The Role of Catchball in Lean and Strategic Planning

Catchball is one of the simplest and most effective ways to achieve continuous improvement in your organization. To reduce ambiguity and misinterpretation during the planning phase of Hoshin Kanri management uses a fact-based inter-level negotiation process known as “Catchball”. The word “catchball” denotes a simple social game in Japan in which a circle of young children throw a baseball back and forth. It metaphorically describes a participative process that uses iterative planning sessions to field questions, clarify priorities, build consensus, and ensure that strategies, objectives, and measures are well understood, realistic and sufficient to achieve the objectives.

Hoshin planning begins with the senior management identifying the strategic outcomes/goals to be achieved, complete with deadlines. Once determined, the ‘challenges’ are sent to the operational units who break them down and determine what each unit and person has to do to be able to achieve the management objective. They then bounce the ‘ball’ back to senior management who catches it and determines if the execution committed to will be satisfactory or not. If it is not, the ‘ball’ is bounced back to the operations folks again who catch it and respond accordingly.

The conversation about strategic objectives and means widens as top management deploys its strategy to middle management because managers throw ideas back and forth from one level of the organization to another. There are three major benefits to catchball. First, it opens up new channels of communication between company leaders and process owners, which greatly improves the quality of the organization’s shared knowledge about its processes, people and relationships. Second, it forges new relationships necessary to execute the strategy. Third, by engaging middle and even front line managers in genuine give-and-take negotiations—that is, by getting their buy-in—Hoshin dramatically reduces the cost of getting people to do what they’ve agreed to do.

In short, catchball is a disciplined multi-level planning methodology for “tossing an idea around.” It takes strategic issues to the grassroots level, asking employees at each level of management to “value add” to the plan based on data analysis and experience of their functional areas.

Most processes are built around the existing organizational structure depicted in the top of the picture. Targets and measures are set and many times a mandate on how we will achieve them. Hoshin Kanri through the use of catchball develops a more collaborative structure and as a result an easier method for change and even more importantly sustainability.

It all sounds great but it requires a huge amount of work and patience achieving consensus and playing catchball, but it is worth it.  You must fight the urge to just delegate the tasks to your team when you get impatient and the pressures are mounting.  You must “give up control” and fight the Amercian mentality of “I’m the boss and I’m the smartest person!”  You’ll also encounter team members that don’t want the accountability of developing solutions!  Don’t be discouraged by these things as you play ball.

Lean Quote: 10 Tips for Communicating Vision

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

"Good leaders must communicate vision clearly, creatively, and continually. However, the vision doesn't come alive until the leader models it."   — John C. Maxwell

When shared, a company vision is the most powerful way to motivate a group of people. It gives your team a common place to strive for. When each person clearly sees that same picture of a better place in their own minds’ eye, each person connects to it and feels that pull of motivation to want to create that place.

10 Tips for Communicating Vision

1. Talk about the vision with excitement and enthusiasm.
2. Tell a story: a story gives context and life to a vision. It m,,akes it memorable and is easier to repeat.
3. Identify influencers. Who are the people in the team whose support for the vision will bring others on board?
4. Communicate one-on-one continually. Personalise the conversation. Listen to feedback. Answer questions, honestly. Let people know the important role they personally play in achieving the vision.
5. Communicate externally and internally. Customers and suppliers who buy into your vision become part of the team. Bring them on board.
6. Walk the talk: what do you do that demonstrates the values and the aims of the vision you have set up for all to believe in?
7. Make sure people have the opportunity to translate the broad goals of the vision into tasks, goals and behaviors that build towards the vision.
8. Share success stories from around the organisation that demonstrate the values and behaviors that will build towards the vision. Recognition is a powerful reward and reinforces the change you want to see happen.
9. Create a feedback loop with staff and customers to let you know whether you remain on track as you move towards the vision.
10. Consistently and continuously articulate the vision.

Sharing your vision is a process. It is not an event or an announcement or a workshop. The leader’s task is to communicate with clearly, consistently and continually. The goal is to make the team care about and genuinely commit to the shared goal. So they have to know about it.

