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True North

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Author: Palak Kumar

True North

Where are you going? Answering this question is important. If the answer to the question is anywhere, you are probably already there. For anything that you do in life, knowing the destination is important for if the destination is not clear, then you get nowhere or you may end up in a place that you really did not want to go in the first place. It is practically impossible to know everything beforehand, but if you wait to have all the information, then life will pass you by. Do some research, ask questions, and gain practical experience and decide and then act on it. If you do not have a direction, why have a rudder or a steering wheel. Without direction, you are adrift in the stream of life, subject to all the problems, and completely without recourse. If you have a direction, you can always change your mind and decide to portage around the rapids.

The True North is a concept of the lean management process that works as a compass to guide an organization from the current conditions to where they want to reach. It acts as a mission statement that reflects the purpose of the organization and the foundation of a strategic plan. True North is a precise, concise, and universal set of ideals which when followed provides a defined direction to the organization.

We must remember that Lean is a journey as the opportunities for improvements never end. However, the opportunities that you work on need to be aligned so that different improvements that you make in an organization are not working against each other. This is where True North comes into play. It guides us towards in making improvements that are all that we want to accomplish.

True North Example

Just because we have a True North statement, does not mean the organization is static. In practice, the True North should indicate the long-term vision of the company but as things change and circumstances change, it is okay to make improvements to the True North statement as required. True North generally consists of two parts:
  • Goals that define the quantifiable business targets
  • Hoshin plans that define direction, purpose, and values

Benefits of True North

All organizations should have a True North statement. Here are some benefits of having a True North statement:
  • It creates a purpose-driven culture. It connects every employee to his purpose of working in the organization by aligning all of them on the same page.
  • It helps prioritize the work and increases engagement. In case of any conflicts between different initiatives, it helps provide guidance.
  • True north improves the work culture and better results flow in. The results are accelerated since the organization is aligned.
  • It leads to better customer satisfaction by increasing reliability and quality of work.
  • It prevents us from derailing from the organization’s primary objective. It provides a strong foundation for strategic decision making.

Steps to find True North

Use the following steps to arrive at the True North for your organization:
  • Develop several True North statements that are clear and govern the company’s objective.
  • Invite all the key stakeholders within your organization and discuss with your management team on the correct True North for the organization.
  • Perform an assessment of the performance of the company in recent years according to the chosen true north and identify the barriers that prevented the organization from moving towards the True North.
  • Communicate your True North to everyone in your organization. Make sure everyone in the company are aligned and clear on the True North.
  • Work on improving the information flows among the teams so that all are aligned to the same goals and decision making is better.
  • Leaders must make sure tough decisions are taken in time and according to the True North of the organization. It is the leader’s responsibility to test the organization’s commitment to True North early so that he/she can take timely actions.
When defining the True North for your organization it is beneficial to break-up the statements into the following categories with some example statements shown below:
  • Safety: We will have zero accidents on our shop floor
  • Quality: We will have zero defects for our critical processes
  • Delivery: 100% of our activities will be value-added with no waste
  • Cost: We aim to be #1 in the markets we serve or lowest-cost operation
  • Morale: We aim to achieve best in class employee engagement levels
Following is a True North example created using Sigma Magic software. True North Example
Once you come up with the True North statements, ensure that you have buy-in and support from all the key stakeholders. To track progress towards the True North, you can assign actual values for each of these metrics and compare them to the target values. Finally, make sure that the True North is broadly communicated throughout the organization so that all actions within the company are aligned with True North.

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