kaikaku

What is kaikaku?

Business / By / December 29, 2022

Kaikaku is a Japanese production philosophy with a core focus on transformational change.

Understanding kaikaku

Loosely translated as “radical change”, kaikaku is a lean methodology that is used to make fundamental or significant changes in a workplace.

It may be considered the opposite of the popular kaizen, which favors slower, smaller, incremental changes.

While kaikaku and kaizen may appear to be mutually exclusive, it’s important to note that the former is used in addition to the latter.

In many instances, kaikaku is used first to institute change after which kaizen is introduced to ensure the change is sustained over the long term. 

Since kaikaku deals with transformational change, it tends to involve a substantial rethink of business processes and can take many months to complete.

By extension, kaikaku initiatives may span across multiple functions or even multiple organizations and require a considerable investment of resources.

Four types of kaikaku projects

Kaikaku projects should be used on projects where the improvement is expected to be 20% or more.

Once this has been verified, there are four project types to choose from:

Locally innovative and capital intensive

Locally innovative initiatives are those that are new to the facility (even if they are not new to the industry).

Capital intensiveness is as it sounds, requiring a significant cost upfront or over time.

A common kaikaku project under this type is robot automation.

Locally innovative and operation close

In the context of kaikaku, “operation close” denotes a project with relatively small costs.

Many conventional TPM or Six Sigma methods can be described this way.

Radically innovative and capital intensive

As the name suggests, this type encompasses the most expensive projects with the longest implementation timeframes.

The introduction of the production line in vehicle assembly is one historical example.

Radically innovative and operation close

A relatively affordable project that has the power to transform an industry.

These tend to be new or innovative products, procedures, or philosophies such as Six Sigma itself.

The commandments of kaikaku

Hiroyuki Hirano was a Toyota guru who created the 5 S framework and pioneered just-in-time (JIT) production systems.

Hirano developed ten commandments of kaikaku which are briefly summarized below:

Strive to amaze internal and external clients

What would be their ideal experience? Find ways to make contributions that foster radical improvement.

Embody the mentality of a dissatisfied person

Always be on the lookout for an ideal process, procedure, or opportunity.

Use the 80/20 principle wherever possible

This means looking to do much more with much less.

Reframe problems as opportunities and use winning skills to solve them

Question assumptions and never accept the status quo.

Understand that current or established processes can entrap people and hinder forward thinking.

Consider a wide range of perspectives to take a fresh look at a problem

Learn how to sell radical ideas and overcome any resistance to their implementation.

Think out of the box and look for synergy

Maintain a positive attitude and adopt a mindset of continuous improvement.

Kaikaku knows no limits

Perform the radical improvement initiative with small continuous improvements (kaizen).

Key takeaways

  • Kaikaku is a Japanese production philosophy with a core focus on transformational change. While kaikaku is best for introducing this sort of change, it should be paired with kaizen principles to ensure the change is sustained.
  • Kaikaku projects can be characterized into four types according to the degree of capital intensiveness and whether they are locally or radically innovative. 
  • Toyota Guru Hiroyuki Hirano developed the ten commandments of kaikaku to ensure teams embodied its principles at all times. Among other things, it is important to adopt a dissatisfied mindset, reframe problems as opportunities, maintain a positive attitude, question assumptions, and never accept the status quo.

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Other strategy frameworks:

About The Author

Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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