implementing a system is that the processes will become a habit and not an event. Part of your marketing strategy is to learn and implement these tools.

Policy Deployment aka Hoshin Kanri

Business901

Product Marketing

Lean Marketing