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The heart of your business success lies in its marketing. The overall marketing umbrella covers advertising, public relations, promotions and sales. Marketing is a process by which a product or service is introduced and promoted to potential customers



Supply chain management involves optimizing your operations to maximize both speed and efficiency. Speed is important because customers value fast service. Increasing speed, however, can cause costs to skyrocket, so maximizing efficiency is equally important



The term "management" refers to the activities (often the personnel) involved in the four general functions: planning, organizing, leading and coordinating resources. This topic will cover the areas of knowledge and skills required to carry out the major functions of management

Operational Excellence - The Shingo Model

Improvement is a hard work! It requires great leaders, smart managers, and empowered people. Improvement cannot be delegated down, organized into a program or trained into the people. Improvement requires more than the application of a new tool set or the power of a charismatic personality. Improvement requires the transformation of a culture to one where every single person is engaged every day, in most often small, but from time to time, large change.

In reality, every organization is naturally in some state of transformation. The critical questions are, “To what end is the organization being transformed and who are the architects of the transformation?” Successful organizational transformation occurs when leaders understand and take personal responsibility for architecting a deep and abiding culture of continuous improvement. This is not something that can be delegated to others. As the CEO of a very successful organization recently said, “Leaders lead culture!

A Culture Built on Correct Principles

Stephen R. Covey described principles as fundamental truths. He defined a principle as a natural law that is universally understood, timeless in its meaning and fundamentally inarguable because it is self-evident. Dr. Covey taught that values govern our actions but principles govern the consequence of our actions.

Values are cultural, personal, interpretable and variable. Our personal values influence how we see the world and ultimately our choices for how to behave. Principles govern the outcomes of our choices. In other words, the values of an unprincipled person will very likely lead to behaviors that are far from ideal.

Principles Predict Performance

One of the most powerful aspects of principles is their ability to predict outcomes. Principles govern the outcome or consequence of the behavioral choices we each make. The closer our actual behavior aligns with the ideal behavior that is linked to the principle, the greater the outcomes of our behavior can be predicted. This is profound given those very few things in any business can be predicted with a high degree of certainty. A culture where every employee understands and is committed to principle-based behavior will be a culture with a very high likelihood of achieving predictably excellent results. Similarly, a corporation not well grounded in principles will result in a wide variety of personal interpretations of how to apply their values in work situations.

Why Operational Excellence?

Quality Circles, Just-in-Time, Total Quality Management, Business Process Re-engineering, Six Sigma and, most recently, Lean Management are a few illustrations of well-intentioned initiatives that have far under-delivered on their promised benefits. The problem has nothing to do with the concepts and everything to do with the programmatic, tool-oriented deployment of them, It's mostly related to their implementation.

By recognizing the necessity of good improvement tools but focus on them only within the context of enabling a system to better drive ideal, principle-based behaviors. The Shingo “house” provides a summary and categorization of this collection of guiding principles and supporting concepts. When taken in their totality, the timeless principles become the basis for building a lasting culture of excellence in the execution of one’s mission statement. The Shingo Model call this relationship between business results and principle-based behavior, “operational excellence.”

Operational excellence cannot be a program, another new set of tools or a new management fad. Operational excellence is the consequence of an enterprise-wide practice of ideal behaviors based on correct principles. Operational excellence is the vision that many organizations have established to drive improvement.

Programs, names, tools, projects, and personalities are insufficient to create lasting change. Real change is only possible when timeless principles of operational excellence are understood and deeply embedded into the culture. The focus of leaders must change to become more oriented toward driving principles and culture while the manager’s focus becomes more on designing and aligning systems to drive ideal principle-based behavior.

For organizations to be successful over the long term, leaders must deeply and personally understand the principles that govern their success. Furthermore, they must ensure the behaviors of every person who contributes to the business are in harmony with these principles. In short, the organizational culture they build must be grounded in correct principles.

The Shingo Model & Concept

Many organizations and their leaders are coming to understand that sustainability requires focusing on the culture; that’s the easy part. The difficult part is in knowing how to really affect change. The Shingo transformation process is a methodology for accelerating a personal and enterprise-wide transformation to a culture of operational excellence. The process is based on the teaching of Dr. Shingo who recognized that business improvement comes through understanding the relationship between principles, systems, and tools.

Dr. Shingo understood that operational excellence is not achieved by superficial imitation or the isolated and random use of tools and techniques (“know how”). Instead, achieving operational excellence requires people to “know why”.  In the 1940s, linear with the work of French social scientist, Jean Piaget, led us to understand that learning occurs when people come to deeply understand the meaning behind the methodology.