The more widely you have shared the job of creating the vision, the more people will feel invested in its success, and the more advocates you will have to communicate it passionately.

What Happens When Leaders Forget The Culture That Made Their Company Great?

Many business leaders view their corporate culture as so important that they make it a point to hire people who are a good fit for that culture – and jettison any employees who aren’t.

But what happens when it’s the leaders themselves – for profits, for expediency, for getting the next deal done – who toss aside the culture and plow ahead with decisions that go counter to what made the company a success?

Trouble, that’s what happens, says Bill Higgs, an authority on corporate culture and the ForbesBooks author of the Culture Code Champions: 7 Steps to Scale & Succeed in Your Business (www.culturecodechampions.com). 

“Your company’s culture should inform everything you do,” he says. “When you start straying from the practices that got you where you are, you run the risk of making decisions that will cost you in the long run.”

One example that surfaced recently involved Boeing, which posted its first full-year loss in more than two decades. The company was already reeling from two Boeing 737 Max crashes in 2018 and 2019 that killed 346 passengers in Indonesia and Ethiopia, and forced the company to ground its entire fleet of Max jetliners. 

According to news reports, the origins of the company’s woes can be traced all the way back to 1997 when Boeing acquired McDonnell Douglas, a merger that immediately led to a clash of cultures. At Boeing, engineers were king. At McDonnell Douglas, the bottom line ruled.

In the end, the McDonnell Douglas culture prevailed.

“Mergers and acquisitions are always fraught with danger both financially and culturally,” says Higgs, a founder and former CEO of Mustang Engineering who recently launched the Culture Code Champions podcast. “Financial concerns get the focus while management figures, incorrectly, that culture will just work itself out.”

But in any organization – with or without a merger – it’s paramount that the leaders take charge of maintaining the culture. Higgs says some steps crucial to establishing a company culture and keeping it on course include:

• Encourage communication. Higgs is fond of saying that all problems ultimately are communications problems. In any organization, there can be communications breakdowns. “The most important way to improve execution and efficiency is to foster and maintain a spirit of inclusion, where everyone who has any contact at all with a particular project feels they are involved and is kept in the loop,” Higgs says.
• Knock down silos. Too often silos emerge in large organizations where departments become insulated from each other. They fail to share ideas and resources, and an attitude of competition replaces a spirit of collaboration. 
• Make sure employees know they are respected and valued. This is the real key to building a successful organization and making sure your best people stay with you, Higgs says. Leaders should communicate regularly with employees to make sure they understand how valued they are. He says employees should also know it’s all right to speak up if they see something problematic.

“When I was at Mustang Engineering and we had grown from a small to a huge company, I still had drafters who were comfortable jumping five levels in the organization to let me know they would have to put out substandard work if the schedule or cost were not changed,” Higgs says. 

“I always told them I would handle the issues internally with engineering and externally with clients or suppliers, but they should stay the course on quality.”

About the Author: Bill Higgs, an authority on corporate culture, is the ForbesBooks author of Culture Code Champions: 7 Steps to Scale & Succeed in Your Business. He recently launched the Culture Code Champions podcast (www.culturecodechampions.com), where he has interviewed such notable subjects as former CIA director David Petraeus and NASA’s woman pioneer Sandra Coleman. Culture Code Champions is listed as a New & Noteworthy podcast on iTunes. Higgs is also the co-founder and former CEO of Mustang Engineering Inc. In 20 years, they grew the company from their initial $15,000 investment and three people to a billion-dollar company with 6,500 people worldwide. Second, third and fourth-generation leaders took the company to $2 billion in 2014. Higgs is a distinguished 1974 graduate (top 5 percent academically) of the United States Military Academy at West Point and runner up for a Rhodes scholarship. He is an Airborne Ranger and former commander of a combat engineer company.

