The fallacy of bottom-up Lean initiatives – Part 3: top-down and bottom-up

the-fallacy-of-bottom-up-lean-initiativesIn the first post of this series, I explained why bottom-up Lean initiatives have little chance to succeed. In the second post I switched the point of view and discussed the top-down driven Lean rollout attempts and their pitfalls. Neither is easy nor a sure way to succeed.

In this third post it is time to bring the conditions for success together.

Guidance comes from above

The system owners or top management are the sole legit to set the system’s / organization’s overall Goal. It is onto the ways(1) to achieve that Goal that all Lean initiatives must align. This is known as the “True North”.

Lean itself is not the Goal, it’s the preferred framework providing a way of thinking, principles, methods and a toolbox to efficiently achieve the Goal.

The Goal must be stated with clarity in order to avoid any misunderstanding and the Goal should be compelling for to motivate the stakeholders to play an active and motivated role in its achievement.

The worst Goal statement I was confronted with was “Survive another year”.

Stating the Goal alone is not enough. Top management should also set a limited set of top level indicators. In Bill Dettmer’s approach using the Goal Tree, those few top level indicators are called Critical Success Factors (CSFs). They are top management’s dashboard and ultimate steps before achieving the Goal.

Those CSFs must be set by top management for at least three reasons:

  1. It would be weird that anybody else defines the indicators by which top management monitors the progress towards the Goal it is responsible for achieving,
  2. Critical Success Factors are most often dictated by strategical analysis or benchmark, which are top management’s responsibility,
  3. Critical Success Factors constrain how the stakeholders will contribute to achieve the Goal. By this third reason I mean remaining consistent with the organization’s purpose, culture and values.

Once the Goal and Critical Success Factors are defined, enough guidance is provided from the top and it’s the subordinate level to take on and propose ways to achieve their goals, which are the CSF. The same will repeat with the next level and so on.

Lean-aware readers will recognize the cascading principle used in Policy Deployment, also known as Hoshin Kanri.

Appraisal comes from above too

If top management provided guidance, its role isn’t over yet. It is top management duty to make sure the whole organization works towards achieving the Goal and to remind and reinforce this guiding principle: working on anything else diverting resources from the achievement of the Goal is waste and is therefore invalid.

Remember, opportunities to improve are always infinite, while resources and time come in limited number. It is therefore mandatory to focus on leverage points and make wise use of limited resources.

I particularly like the Goal Tree because its logical structure lets no room for irrelevant nice-to-have that are immediately visible and their discarding rationally explained.

Enlightened management is about knowing what to do and what not do. And enlightenment can use a little help from a logical tool.

Without promoting the outdated command-and-control model, direction must be set top-down as well as the periodic checking of the organization’s right trajectory.

Constant attention is required over time in order to avoid any drift, deviant behaviors or loss of focus.

Help comes from above. Sometimes.

It’s still not enough to give direction and check the progress towards the Goal. Management’s top-down support is mandatory. By support I mean advice and backup when tough decisions need senior management to give input or take the decision, especially when those decisions lay beyond the field of authority of the lower ranking staff.

Support is also required when a settlement between conflicting objectives must be found.

From the Logical Thinking Process (Theory of Constraint) Body of Knowledge we know that conflict resolution should not seek a consensus (often disguised as “win-win” solution), but a way to “dissolve the conflict so that nobody has to give up anything except their beliefs in false assumptions.

Yet beware of drilling holes into the pyramid (2), meaning do not do what your subordinates have to do.

It is commonly accepted I hope, that leaders have to communicate the “what to change to” (the Goal) as well as the “why” of Lean transformation. It is up to the lower ranking staff in the organization to figure out “how to change”.

Achievement happens bottom-up

Since Policy Deployment or Hoshin Kanri are around, the cascading principle of top-down Goal setting and corresponding bottom-up answers is known.

Just as Hoshin Kanri, the Goal Tree uses the same principle: when the lower objectives are achieved, the corresponding upper objectives are achieved, and so on bottom-up till the top most objective (the Goal) is achieved.

Each layer of objectives is a set of Necessary Conditions for achieving the objective above. And here again, the Goal Tree provides the rational demonstration why employees can’t freely choose to work and improve whatever they want, even it seems an improvement from their point of view.

This disciplined approach may sound very constrained and limiting compared to other approaches asking staff for whatever improvement ideas. Maybe it sounds disappointingly controlled and restrictive but it makes no sense to burn limited and precious resources to “improve” whatever is proposed.

