Relentless pursuit of common purpose is necessary for organisations to lead in their business segment. Hoshin Kanri offers one of the foremost management methodologies available to executives in terms of organisational leadership and continuous improvement.
Leaders must retain sight of a big picture while working through quality management components. Holistic methodology requires application of Hoshin Kanri in conjunction with Excellence Modeling, Balanced Score Card, ISO management system standards, and culture, to develop and deploy strategic objectives.
Managers should use project by project improvement at a revolutionary pace, ensuring management breakthrough, as defined by Dr JM Juran.
Executive must carefully consider what and how they measure, and how they deploy vision, mission, policy, strategy, product life cycle, financial and occupational sheq risk management.
Quality management is not simple
David Hutchins said to me many times that all gurus have something to add and they all have a center of gravity, you have to find what bests suits your organisation.
Our country, organisation and individuals need purpose! A reason for being, for without it we have no meaning and we die!
In his book ‘Jack; What I’ve learned leading a great company and great people’, Jack Welch indicated that organisations are successful because of people management and process excellence.
Social accountability goal
The majority of expert consultants say that strategy is all-embracing and central to business. It’s about how do we get from here to there, with the hope that the destination is the right place.
In the journey of today’s world, getting to the destination is no longer all about profit; issues of the totality of risk must be addressed perhaps even more is the social accountability in this day and age can we continue to ignore what is happening in our world or even closer to home what is happening in our local community.
The complexities of developing strategy to deliver a set of holistic balances for a South African Organisation can be more challenging, In particular for SMMEs, considering the requirements and amount of labor legislation and administration.
Black Economic Empowerment abused by fronting, while the political climate poses uncertainties to investors and clients.
Education and training are quality issues
Laobur strikes have increased by 20% in 2011, while union membership has dramatically declined. As a former unionist I am firmly a believer in the need, however, South Africa unions are immature in their objectives, based on demanding unrealistic wage increases, while our skills base remains low.
Skills will not rise unless there is a fundamental change in teaching strategy at school, based on Identifying Customer Requirements, Providing Resources, Managing processes, Measurement, Analysis, Continuous Improvement. This sounds like ISO 9001, and indeed education and training are quality management concerns.
SA brain drain
South African leadership competencies are scarce due to the South African exodus of executive skills over the years and currently. Employers are forced to pay international equivalent packages to keep our executives.
BEE has been utilised to address this gap, but my experience is for many reasons it has benefited the few and has failed to the detriment of the many and our economy. Corrupt business practice is justsified by a perception of government and state corruption.
State leadership and project management failures
Eskom’s failure is an example of failure in every aspect of leadership, management and quality. The current Eskom capacity building programme is managed by American project managers, which I find strange considering remaining local expertise.
I have been involved directly with some of the largest projects in South Africa and my personal view is that South African project managers are by far more competent particularly on our own turf.
It begs the question; were local project managers not black enough, or not marketed and sold well enough?
The unfortunate thing about BEE is we have continued to racialise and stigmatise skills and business. Born a Scot, I remember the lingering pain of the Highland Clearances at the turn of the 1800s. Scots, like black and white South Africans, continue to allow ‘race’ to dominate our minds, while we lose focus and energy.
South Africans must seeing ourselves as a team, to win our freedom and win in the world economic game. Pres Nelson Mandela said; “Freedom is indivisible; the chains on anyone of my people were the chains on all of them, the chains on all of my people were the chains on me.”
South Africans should identify what we are about. SA consumers must demand local products. Africa’s economic challenge is to add value to natural resources.
National and African quality strategies required
Africans must access these resources, develop processes to add value to those resources, innovate and develop new uses for those resources, compete in Quality, Service, Reliability and Cost, and create the perception of South African Excellence, as we have done in sports.
To achieve this we need to train people in sciences, skills and competencies to extract, design, innovate, manufacture and market, as we have done with gold, coal and iron, while learning from policy, health, safety, environment, quality and governance misstates that were made in coal, gold and iron industries.