People naturally search first for meaning, the principle and then attempt to organize them somehow into a system or some kind of order. Finally, they create tools to better enable the systems to accomplish the purpose for which they were created.

Learning and Teaching the Principles

The first step a leader must take in leading cultural transformation is a personal journey to understand what each of these guiding principles means conceptually and then what they mean personally. It is impossible for a leader to lead the development of a principle-based culture until he or she has gone through the deep personal reflection required to begin a cultural transformation.

At a minimum, leaders must be curious enough to experiment with the principle. By carefully analyzing the cause-and-effect relationship between principles and results, a leader will begin to shift their own beliefs about what drives optimal business performance. After gaining this new insight, it becomes the effective leader’s primary responsibility to see that others in his/her organization have experiences where they can gain the same insight. Leaders who choose to disregard the principles that govern business outcomes do so at great peril. Whether we acknowledge them or not, the principles of operational excellence always govern the consequence of leadership and management behaviors.

When people understand principles for themselves, the “why,” they become empowered to take personal initiative. Leaders who teach associates the principles behind the tactics or the tools can be confident that innovation from each individual will be pointed in the right direction. It is not necessary for a leader to define every ideal behavior for others. If the principle is truly a principle, people with different values will readily be able to define ideal behavior for themselves and, over time, behaviors become consistent even in a diverse environment. On the other hand, when leaders precisely define the detailed and expected behaviors for everyone else, resentment builds. It conveys mistrust and makes people feel incompetent.

Aligning the systems with principles

All work in organizations is the outcome of a system. Systems must be designed to produce a specific end goal, otherwise, they evolve on their own. Systems drive the behavior of people or rather they create the conditions that cause people to behave in a certain way. One of the outcomes of poorly designed systems is an enormous variation in behavior or even consistently bad behavior. Variation in behavior leads to variation in results. Operational excellence requires ideal behavior that translates into consistent and ideal results.

Dr. Shingo also taught that the primary role of managers must shift from firefighting to designing, aligning and improving systems. The Shingo transformation process illustrates the critical need to align every business, management and work system of the organization with the principles of operational excellence. When systems are properly aligned with principles, they strategically influence people’s behavior toward the ideal.

The Shingo Model - Pyramid Dimension
Dimension 1: Cultural Enablers
Dimension 2: Continuous Process Improvement
Dimension 3: Enterprise Alignment
Dimension 4: Result

Enabling role of improvement tools

A tool is nothing more than a point solution or a specific means to a specific end. Dr Shingo referred to tools as techniques for problem-solving, necessary but not sufficient. He taught that tools should be selected to enable a system to perform its intended purpose. In many ways, a system may be thought of as a collection of tools working together to accomplish an intended outcome. Powerful organizations are made up of powerful people who understand the principles that govern their successful contribution.

Perhaps the largest mistake made by corporations over the last three or four decades has been the inappropriate focus on a specific tool-set as the basis for their improvement efforts. Tools do not answer the question of “why” only the question of “how.” Knowing the “how” without understanding fully the “why” leaves people waiting for instructions and powerless to act on their own.

The Shingo model may be used as a benchmark for what excellence at the highest level should look like. It may be used to align all elements of an organization around a common set of guiding principles and a proven methodology for transformation. Some use the Shingo model as the basis for organizational assessment and improvement planning. A few use the Shingo model as a way to recognize their associates for excellent work, and others use it to demonstrate to current and prospective customers that they can compete with anyone in the world. Some use the Shingo model for all of the above.

Principles of operational excellence are the only foundation on which organizational culture can be built with confidence that it will stand the test of time. Cultures built on principles and eliminate much of the normal variation of business and, to a large extent, become more predictable in their ability to execute on business strategy.

For organizations to be successful over the long term, leaders must deeply and personally understand the principles that govern their success. Furthermore, they must ensure the behaviors of every person who contributes to the business are in harmony with these principles. In short, the organizational culture they build must be grounded in correct principles

Just for additional information, here are some organizations with whom The Singo Prize for Operational Excellence has engaged: Autoliv, The Boeing Company, Boston Scientific, Caterpillar Inc, Daimler, Delphi, GE, Goodyear, Jaguar Land Rover, Johnson & Johnson, John Deere, OC Tanner, Cleveland Clinic, Denver Health, Lehigh Valley Healthcare, Toyota Memorial Hospital, Royal Bank of Scotland, Stephen Covey Group, Verizon, UL, Export Development Canada and many more.

