The Management Brief — January Summary

In January, The Management Brief examined the complex relationship of strategic direction and meaningful execution from different perspectives. Most of the executives that participated this past month also will be presenting at the Lean Summit 2025 in Atlanta on March 5 and 6.

?A key takeaway from the January’s content is that there is no single way to transform and improve:

Lean Transformation: A Long and Winding Road

Josh Howell reflected on the improvement path that a business unit of Turner Construction traveled. It was not a well-defined journey with specific initiatives to take at predetermined dates. Instead, the lean transformation leader confronted check-and-adjust moments (“turning points”) that ultimately led to the development of a structure comparable to LEI’s Lean Thinking/Transformation Framework (LTF) — and significant operational improvements.

In establishing LTF, Turner reactively and sequentially identified the need for and then applied three components necessary for a lean management system: a daily management system, A3 problem-solving, and hoshin kanri. Many company executives and lean consultants can debate endlessly over the deployment sequence for these lean foundational requirements. But in Josh’s telling of the Turner story, we see that the best approach was one entirely dictated by need at the moment and not by ingenious design. In following a similar quest for lean transformation, your path and turning points may lead you and your company to a sequence unlike Turner’s evolution. And that’s the point: it’s your lean transformation.

Building a Resilient Business with Hoshin Kanri and Problem-Solving

In this podcast, Geoff Miller, CEO of Grand Rapids Chair, discusses with Mark Reich of LEI how this family-run company has been on a lean journey for more than 25 years — but real transformation did not occur until understanding hoshin kanri. Geoff describes how, prior to leaning about hoshin kanri from LEI, he thought he knew what lean was; his company had a one-page strategic plan and every intention of achieving it; but eventually realized that the company did not do anything that they had planned. “Without a meaningful management system, the strategy was never worked on in a purposeful way,” he says.

The hoshin kanri process at Grand Rapids Chair had a “messy” start, but is now in its fourth year, and with each annual cycle the process has gotten progressively better. “Today it’s a remarkable difference from strategy planning prior to hoshin. Today you can go to Grand Rapids Chair and very quickly assess what is the strategy, what is being done to work on the strategy, and is it working or not those activities.” Hoshin kanri helped the company to stabilize and then significantly improve quality and reliability issues coming out of the pandemic, as well as grow back business heavily focused on restaurants and hotels.

The company has a three-year target strategic plan and uses hoshin kanri to break that down and fine tune it to a one-year plan and objectives. The annual planning cycle looks to see if goals were achieved and if revisions are necessary for the next year. That information is communicated via a strategic A3 (drafted by Geoff). Multiple rounds of catchball are used to present the A3 to the leadership team and gather input: “Are these the right things to do?” Helping hoshin kanri succeed was the development of an obeya in the second year of hoshin kanri, which visualized the work being done and allowed them to see if actions chosen were being accomplished.

Geoff’s advice to leaders seeking to implement hoshin kanri: “You have to model the way and commit yourself to the problem-solving tools within hoshin kanri. If you just leave it to other people to do, I believe they won't do it because they don’t see you as the leader doing it, and you’re probably not going to be successful.”

Today there is clarity around the company’s management system, and it’s Geoff’s responsibility as CEO to make that happen and communicate the organization’s mission. In doing so, leadership and employees at Grand Rapids Chair are able to answer four questions: “What is your organization’s problem to solve? What is your vision of where you’re going? And then what are the choices or your strategy, and how are you going to get there? ... Every organization needs to have some type of management system to bring clarity to those four things so people want to be in the organization and help the organization feed into the four things.”

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Reflection on DOGE and Efficiency

?Jacob Stoller urged individuals leading the new U.S. Department of Government Efficiency (DOGE) to “examine the accomplishments of thousands of lean organizations in the public and private sectors.” Rather than establish aggressive objectives (cut $2 trillion from federal spending) based on perceptions of the current state and wedded to past approaches (i.e., “mass headcount reductions”), Elon Musk and others leading DOGE should study the lean playbook.

There is a clear need to reduce government inefficiencies, acknowledges Stoller, but not by jeopardizing the quality of the complex network of services that U.S. citizens depend on for everything from law and order and national defense to safe food and drugs and public health. Lean organizations have significantly reduced waste, optimized processes toward a clear purpose, and improved both quality and efficiency.