Government, Business, Learner Institutions and Technical Colleges need to work together on a Common National Strategy. The previous Government initiative GEAR, unfortunately has failed.
Pres Jacob Zuma has called on the newly elected National Planning Commission (NPC) to map the future of South Africa for the next twenty years.
Speaking at the inaugural meeting of the commission, which was assembled at the end of April, Zuma said; “For the first time in our country’s history we will begin to chart our way forward in a purposeful manner with a view to the country’s long term interests”.
Members of the commission specialise in sectors such as finance, industry, telecommunications, biotechnology, water engineering, rural development, governance, energy, education, health, food security, and climate change.
The commission is headed by minister in the Presidency, Trevor Manuel, and former ANC secretary general Cyril Ramaphosa as deputy.
It is still unclear what the NPC would do in day-to-day activities. “The National Planning Commission… and Vision 2025 will muster the views of all South Africans to participate in the realisation of the South Africa we want to live in”, Zuma said. The intention is clear, but most businesses and states fail at implementation.
SA business leaders’ challenges
Executive require a toolbox of knowledge on subjects of Financial Risks, Occupational Health and Safety Risks, Quality and Customer Excellence Risks, Environmental Risks, Social Accountability Risks and Political Risks.
Political failures have caused spectacular national and business failures in South Africa, Africa, north Africa, and the Middle East.
Organisational Strategy. The process whereby top management, identify the purpose, vision and core objectives of the organization. The objectives are translated into a number of organisational missions and numerous Continual Improvement Projects cascade throughout organisation, which are assigned clear performance measurements.
The mistake most executives make is their belief that now that they have done the hard work they can delegate implementation to executive managers. In practice, this kind of strategy almost never works.
In the words of Dr Joseph Juran the worlds foremost guru on quality; “this stuff is not delegable”.
Most South African managers spend 60% to 80% of their time fire fighting the same repetitive problems from year to year. If common sense prevailed those executives would develop and implement an effective Quality Management System such as ISO 9001:2008 which if implemented correctly would make a return of their most precious asset “TIME”.
ISO 9001 is about driving effectiveness rather than efficiency, so ISO 9001 by itself does not produce a world class organisation, unfortunately in this respect ISO 9001 has done more damage than good due the belief by executives now they have the flag they have arrived at the total quality destination.
State culture example
Until such time our Government leads by example and adopts a strategic approach towards Total Quality in all services they provide, we will continue with the existing culture of ineffective deliverables steeling the time of all the citizen’s from services which are ineffective and in particular our police service which continues to enforce a police state designed in the former regime the only difference being is the complexion of the leadership and that the corruption is just more visible.
Government is demanding too much repetitive administration. The amount of paperwork demanded is unrealistic for small business never mind the large corporate, A solution is establish one central database which is maintained and all information is fed into it by potential suppliers.
Every Government tender asks the same repetitive questions. Standardise a common database to save billions.
When your Government is on the take it sets the foundation for Business to behave in like manner. The competitions board recently has highlighted many examples of unethical behavior by blue chip organisations.
Total quality and Hoshin Kanri
I am of the opinion that a philosophy of Total Quality Management in an organisation develops a positive culture and value systems of positive behavior’s throughout the organization because that’s just the way things are done around here.
When demand exceeds supply and the vendor can sell everything he can make, it is possibly difficult to convince him of the importance of a customer driven philosophy. The customer will have to buy his product regardless of the quality of the service, the price, delivery or after sales support.
This will usually be the case in monopolistic situations where the customer has no choice such as we have had with organisations like Telkom. There is therefore no pressure on the supplier to achieve anything because he knows that he is secure.
Alternatively, when supply exceeds demand, the rules change completely. Suddenly the customer becomes king and collectively has the power of life or death over the hapless vendor.
Since in this situation, every competing vendor wants to be amongst the survivors, the pressure is on to be amongst those who are favoured by the customers and in the end it will only be the best who will survive.
