THE LEAN POST

How Cascading A3s Deploy Responsibility to Think as Well as Assign KPIs

by David Verble
January 7, 2021

During a recent virtual workshop on how to use the A3 problem-solving methodology,

R&D/Leverage CEO Mike Stiles asked how to cascade A3s down through every level
of the company to link specific initiatives and strategic goals.

The A3 methodology and its associated report capture a problem, analysis, corrective
actions, and action plan on a single sheet of paper, usually with ample supporting
graphics. Built on the scientific process of plan-do-check-act, the A3 methodology
becomes a way of thinking, managing, communicating, learning, completing tasks, and
developing an organization of problem solvers. The report typically is done on A3-
sized paper, the international term for paper roughly equivalent to U.S. 11-by-17-inch
sheets.

Below is the answer from workshop instructor David Verble, a leadership coach at the
nonprofit Lean Enterprise Institute, during a follow-up conversation with Stiles and
Dave Taylor, R&D/Leverage’s vice president of organizational development. The text
was edited for length and clarity.

David Verble: Cascading A3s are used to execute strategy and manage complex
projects. The process is built not only around deployment of goals but also deployment
of responsibility to think.

The CEO or management committee devising strategy starts the process by doing an
A3 that sets the context, describes the strategic priorities, makes their purpose clear,
and identifies what is required from each function to execute the strategy.
Responsibility is then deployed to the heads of those functions for achieving certain
improvements in performance by developing the needed capability. You want results,
but in the process of getting them you want to build and maintain the capability to get
those results consistently, whether it's process capability, technical capability, people
capability, -- or often all three. The deployment responsibility part is the responsibility
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to think. It's not just, "I'm giving you a KPI [key performance indicator] to meet, and I
want you to do X to help achieve it."

The person getting the responsibility does an A3 describing their thinking about what
has to be achieved, what is the current state and performance capability --
demonstrated by reflection on recent results -- of the department, unit, or function. In
classic problem-solving thinking it presents where do we need to be, what's the gap in
capability, what do we need to develop and change to reach the new level? That A3
sets the context for the staff or lower-level managers and deploys responsibility to
them to do similar A3s. Built into this process is a regular schedule of plan-versus-
actual reviews that roll up to the levels above and report what's being accomplished
toward the overall strategy, how it’s being done, and what problems, if any, have been
encountered.
There is a vertical alignment
In traditional planning, we tend to hand around critical improvements
out a lot of KPIs -- the new term for needed that go down through the
goals and objectives – that are often the organization and a clear picture of
same for everyone. In strategy what it’s going to take to achieve
deployment, the focus is on two, maybe them comes back up.
three critical breakthrough goals,
strategic priorities that go beyond current
performance. We want to focus on achieving those critical few improvements and hold
performance in all other areas constant, so we don't lose any ground.

Dave Taylor: I like the terminology you're using about deployment of responsibility.
We're still at that very top level of strategy planning but at some point, as we start
deploying strategies down, responsibilities from others must come into play. I've been
trying to make sure that Mike and the management team understand that Mike's not
going to do all the work for the strategies he's sponsoring. He's going to have a lot of
help.

David: As the CEO developing the strategy for the business, Mike has responsibility to
make sure that everybody understands what he's trying to accomplish and why he's
trying to accomplish it. That's part of his A3 strategy report. And he has the
responsibility to make sure the people he’s deploying goals to understand what they're
responsible for, why they're responsible, and what improvements in performance and
capability they're expected to deliver. But his responsibility doesn’t end with deploying
down in the organization.

Let’s say Mike has done his A3 and he has assigned a functional manager a goal that
is part of his strategy. That manager does an A3 breaking down the goal to outcomes
that people at the next level, generally the operational level, are responsible for
achieving. Then they do A3s and come back one at a time for back-and-forth
discussions for the means they propose to achieve their goals. This process is called
“catchball.”

So, Mike might say, "Dave, I think there are several new things your folks will have to
learn how to do to achieve the goals you’re deploying." And then you might respond,
"Well, that's taking on a lot, Mike." And Mike says, "I know, but the strategy is critical
for the success of the business. So, let's talk about how we can get it done and the
support needed. Maybe we can't get everything done all at once, but we need to
improve performance in this area as much as possible.”
So there is a vertical alignment around critical improvements needed that go down
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through the organization and a clear picture of what it’s going to take to achieve them
comes back up. In that process, Mike also is responsible for coaching you, Dave. This
should occur regularly but certainly at least quarterly and at mid-year and year-end
when the two of you will reflect on what you accomplished, what you learned, and what
you need.

When it comes time for your performance review, there aren’t a lot of questions about
what got done. Mike knows and you know. And Mike understands if you ran into
unanticipated challenges. Sometimes, there will be leftover targets that are carried into
the next year and new plans made. Mike also has responsibility for assuring that the
managers who are reporting to him are coordinating their efforts horizontally and
supporting each other where needed. The result of cascading responsibility through
A3s is that Mike has a portfolio of A3s and a clear picture of how he needs to lead and
manage to achieve his strategic priorities.

Mike Stiles: The “deployment of responsibility” PowerPoint visuals you sent me made
a lot of sense and I forwarded them to Dave. There is one big A3 at the top of the
pyramid that is the ultimate goal we're going for, and then everything below it is all the
pieces it takes to put together that strategy to get to that goal. It was a good visual.
(See graphics below.)

Dave: I think we're in the same mindset. We just haven't done the A3s moving down
from the top-level strategy.

David: And as we discussed, it's not enough, Mike, for you to deploy KPIs for
increasing production by say, 4%. You must point out the strategic priority for the
increase, why it is critical to the business, what you see as the current capability, what
performance level will have to be reached and sustained to achieve the 4%, and what
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are the gaps in the current capability that will have to be closed?

Maybe production is being dragged down by high scrap. So, you have quality working
on it, operations working on it, and you may have engineering working on it. Each
department has a piece. Each of them is responsible for delivering their piece, but in
coordination with other managers. And as owner of the strategy, Mike, you are
responsible for assuring all that happens.

The good thing about the A3 strategy document is that you have the master schedule
section that everybody can look at to know how and what they need to contribute to
the overall effort and what they each are responsible for achieving by the means they
have proposed. It is a major communication tool and its greatest value is that it is
based on the plan-do-check-adjust cycle of problem-solving and management. Vertical
and horizontal alignment of aims and efforts are achieved through the cascade of A3s
that require thinking as well as doing.

Next Step:

Check out what you and your team will learn about the A3 methodology when you
register for a comprehensive workshop with David Verble. It’s taught online but live so
you can tackle an actual problem from work with feedback from instructors and peers.
Learn more about Developing Structured Problem-Solving and Leadership Skills using
A3 Thinking: Managing to Learn Remotely. The next training, which begins Jan. 29, is
filling up so act quickly.

The views expressed in this post do not necessarily represent the views or policies of
The Lean Enterprise Institute.

Keywords: A3, capability development, leadership, people development,

problem solving