The Shingo Model - Cultural Enablers

Cultural enablers make it possible for people within the organization to engage in the transformation journey, progress in their understanding and, ultimately, build a culture of operational excellence.

Operational excellence cannot be achieved through top-down directives or piecemeal implementation of tools. It requires a widespread commitment throughout the organization to execute according to the principles of operational excellence. A culture must be developed where every person in the organization demonstrates a high level of respect for every other person. Developing a culture of mutual respect and humility takes a consistent commitment over a sustained period of time.

Lead with Humility

One common trait among leading practitioners of operational excellence is a sense of humility. Humility is an enabling principle that precedes learning and improvement. A leader’s willingness to seek input, listen carefully and continuously learn creates an environment where associates feel respected and energized and give freely of their creative abilities.

There is also a need for humility on the part of all members of an organization. Ideas can come from anywhere. One can learn something new from anyone. Improvement is only possible when people are willing to abandon ownership, bias and prejudice in their pursuit of a better way.

Assure a Safe Environment

There is no greater measure of respect for the individual than creating a work environment that promotes both the health and safety of employees and the protection of the environment and the community. Environmental and safety systems embody a philosophical and cultural commitment that begins with leadership. When leadership is committed, then the organization creates and supports appropriate systems and behaviours.

In short, safety always comes first!

Develop People

People development has emerged as an important and powerful cultural enabler and goes hand-in-hand with principles of operational excellence. Through people development, the organization creates the “new scientists” that will drive future improvement. People development is far greater than just classroom training. It includes hands-on experiences where people can experience new ideas in a way that creates personal insight and a shift in mindsets and behaviour.

An organization’s leaders must be committed to developing people and expanding the knowledge base. Leaders come to realize that expenses for education and training are necessary investments for long-term health; as such, the commitment to this investment does not waver.

Empower and Involve Everyone

For an organization to be competitive, the full potential of every single individual must be realized. People are the only organizational asset that has an infinite capacity to appreciate in value. The challenges of competing in global markets are so great that success can only be achieved when every person at every level of the organization is able to continuously innovate and improve. Elimination of barriers to that innovation becomes the responsibility of management.

Fundamental to the Shingo model is the concept of teaching people the key principles (the “why”) behind everything they do. When people understand why they become empowered to take personal initiative. Managing a team of people who share a deep understanding and commitment to the key concepts and principles is much easier than managing the work of those who are only doing what they are told. Empowered employees who understand relevant principles are far more likely to make good decisions about the direction and appropriateness of their ideas for improvement.

Similarly, when employees have a clear sense of direction and strategy and have a real-time measure of contribution, they become a powerful force for propelling the organization forward.

Respect Every Individual

Respect is a principle that enables the development of people and creates an environment for empowered associates to improve the processes that they “own.” This principle is stated in the context of “every individual” rather than “for people” as a group. Respect must become something that is deeply felt for and by every person in the organization.

Respect for every individual naturally includes respect for customers, for suppliers, for the community and for society in general. Individuals are energized when this type of respect is demonstrated. Most associates will say that to be respected is the most important thing they want from their employment. When people feel respected, they give far more than their hands; they give their minds and hearts.

Respect for every individual becomes a powerful “why” for many of the values espoused by great organizations. For example, simply stating important values such as safety first, empowerment or open communication often fails to create uniform ideal behaviours throughout the enterprise. This is because these values are “whats” that fail to answer for people the question of “why.” The principle “Respect Every Individual” answers the question of “why.”

Example of ideal principle-based behaviour


  • All leaders routinely spend time at the actual work locations where the actual work is performed.
  • Leaders continuously seek the input of others, listen to their input and adapt their actions based on what they learn.
  • Leaders in all areas demonstrate a willingness to learn and publicly acknowledge important insights they have gained.
  • Leaders take responsibility for applying principles of operational excellence in their own lives and ensure these principles become the foundation of organizational culture.
  • Leaders engage people at all levels in defining ideal, principle-based behaviours and support managers in the alignment of all business and management systems.
  • Leaders develop systems to ensure they remain publicly accountable for their own principle-based behaviour seeking feedback from all levels and across the entire enterprise.
  • Leaders ensure products and services do not have an unintended negative impact on the sustainability of communities and the planet.