Lean Tips Edition #151 (#2476 - 2490)

For my Facebook fans you already know about this great feature. But for those of you that are not connected to A Lean Journey on Facebook or Twitter I post daily a feature I call Lean Tips.  It is meant to be advice, things I learned from experience, and some knowledge tidbits about Lean to help you along your journey.  Another great reason to like A Lean Journey on Facebook.

Click this link for A Lean Journey's Facebook Page Notes Feed.

Here is the next addition of tips from the Facebook page:

Lean Tip #2476 – Leaders Be Yourself

There is no replacement for authenticity. People can sense fakeness! Having to put on a face with your employees every day can not only lose their trust, but it also makes work less enjoyable for you.

There's no need to overcompensate with certain leadership styles based off of how other people lead -- especially if it is out of your comfort zone. Behaving in a manner that is consistent with your beliefs and values will give you more energy each day and it will send a message to your employees to be themselves.

Lean Tip #2477 – Get Everyone Behind the Mission and Keep Them There

One of the biggest challenges at a company, especially as it grows, is keeping each employee excited about the work that they're doing. When people are working intrinsically and feel like the work that they are doing is the best possible way that they could be spending their life at the moment, their output is going to be exponentially higher.

If they're basing part of their self concept on the work that they are doing and they care deeply about it, then each day they will be coming into work with the energy to give it all they have.

Lean Tip #2478 – Give People Freedom and Autonomy

If people feel like they have to be doing their work in a particular way, have to wear certain things in the office, and can't be themselves, they are going to be less happy and productive.

Having honest conversations about the type of work they want to do, encouraging employees to take a goal or idea and run with it, and letting them revolve their work around the lifestyle they want can create momentum in the office -- encouraging employees to work harder on what they enjoy most.

Lean Tip #2479 – Encourage Risk Taking

If there were a 40 percent chance that a project one employee could take on would fail and a 60 percent chance it would succeed, then the decision to pursue the project will be largely based on their perception of the risk of failure. In a culture where failure is met with harsh criticism and fear of being fired, these 60/40 decisions that, overall, would benefit a company, won't be enacted.

Employees face decisions like these daily on whether to try something a bit more ambitious than the norm. Encouraging this risk taking will not only make employees more confident and autonomous, but it will yield more output within a culture of innovation.

Lean Tip #2480 – Foster Good Communication

Open and honest communication is at the heart of a happy and productive workplace. Start by explaining to your employees your company’s vision, goals and plans for achieving them. Focus especially on clear communication in times of change or uncertainty.

“Meeting regularly with employees face to face is very important in smaller companies,” she says.

In larger companies, you can also share written information, such as a printed or electronic company newsletter. You can include employees’ contributions, staff success stories, company news and business performance metrics.

Lean Tip #2481 – Choose KPIs That Look Forward, Not Back

The speedometer in your car tells you how fast you were driving a second ago. But it doesn’t predict how fast you’ll be driving in five minutes.

So it is with KPIs. They tell you what just happened, but they do not forecast what is coming.

Sometimes, information about the past is useful. But if you are looking to predict where things are headed, you should adjust the metrics you collect to give you information that will allow you to make an educated guess about what’s coming.

In other words, I suggest paying close attention to the metrics you monitor, and choosing those that are leading indicators of your performance.

Lean Tip #2482 – Don’t Let The Numbers Lull You Into Feeling You’re In Control

The more numbers, dashboards and charts and your disposal, the more you will feel you are in control of the situation.

That is not always the case. And in fact, thinking you are in control can be dangerous.

Companies sometimes put a lot of effort into creating very elaborate performance management plans based on metrics. It really feels like they are doing all the right things. But are outcomes actually improving because of all of this? Often the metrics being monitored are not aligned with common objectives, and the related actions don’t actually move the needle.

Just having numbers doesn’t guarantee results. The numbers have to be relevant.

  

Lean Tip #2483 – Less is More With KPIs

The purpose of having KPIs is to drive action that affects results. Many times we find that companies track, measure and report on a boatload of KPIs every week, but there are only a handful that ever cause anyone on the team to take action. This is a big waste of time for the executives responsible for collecting and reporting the data, and can easily cause a team to overlook the few that really do matter.