Hoshin Kanri is the only proven means by which this can be achieved when competition is at its most severe. It is a systematic approach, which can be ruthlessly applied to grind down even the most severe competition.
Organisations that have applied Hoshin Kanri have in some cases come from being also ran’s in their field to becoming performance record breakers in only a matter of three to four years. Hoshin Kanri is not a difficult concept to understand or to apply.
Most organisations will have some of its elements in place and in some cases a large percentage. However, Hoshin Kanri does require meticulous planning, targeted benchmarking and the effective and systematic use of the tools for continuous improvement at all levels of the workforce. In short it is a means of managing a business.
Hoshin Kanri is a Japanese management term that includes four key elements of business management; Vision, Policy Development, Policy Deployment, Policy Control, and the sum, Total Quality Management.
1. Goals, aims and future scope are derived from vision.
2. Vision requires development of strategy, policy, benchmarking, targets.
3. Deployment of targets must be to all levels through a cascade process, and creation of policy at each level of management.
4. Feedback of results completes the Plan-Do-Check-Act (PDCA) ‘Shewhart Cycle’, which many people now refer to as ‘Deming Wheel’.
5. It has no value unless it includes Total Quality Management, the Japanese version not the suspect version that fluttered for a while in the West in the late 1980s, which represents the ‘DO’ part of the PDCA Cycle.
Prof Ishikawa said on many occasions ‘Quality begins and ends with education’. Hoshin Kanri has four components:
Ho means ‘Direction’
Shin refers to ‘Focus’
Kan refers to ‘Alignment’
Ri Means ‘Reason’.
Unfortunately most organisations are a very long way from the Hoshin ideal. In many cases, they exhibit a blame culture with recriminations and punishment when things go wrong and very little in the way of praise when they go well. Direct employees are treated as robots, nobody asks them anything or involves them in anything.
They are only given the minimum training and in some cases no training at all. They are not given much information as to how the company is doing in its market place or even the purpose of their own jobs. Only the directly relevant negative financial goals and financial constraints are clear. All other organisational goals are either stated in vague and very subjective general terms and are often open to wide interpretation.
In an organisation which does not practice Hoshin Kanri or something similar, then in the absence of clearly defined quantitative goals, managers are somehow mysteriously expected to ‘know’ them.
Usually they struggle to do so but their perceptions as to their meaning will often vary widely from person to person and across the organisation. The resulting confusion will generally lead to serious under achievement against the potential capabilities of the organisation when everything is in alignment.
Goals are often vague
Since all departmental managers will be managing in line with their own interpretations of the business goals and targets, there will be considerable conflict and sub optimisation. Departmental goals which may seem clear to the managers will be considered to be more important than organisational goals which appear vague and indistinct.
Goals for quantity which will derive from the financial goals and constraints will often appear to be very clear whereas goals for Qualitative requirements will usually be stated in euphemistic terms if at all. For example: ‘we must have better performance’ or ‘increase customer satisfaction’.
On the face of it, these seem like laudable goals but in reality they mean nothing because they are too vague. This vagueness cannot compete with the clarity of the financial goals; as a consequence the qualitative goals will always be the poor relation even though their sustained non achievement could result in dramatic financial impact or even threaten the future of the operation.
This lack of clarity also leads to rivalry and conflict between departments. Managers have their own ambitions and these may not always be compatible with the goals of the organisation as a whole or the local goals of other departments.
‘Scientific management’ failed
A further common problem is the lack of process ownership. For most of the 20th Century, the so called Scientific Management system prevailed in the West and also throughout the Soviet system.
In such organisations, each department was almost an independent fiefdom. In some cases, it literally bought and sold its products and services from or to the other departments within the organisation. Each of these ‘fiefdoms’ were fiercely hierarchical.
Promotion, hiring and firing only occurred within the department, with the consequence that each was a self contained unit. Whilst the organisation may have had business wide advisory and service departments such as maintenance, training, HR, Industrial engineering etc. they were often regarded as intruders by the managers and treated with hostility and suspicion.
