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.

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