Remember that the secret to success is not in the KPI itself. The secret to success lies in the actions you take to impact the KPI. Don't measure everything that moves. Measure what you want to move. Focus on actions, get value, achieve success, and maintain momentum. Once you move into the phase of maintaining momentum, you're ready to tackle another area and develop a few more KPIs. You can keep the original KPIs on your dashboard for a period of time to ensure they stay on track, but eventually you may be able to remove them. Less is more!

Lean Tip #2484 – Use Leading Indicators To Drive Results

KPIs come in two flavors: Results Indicators and Leading Indicators.

Results indicators report what you have achieved. These are the usual suspects such as sales closed, products shipped or net profit. Use results indicators to establish targets for effective annual and quarterly plans. Begin with the end in mind by setting targets, and developing a plan to hit the targets.

Leading indicators, on the other hand, are predictive in nature. These measure how you are doing on the activities and levers that will move your outcome in a positive or negative way. Identifying and tracking leading indicators with frequency will help guide your day to day operations and decision making, and can give you a glimpse into the future, allowing you to make adjustments mid-stream that will positively impact your results.

Starting at your result indicator will not get you there. Instead, push on your leading indicators to drive towards your results.

To find your leading indicators, ask yourself "What results are we trying to achieve?" Once you understand what you need to achieve, start peeling back the layers of the onion by asking more questions to determine what actually causes that result. You may need to go several layers deep to get to the most important leading indicator. Once you have discovered your most important leading indicator KPI, track it frequently (weekly or daily).

Lean Tip #2845 – Don’t Measure More Than 10 KPIs.

Key performance indicators (KPIs) are powerful, yet they come with a cost. That said, it’s critical to keep the list short and sweet so you can invest your time and resources efficiently. I recommend you start with measuring your number of leads, lead conversion rate, average sales, number of transactions, and margins. The remaining 5 should be operational measurements and tied directly to your goals.

Lean Tip #2486 – Assign Ownership For Your KPIs

Effective KPIs require two types of ownership. The first is the ownership of the KPI in terms of its meaning and interpretation. Someone needs to be in charge of looking at the KPI, interpreting its meaning, monitoring how it’s changing and deciding what that means for the business.

The other ownership refers to the data collection. Sometimes you can automate the process but, more often than not, data collection will require some human interaction. Perhaps certain personnel are involved in transferring data from one database to another, or they have to collect it manually. Again, this ownership needs to be clearly set out and followed through.

Lean Tip #2487 – Ensure KPIs are Understood by People Within Your Organization

It’s essential that everyone in your business is aware of what you’re trying to achieve, and how you’re measuring progress towards those achievements. This is especially important for those who are charged with ownership of the KPIs, but it’s also important for people right across the business, at any level. KPIs should form part of the decision-making process for every employee, and everyone should be able to answer the question, “How will what I am doing today affect our KPIs?”

You therefore need to ensure everybody understands how the metrics you are gathering are linked to your strategic priorities. This will increase “buy in” – how personally involved and enthusiastic your staff feel about your priorities – and ensure that constant review and improvement are at the heart of everything your people do. If you simply tell everyone that they have to collect a whole heap of extra data from now on without explaining why, you are likely to end up with a very cynical and disengaged workforce!

Lean Tip #2488 – Find the Best Way to Communicate Your KPIs

It’s always wise to think about how best to communicate your KPIs so their insights are obvious, engaging and apparent to all. So many KPIs are reported in long reports full of numbers or tables, perhaps with a traffic light graphic to indicate urgency. This is not good enough. There is absolutely no point hiding important insights in excessively long reports that no one ever reads.

Really effective visualizations clearly illustrate trends and variations in data, and engage the reader. Try to find the right picture for your KPIs and create an explanation of the insights so that the nuggets of wisdom extracted from the data are clear, unambiguous, accessible and, most importantly, actionable.