As a consequence, these organisations had very strong vertical fibres of organisation but were very poor horizontally. Since processes run horizontally across departments it meant in effect that no-one owned the process.
In the worst case scenario, each department performs its activities and then in effect ‘throws the output over the wall’ to the next department. There would be very little communication in either direction between the two and virtually no understanding of each others needs.
Management style extremes
A blame culture will almost certainly prevail, unless a positive culture is developed. As soon as anything goes wrong which will be frequently, the question will always be; whose fault was it?
A better approach would be to find out the circumstances that prevailed that caused someone who wanted to do a good job, to do something that neither they nor anyone else wanted. In other words the approach should be to attack problems instead of people. This is difficult in a macho style environment.
The likelihood of insecurity at all levels of organisation is obvious. Such organisations usually suffer high levels of staff turnover, sickness and absenteeism.
Hoshin Kanri management model
Concentrate on how to install positives and drive your organisation to leadership. The Hoshin Kanri model developed by David Hutchins is based on many years of practical experience in implementation of Hoshin Kanri in industry.
Use an expert facilitator from within our outside your organisation to guide discussions, ensure relevant facilities and resources are available, to produce reports and offer advice where requested or when it is deemed necessary.
They must never take over the project or to create any of the materials at any level. This must be done within the organisation itself. I have facilitated many such programmes for very large and very small organisations.
I have always ensured that ownership of every piece of work at every level stays firmly in the organisation itself. The pay off is that the sense of achievement when the results begin to appear are enormous and the organisation concerned can be justly proud of their efforts.
Hoshin Kanri in conjunction with business excellence is the most powerful combination of tools, Excellence Modeling provides a methodology of identifying best in class practices and the identification of benchmarks and identification of Areas for Improvement.
Ask the right questions
Strategy is about asking questions. Meaningful strategic conversation requires rigorous probing into what your organization does, why, and how.
The first answer to any question is rarely the best answer. Obtaining the facts and not making decisions based on assumptions can lead to bankruptcy. Top management require to get down to the grass root issues of the business. Executives must learn the skills of Executive Benchmarking rather than just looking over the fence as to what the opposition are doing.
Consider ten Competitive Business Skills top management must develop to be competitive and think carefully about how you see your own organisation now and in the future;
Skill 1: Identify the Organisation’s Purpose and Core Business Objectives
Skill 2: Identify our current position in relation to competitors current and future, and our responses.
Skill 3: Indentify our scope.
Skill 4: Foresee realistic scenarios. Develop strategic IQ by knowledge management.
Skill 5: Get buy-in from stakeholders.
Skill 6: Use a Business Excellence Model.
Skill 7: Develop and deploy strategy.
Skill 8: Complete initiatives.
Skill 9: Ability to Learn, Unlearn and Re-learn. Develop EQ of our people.
Skill 10: Develop people by multi-skilling. Build precept upon precept.
Five building blocks
There are five building blocks that require answering five crucial questions. Each should be answered in terms of four implicit questions;
Why do we exist? Whom do we serve? What other stakeholders must we consider? How do we rank them if their demands conflict? What value do we deliver? What is our difference? Why do we matter? What is our ambition and target dates?
How do we delivery required results? Our business formula and measurement methods. What is our uniqueness? What is your value proposition to customers? What makes it unique? Why does it matter to them?
What methodology do we develop and deploy? What business model underpins it? What makes our strategy a winner?
How will it evolve? In a sustainable manner short and long term? Many organisations fail to hold the gains from lessons learned as top level management move on and the new management move in they often change the strategy throwing out the baby with the dirty water. This often happens in government organisations where leadership tends to be political appointees.
Business Excellence Model process. Successful organisations simply work hard at being good by adopting a philosophy of continuous improvement at a rate of revolution as opposed to their lagging competitors who move at a rate of evolution.
Designing and effective business model requires that you think about the value-added potential of a number of key building blocks, both separately and strategically linked.
SA ‘11 Box’ framework
The South African ‘11 Box’ framework gives you a holistic view of your organisation. It prompts you to think about factors that are easily overlooked, yet which may be pivotal creating and holding your competitive advantage.
