A problem organizations commonly encounter during the annual
planning process is overloading the plan with too many initiatives. Although this shows a lot of enthusiasm and
energy during the development of the plan, it often results in frustration and
disappointment during the year as people get overloaded and confused by too
many priorities. Good intentions don’t
always lead to good results.
When applied correctly, the A3 planning process can greatly
aid in the development of a plan that provides clear and focused objectives for
the team. And integrating the
Plan-Do-Study-Act (PDSA) cycle into the process can enable the energy – and
clarity – to continue throughout the year.
A key to making the process successful, however, is to create a plan
that focuses 85% of the organization’s effort on meeting current year targets
and 15% on breakthrough improvement.
85% Effort = Maintain
The first step in creating an effective annual plan is to obtain
clear understanding and agreement on the targets that need to be achieved
during the year. And generally, these targets
should be set at a point equal to the capability of the company’s processes and
systems. As long as processes are
maintained at current levels, the targets can be achieved. Although unforeseen problems will undoubtedly
occur throughout the year, they can largely be handled through the company’s
meeting rhythm and kaizen process.
This is what I often refer to as the day job. It involves
putting effort toward maintaining the current level of performance and meeting
company commitments. As a general rule,
assuring process capabilities are maintained to a level that meets targets should
require about 85% of people’s effort.
15% = Improve
As important as it is to put forth the effort to maintain
process performance and meet targets, if no energy is directed improving
performance, it will only be a matter of time before the company is passed by
competitors. Step-change or breakthrough
improvement must be a strategic focus if it is to become a reality. To assure this happens, the annual plan
should include breakthrough objectives that require about 15% of the
organization’s effort.
The breakthrough objectives come from a thorough reflection
of the company’s past performance and future direction. A clear understanding of the big problems –
i.e., where the organization’s performance needs to significantly improve – must
be established in order to comprehend the root causes that need to be
addressed. Examples could include enhancing
a weak product development process, establishing a system for coaching and
developing future leaders, or significant improving safety performance.
During the year, an unforeseen problem can surface that
affects current process capability and meeting targets that will require
significant effort to address (e.g., a significant quality problem, repetitive
machine breakdowns, or a rash of safety problems). In situations like this, when the normal
meeting rhythm and kaizen process will not be enough to address the situation,
breakthrough improvement may be required, and a decision needs to be made
whether or not the organization is going to undertake the effort. If so, people need to be clear on which
breakthrough projects may be delayed to maintain the 15% focus on improvement.
Kaizen for Leaders
Confusion between the maintenance and improvement efforts
often leads to the development of an unachievable plan. There will always be distractions attempting
to interfere with maintaining the 85-15 balance, so continued PDSA is required
to maintain clarity and focus. This is
basically kaizen at the leadership team level, where annual targets and improvement
needs represent the target conditions
and the plan (breakthrough actions) and priorities – become the
countermeasures.
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