The lack of focus leads to many critics about lean lacking noticeable results compared to the time and money spent to improve. In this “open” approach stakeholders may have had their moment of glory when their proposed idea was validated, but their “improvements” didn’t impress nor last.


Neither bottom-up nor top-down initiated Lean journeys won’t lead to a Lean transformation success. The approach most likely to succeed is a smart mixture of top-down guidance, monitoring and assistance and aligned bottom-up contributions focusing on specific leverage points.

While top management provides the Goal to achieve and the framework within transforming the organization, the lower ranking staff make things happen working on meaningful and contributive topics.

Even if this approach looks constrained, it is more likely to demonstrate real improvement and proven, lasting benefits. Ultimately, this disciplined way should provide more satisfaction to all parties involved.

This ends the series of posts about the Fallacy of bottom-up Lean initiatives.

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(1) Theory of Constraints’ Thinking Processes would refer to these ways as “tactics”, while the Goal is a strategy
(2) An allusion about another one of my tales of the pyramid: the Swiss cheese

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Goal Tree is a Lean tool

This post title may sound provocative to all readers knowing the Goal Tree origins lay with Theory of Constraints and to hardliners of each philosophy wanting to keep their toolbox clean of “imported” tools, yet it won’t change the fact that a Goal Tree is a Lean tool.

Goal Tree

Goal Tree

1. Goal Tree as its name tells is totally goal-focused

Starting with the Goal statement is totally in line with Jeffrey Liker’s first principle the 14 principles of The Toyota Way: “Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.

The Goal Tree sets a benchmark for the long-term in order to achieve the organization’s Goal or purpose. The Goal is by definition far away, otherwise it would rather be called an intermediate objective on the way to achieving the “real” Goal.

Once the Goal is stated, the Goal Tree describes all Necessary Conditions to achieving it, thus an explicit invitation to take all necessary management decisions. As the focus is on the Goal, the short-term goals are nothing else than Necessary Conditions or Intermediate Objectives and never a diversion to fetch a short-term opportunity.

2. Goal Tree’s necessity based logic filters out all nice-to-haves

A Goal Tree is built on a cascade of Necessary Conditions which are allowed into the Tree only if they comply to the necessity logic. The test is binary: if the condition responds positively to the condition “in order to have…[objective], we must have…[condition]”, than it passes the test. If the suggested idea does not respond to the test, it does not fit into the Tree.

This means that a robust Goal Tree is lean as it is built only on strictly Necessary Conditions and the required or available resources will therefore be used only for really necessary things!

Conversely, everything that would consume any resource without being strictly necessary (muda) is discarded, keeping the Tree lean.

3. Goal Tree trumps Hoshin Kanri

In my opinion, Goal Tree “trumps” Hoshin Kanri when it comes to list all the necessary breakthroughs to achieve mid to long-term objectives.

The reason is the same as above: the necessity logic that guides the analysis of what is required vs. what we have, hence the gaps that must be filled with breakthroughs.

Hoshin Kanri is too open and to pervious to nice-to-haves as it intrinsically lacks the filter to keep them out, the necessity logic.

Yet to be fair, Hoshin Kanri does better than Goal Tree in later steps, when the breakthroughs must be broken down into short-term objectives with proper KPIs and resources allocation. While Hoshin Kanri does it all within the same X matrix, the Goal Tree needs other logical trees or action plans to do it.

Hoshin Kanri X matrix

Hoshin Kanri X matrix

This is why I like to combine both: start the analysis of what gaps to fill with the Goal Tree and then feed findings into a Hoshin Kanri.

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Goal Tree Chronicles – from Goal to action plan in a couple of hours


Chris HOHMANN – Author

In a previous post I described the utilisation of a Goal Tree to order ideas when working on a small project, a part of a project or an improvement plan.
In another post I gave answer to the question “is it worth the time and energy invested?”.

In this post I share my own benchmarks about time required to build a Tree.

1. Limited scope

Let’s begin with the “order the ideas” case.

When building a Goal Tree for such a limited scope, it takes a couple of hours from scratch to action plan. The action plan will contain a dozen actions and the Tree have about thirty entities.

Is it worth it?

One may question if building a Goal Tree for such a limited scope makes sense?

Yes it does. The Tree is not only a fine way to order ideas, it helps having a sound and robust series of Necessary Conditions (read requirements) without Nice-to-haves that would certainly add costs but not always more throughput.

A Goal Tree is also a very good communication tool.

