Blog # 4 Organizational Transformation: Process: Methodology

The 4th entry in this blog series on whole system organizational transformation is under the rubric of Process and is the Methodology for  continuous improvement.This is the Toyota Production System applied to healthcare.

The methodology of improvement could be a blog series in and of itself. The first of several upcoming blogs on methodology involves understanding Hoshin Kanri a core component of the  Toyota Production System .

Hoshin Kanri . Developed in a few major Japanese companies during the quality movement of the 1950s, hoshin kanri is a discipline used to focus the work of senior executives. It was created by lean executives who saw many initially enthusiastic companies fail to become lean because, even when everyone’s eyes were opened to waste in the processes and the power of lean improvements, leaders would all rush off in different directions, pursuing different ideas of the most important problems to solve. The impact was often too diffuse to hit the bottom line and soon the lean initiative looked like nothing more than frantic action without direction.

At ThedaCare, we used hoshin kanri techniques – including a visual matrix diagram to identify key objectives and clearly deselect others — to focus our top leaders. Identifying key objectives came out of repeatedly asking the question, “What is most important?” Then leaders asked, “How do we measure that?”

We asked the questions repeatedly over six years, sometimes arriving at different answers and always striving to determine the most important needs of the entire organization. As we narrowed down the list of critical needs, we winnowed our major projects each year down to three or four initiatives that could be accomplished in a reasonable time frame and easily explained to the entire organization.

Although we started our Hoshin Kanri learning with the visual matrix we changed after we realized that the matrix was not allowing us to have the dialog necessary to deeply understand and solve problems. We converted to an A3 process for strategy deployment in the hopes that we would become more strategic in our thinking and less focused on the specific numeric results which were very important but crowded out any other discussion. The A3 process is based on the scientific method of proposing, implementing and studying changes in a process. This method has been referred to as PDSA (or PDCA), Plan-Do-Study (or Check)-Act.  Some have referred to this as the Deming cycle after W. Edwards Deming, although he credits Walter Shewart with its development. Deming introduced the method to the Japanese in the 1950s. This powerful method is the foundation of A3 thinking and was widely adopted within Toyota.


The PDSA cycle has four stages:

Plan – Determine the problems with current conditions, goals, and the needed changes. This is the hypothesis.

Do – Try out the changes. In other words, experiment or trial.

Study – Analyze the results of the experiments and reflect on the learnings.

Act – Incorporate the new learning or knowledge into the new process and work to standardize the change.

The A3 method assures that the PDSA cycle is followed and the changes are monitored. The process steps can be documented in a variety of formats, but it typically includes the following elements, on a single piece of paper.  A3 refers to the standardized paper size of 11” x 17”.

  1. Title – Names the problem, issue, or topic
  2. Owner/Date – Identifies who owns the problem or issue and the date of the latest revision
  3. Background – Why is this important? What background information is important?  What have we seen in gemba?
  4. Current Conditions – Show the current state using pictures, graphs, data, etc. What is the problem?
  5. Goals/Targets – What results do you expect? What are the key measures? (quality, cost, morale, delivery, access, etc.)
  6. Analysis – What is the root cause(s) of the problem? If you work to eliminate this root cause, will you make progress toward solving the problem?
  7. Countermeasures – What proposed actions do you intend to take to reach the target condition? How will you show how your countermeasure will address the root causes of the problem? What is the new standard process?
  8. Implementation – What needs to be done?  Who will do it? By when? What are the performance indicators to show progress? How will people be trained in the new process?
  9. Follow Up – What issues can be anticipated? How will you capture and share learning? How will you continuously improve or begin the cycle again (PDSA)?


Wide adoption of A3 thinking through all levels of the organization will create a community of problems solvers. People will begin to think of every activity as a potential learning activity, rooted in everyday work.

Using the A3 tool to cascade key strategies and metrics from the CEO level to front line worker is the end game. Along the way, much dialog occurs which inevitably changes the A3 so that a system A3 for a key initiative may look different after it has been reviewed and talked about at every level of the organization. In this way each business unit of the organization can make the system A3 meaningful to their area. For example, a quality target of reducing falls by 50% might be appropriate for a hospital or a nursing home but inappropriate for an ambulatory clinic.But a system quality target of reducing medication errors by 50% could easily be applied in both settings.

In this way, through trial and error and long discussions ThedaCare’s leaders struggled to find true north metrics – the few, critical metrics to steadily guide everyone in the organization toward the same purpose and ideal. With the A3 process which is iterative, true north metrics were developed and changed based on the changing environment. Instead of waiting until the next year to develop the strategic plan, strategy changed real time based on these regular discussions with the A3. Leaders rethink metrics all the time, and nobody really believes the true north metrics will remain fixed forever. As the environment changes, what we measure  needs to adjust. It is a dynamic world and, as Wayne Gretzky said, you have to skate where the puck is going to be, not where it’s been.

I would recommend reading John Shook’s book Managing to Learn published by LEI press if you want to learn  more about the A3 process.

One Response to Blog # 4 Organizational Transformation: Process: Methodology

Leave a Reply

Your email address will not be published. Required fields are marked *