  • All managers constantly work with others to better align systems with ideal behaviours as defined by the guiding principles.
  • Managers act as coaches and mentors to others in the execution of principle-based systems and are constantly receiving personal and organizational feedback for improvement.
  • All managers are visible in the workspace and demonstrate an openness to listen and learn from others.
  • Managers across the enterprise ensure associates have the information they need to be successful in their work and push decisions out and down to the appropriate levels.
  • Managers create a safe and productive work environment, keeping the safety of all associates as the highest of all priorities.
  • Managers regularly review the skills and competencies required of all associates and work with each one to provide appropriate opportunities for associates to gain new insight.
  • Managers ensure appropriate systems are in place to protect the environment and support for the communities where they are located.


  • All associates, every day, demonstrate a commitment to the policies, principles and standards developed for the areas in which they work.
  • Associates seek out and learn from others in the organization including leaders, managers and peers.
  • All associates take full responsibility for their own personal development in relation to their contribution to the enterprise.
  • Associates demonstrate an eagerness to learn new skills, take initiative and share their learning and success with others.

The Shingo Model - Continuous Process Improvement

Continuous improvement begins by clearly defining value through the eyes of customers. Expectations must be clearly communicated so systems can be designed to meet customer needs. Every employee must know “what good is” whether his or her process is creating good product or service, and they must know what to do if it is not.

As associates learn to identify and eliminate waste, they will, by necessity, follow Dr Shingo’s advice: “Improvement means the elimination of waste, and the most essential precondition for improvement is the proper pursuit of goals. We must not be mistaken, first of all, about what improvement means. The four goals for improvement must be to make things easier, better, faster and cheaper.” Particular emphasis is placed on a quicker, more flexible response throughout the system.

The focus for continuous improvement cannot be only quality or cost but instead must incorporate all aspects of value as perceived by the customer, including innovation, quality, cost, flexibility quick delivery and a comprehensive view of environmental health and safety. Continuous improvement focused on the flow of value requires both scientific thinking and the capacity to identify and eliminate waste (things that interrupt the continuous flow of value).

Focus on Process

A process focus recognizes that all outputs, whether product or service, are created by processes acting upon inputs. This simple truth is often overlooked: Good processes will produce the intended output, as long as proper inputs are provided.

Process focus also helps focus problem-solving efforts on process rather than people. A complete shift to process focus eliminates the tendency to find the culprit (person) who made the mistake but rather leads to a pursuit of the real culprit (process) that allowed the mistake to be made. Thus, process focus also supports the cultural enablers, creating an environment where learning from mistakes can become a powerful element of continuous improvement.

“Simplicity is the ultimate sophistication.” Leonardo Da Vinci

Embrace Scientific Thinking

A focus on process lends itself to scientific thinking, a natural method for learning and the most effective approach to improvement. All associates can be trained to use scientific thinking to improve the processes with which they work, creating a culture that provides common understanding, approach and language regarding improvement. Scientific thinking is also results-based, placing a premium on defining and communicating desired outcomes throughout the organization.

There are a variety of models for scientific thinking, such as PDCA (plan, do, check and adjust), the QI Story, A3 thinking and DMAIC (define, measure, analyze, improve and control).

Flow and Pull Value

Flow thinking is the focus on shortening lead-time from the beginning of the value stream to the end of the value stream and on removing all barriers (waste) that impede the creation of value and its delivery to the customer. Flow is the best driver to make processes faster, easier, cheaper and better. Other potential drivers such as unit cost or process variability are too narrowly focused, distorting priorities and delivering suboptimal results. A cost focus is particularly dangerous when it creates perverse incentives and budget manipulations incidental to actual improvement.

Pull is the concept of matching the rate of production to the level of demand, the goal in any environment. Yet pull is not feasible or cost-effective without the flexibility and short lead times that result from the flow.

Flow and pull create enormous positive benefits in all aspects of any business. Focusing on flow will lead to improvements, including better safety and morale, more consistent quality with fewer defects, increases in on-time delivery and flexibility and lower costs, without running into the traditional trade-offs. In addition, daily and weekly results become more consistent and predictable.

Assure Quality at the Source

Assuring quality at the source is the combination of three important concepts:

  1. Do not pass defects forward, 
  2. Stop and fix problems and 
  3. Respect the individual in the process. 

Defects are a source of instability and waste so assuring quality at the source requires the establishment of processes for recognizing errors in the process itself. Organizations must commit to stopping and fixing processes that are creating defects, rather than keeping products or services moving while planning to fix the issue later. Proper use of the human element in the process of thinking, analysis, problem-solving and the implementation of countermeasures is vital to continuous improvement.

