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The Continuous Improvement Companion

By Jeff Hajek, Founder of Velaction

The Continuous Improvement Companion is our free guide to making your job better. Use it online, or

download terms to create your own personalized

desktop reference.

See our entire list of terms and many additional

features at http://www.velaction.com/lean-dictionary/

Revision Date: 12/18/2012

What is A3 Thinking?

A3 thinking is a philosophical approach to problem solving

that centers on a well-communicated, team approach to using

the PDCA cycle. The tool used to apply this way of thinking is

known as the A3 report.

The act of working through the A3 report is generally known as

the A3 process. "A3 management" or the "A3 management

process" are broader terms that refer to a coaching style of

fact-based leadership that makes ample use of A3 thinking in

decision making.

The Origin of the A3

Toyota is widely reported to have been using various forms of

the A3 report for decades. It migrated to North America in the

1980's with the expansion of Toyota's operations in the region.

It started gaining substantial popularity during the first decade

of the 2000's, and is now mainstream within the Lean

community.

One of the primary reasons for its rise in popularity is the role

A3 thinking is said to have played in Toyota's rise to

prominence. While the A3 is but one ingredient in Toyota's

success, it is a substantial one. Its prevalent use by the

A3

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company's management team helped the car maker weather

both a global economic crisis and a PR nightmare related to a

now largely debunked rash of sudden unexplained

acceleration. But more importantly, A3 thinking permeates the

organization at all levels. This methodical approach to problem

solving is the real discriminator between good companies and

great ones.

What an A3 Report Is

The A3 report is a storyboard that follows the PDCA cycle.

While there is no firmly set format for the A3 report, a typical

version contains the following sections:

1. Background

2. Current Conditions

3. Goal(s)

4. Root-Cause Analysis

5. Countermeasures

6. Effect Confirmation

7. Follow-Up Actions

Authors of the A3 report should feel free to adjust this problem

solving tool to suit their needs, but should never stray far from

the guiding principles: using the PDCA cycle, taking a team

approach, back and forth communication, guidance from an

experienced mentor, deeply understanding the problem,

creating agreement about goals, and making decisions based

on fact.

Velaction Continuous Improvement

3 | A3 THINKING | © 2012. Velaction Continuous Improvement, LLC

Learn more about the A3 process in our

45-minute Lean Training System DVD,

Fundamentals of A3 Thinking.

A short video excerpt of this DVD is

available on YouTube at

http://youtu.be/03m_yf5kMZY.

Background

Whether you are a leader or a process owner, a big part of your

job will entail problem solving. Taking on problems in a

haphazard, random manner is a recipe for inconsistent

results. A3 thinking, while not a magic solution to problems,

does increase your chances of successfully solving them. The

power of the A3 report lies in the structured approach it takes

to solving problems.

Before diving into the A3 report,

though, let's take a look at what a

problem is. Essentially, a problem is

any situation when "should be" does

not match reality.

That gap develops in one of two ways.

Either the target gets higher, or

performance drops. Regardless of how

the gap came to pass, the basic

problem solving system is the same,

even though the specific actions taken

to close the gap may vary. Image taken from our A3 Thinking Module

(http://www.velaction.com/fundamentals-of-a3-thinking-training-module/)

See our extensive list of terms at www.velaction.com/lean-pdf-directory/

4 | A3 THINKING | The Continuous Improvement Companion

Problems with Problem Solving

There are three common failure modes that keep

people from effectively solving problems.

1. They treat symptoms. Treating just the

surface issue leaves the root cause

untouched. It will likely pop out sideways,

possibly in a worse way.

2. They don’t set clear goals. Without a

clear end point, it is impossible to know

when to stop working. Furthermore, people won't agree

on whether the project was successful or not.

3. They don't build consensus. Most significant problems

cross team boundaries. Without support from affected

people, problem solving fails.

PDCA (Plan-Do-Check-Act)

At the heart of most effective problem solving methodologies is

the PDCA Cycle (aka the Deming Cycle).

Plan: Create a solid plan for solving the problem. This

should include creating a deep understanding of a

problem, identifying the root cause, defining the

problem, and setting goals.

Do: The plan must be implemented.

Check: Poor problem solvers stop after the "Do" step.

Good problem solvers check to see if the solution they

put in place really worked.

Act: When you identify an area where the "Do" step fell

short, you have to actually fix it.

