What is kaikaku?

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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 ten 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:

  1. Strive to amaze internal and external clients. What would be their ideal experience? Find ways to make contributions that foster radical improvement.
  2. Embody the mentality of a dissatisfied person. Always be on the lookout for an ideal process, procedure, or opportunity.
  3. Use the 80/20 principle wherever possible. This means looking to do much more with much less.
  4. Reframe problems as opportunities and use winning skills to solve them.
  5. Question assumptions and never accept the status quo. Understand that current or established processes can entrap people and hinder forward thinking.
  6. Consider a wide range of perspectives to take a fresh look at a problem.
  7. Learn how to sell radical ideas and overcome any resistance to their implementation.
  8. Think out of the box and look for synergy.
  9. Maintain a positive attitude and adopt a mindset of continuous improvement.
  10. 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.

Other Lean Manufacturing Frameworks

Toyota Production System

The Toyota Production System (TPS) is an early form of lean manufacturing created by auto-manufacturer Toyota. Created by the Toyota Motor Corporation in the 1940s and 50s, the Toyota Production System seeks to manufacture vehicles ordered by customers most quickly and efficiently possible.

Gemba Walk

A Gemba Walk is a fundamental component of lean management. It describes the personal observation of work to learn more about it. Gemba is a Japanese word that loosely translates as “the real place”, or in business, “the place where value is created”. The Gemba Walk as a concept was created by Taiichi Ohno, the father of the Toyota Production System of lean manufacturing. Ohno wanted to encourage management executives to leave their offices and see where the real work happened. This, he hoped, would build relationships between employees with vastly different skillsets and build trust.

Kaizen Approach

Kaizen is a process developed by the auto industry. Its roots are found in the Toyota Production System, which was heavily influenced by Henry Ford’s assembly line system. The word Kaizen is a hybridization of two Japanese words, “kai” meaning “change” and “zen” meaning “good.” Two of the basic tenets of Kaizen involve making small incremental changes – or 1% improvement every day – and the full participation of everyone. 


Poka-yoke is a Japanese quality control technique developed by former Toyota engineer Shigeo Shingo. Translated as “mistake-proofing”, poka-yoke aims to prevent defects in the manufacturing process that are the result of human error. Poka-yoke is a lean manufacturing technique that ensures that the right conditions exist before a step in the process is executed. This makes it a preventative form of quality control since errors are detected and then rectified before they occur.


Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.

Six Sigma

Six Sigma is a data-driven approach and methodology for eliminating errors or defects in a product, service, or process. Six Sigma was developed by Motorola as a management approach based on quality fundamentals in the early 1980s. A decade later, it was popularized by General Electric who estimated that the methodology saved them $12 billion in the first five years of operation.

Value Stream Mapping

Value stream mapping uses flowcharts to analyze and then improve on the delivery of products and services. Value stream mapping (VSM) is based on the concept of value streams – which are a series of sequential steps that explain how a product or service is delivered to consumers.

Kanban Framework

Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.


A SMART goal is any goal with a carefully planned, concise, and trackable objective. To be such a goal needs to be specific, measurable, achievable, relevant, and time-based. Bringing structure and trackability to goal setting increases the chances goals will be achieved, and it helps align the organization around those goals.

TQM Framework

The Total Quality Management (TQM) framework is a technique based on the premise that employees continuously work on their ability to provide value to customers. Importantly, the word “total” means that all employees are involved in the process – regardless of whether they work in development, production, or fulfillment.

Kepner-Tregoe Matrix


Other strategy frameworks:

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