Seek Perfection

It is important to understand that the continuous process improvement journey has no end. This explains Dr Shingo’s philosophy that one should always look for problems where there doesn’t appear to be any. This is contrary to the traditional belief: “If it isn’t broken, don’t fix it.” The pursuit of perfection reveals that there are always opportunities for improvement. There is always waste, and the more a process is observed the more waste will be seen. While focussing on process guides and directs the improvement efforts, seeking for perfection is the engine that keeps improvement energized and moving forward at an aggressive pace. The term problem-solving may imply that after a solution is implemented, improvement is done. Seeking perfection and scientific thinking combine to find countermeasures, not game-ending solutions, and then revisits the issue, again and again, pursuing perfection without really expecting to find it.

The pursuit of perfection reveals that there are always opportunities for improvement

Stabilize Processes

Stability in processes is the bedrock foundation of any improvement system, creating consistency and repeatability. Stability is a prerequisite for improvement providing a basis for problem identification and continuous improvement. Almost all of the continuous improvement principles rely on stability. Stability is the precursor to achieving flow. Many of the rationalizations for waste are based on the instability of processes as if they are beyond our control. Instead, we should apply the basic tools available to reduce or eliminate instability and create processes that enable the identification and elimination of waste.

Standardize Processes

While stability is a necessary precondition for creating flow and improvement, standardization builds control into the process itself. Standardization is the supporting principle behind maintaining improvement, rather than springing back to preceding practices and results. Standardization also eliminates the need to control operations through cost standards, production targets or other traditional supervisory methods. When standardization is in place, the work itself serves as the management control mechanism. Supervisors are freed up for other tasks when they are not “required” to monitor and control the work process.

Insist on Direct Observation

Direct observation is a supporting principle tied to scientific thinking. It is, in fact, the first step of the scientific method. Direct observation is necessary to truly understand the process or phenomenon being studied. All too frequently, perceptions, past experience, instincts and inaccurate standards are misconstrued as reality. Through direct observation, reality can be seen, confirmed and established as the consensus.

Focus on Value Stream

Flow and pull value combined with the focus on a process lead to the necessity of defining value streams and focusing organizational attention on them. A value stream is the collection of all of the necessary steps required to deliver value to the customer. Defining what customers value is an essential step to focus on the value stream. Clearly understanding the entire value stream, however, is the only way for an organization to improve the value delivered and/or improve the process by which it is delivered

Keep It Simple and Visual

In society today there is frequently a bias toward complex solutions and a premium paid to those who seem to manage complexity well. However, it is usually the case that better results at a lower cost can be achieved by simplification. Dr Shingo’s life work in mistake proofing is centred on this principle. Many of the seven forms of waste are in fact the result of information deficits. Making information visual is the supporting principle that when combined with simplification solves the information deficits.

Identify and Eliminate Waste

Identification and elimination of waste is a practical concept for making processes flow, thus it becomes a primary focus of continuous improvement. Waste elimination is a powerful supporting principle because it is easily understood by everyone associated with a value stream, compared to the complex concepts and computations often associated with the cost per unit, cost variances, statistical variability and other complex metrics. Focusing on the elimination of waste will consistently drive appropriate behaviour, while the wrong focus can frequently become a barrier to improvement, large inventory write-downs, fire sales or scrap.

One way to view waste is that it is anything that slows or interrupts the continuous flow of value to customers. In the end, identifying and eliminating waste is a concept that effectively engages the entire organization in the continuous improvement effort.

No Defect Passed Forward

This concept is essential for operational excellence from many different points of view. From a leader’s perspective, it requires great courage to stop the process long enough to understand the root cause and take counter-measures that prevent the process from reoccurring. For the leader, this often means trading any short-term loss for substantial long-term gain. From a manager’s perspective, systems must be in place to ensure that any result that varies from the standard, even slightly, creates an expectation of and support for immediate action. We often call this “swarming.” From an associate’s point of view, “no defect passed forward” requires a mindset of ownership and accountability. If standards are clearly defined, every person should know what good is.

Leaders and managers should role model then create the conditions for associates to develop the mindset of personal integrity; meaning, that no one would ever knowingly or willingly forward the outcome of their valuable contribution to someone else if it contained the slightest variation from the standard. This supporting concept feeds the mindset and tools of continuous improvement and creates the conditions for seeking perfection. It is possible to achieve perfection in the application of this concept.

Integrate Improvement with Work

As the migration toward a principle-based culture occurs, the activities and approaches for continuous improvement become a part of the everyday work of every employee in an organization. Associates become “scientists” who continually assess the current state of their processes and pursue a better future state that will enhance the value (or eliminate the waste) and thus pursue perfection. Each person in an organization performs daily work. When improvement is integrated with work, each person accepts responsibility for improvement of the daily work processes.