As its name suggests, there are seven areas for enquiry. Your goal should become “Best in Class” and to outperform your competitors in each of them. Add up the Competitive Edge’s in each of the elements to make the Competitive Gap big enough to make positive differences, and you’ll be hard to catch.
You’ll gain even more advantage if you get the Eleven Criteria to lock together, to reinforce each other into a whole that is greater that the sum of the parts. The downside is that while it may be hard to change one part of your model in the future, it’ll be even harder when they’re entwined. So the challenge is to create a “tight” model- and at the same time build flexibility. Strategic conversation is a crucial factor.
The framework can be utilised in a number of ways. One is to look at the Current Reality, so you get a comprehensive picture of your current Position or Benchmark in relation to Best in Class- “Where we are today”.
Enablers: What we do to run our organisation. How we operate.
Results; What we achieve as seen by all those who have an interest in our organisation; customers, our people, the community at large and those who fund our organisation. How we measure and target achievement.
Eleven criteria of the excellence model are linked by the principle that ‘Customer Satisfaction, People (employee) Satisfaction, Impact on Society and Supplier and Partnership Performance are achieved through Leadership, driving Policy and Strategy, People Management, Customer and Market Focus, Resources and Information Management and Processes leading ultimately to excellence in Business Results’.
The Framework of Business Excellence Modeling and Self-Assessment will help us to:
– Identify and recognise both our strengths and areas for improvement.
– Consider how to build on and extend our strengths and successes.
– Review our approach to Continuous Improvement and identify how we can enhance it and increase the rate of progress.
– Focus our efforts and resources to increase our success as an organisation and as individuals.
– Share good ideas and best practices within our organization.
– Enable more effective benchmarking by providing a basis for comparison between ourselves and recognised “world class” organisations.
– Consistently measure our progress towards our organizational goals and the achievement of excellence.
– Achieve a common sense of purpose and direction, based on a shared view of what needs to be done.
– Link what we need to do and how we need to do it with what we need to achieve.
The model itself is a framework for assessing the “Excellence” of an organisation.
The model is based on the concept that an organisation will: “achieve better results by involving all the people in the organisation in Continuous Improvement of their processes”.
The other is to utilise the model to Strategise your Future Potential for improvement and innovation. Where we want to be tomorrow”.
Business rating criteria
The Business Model can also be utilised to analyse Best in Class and competitors, and to identify areas for improvement. Here are the criteria:
1. Leadership Enablers. Consider how all leaders inspire and drive a culture of organisational excellence. What are your philosophies, culture, customer service, types of people you hire, how you treat them, cost management, investing in research and development, outsourcing, e-commerce. Managers seldom question their underlying beliefs, yet they set boundaries for business decisions.
2. Policy and Strategy Enablers. How we translate them into actions and improvement against outside change.
3. Customer and Market Focus Enablers. How market intelligence is determined, how market information is collected and used and how customer complaints are managed. POSITIONING and promotion in the market.
4. People Management Enablers. How do we develop skills, recognise improvement opportunities, communicate inside.
5. Resources and Information Management Enablers. How we manage partnerships and supplier relationships.
6. Processes Enablers. How we meet customers’ requirements and internal processes such as ensuring safety at work. How we manage these processes, review our performance, stimulate creativity to improve them. How good is our Approach? How widely do we apply our approach? What do we measure?
Business results criteria
We should measure results by five criteria;
Impact on society
Supplier and partnership performance
Business bottom lines against planned performance
• David Crawford is chairman of QSI. This post is an extract of an extensive address to the SA Society for Quality, SASQ, national conference in August 2011. An electronic version of the full paper is posted at www.qsi.co.za
• This paper is dedicated to quality researchers like David Hutchins, who in I992 was keynote speaker at the launch of SAQI, Dr Juran, Dr Feigenbaum, Prof Ishikawa, Dr Deming, Philip Crosby, Tom Peters, and Michael Porter.