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


Leaders


  • 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

  • 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 

  • 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.

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