The Kaizen Pyramid – Top-Down and Bottom-Up

Small and continuous improvements lead to sustainable long term results. People hear this over and over again, and yet many never put such thinking into action. Some people even have an advanced understanding of the Kaizen philosophy of continuous self-development, but they never experience the benefits in reality. As someone who coaches organizations in these methods, this disconnect between ideas and implementation is a major challenge. One great model I've found to address this is known as the “Kaizen Pyramid.” This model was created by Toshihiko Miura, my co-author on our book “True Kaizen.”

The Disconnect Between Top-Down and Bottom-Up Strategy

How do you build a pyramid? The simple answer is, “From the bottom up.” We seem to know this intuitively when it comes to physical structures. You need a foundation or else everything will fall over. Why then do people have so much trouble understanding the importance of developing the frontlines of their companies? True development means that frontline people must encompass leadership of their own processes with their own authority and resources to manage themselves (self-managed). Companies, much like buildings, need architects. So, in terms of people and planning, how do you build a pyramid? In the organizational sense, you might say, “From the top down.” The disconnect between top-down objectives and bottom-up implementation has been the downfall of many attempted Kaizen transformations. It essential to absorb the principle that objectives need to be top-down to initiate a more dynamic bottom-up cycle that will complement further top-town direction.

Many transformation attempts start with a great plan and often the initial results from this top-down approach are dramatic, leading people to believe that the greatest results happen this way. It is true that improvements at the top have the biggest impact, since they directly affect the entire organization below them. But these improvements are few and far between. The result is that, while greater in scale, they are limited in quantity and unsustainable without support from the bottom-up. It's like trying to build a tower of blocks one atop another in a straight line. You will reach higher in a shorter amount of time, but the heights you can reach will be limited by the limited-stability of your foundation. Reach too high and the tower will fall. If you want to build higher, you need to continuously expand your foundation. This is where the pyramid analogy comes from. But I should add that the composition of the base of the pyramid versus the base in the future is different in size, consistency, capability, knowledge, and resources for the context and time the pyramid is needed.

The Kaizen Pyramid Model To Connect Top-Down and Bottom-Up

When we coach an organization, we always get top leadership involved first (top-down). This involvement, however, starts by going straight to the frontlines so the leaders can learn the true current state on the gemba compared tothe needs of the shareholders and customers. The leaders go to the respective activities to assess the Kaizen Pyramid as it is in the moment. From there, any problems are traced upstream to get to the root cause. This is how leaders gather information to make the right decisions, so the top-down strategy is actually based on gathering information from the bottom and going up. This strategy then needs to be “cascaded” down to different levels and departments. Cascading strategy ensures the multitude of small improvements at the base of the pyramid ultimately contribute to expanding, reacting, and strengthening the organization's capabilities in order to realize the high level targets defined at the top. This is the goal behind Hoshin Kanri (strategy deployment). For all the visual management tools and X-matrices used for this process, the basic definition of Hoshin Kanri is as follows:

• Top-leadership defines strategy.
• Top-leaders discuss this strategy with the mid-level leaders under them to form consensus (“catchball”).
• Mid-level leaders create contextualized action plans to achieve the agreed upon strategy (ie 10% increase in profitability = 22% increase in productivity for assembly area).
• Mid-level leaders repeat this contextualization of actions needed with those who work under them.
• This process is repeated until you reach a consensus and create action plans on the respective frontlines.

As you can see, the definition of strategy starts as top-down, but the action plans are defined from the bottom-up contribution through collaboration.Top leadership must be prepared to support the frontlines by making sure their strategy is contextualized and granulated to each member of the company. Most of all, they need to make sure the goals are achievable.

PDCA is CPDA-PCDA-DACP

Depending on the size of the organization, you will have any number of action plans as you deploy strategy down the hierarchy. Each of these action plans will have to be continuously evaluated and revised based on the PDCA problem-solving cycle. The challenge is then to keep these ongoing cycle's of Plan, Do, Check, and Act in alignment and contextualized for each layer of leadership and all the way down to the self-managed team members. This way, when new problems are detected and solved, they can be prioritized toward achieving organizational goals. And the cycle of feedback and information flow supports the PDCA cycle. In the same way that a number of small gears turn the hands of a clock, the numerous PDCA cycles toward the base of the pyramid must drive the overall problem solving to meet the top-level goals. To ensure that everyone's efforts are aligned with the overall plan for the organization you should think of the entire organization as one overall PDCA cycle which encompass all others. For this, the different levels of the pyramid represent different phases of PDCA. Leadership is responsible for planning (P) to define the high level strategy and checking (C) to make sure that the frontlines are on the right track to accomplish the plan. (Keep in mind that the first PDCA cycle starts with “Checking” the real current state to contextualize the ability to reach an achievable “Plan” as Jun Nakamuro explained in his article “Re-Translating Lean from Its Origin.”) The frontlines meanwhile are responsible for doing (D) the actual value-added work that must be done to achieve the plan's objectives. They also take action (A) to revise and establish new standards to close the gap between the current state and the goals set by leadership.

Expand Your Base to Reach Higher

Your ability to achieve top-level Kaizen is dependent on the capacity of the frontlines. If you want to reach higher goals as an organization, you need to expand the base of your pyramid by investing in the people-development and capabilities of the frontlines. Your goal, regardless of strategy, is to grow your Kaizen Pyramid by creating self-managemened people who grow in their capabilities while being productive, meeting the demands of the customer, and expanding their roles and responsibilities. As they contribute, they will also be rewarded for this growth.

Your own growth is a dependent derivative on the growth of those you lead. Training frontline people in multiple skills and cultivating them to solve their own problems will not only increase their capacity as an autonomous self-managed workforce; it will free up leaders to focus on developing an ever greater organization that will lead to a more prosperous life for everyone involved.

This is my understanding of Kaizen, which I communicate and share with my community. The concept of the Kaizen Pyramid is explained with detail in Chapter 10 of “True Kaizen” as well as the new book I am collaborating on with Jun Nakamuro and Will Homel.