Lean Tip #2489 – Review Your KPIs to Ensure They Help Improve Performance

If a KPI isn’t useful in helping you or others in your business make better decisions, which, in turn, will improve your business’s performance, then it’s just noise. You therefore need to constantly review the metrics you are measuring to make sure they are genuinely useful and you aren’t spending hours (or asking your staff to spend hours) measuring data simply to tick off boxes.

Lean Tip #2490 – Maintain A Healthy KPI Balance.

You want to make sure your KPIs indicate you are maintaining a good balance between People and Process. It is very easy to become so narrowly focused on solving one problem that you create new problems in other places. For example, if an efficiency measure in one area of your business has fallen behind, you may want to develop on or two KPIs designed to drive up productivity in this area. In doing this, you need to be aware of the possibility that you could push too hard on improving this KPI, burning out your people, and possibly doing permanent damage to your relationship with employees.

On the People side, make sure you have 1-2 KPIs to monitor the health of your relationships with:

Employees

Customers

Shareholders

On the Process side, make sure you have 1-2 KPIs to monitor productivity in:

Operations (how you make/buy/deliver)

Sales

Record keeping (how you monitor your finances)

Taking the time to make sure you've identified the right KPIs, that you're using Leading Indicators to track your progress, that you have clearly identified what success looks like, and that you're taking a healthy, balanced approach to running your business can be one of the most important exercises you and your executive team can do together. Invest the time, commit to the process, assign ownership and improve your company's results.

Lean Quote: Attitude is a Little Thing That Makes A Big Difference

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

"Attitude is a little thing that makes a big difference."   — Winston Churchill

Anyone who has worked in or led an organization's transformation understands change is not easy. People commonly resist change for a variety of reasons.  Although you intend for the change to result in a positive outcome, change is often viewed as negative. For your plan to be accepted, you must anticipate and overcome any negativity, anxiety and/or resistance.

In his book How to Win Friends and Influence People, Dale Carnegie gives nine suggestions of ways to handle people when you need them to change.  Here are his suggestions on how to approach people and influence them to change: 

1) Begin with praise and honest appreciation. Begin by finding a common point on which both can agree, something the other person has done well and for which specific praise can be given.

2) Call attention to people’s mistakes indirectly. This is the difference between sayings, "You're dumb!" and "What you did was dumb and I know you're better than that!" Try not to zoom right in and focus on mistakes. Be gently and make suggestions rather than focusing solely on what has been done wrong. 

3) Talk about your own mistakes before criticizing the other man. We’ve all made mistakes. No one is exempt from this rule. Demonstrate that you too have made mistakes, and you can recover and do better. 

4) Ask questions instead of giving direct orders. This is a powerful principle to develop creative thinking. Be polite and make requests not demands. 

5) Let the other person save face. A "cornered" animal will fight back; so will we. Give a person an opportunity to save his or her self-image. 

6) Praise the every slight improvement. Make sure the person knows when they’ve done right. People want to be praised, so this will encourage behaviors that allow them to receive praise. 

7) Give people a fine reputation to live up to. Set them up as a successful and productive person, when they hear tour expectations they are more likely to attempt to make them happen. 

8) Use encouragement. Make the fault seem easy to correct. Do not set them up for failure. Encouragement is a powerful tool that influences people to make changes. If they believe they can succeed, they can and will. 

9) Make other people happy about doing the thing you suggest. This is accomplished by sharing the benefit to those who will see the result of doing the thing you suggest. Giving someone ample praise when they have made a change or exhibited a good behavior will make them happy to complete asks that are requested of them. 

All in all, the key takeaway is be positive when approaching people who need correction. Kindness and encouragement will get you much farther than anger and

harshness. 

4 Step Process to Determine Leading Indicator KPIs

There’s no magic formula or standard set of Leading Indicators that works for every company. Leading Indicator KPIs only become powerful when you find that right lever to pull that impacts the results that are most important to your business. While we can’t tell you which leading indicators are most important in your business, I do have a proven process for determining the ones that will work for you:

Step 1: Be clear about the business problem you are trying to solve, or the opportunity you are trying to maximize.