Executives are responsible for improving strategy-setting processes or perhaps resource alignment processes. They are primarily responsible to deploy mission-critical strategy and metrics down into the organization such that every person not only has a clear line of sight to what matters the most but are also motivated by the mission in a way that creates a compelling case for improvement.

Managers are responsible for improving quality systems, or performance development systems or value stream flow. Line workers are responsible for improving their cycle times, or quality of work or yields. Integrating improvement with work is more than assigning responsibility. It entails the creation of standardized work that defines systems for improvement.

Rely on Data & Facts

Shingo emphasized the importance of being data-driven in the pursuit of continuous improvement. He frequently shared examples of specific situations where data was collected, but it was not the correct data or the data wasn’t actually being used in the improvement process.

Finally, he was adamant that the understanding of the actual process be so detailed that when implementing a change in the process, the improvement, as evidenced by the data, could be predicted. Thus, reconciliation is required between the predicted results and the actual results, making the improvement process truly data-driven. The principle is that when data is treated loosely or imprecisely, there is a tendency to leave potential improvement on the table or, even worse, to not achieve any improvement at all.

Examples of Ideal Principle-based Behavior


  • Every leader devotes a significant amount of his/her time (up to 80 per cent) ensuring the principles of continuous improvement are deeply embedded in every facet of the organizational culture.
  • Every leader consistently evaluates their own behaviour related to each of the principles.
  • Leaders ensure continuous improvement is a part of their daily standard work and are accountable to others for their improvement.
  • Leaders in all areas create a healthy tension between celebrating accomplishments and setting goals to move to the next level.
  • All leaders in every area of the organization encourage the establishment of stretch goals and encourage managers and associates to push themselves to levels of performance that do not seem possible.
  • Leaders consistently ask for and expect to see the application of appropriate tools to understand root cause prior to implementing countermeasures.
  • Leaders expect and support the role of managers in designing and constantly improving systems at the business, management, improvement and work levels as the first course of action when results are less than expected.
  • Every leader understands and balances the organizational focus on both behaviours and results, holding themselves and others accountable for both.


  • Managers in all areas devote a significant amount of their time (up to 80 per cent) ensuring the management systems of the organization are perfectly aligned to drive ideal principle-based behaviour.
  • All managers participate with associates as required on improvement initiatives.
  • Managers demonstrate knowledge of appropriate tools and use them regularly to solve problems related to their areas of responsibility.
  • All managers watch for and appropriately recognize associates for both demonstrating ideal behaviour and for achieving business goals.


  • Every associate in every part of the organization is engaged every day in using the appropriate tools of continuous improvement to eliminate waste and maximize value creation.
  • Associates everywhere seek to understand the principles (the why) behind the tools (the how); they learn and use that knowledge to continuously improve the application of the tools.
  • All associates demonstrate the courage and integrity, to tell the truth, stop production and be accountable for defects they observe or create themselves.
  • Associates share their expertise in developing best practice standard work and demonstrate the discipline to follow it until a better way has been developed.

The Shingo Model - Enterprise Alignment

One of the most significant failures of modern management is its focus on strategy and planning without considering execution. To succeed, organizations must develop management systems that align work and behaviours with principles and direction in ways that are simple, comprehensible, actionable and standardized. We call this “Principle-based Strategy Deployment.” Individual leaders cannot develop individual approaches to management without introducing massive waste into an organization.

Strategy deployment requires a management system built around scientific thinking, with more emphasis on cycles of learning than on perfect plans. It is essential to establish effective communication, a process for gaining consensus, clear accountability and systems where execution and countermeasures are planned and tracked, whether through PDCA or a similar methodology. In essence, operational excellence is the definition of successful strategy deployment when business strategies are aligned with correct principles.

The sum of individual efforts rarely even approximates the effective alignment of the pieces into a single integrated whole. Creating value for customers is ultimately accomplished through the effective alignment of every value stream in an organization.

Create Constancy of Purpose

Almost every aspect of any organization is always in a constant state of change. Customers change, customer’s expectations change, competitors change, markets change, technology changes, leadership and management changes, processes change, products change, strategies change, even values or the implied meaning of those values change. Even knowing this, the first of W. Edwards Deming’s “14 Points” is to create constancy of purpose. How is this possible?