People involved building Trees and Tree owners get usually good at telling the story and selling the Necessary actions to undertake, even they’re not used to present summaries and reports to any audience.

Henceforth, a Goal Tree is a collection of benchmarks, and if using my suggested color coding system, a convenient assessment tool. These benchmarks remain valid for a certain time.

So is it worth investing a couple of hours to get all of these? Yes it is. At least if communication and benchmarking is meant to be used.

2. Defining strategy

What about a broader scope, like setting up a strategic plan for mid or long term?

For such a broader scope the need for a longer time to build a Tree makes sense and it’s a bit more difficult to give an indication of required time. Depending upon the initial alignment of executives, discussion about the Goal and/or Critical Success Factors (CSFs) can take some time until all agree.

My experience with (French*) executives discovering the Goal Tree tells it can take up to several sessions to get the Goal and CSFs set.

*we French are famous for arguing, resist change and slow to get consensus, aren’t we?

Once this is achieved, I usually recommend to let the next line of managers work out the Necessary Conditions (NCs) and come back to execs with their proposals. If execs are to define the first NCs, it will usually take a little more time than with managers. The higher in the organisation, the more freedom to question everything.

To keep long story short, a strategic tree may take several days to have its top built (Goal and CSFs) in a sound and robust way.

According to the required width and depth of the Tree, additional time is necessary, especially if built in a participative way with subordinates.

Is it worth it?

Yes it is. First the previous arguments with limited scope are still valid with this broader one.

A Goal Tree defining the next years’ strategy is a great communication tool and a way to feed a Hoshin Kanri X matrix for those using it.

Such a Tree may remain valid for an extended period of time: 3 to 5 years, except for faster changing businesses.

So even investing several days to build a lasting Tree providing guidance for decisions and benchmarks is definitively worth it.

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Cost and inventory reduction, right target?

Lego_022aWaste and costs reduction has almost become the definition of Lean for many people as well as an irresistible lure for most executives and managers.

Yet costs and inventory reduction, is this the right target?

In the various definitions proposed by Lean theorists, including Jim Womack, priority is given to identifying and creating value for customers. Using just needed resources is only a way to achieve this while seeking a competitive advantage. Reducing costs and make savings is only a corollary effect of this achieved frugality, not a prime objective.

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Why this obsession about waste / costs?

Lean has long been considered being something for operations: Production, Logistics … as its first name “Lean Manufacturing” could suggest. Indeed, first attempts and successes happened in the workshops and warehouses, on shop floor.

Operations guys have little leverage to create value for the customers. Conversely they can improve almost infinitely operations seeking to be more efficient, to speed up the flow or to reduce defects.

These improvements, synonyms of savings, quickly raised management’s interest in order to justify related expense of these initiatives with ROI and reap the “promised” gains.

However, most of the time these approaches do not produce the expected measurable results and generate frustration among actors although they often see dramatic improvements at their level .

Frustrations, failures, how is this possible?

First one must understand that local initiatives are often disconnected from the purpose of the organization / company. They “improve” activities or processes without a prior validation about their system-wide usefulness and contribution to the higher objectives of the organization / company.

The most disappointing case is to have improved a doomed process or one being itself a waste. In such a case, time and resources were consumed in vain. Deadly sin.

In a less extreme but frequent case, time and resources were consumed to improve a marginal process, which will be insignificant to the overall performance, despite the fact it looks spectacular in situ.

Second, one must remember that the cost and/or inventory reductions necessarily face an absolute limit, which is zero. Once there is no more spending and/or any inventory, this is the end of “continuous” improvement and ironically… an optimum.

Of course there is a practical limit before zero, from which the activities can not proceed satisfactorily neither for customers nor for other stakeholders. But this practical limit > zero only reduces the overall potential of cost and/or inventory reductions.

In contrast, sales growth is virtually unlimited. Although productive resources are saturated, it is always possible to provide new, additional value added services, such as express delivery, personalization, premium services, etc.

But this lever, far more powerful and faster to implement, contrary to general belief, is rarely used.

What alternatives to achieve success?

Those who embraced Lean Management understand that all improvement efforts must be aligned with the purpose of the organization / company, i.e. the need for improvements is derived from the Goal, strategic objectives and necessary conditions to achieve strategic objectives.

Therefore, Lean is only conceivable top-down, from the strategic intent to shop floor actions. Then, for people to apply coherently tools and methods, instead of locally cherry-picking any good looking idea, top management must dictate the needs to cover or better, communicate in transparent manner strategic intents and the cascade of necessary conditions to achieve high level objectives, thus the Goal.