Step 2: Clarify the desired result, and make it SMART by setting success criteria on this result KPI. 

Step 3: Dig deeper with questions to determine how you get the results you want. Most people don’t ask enough questions to get to a meaningful underlying Leading Indicator.

Step 4: Drive results by setting clear success criteria and putting your Leading and Results Indicators on a dashboard to status every week.

It is really important you ask the right questions about what you want to achieve with your leading indicator.  There are basically three questions:

1. What is this about?  What is the component, system or outcome you are interested in?
2. What is lag event you are interested in predicting (and what is the lag indicator of that event)?
3. What aspect of potential performance are you interested in measuring?  What leading aspect are you trying to measure?

In summary, what sort of decision, about what, do you want to understand and predict?

If you do not know why you are trying to introduce a leading indicator and what decisions you are going to use it to inform, then you are wasting your own and everyone else’s time.  You will just add to the large volume of indicators out there.

When it comes to KPIs, less is more. Don’t overwhelm yourself by tracking more than you really need. For each goal that you set, you should only set a few KPIs, each of which should be directly correlated with that goal.

Determining the right leading indicators can ensure your lagging indicators meet your desired results.

Leading and Lagging Indicators Work Best In Tandem

In performance management we often talk about “lagging” and “leading” indicators. But what do they mean exactly?

Lagging indicators are typically “output” oriented, easy to measure but hard to improve or influence. A lagging indicator is one that usually follows an event. The importance of a lagging indicator is its ability to confirm that a pattern is occurring.

Leading indicators are typically input oriented, hard to measure and easy to influence. These indicators are easier to influence but hard(er) to measure. I say harder because you have to put processes and tools in place in order to measure them.

Let me illustrate this with a simple example: For many of us a personal goal is weight loss. A clear lagging indicator that is easy to measure. You step on a scale and you have your answer. But how do you actually reach your goal? For weight loss there are 2 “leading” indicators: 1. Calories taken in and 2. Calories burned. These 2 indicators are easy to influence but very hard to measure. When you order lunch in a restaurant the amount of calories is not listed on the menu. And if you are me, you have no clue how many calories you burn on a given day.

Now lets try to translate this to business. Most financial indicators such as revenue, profit, costs are “lagging indicators”. They are results of the activities of the company. Past company efforts influence your lagging indicators.

Lagging indicators serve as a starting point on the road to improvement. If a lagging indicator shows negative results, it’s too late to correct the damage that has been done. But it’s not too late to correct any future damage that might occur.

Leading indicators in business are used to gain a sense of the direction a business is headed. Company leaders use them to adjust their strategy to create positive future business conditions. Good leading indicators should help you forecast whether or not you will reach company goals. Valuable leading indicators should help you address company challenges. That way you can realign your actions and strategies to make your company successful.

Managers really need to understand the difference between the two and ensure they have both types of metrics in place if they’re to build an accurate understanding of performance.

Lagging and leading indicators both have an integral place in your organization’s metrics. Lagging indicators show the health of the organization, and are important signals to investors, stakeholders and the like as to how the organization is performing.

Leading indicators show how well the key processes and essential customer appreciation points are performing, and therefore are good predictors of whether or not you are going to meet the performance goals of the organization as a whole, i.e., whether or not your lagging indicators will continue to look favorable.

Leading indicators benefit companies in a variety of ways by:

• Creating visibility of the efforts and activities which impact the future
• Helping leaders know where to improve performance
• Setting individual and team performance expectations
• Holding employees accountable for their responsibilities
• Helping to maintain consistent execution of high-impact efforts

The bottom line is if you’re using lagging indicators without leading indicators, you’re only getting half of the KPI picture. Lagging indicators are an important resource for creating leading indicators that can launch your business into growth mode, but they aren’t the entire package. These sets of metrics work best in tandem to produce the most accurate and achievable KPIs.