Strategy deployment and daily management from a Lean perspective

Developing a good strategy and deploying it is always a challenge for companies of all levels and industries. It is a fundamental process in the Lean System – a management philosophy that originated at Toyota and is now adopted by companies in diverse sectors all over the world –, a system that aims to identify the activities that add value for customers (what they are really willing to pay for) and to eliminate waste (what they are not willing to pay for).

In this context, more than creating a good strategy, the great challenge for leaders is how to deploy it. This means engaging people and managing in the shortest possible time, in order to know whether what has been achieved is in line with what was planned.

In the Lean System, for this to happen, first of all everyone in the company – from the doorman to the president – must know what needs to be done, and how and when each stage, objective and indicator must be met in order to fulfill the requirements of what was planned.

That is because in a truly Lean company, developing a strategy is a much more participative, group-coordinated effort than the initiative of an isolated leader, however brilliant he or she may be.

And to carry this out, there is a fundamental concept: the “Daily Management” of this strategic deployment. In the Lean System, strategy deployment is defined by the term “hoshin kanri”, a Japanese expression meaning “management by policy”.

Daily Management occurs when, in the company's everyday life, leaders and employees are able, in the shortest possible time, to track through the key indicators whether they are reaching the goals defined in planning. This requires “visual management”: the installation of standardized boards, easy to read and interpret, in an easily accessible location.

Another important process in Daily Management is running a routine of brief meetings, daily or every shift, of 15 to 20 minutes, for example, to check whether the goals are being met and whether problems are being solved – immediately or, at the very least, referred for future resolution.

This process generally takes place at three levels: in the areas (between team members and their supervisors), in the departments (between supervisors of interconnected areas) and in the plant as a whole, between management and the sub-leaders. These meetings should always take place, as we call it, “at the foot of the board”, which is where the main production indicators are recorded – to discuss, for example, the previous day's results, the progress of problem solutions and the necessary realignments of the strategy.

It is important to make clear that Daily Management is not done in “closed rooms”, with indecipherable reports and minutes. Meetings should always take place with people standing and facing “the board”. In this context, all the boards should be on the shop floor or close to the administrative areas they refer to.

To help in this process – considering that Daily Management also aims to identify and solve “problems” –, a fundamental “tool”, also typically lean, is the so-called “A3”.

It is a practice pioneered by Toyota, in which every problem found in Daily Management, as well as its analyses, corrective actions and action plans, is written on a single sheet of paper (A3 size), usually using charts and figures. At Toyota, A3 reports evolved into a standard method for problem solving, status reporting and planning exercises. A3 is the international term for a sheet of paper 297 millimeters wide and 420 millimeters long. In Daily Management, however, A3s must be “alive”. That is, they must actually be used and not be mere “decorations”.

In short, Daily Management, if well applied, generates a series of benefits. It is through it that one manages, for example, to engage people in the necessary transformations. It is what will carry the messages, the goals and the results achieved to every level of the organization. With it, a continuous culture of problem solving can begin, as an inexhaustible source of learning for the organization. It will also be a way for leaders to demonstrate, through examples and attitudes, their commitment and actions toward executing the strategy. Finally, it is the tool that will allow results to be followed up in the “gemba” – another expression of Japanese origin, typically lean, meaning “the place where things happen”.

A surprising number of strategies fail because leaders do not make a realistic analysis of the organization's capacity to execute the plans, in addition to neglecting the systematic follow-up of actions and their indicators. Daily Management and its innovative concept of Lean management come to close the existing gap between planning, executing, engaging, developing people and achieving admirable results.

*Robson Gouveia is a lean specialist. He was co-responsible for developing the system at Alcoa.