Once these necessary conditions known, operators can measure the gap between the desired state and the current state and work to reduce this gap, on relevant topics and perimeters.

This communication is done using Hoshin Kanri and A3 reports when remaining in the traditional Lean framework, or using Goal Tree if open to add some Theory of Constraints’ tools.
Both are perfectly combinable.

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Goal tree chronicles – ToC is about focusing

This post is a post scriptum to the previous one of this series, relating how a Goal Tree could have helped a pharma plant. In this plant, top management selected more than 20 streams as strategic and worked to achieve the related objectives.

The trouble with this approach is the vast number of objectives to monitor for the top management and the dilution of efforts and resources.

Theory of Constraints (ToC) practitioners keep repeating it, ToC is about focusing on the constraint, thus finding the leverage point. The Goal Tree is a simple but powerful tool to achieve this. From the Goal or vision statement, a logical suite of Critical Success Factors and Necessary Conditions is built with a necessity-based relationship as a rule.

Goal Tree

Goal Tree

Anything that does not obey to the “in order to achieve X we need Y” logical relation is to be discarded.

Following this rule strictly prevents any drifting away from what is really essential and required.

For me, reflecting on this pharma plant experience, it is a brilliant demonstration how easily limited resources can be wasted on secondary objectives.

Even with a Hoshin Kanri to structure the cascade of objectives, I believe many of these 20 streams would have found their way into the X-matrix, keeping the dilution of resources.

Using a Goal Tree as stand-alone tool or in conjunction with Hoshin Kanri is the best approach for efficient outcome.

Feel free to share your thoughts and experiences!

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How Goal Tree can help Hoshin Kanri

Hoshin Kanri or policy deployment’s purpose is to focus and align all contributions on a limited number of necessary breakthroughs, in order to achieve the goal without diluting limited resources on minor on irrelevant subjects.

X-MatrixThe X-Matrix is used to breakdown the higher objectives, usually the breakthroughs, into smaller objectives and actions, setup the KPIs for monitoring and allocating tasks accountability and resources.

> Learn more about Hoshin Kanri

So far so good, but how to first identify the limited number of necessary breakthroughs?

Reflecting on achievements so far and brainstorming for improvements may seem a good way, but experience tells that without a structured and logical process, the brainstorm may produce a nice-to-have wish list.

This would produce the opposite of expected outcome: instead of focusing on a limited number of required drastic improvements, this kind of wish list invites again to dilute scarce resources on numerous minor, probably incremental, improvements.


  • improvement potentials are infinite, resources are not
  • when it comes to resource allocation, everybody likes to have a big share
  • breakthroughs and innovations are appealing but scary, while incremental improvements are safer
  • people always have ideas about improving somebody else’s business

Preparing Hoshin Kanri is an important exercise which sets objectives for at least the short-term period, usually twelve months, and intended to drive consistently the whole organization to achieve its goal. It has to be carefully built.

Goal Tree prior to Hoshin Kanri

This is where Goal Tree is welcome to give guidance. Remember, a Goal Tree is a logical description of all Necessary Conditions (NCs) to achieve the Goal via a limited number of Critical Success Factors (CSF).

> Learn more about Goal Tree

Sounds pretty much like Hoshin Kanri, but while Hoshin Kanri is made for planning and cascading actions, Goal Tree is made for analysis, assessment and designing the future state, depicted in a Tree shaped graphic.

Goal Tree

Goal Tree

This two tools have much in common, but are different. What is interesting is to use Goal Tree to feed Hoshin Kanri.

When using a Goal Tree to plan the future ideal state, the participants start with setting the Purpose or Goal of the organization in the top box of the tree. Then, they identify three to five Critical Success Factors (CSF) necessary to achieve the Goal. Those CSF often are the minimum condition to stay in competition and are based on benchmarks. Each CSF requires a cascade of Necessary Conditions (NCs) to be achieved, hence the Goal to be achieved.

Once the Goal Tree is built, the management should assess the current state of the organization versus the ideal state depicted in the Goal Tree. From the deviation, the need for some breakthroughs should surface:

  • Know-hows or technologies which must absolutely be acquired or mastered
  • Performance levels that need drastic improvement
  • Services that are awaited by customers but not yet provided
  • Regulatory changes that must be anticipated

Chris HOHMANN, author

As the Goal Tree is entirely based on necessity-logic relationship between the items, there is no place for nice-to-haves. An item is necessary or not, nice-to-haves do not find their way through this binary filter. A Goal Tree is therefore robust and Lean by essence. It helps focusing on the important factors and conditions and prevents going astray.

