Continuously improve with A3 Report

The more complex or networked the structure of a company is, the more difficult it is to establish a culture of continuous improvement or CIP culture in them, because: Then, in addition to the employees of a department or division, employees who have their workplace in other divisions or even at other locations are usually integrated into the service provision process, as well as cooperation partners such as external service providers. For this reason, it is important in such projects to provide employees and managers with easy-to-use tools for implementing the desired changes and improvements - across divisions or even companies - in parallel with day-to-day business. One such tool is the A3 Report.

Increase the problem solving competence

This goes back to the industrial engineer Joseph M. Juran. About 60 years ago, he recommended that Japanese top managers present problem solutions, decision-making principles and strategies on a sheet of paper in DIN A3 format for reasons of clarity. Toyota, among others, followed this advice.

The A3 Report provides employees with a template for the analysis and action steps to be taken when solving a problem. In addition, working with it triggers a learning process in them that leads to a deeper understanding of the problems and gives them the competence to design and implement sustainable solutions.

The A3 report is based on the PDCA cycle known from lean management, according to which every problem is also an opportunity for improvement. This consists of four phases.

• Phase 1: Plan. In it, the problem and the current state are described and the (core) causes of the problem are analyzed. In addition, the target state is formulated. In addition, metrics for achieving the target state are defined.
• Phase 2: Thu. In it, the measures to achieve the target state are fixed.
• Phase 3: Check. In it, the effectiveness of the measures is monitored so that they can be readjusted if necessary.
• Phase 4: Act. It evaluates the experience gained in solving the problem and derives standards for future action, which serve as a basis for further improvements.

A3 Report: Structure

 Above each A3 report is a title such as "Reduce the processing time of customer inquiries" or "Reduce the scrap when producing product xy". It thus names the problem to be solved. This is followed by seven analysis and work steps that must be followed in order to solve the problem and implement a new standard.

1. Here, the problem should be described in such a way that all people involved understand the problem and its implications, as well as the relevance of a problem solution for achieving the company's goals.
2. Actual State/Situation. Here, we describe what is actually happening "on the ground" or at the operational level. It also analyzes what is preventing those affected from achieving the target state. The actual state should be presented as vividly as possible. In addition, a fact-based understanding of the problem should be created among the report users - for example, with the help of graphics and tables.
3. Target or target state. This state must be specified precisely - also because thinking backwards from the desired goal usually leads to better solutions than searching for solutions without a defined goal. Those involved should also ask themselves: How do we measure whether our improvement initiatives have been successful? And: What basis (for example, key figure) do we use for comparison?
4. Root Cause Analysis. The task now is to identify starting points for effective measures. An Ishikawa diagram, also known as a fishbone diagram, helps here by collecting the possible causes of the problem. The goal is to identify the factors that have a direct influence on the problem.
5. Countermeasures. This is where the measures are listed to increase performance. It is important to name the countermeasures clearly when listing them:
   - "Which" (sub)problem is to be solved by the measure,
   - "how" it will be solved,
   - "who" is responsible for the measure,
   - "when" and "where" will it be carried out?
6. Performance measurement. It is checked whether the measures led to the planned result. In addition, the reasons for any deviation from the target are stated. The impact achieved is quantified, with a graphical representation (before/after comparison) facilitating comprehensibility.
7. Standardization and follow-up. Finally, the overall process is evaluated. In addition, it is reflected which measures should be taken to secure and further advance the improvements achieved. The following questions, among others, need to be answered:
   - What needs to be done to secure what has been achieved in the long term?
   - To what other tasks/problems can we transfer our experience?
   - Who should we inform about our experience so that other areas/teams can benefit from it?

Managers become learning facilitators

Working with the A3 Report requires special skills from all those involved - especially the managers. They must be intensively involved with the value-adding processes; moreover, they must (also) see themselves as learning companions for their employees. This kind of self-image on the part of managers is indispensable for the development and expansion of a CIP culture in companies. This is why many companies are currently working on new management development concepts. In doing so, they are often guided by the lean leadership development model.

This distinguishes four levels in the competence development of managers.

• Stage 1: Developing yourself as a leader. The underlying assumption is that in the future it will be a core competency of managers to reflect on their own behavior and actions and to systematically improve their own performance.
• Stage 2: Coach and develop other people. The second level of competence involves the ability to develop other people as a leader in such a way that they in turn acquire the competence to reflect on their behavior and actions and to initiate their own learning processes.
• Step 3: Support the daily self-improvement (Kaizen). This is about aligning groups of employees (teams, departments) in one direction and ensuring the continuous improvement process.
• Stage 4: Create a vision and align goals. Ideally, all managers are involved in the last development stage. Now it is a matter of overcoming silo thinking and aligning all activities in the organization in such a way that the corporate goals are achieved.

Increase the innovative power of the organization

Companies expect that management development based on this competency model will increase the innovative strength and speed of their organization, and that it will gradually reduce the workload of managers. The more competence and routine their employees have in solving problems independently, the more complex the tasks they can be assigned and the less often they have to act as "trouble shooters.

About the author
Dr. Georg Kraus is managing partner of the management consultancy Kraus & Partner, Bruchsal (www.kraus-und-partner.de). Among others, he is a lecturer at the University of Karlsruhe, the IAE in Aix-en-Provence, the St. Gallen Business School and the Technical University of Clausthal.