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5 | A3 THINKING | © 2012. Velaction Continuous Improvement, LLC

The A3 Report

The A3 process is a specific, structured method of problem

solving. While the A3 report is the visible centerpiece of the

process, it is actually more of a result of the process than the

actual process itself. The A3 report is simply a concise,

communication tool. Because of the recognizable format,

individuals can rapidly share ideas and have confidence in

what they are talking about.

The A3 report gets its name from the size of paper used in

Japan where the report originated. It is relatively close to the

size of an 11x17 sheet of paper in the US.

As you continue to read about the A3 report, keep in mind that

there is no set format, other than that the sections should

follow the PDCA cycle. Templates (such as the ones offered at

www.Velaction.com/a3-template/) are handy to use as

starting points, but feel free to deviate from the precise layout if

there is a good reason to. One warning, though, if you do make

a change: make sure that sufficient space is devoted to the

plan step.

See our extensive list of terms at www.velaction.com/lean-pdf-directory/

6 | A3 THINKING | The Continuous Improvement Companion

A3 Communication

The A3 report is not intended as a tool for independent use.

They involve several people. There should be an owner who is

responsible for maintaining the document and managing the

problem solving efforts.

He or she should also have an experienced mentor who can

help guide the problem solver through the A3 process. This

mentor typically uses a healthy dose of the Socratic Method,

pointing the person toward ways to overcome roadblocks rather

than actually giving answers. The mentor, in many cases, also

lends his authority to the A3 report, so the problem solver acts

on the mentor's behalf in solving the problem. Because of the

mentor's support, there is authority strapped to the A3 report.

That translates to higher prioritization.

There will also be a variety of stakeholders with a vested

interest in the outcome of the A3 project.

Finally, there will be the people involved in data collection,

analysis, and, of course, implementing the solutions.

In most organizations, people are busy, and there is a lot

coming at them. They have to separate the wheat from the

chaff. One of the benefits of the A3 process is that it gets

people's attention. It is generally used for only the most

significant problems in the organization, so people tend to take

notice when they see the A3 report.

Another big reason that people pay attention to A3 reports is

that the somewhat standard format lets them quickly get a

handle on what is going on. The A3 report acts as a

standardized communication tool. Readers can follow the

storyboard and, without much wasted effort, know the

background and status of the project.

Velaction Continuous Improvement

7 | A3 THINKING | © 2012. Velaction Continuous Improvement, LLC

The A3 Process

A3 thinking takes a systematic approach to problem solving.

Typically, a project owner draws up the A3 report with ample

support and input from all involved people. The author then

runs it by the mentor throughout each step. The feedback and

ideas from the discussion are then integrated into the report.

1. Background

The background section is exactly what it sounds like. It is a

brief section that clarifies the problem and adds context.

Metrics are often shown in this box.

2. Current Conditions

The current conditions section summarizes, not surprisingly,

the current situation. It can show an overview of the process,

highlight problems, or present anything else that will help

people gain understanding of how things are now.

3. Goal(s)

Specific goals should be set. In most cases, goals should have

dates associated with them. An A3 report, though, is a

storyboard to guide you through a process. At this point, you

only know where you want to go, not how long it will take to get

there. The goal dates will come out indirectly in the

countermeasures step. Once the project is more fully fleshed

out, though, you should add dates to the goals.

4. Root-Cause Analysis

This step can take a substantial amount of time, as it is the

most important one. If the root cause is not clearly identified,

you'll be solving the wrong problem. Mentors should spend

significant time reviewing this step to make sure the author

has it right.

5. Countermeasures

Only when the root cause is understood should an A3 report

author start coming up with solutions. For big projects, the

countermeasures listed here might have action plans

associated with them. Of particular importance is that the

projected improvements from the countermeasures should add

up to reach the goal.

See our extensive list of terms at www.velaction.com/lean-pdf-directory/

8 | A3 THINKING | The Continuous Improvement Companion

6. Effect Confirmation

It is particularly important that the effects of the

countermeasures are confirmed. On occasion, positive but

unexpected changes happen. If they were not predicted with

the countermeasures, the root cause is likely still present. Go

back and try again, or you'll be starting the whole project over

down the road.

7. Follow-Up Actions

Follow-up items are not things that have to be done to get a

new process up and running. They are intended to capitalize

on an opportunity to add further improvement, or to help

spread knowledge. In no case should the failure to do a follow-

up action item prevent the full implementation of the solution.