Therefore, when I discovered Goal Tree I was immediately struck by its ability to feed Hoshin Kanri in a very effective way. From then on I started analyzing the current state and define the future with Goal Tree and align and cascade contributions with Hoshin Kanri.

Considering Goal Tree and Hoshin Kanri as companion tools, displaying the seminal Goal Tree altogether with Hoshin Kanri in the operations room helps explaining what the organization is up for, the Goal, and how to achieve it.

Presenting the concept during the June 2016 LTP alumni reunion

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What is Hoshin Kanri?

Christian HOHMANN

Christian HOHMANN, the author

Hoshin Kanri or Hoshin planning, strategic planning or policy deployment is a method designed to focus and align all contributions of the organization’s staff on required breakthroughs in order to achieve the top strategic objectives.

Lack of focus

It is very common in all kind of organizations that people work a lot, spend energy and consume resources on projects and performance improvement without the organization noticing significant progress.

Some may say things are done in inefficient way, let’s hunt waste. But that haste is waste too if not given a prior bit of thinking.

Improvement opportunities are infinite in any organization. Think about a factory, a hospital or an office building. What comes limited are resources: money, people, equipment, material, floor space… and time.

If too many projects are launched, too many improvements strived for or too many goals targeted, chances are that despite great efforts and spending, the dilution of limited resources will not earn noticeable / satisfactory progress.

Some of the planned projects or initiatives may simply be left aside because it is too much to handle, and chance are that priorities are not shared, bring a lot of frustration: top management does not get what it expected, bottom worked hard on topics which are not valued by the top.

The top management is often guilty too, failing to communicate strategic goals and/or sharing written priorities, keep teams focused on a limited number of projects or setting local target that will make divisions compete internally.

Focus and align

To prevent resource dilution, it is necessary to define what are the few things that are really required to achieve the long-term goal and is not yet available or not under control. This things are referred to as breakthroughs, which means we’re not after trivialities but important, critical things: new technology, specific know-how, methods, etc.

All efforts, contributions and resources will be focused on acquiring, building, installing the few breakthroughs. Furthermore, all efforts, contributions and resources must be aligned so that local initiatives do not negatively interfere with each other, but help the whole organization to achieve the goal.

The focus is now on what is referred as ‘true North’, a metaphor used to indicate where all units should head for, regardless the routes they individually have to take.

Hoshin Kanri starts with the definition of the few critical breakthroughs the organization must achieve so that its goal or purpose can be achieved. This is considered on long or mid-term, typically three to five years ahead.

The next step of planning is to breakdown the long or mid-term objectives into shorter term objectives, usually for the coming year or next twelve months.

While strategic objective setting is done at the top of the organization, the underlying objectives and tasks are handed top-down. Each head of division has to propose his plan to support and achieve short-term objectives. Proposals are submitted to the top and a consensus searching process known as ‘catchball’ will make top and next level discuss the proposal until agreement is found.

The process repeats itself level after level, cascading down the objectives and cascading up the proposals.

Once everything is settled, the cascade is built so that achievement of lowest objectives automatically achieve higher objectives.


Strategic planning and deployment can lead to fairly big collections of objectives, hence actions. In order not to recreate the loss of focus it is supposed to avoid, planning overview is done with the help of a X-Matrix.

Such a matrix usually reads clockwise starting with long-term objectives, the related short-term objectives, the actions to achieve short-term objectives and KPIs to monitor progress. At each intersection of the X, a symbol shows the contribution level. For example if an action contributes strongly to achieve an objective, the square at their intersection will show a dark disc. If the contribution is weak, the square will display a circle and if the action does not contribute to the objective, their connecting square will be left empty.



This matrix allows a synthetic overview as well as a way to check if planned actions will effectively help achieving objectives.

An additional table on one side of the matrix shows who takes over actions (what resources, who’s in charge…).

A3 reports

The X-Matrix is a summary and a high level planning tool. For the cascade to lower levels and a more operational use, A3 reports are great tools. The cascading is done with a set of A3 reports, the higher level A3 report being father or mother of the subordinate A3 reports, the sons or daughters.

To learn more about A3 reports, read my related posts.

Hoshin Kanri reviews

Hoshin kanri or policy deployment is reviewed periodically. The A3 reports are used for operational daily, weekly and monthly reviews while more formal strategic level reviews are done every quarter or twice a year and a final review closes the short-term plan the end of the period and fuels the next one.