Examining the problem as lean organizations do, DOGE leaders will learn that government inefficiencies (waste) are not independent line items to be cut, but embedded in complex systems of interdependent and interactive components; this requires collaborative work across departments to identify true root causes. Waste also is distributed in tiny increments and does not necessarily appear directly as costs to cut but as problems to be solved (e.g., defects, redundancies, delays, inaccurate information) by people who work in the processes.

“Eradicating waste on a significant scale, therefore, requires that organizations transform their entire workforces into armies of problem-solvers,” writes Stoller. “To do this, leaders must earn the trust of the workforce and convey enormous clarity about the value of the work and what constitutes waste. This sets the stage for building collaborative team cultures in which employees at all levels are trained and empowered to initiate improvements in their work processes.”

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Managing on Purpose: Preview

In this webinar, Mark Reich discussed his upcoming workbook, Managing on Purpose, an essential guide for leaders aiming to develop and execute strategy, develop leaders, and innovate across their organizations. Mark — with over 23 years of experience with Toyota, including process owner of hoshin kanri for North America, and more than a decade as a senior coach at LEI — described the detailed framework put forth in the book for implementing hoshin kanri and managing the cultural shifts required for effective and sustainable strategy deployment:

1. Determine where and how to get started with hoshin kanri.
2. Gather inputs for and develop the corporate hoshin (objectives and associated activities, targets, leads, and support).
3. Define the specific implementation approach and communicate the corporate hoshin with strategy A3s, facilitating the development of department hoshin.
4. Undertake activities to achieve hoshin objectives, including frontline problem-solving with A3s to hit targets, and regularly monitor progress with the support of an obeya.
5. Conduct a midyear reflection (what needs changed based on internal and external events) and yearend reflection (identify corporate objectives that should remain for the coming year, get moved to a department hoshin, be standardized to daily management, or are simply no longer needed).
6. Sustain and improve the hoshin kanri process for the long term.

Mark also fielded a variety of questions about hoshin kanri from webinar attendees, including:

What are the challenges encountered when putting hoshin kanri into play?

“The two biggest areas that I saw that organizations [struggle with] outside of Toyota were primarily the vision representing where the organization was going was, at best, on a wall, and sometimes it’s on a website. There was no methodology in many organizations to take that ... and define actionable problems and then execute on those issues. Execution is where the challenge comes in. It’s awesome for a company to set great aspirations. But there is always a gap between what they want to do and what they’re capable to do. And how you bridge that gap is the second component that was different. Nobody talked about people development. In Toyota those were interconnected.”

What do you think about including incentives and rewards for the achievement of a hoshin objective or target?

“In Toyota, we rewarded achievement of objectives, and we also rewarded how you achieve objectives. It was as much about the behavior of the leader — capable leaders who can work across functions, who can lead without authority. Has the organization incentivized those behaviors? Typically what they incentivize is you get a target, and often it’s a financial one... We have to think beyond if they achieve a number or not.”

What have you seen that is unique about implementing hoshin kanri in a small company?

“I don’t think there is so much uniqueness. The process can be similar. Obviously, if you have a top leadership team of five people that run the company, for example, in a smaller company those people will probably be communicating and interacting more frequently. You’re not going to need layers of hoshin. If you have a corporate hoshin that encompasses the organization, that’s probably enough... Obviously, if you’re working in a smaller company, the whole company has to be involved and the CEO needs to be leading it for a small organization.”

How many years does it take organizations to become really capable with hoshin.

“Don’t get nervous when I say this, it takes three... The PDCA cycle for hoshin is a year. So if you’re in manufacturing and you put in a new process, is a team member going to follow that if they do it once? No, they need to practice. I know this from personal experience, you can get impact in six to 12 months, but that does not mean that the process is yet stable. For it to be robust, you need to go through this a few times.”

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Next Month

The February releases of The Management Brief will include:

• The Introduction chapter from Managing on Purpose
• In-depth podcast with Isao Yoshino, who spent decades at Toyota and was a driving force behind the company’s success with hoshin kanri
• An interview of Mark Reich by LEI CEO Josh Howell that explores Mark’s experiences at Toyota and his upcoming presentation and panel discussion at the Lean Summit 2025.