Purpose, at the highest level, answers the question: “Why does this organization exist?” It is incumbent upon leaders to find agreement on the philosophical and strategic direction that provides a unifying vision. This sense of direction helps people keep their eyes on the horizon so that when tactical decisions require a temporary detour, they understand why and can contribute to getting back on track.

The second category for where constancy of purpose can be achieved is in the establishment of the guiding principles upon which the organization is grounded. Principles are universal, timeless and self-evident laws that govern the consequences of our actions. The degree to which principles have adhered will always impact the long-term success of any organization. Leaders must come to understand which principles have the greatest impact on their results and then make certain every aspect of the organization is aligned to drive behaviour that is in greatest harmony with the principles.

Having established direction and guiding principles, a leader must align strategy and performance metrics broadly and deeply into the organization. A system must be built to ensure constant communication, both up and down.

Changes in direction, guiding principles and key metrics should be treated like changes in the national constitution. Organizations that frequently redirect philosophies and strategies fail to recognize the tremendous waste associated with instability, fluctuation and, perhaps most importantly, the loss of human commitment.

Think Systemically

Systemic thinking is the principle that unifies all the other principles of operational excellence and enables organizations to sustain their culture of continuous improvement and develop a constancy of purpose.

Systemic thinking requires organizations to both analyze and synthesize. Analysis, or convergent thinking, is focused on taking things apart to see what can be learned from the various components. We call this “looking into things.” Convergent thinking is what leads us to focus on the “how.” Synthesis, or divergent thinking, is focused on seeing how things might work together. We call this “looking out of things.” Divergent thinking is what leads us to focus on the “why.” Operational excellence requires both.

Leaders realize that the impact of synergy — how things work together — is far greater than the sum of the parts. As managers design and align systems with correct principles, they must shift from thinking purely analytically to thinking systemically.

As managers move into systemic thinking, the full value of operational excellence is realized across the organization, the enterprise and ultimately the entire value chain. As associates adopt systemic thinking practices, they gain the necessary perspective to safely initiate improvement projects on their own. Ultimately, this understanding is what allows improvement effort to transition from being solely top-down to more of a grassroots effort.

See Reality

This is a very important concept. Most managers and leaders consider themselves quite capable of seeing the world around them and assessing the current situational realities. However, Dr Shingo teaches that people can have blind spots created by long-held paradigms, experience, history, expectations, etc. Thus the practice of “go and see” was developed based on the principle that reality needs to be perceived and understood based upon the five senses. Most organizations create barriers that make it very difficult for people to see and tell the truth about what they see.

A recently retired US senator wrote that having travelled on numerous trips with other political and military leaders to areas of serious world conflict, his greatest disappointment was that virtually all of their assessments of progress were greatly distorted from the actual data they observed.

Further, most organizations unintentionally build cultures that prevent the free flow of information that communicates an honest picture of reality. Max De Pree said, “The first responsibility of a leader is to define reality.” A leader must establish systems that make organizational performance and associate behaviour transparent to all.

No leader can effectively lead without having a firm grasp of the current business realities.

Focus on Long Term

Jeffrey Liker highlights the principle of long-term focus, which provides a foundation of stability in the executive suite that can be achieved in no other way. When an organization creates a long-term focus, it is more likely that decisions will, in fact, pursue safety, quality, delivery and cost rather than just monthly or quarterly financial targets or bonus cut-offs. In conjunction with taking care of the short- and medium-term priorities, thinking in terms of 20- to 50- year legacy goals significantly reduces the tendencies for knee-jerk reactions to urgent pressures.

Align Systems

From the stakeholders’ perspective, the full potential is realized only when most critical aspects of an enterprise share a common platform of principles of operational excellence, management systems and tools. While it is expected that organizations develop some unique elements of their local culture, it is also expected that principles become common, unifying part of each locale. Top-level leadership, staff and business processes should exemplify the same principles, systems and tools as do the operational components of the enterprise.

Align Strategy

Policy deployment is a planning and implementation system, based on scientific thinking, employee involvement and respect for the individual. At the strategy level, policy deployment provides leadership with the necessary principles, systems and tools to carefully align key objectives and execution strategies while empowering the organization through cascading levels of detail to achieve those objectives. Because so many people are involved, clarity is critical. An aligned strategy helps keep everyone, literally, on the same (single) page and pointed in the same direction.

Standardized Daily Management

The concept of having some level of detailed work description for how to actually do daily work applies at all levels of the organization. Regardless of the perception among many leaders, their work can and should be organized into standard components.

