The Dilution of the Shingo Prize

It's been a long time since we've talked about the Shingo Prize, but some of our long-term readers will remember when we took the Prize to task exactly three years ago.  That was the year when the Shingo Prize, once called the "Nobel Prize of Manufacturing," was awarded to multiple Delphi plants.  Yes, Delphi.  As we put it back then,

Delphi was not lean.  Their inventory turned so slowly it was almost imperceptible.  Their cost did not improve.  They may have achieved excellent quality levels, but they proved unable to translate that to bottom line improvement.  We don't need to go over the same old ground.  They looked lean, but they weren't lean.  The legacy cost whining began after it was plain that their lean effort was not producing results.  They are back to the same old, worn out automotive industry solution - blame it all on the Unions, close plants, outsource work to Asian countries, blah, blah, blah.  They have a lawyer in charge who is trying to accomplish in Court and on Wall Street what they were unable to accomplish in their plants.

Clearly the bankruptcy of Delphi is evidence of a gaping hole in the Shingo Prize criteria, as well as in the lean body of knowledge.  That is no big deal - just learn from it, improve the Prize criteria, and move on.  It is what good manufacturers do every day - they make mistakes, they learn, they improve.  To take a defensive position, however, and repeat the self-serving rationalizations coming out of Delphi management does a disservice to manufacturing and to Shingo's legacy.

Apparently they did learn, as the Prize criteria changed a bit.  Unfortunately in more ways than one.  The Prize has evolved from a manufacturing prize to one broadened to "operational excellence."  Additional categories were added for public sector and research, and apparently there will be future categories for industries such as healthcare.  Multiple silver and bronze levels. Now it has extended the Prize to a bazillion regions, from the northeast to the northwest, multiple state level prizes, and it has even jumped the pond.

I like much of the Shingo Prize criteria; in fact I have used it as part of the model for guiding lean transformations at multiple companies.  I have many friends on the Shingo Board of Governors and the Shingo Academy, and there are many deep lean thinkers and innovators in those two groups that I have tremendous respect for.  I even have a quote from a prior Shingo Prize executive director in the header of this blog

But what is going on?  The Shingo Prize used to be awarded to very few companies, and even if the criteria were flawed it had a large measure of prestige.  Now the criteria have been revised but the Prize is awarded to companies in multiple industries, levels, and regions. 

If this isn't stopped it will become as diluted as the Oscar... there will be a Prize for the best donut shop within five miles of a medium-sized police station within the state of Alabama when the moon is full.  I can hear it now at the next Prize ceremony... "Earlier this evening the following prizes were also awarded..."

Who is the branding expert at Shingo?  He is obviously skilled at "fragmentation branding," perhaps gaining his experience at a toothpaste or detergent company.  It's sort of like Rolls Royce hiring a guy from Proctor & Gamble.

Of course there's the question of the fundamental value of the Shingo Prize, or any award for that manner.  Ever ask a true lean company like Toyota or Danaher whether they go for such awards?  Their answer will be "what value does it have for the customer?"  Good question.  Shouldn't a Prize devoted to excellence as measured by creating customer value automatically disqualify any company that applies because the act of applying creates waste, demonstrating the company doesn't understand customer value?  Now there's a statement that will require a couple aspirin if read twice! 

Conundrums can create interesting business models.

Comments

[Adam Zak]

Kevin, very Zen of you in the last paragraph here. And I agree.

As we search to create and pursue relevant and meaningful metrics by which to document our lean achievements we must not lose sight of the underlying purpose of lean itself: respect for people and continuous improvement.

If a prize or award serves to further that purpose, great. If taken to extreme it may become another form of muda.

And at some point the dilution becomes devaluation, and becomes meaningless. My son's 6th grade soccer coach awarded trophies to each member of the 23-boy squad. That year's team MVP probably didn't receive quite the degree of recognition he deserved among the 22 other "prizes" handed out that day. Adam Zak

[Mark Graban]

I've also criticized the Shingo Prize before. But, I have met a few times with the new director, Bob Miller (and will be doing a podcast in the near future). He's going to talk about what I think are some positive changes to the prize. It will be harder to win and they'll make sure companies keep up with lean (the prize has a 5-year window where it "expires", I think that's the way to put it).

I think we'll see fewer cases of a "lean" factory in a bankrupt business getting the Shingo Prize.

[Bob Miller]

My name is Bob Miller and I am the new executive director of the Shingo Prize for Operational Excellence. Two important considerations; first, for twenty years the emphasis of a Shingo assessment was on the successful deployment of lean tools, and challenging organizations were allowed to define the scope of the challenging entity, most often choosing to challenge with the scope of an individual manufacturing site or value stream.

In the last year the bar has been substantially raised, now emphasizing not only lean tools but also lean systems and most importantly a deep lean culture. Many companies recognized in the past will require a significant effort to reach the level expected today.

That being said; we have seen many excellent Delphi facilities whose deployment of Lean rivals the best. Unfortunately Delphi as a corporation still bears the consequences of many sins unrelated to a challenging entity. At the Shingo Prize we are now strongly encouraging a much broader view of the Enterprise.

We also encourage people not to pursue the Prize for the sake of the prize but we view the Prize as the results made possible not only for customers but for all stakeholders. We also believe that good leaders need to know the truth about where their organizations really are and from that place are far better prepared to create the future. The Shingo model is an excellent way to reveal the truth and point the way forward.

Go to www.shingoprize.org to download the model and assessment guidelines. Read them and decide for yourself. We hope people will use the information whether or not they ever want to receive feedback and/or recognize publicly the efforts of their team members.

[Kevin]

Bob,

Thanks for the comments and I appreciate you taking the time to add your perspective.

As I mentioned, I do recognize that the criteria have become tougher which is definitely a good thing. And as I also mentioned I believe the criteria are valid and I (like many consultants and business owners) use them as a guide to turnaround projects. And I can see how some businesses could see value in having an external organization scrutinize and validate their improvements, although there are many other ways of accomplishing that.

My primary concern, however, is with the dilution. Why have all the regional, sector, and level awards? To be very blunt, in my opinion that really tarnishes the brand. What used to be a very valuable and prestigious brand even with the award criteria problems. I'd be interested in knowing the rationale.

Kevin

[Brian Maskell]

Kevin:
I would like to add a personal note here. I recently attended the Shingo prize conference for the North East region and I found it an exciting and inspiring event. Four companies received prizes ranging from a small family owned manufacturer through to a huge Raytheon division. None of these companies would have won the top Shingo Prize at this time because they are at various stages on their journey, but the level of genuine lean achievement and lean culture focus was very impressive. I was moved emotionally by the presentations of the prize winners because the Shingo Prize process had engendered such passion and commitment for change and improvement. I know - as well as you do Kevin - how difficult it is to create this kind of lean momentum, and I was very impressed.
Brian