Velaction Continuous Improvement

9 | A3 THINKING | © 2012. Velaction Continuous Improvement, LLC

Benefits of A3 Thinking

The consistency of the process supports the mentoring

process.

The systematic approach and

recognizable format promotes

collaboration.

The A3 process acts as a hands-on

classroom, promoting learning and

growth.

Because of the methodical approach,

solutions are more likely to have

permanent fixes.

The A3 report's format makes it easy to spread gains

around the organization.

The act of assigning a problem solving owner increases

the likelihood of a successful project.

The economy of language in the A3 report engages

people. They know they won’t waste time trying to figure

out what is going on.

The collaborative process means more effective decision

making.

You can download an A3 template from our website at

http://www.velaction.com/a3-template/. There are a few

different sizes available to suit your needs. The templates are

created in PowerPoint, so you can modify them to suit your

needs.

Remember, though, that there is no set format for the A3

report. This template is just intended to be used as a starting

point in your problem solving efforts.

See our extensive list of terms at www.velaction.com/lean-pdf-directory/

10 | A3 THINKING | The Continuous Improvement Companion

No problem is ever truly solved. You can always go

further. Some people make a point of avoiding the word

"solved" altogether. You don’t need to go to that extreme,

but do keep in mind that improvement is an ongoing

process and you will likely address the same problem

repeatedly over the years. Each time you will be making

incremental improvements, or you'll be fighting back

entropy as outside forces affect your processes.

While purists advocate handwriting an A3 report, the

world is a changing place. Teams are often spread out

around the whole globe, and more people than ever are

working remotely. In the spirit of continuous

improvement, adapt the report to suit your needs. A

good technique is to handwrite the section you are

working on, and then transfer it to a computer for ease of

update, review, and transmission.

Don’t expect immediate expertise in A3 reports. You'll

need a lot of practice to get good at them.

Don’t expect immediate expertise in A3 reports. You'll

need a lot of practice to get good at them. (Note that this

is intentionally mentioned twice. It is that important.)

Don’t focus heavily on the report. The process is far more

important.

Use copious graphics on the report. They take far less

space than words and are much clearer.

Make sure targets are specific. Collaboration requires

clarity in what people are agreeing to.

Keep an appropriate scope. The A3 report is not an

annual plan. It should be focused on a specific problem.

Think "reduce dings on doors", not "improve quality".

Don’t move forward without consensus. If stakeholders

are not bought in, solutions are unlikely to be supported.

Velaction Continuous Improvement

11 | A3 THINKING | © 2012. Velaction Continuous Improvement, LLC

Don’t let due dates slide. Planning the project is only half

the battle. Keep projects on track.

Don't forget the confirmation step. You must check that

the effects were as expected. If you were not able to

accurately predict the results, you did not fully

understand the problem.

Avoid opinions like the plague. Everything on the report

should be based in fact.

Don’t jump to conclusions. In many cases, the

conclusion will be right. Unfortunately, you won't know

when it is not until you are well down the wrong path.

In an organization that embraces A3 thinking, you will have a

big role to play. While you may not be designated as the author

or owner of a report, there is a great likelihood that you will see

people visiting your work area, scribbling on large sheets of

paper.

You will probably be asked many questions, and may even be

asked to collect data. If you are approached with an A3 report,

ask to see it. It will give you a better understanding of how the

individual sees the problem. Chances are you are closer to the

process than he or she is, and can probably offer some great

insight. You may even identify an error that can help prevent

your life from being harder down the road.

If you have aspirations to move up in your organization, the A3

process is a great way to show what you can do. They tend to

be used for important projects, and have a good deal of

attention paid to them by the decision-makers in the company.

Ask your boss for some opportunities to participate in the A3

process. Tip: Sitting in on a mentor meeting is a good way to

gain knowledge about the process a little more quickly.

See our extensive list of terms at www.velaction.com/lean-pdf-directory/

12 | A3 THINKING | The Continuous Improvement Companion

If you want to be a top performer in a Lean company, make A3

thinking your go-to problem solving methodology for anything

that crosses a functional boundary or involves multiple work

areas. In addition to helping you develop critical thinking, it

hones several other skills that will be invaluable to you.

Many new leaders struggle with talking to senior managers.

The A3 report gives them experience in a structured manner.