Standard daily management creates a reference point from which continuous improvement can be based. Standard daily management can lead to greater process control, reduction in variability, improved quality and flexibility, stability (i.e. predictable outcomes), visibility of abnormalities, clear expectations and a platform for individual and organizational learning. Standard daily management enables creativity that is focused and controlled rather than ad hoc.

Leaders who follow standard work send a clear message that they are serious and no one is above continuous improvement.

Examples of Ideal Principle-based Behavior


  • All leaders share a common, clear and compelling vision of the future and talk about it in a consistent way everywhere they go.
  • Leaders create and consistently execute a system of “catch the ball” to present ideas on strategy down and across the organization, receive feedback and build organizational consensus.
  • Leaders establish a simple system of metrics and accountability that aligns and prioritizes the work, decision making and improvement efforts of the organization.
  • Leaders focus both on results and behaviour, setting targets and accountability for both.


  • Managers ensure a continuous flow of information (both horizontally and vertically) to associates, making sure they fully understand the context for their work and the goals they set.
  • Managers develop systems to ensure all associates understand strategy, tactics and metrics and know how their work contributes.
  • All managers ensure people have enough information and a broad enough perspective to know the implications of their recommendations and actions.


  • Associates ask questions that expand thinking to the broader context beyond their own jobs.
  • Associates seek job experiences that broaden their perspective.
  • All associates know the performance and behavioural metrics for their area, use them to create personal and team improvement and connect their work with company goals.

The Shingo Model - Results

All leaders of organizations share one common responsibility: they are responsible for results. Great results are the outcome of following the principles that govern the results. Ideal results require ideal behaviour. This is what we call operational excellence.

Create Value for the Customer Every aspect of an organization should be focused on creating value for the customer. It is helpful to consider this true-north concept that should guide decision making and continuous improvement. An organization should drive all aspects of value, including quality, cost, delivery, safety and morale.

Measure what matters

Historically, measurement has been focused on management – what management needed to know to be able to plan, organize and control. Within a model where widespread involvement is essential for continuous improvement and consistent performance, it is important to define measures that matter to those who will be using them.

Therefore, line associates need different measures than leaders responsible for the overall enterprise. Many thought leaders on measurement have suggested the new measurements need to:

1. Be directly tied to strategic priorities – move the dial,
2. Be simple and easy to capture,
3. Give timely feedback that is tied to the cycle of work, and
4. Drive improvement.

Measures that matter can be created throughout the organization to assure that everyone is focused on the appropriate strategic activities and driving continuous improvement that moves the whole enterprise ahead.

Align Behaviors with Performance

Ideal behaviour drives long-term results. This happens when the systems are aligned with principles of operational excellence. Managers should help each person anchor their own personal values with these same principles. Personal values are what ultimately drive individual behaviours. Leaders are responsible for creating the environment and the process for people to evaluate the correctness of their own values relative to the performance results required of the organization.

One business set a goal to reduce customer complaints only to find that as they did, they began to lose valuable customers. The measure was driving behaviour that made complaining about such a painful experience that they just stopped calling. A better measure might have been to increase the number of complaints so that every single disappointment is given an opportunity to be resolved.

Identify Cause and Effect Relationships

When we want to make a car go faster, we simply press more on the gas pedal. So, the “dial” is the speedometer. What moves the dial? Pressing on the gas pedal. Why does this work? Because there is a physical linkage from the pedal to the engine to the axle. There is a clear cause-and-effect relationship. Organizations must follow the linkages to determine the cause-and-effect relationships and how goals can be achieved. This is the same concept as root-cause analysis but applied to create value.

Examples of Ideal Principle-based Behavior


  • Leaders make sure the company scorecard is balanced between results and behaviour.
  • Leaders ensure the voice of the customer is clearly heard throughout the entire organization.
  • Leaders systematically discuss all business results with employees, encouraging questions and discussion.


  • All managers implement systems that place value creation and waste elimination at the heart of management and improvement efforts.
  • Managers routinely discuss with associates the relationship between actual results and the systems and principles that are creating them.
  • Managers make sure that established metrics are aligned upward and side-to-side and are understood and committed to by the people who affect them, so people can see instantly where they are relative to the targets and they know how to move the dial.


  • All associates systematically review results and ask questions to understand cause-and-effect.
  • Associates use results metrics to prioritize and take personal initiative to make improvements that impact the areas where improvement is needed most.
  • Associates demonstrate a strong commitment to providing the greatest value for customers with the least amount of nonvalue-added resource.
  • All associates seek to understand issues from the customer point of view and strive to maximize the uninterrupted flow of value to them.

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