They know what to expect, are working on something positive,

and have a chance to be well-prepared for the meeting. It can

provide a great opportunity to build a network.

That network building also extends to managers at a similar

level. In some companies, leaders are so compartmentalized,

they seldom get to know their peers anything more than a

passing level. Working together on an A3 report helps build

strong relationships.

Communication skills are also refined. Put bluntly, many

managers are horrible writers. Grammar aside, it can be a

challenge to figure out what a person is saying. Sugar coating

abounds. People are reluctant to commit to an idea, so write in

a wishy-washy style. (i.e. The problem could be related to the

gyros, but there is also evidence that the gyros are testing out

OK.) A3 reports, because of their brevity and scrutiny, quickly

cure people of many bad writing habits.

A3 Report Types

There are two types of A3 reports. The first is

the one that most people commonly think of,

the problem solving version. The second, and

much more seldom used version, is the

proposal or status A3 report. Don’t worry

much about learning the second version

until you have some degree of mastery with

the first.

Velaction Continuous Improvement

13 | A3 THINKING | © 2012. Velaction Continuous Improvement, LLC

Practice, Practice, Practice

A3 thinking takes lots of practice until it becomes second

nature. While A3 reports tend to be reserved for bigger projects,

you should strive to get to the point where you are going

through the steps in your head for even the most minor of

issues.

A3 reports cross the bridge between leadership and problem

solving. The report author needs to be able to sway people and

rally support. Whether she is in a permanent leadership job or

not, managing an A3 project is definitely a leadership role.

Velaction offers a series of emails intended to sharpen people's

leadership skills in a continuous improvement culture. Sign up

to receive a leadership tip every few days.

Velaction also offers a similar series of messages with a

problem solving theme. An A3 author must have good problem solving skills to come up with a solid solution. Sign up to

receive some great problem solving content every few days.

In addition to the free emails listed above, you can take your

learning to the next level with our DVD packs on leadership

and problem solving.

See our extensive list of terms at www.velaction.com/lean-pdf-directory/

14 | A3 THINKING | The Continuous Improvement Companion

Visit our website at http://www.velaction.com/a3-thinking/

to participate in our polls on A3 thinking.

A3 thinking is more than just filling out an A3 report. It

is a way of training oneself to approach problem solving

and leadership in a structured manner.

A3 thinking is a structured thought process that is based

on the PDCA cycle.

The A3 process is not an individual activity. It requires

the effort of the whole team.

1. Determine if your organization has anyone with

experience in mentoring others on the A3 process. (If you

do not have anyone who can help train your organization

and need help, contact us at Info@Velaction.com.)

2. ID a few key people for each A3 mentor to develop.

3. Train the team members on the Fundamentals of A3

Thinking. (http://www.velaction.com/fundamentals-

of-a3-thinking-training-module/)

4. Identify basic projects for each individual to lead.

5. Complete the projects, meeting periodically to help

individuals learn from each other.

6. Repeat with increasingly challenging projects.

Velaction Continuous Improvement

15 | A3 THINKING | © 2012. Velaction Continuous Improvement, LLC

See our extensive list of terms at www.velaction.com/lean-pdf-directory/

16 | A3 THINKING | The Continuous Improvement Companion

About Velaction Continuous Improvement

Velaction Continuous Improvement is focused on helping

leaders develop the systems companies need to make frontline

improvement efforts more successful. Visit our website to see

how our extensive line of products and services can help speed

up the pace of improvement in your organization.

Consulting Training DVDs PowerPoint Forms Dictionary

About Jeff Hajek

Jeff Hajek is a master black belt, the author of

the award-winning book, Whaddaya Mean I

Gotta Be Lean?, and the founder of Velaction

Continuous Improvement. He has over two

decades of leadership and Lean experience, which

he blogs about at

www.GottaGoLean.com

Jeff has worked in a wide variety of roles and

industries. His broad experience and extensive

contact with frontline employees gives him a unique

perspective that helps him create grassroots support

for a company's improvement initiatives.

Help Us Improve

Please help us improve the quality of our products. If you find

any typos, errors, or if you have any suggestions about

information to add, please contact us at Info@Velaction.com.

Contact Information

Velaction Continuous Improvement, LLC

P.O. Box 14700 Mill Creek, WA 98082

1. 800.670.5805

1.425.939.1604 (Fax)

Info@Velaction.com