Bob Miller is the executive director of The Shingo Prize for Operational Excellence at Utah State University. In this article, he explains how companies can use the Shingo model to benchmark themselves against best practice and aspire to real organisation-wide change.

The search for improvement is instinctive. To be successful in the long term, businesses and indeed any organisation must be engaged in a relentless quest to make things better. Failure to make this an organisational priority will inevitably result in organisational decline. Excellence must be the pursuit of all great leaders. In fact, the passionate pursuit of perfection, even knowing it is fundamentally impossible to achieve, brings out the very best in every human being.

Improvement is hard work. It requires great leaders, smart managers and empowered people. Improvement cannot be delegated down, organised into a programme or trained into the people. Improvement requires more than the application of a new tool set or the power of a charismatic personality. Improvement requires the transformation of a culture to one where every single person is engaged every day in most often small but, from time to time, large change.

In reality, every organisation is naturally in some state of transformation. The critical question is, to what end is the organisation being transformed and who are the architects of the transformation? The Shingo model of operational excellence asserts that successful organisational transformation occurs when leaders understand and take personal responsibility for architecting a deep and abiding culture of continuous improvement. This is not something that can be delegated to others. As the CEO of a very successful organisation recently said, “Leaders lead culture.”


Dr. Stephen Covey describes principles as fundamental truths. He defines a principle as a natural law that is universally understood, timeless in its meaning and fundamentally inarguable because it is self-evident. Covey teaches that values govern our actions and principles govern the consequence of our actions.

Values are cultural, personal, interpretable and variable. Our personal values influence how we see the world and ultimately our choices for how to behave. Principles govern the outcomes of our choices. In other words, the values of an unprincipled person will very likely lead to behaviors that have negative consequences.

Principles govern everything that happens in the natural world. Scientists the world over continually search to understand more of the principles that govern the universe. They do not invent them; they only discover their existence and seek to do good by taking purposeful action based on knowledge of the guiding principle. Principles govern the laws of science; they determine the consequences of human relationships and, ultimately, principles influence the successful outcome of every business endeavor. Similarly, the values of a corporation, not grounded in enduring principles, are largely ineffectual in influencing the creation of a consistent organisational culture.


For decades we have watched, and all too often experienced, the disappointing efforts of programmatic improvement initiatives, leaving in their wake a trail of unintended negative consequences; rarely resulting in lasting improvement. Quality circles, just-in-time, total quality management, business process re-engineering, six sigma, and most recently lean are a few illustrations of well intentioned initiatives that have far underdelivered on there promised benefits. Our study of these programmes over the last 25 years has led us to believe that the problem has nothing to do with the concepts and everything to do with the programmatic, tool oriented deployment of them.

The Shingo model for operational excellence is based on a systematic study of each of these improvement initiatives. Our approach bypasses the tools that each programme has engendered and focuses rather on the underlying/guiding principles and supporting key concepts behind them. We recognise the necessity of good improvement tools but focus on them only within the context of enabling a system to better drive ideal, principle based behaviors. The Shingo “House” (Figure 1) provides a summary and categorisation of this collection of guiding principles and supporting concepts.

When taken in their totality, these timeless principles become the basis for building a lasting culture of excellence in the execution of one’s mission statement. We call this relationship between business results and principle based behavior operational excellence. Operational excellence cannot be a programme, another new set of tools or a new management fad. It is the consequence of an enterprise-wide practice of ideal behaviors, based on correct principles. As long as improvement is seen as something outside the core work of the business, as long as it is viewed as “something else to do”, operational excellence will remain elusive.

When leaders anchor the corporate mission, vision and values to principles of operational excellence and help associates to connect and anchor their own values to the same principles, they enable a shift in the way people think and behave. Changing the collective behaviour of the group changes the culture. This is a leadership responsibility that cannot be delegated.

In his book Key Strategies for Plant Improvement, Shigeo Shingo said, “Think in terms of categorical principles.” The Shingo House is a categorisation of the guiding principles of operational excellence. Associated with each category are also listed many important supporting concepts.

The principles are categorised into four dimensions: cultural enablers, continuous process improvement, enterprise alignment, and results, the ultimate end of all business initiatives. These four dimensions overlay five core business systems – product/service development, customer relations, operations, supply – and a variety of management or administrative support systems.


The Shingo Prize did not create the ten guiding principles of operational excellence, but rather they have always existed. In truth, there is ample evidence that these principles have been well understood, more or less, at different times for thousands of years. As the world has gone through cycles of advancement and decline, it seems these principles are routinely lost and forgotten and must be re-discovered. Emerging from the dark ages into a period of enlightenment and industrialisation, the impact of these principles are only now beginning to be understood again.

Certainly and even surprisingly, business schools do not emphasise these principles even though they are the drivers for business execution excellence. The cause for this may be that these fundamental business principles have been disguised in management fads and tool boxes that become programmes or “flavors of the month”.

The Shingo Prize has made a diligent search of thought leaders over the last 100 years. Their work has been carefully analysed and dissected and the unique concepts or principles from each have been extracted. Compiling, distilling and prioritising the list led to the 10 guiding principles on the left side and the supporting concepts for each dimension on the right side of the house.

Supporting concepts are critical to pay attention to but may not stand up to the rigor of being universal, timeless and selfevident as are the principles.

The dimensions are the result of ‘thinking categorically about the principles.’ It is clear that all four dimensions of the model require focus in order to achieve excellence. In the same way that we need to comprehend objects in three dimensions to truly appreciate all of their characteristics, operational excellence must be viewed in these four dimensions in order to fully appreciate the power of the principles to affect business outcomes.


Many organisations and their leaders are coming to understand that sustainability requires focusing on the culture; that’s the easy part. The difficult part is knowing how to really affect a change.

The Shingo transformation process is a methodology for accelerating a personal and enterprise-wide transformation to a culture of operational excellence. The process is based on the teaching of Dr. Shigeo Shingo who recognised that business improvement came through understanding the relationship between principles, systems and tools.

Shingo understood that operational excellence is not achieved by superficial imitation or the isolated and random use of tools & techniques (‘know how’). Instead, achieving operational excellence requires people to ‘know why’ — for example, an understanding of underlying principles.

In the 1940s, the work of French social scientist Piaget led us to understand that learning occurs when people come to deeply understand the meaning behind the methodology. People naturally search first for meaning, the principle, and then attempt to organise them somehow into a system, or some kind of order. Finally, they create tools to better enable the systems to accomplish the purpose for which they were created.


The first step a leader must take in leading cultural transformation is a personal journey to understand what each of these guiding principles mean conceptually and then what they mean personally. It is impossible for a leader to lead the development of a principlebased culture until he or she has gone through the deep reflection required to begin a personal transformation. This is no trivial task. For many and perhaps most, fully embracing these principles requires a fundamental re-thinking of the rules of engagement used to get to where they are.

At a minimum, leaders must be curious enough to experiment with the principle. John Shook at the Lean Enterprise Institute taught us that it is often impossible to “think our way into a new way of acting”. Rather, guided by correct principles, what we should do is to do, observe, learn and then do something else, until we “act our way into a new way of thinking”. By carefully analysing the cause and effect relationship between principles and results, a leader will begin to shift their own beliefs about what drives optimal business performance. After gaining this new insight it becomes the effective leader’s primary responsibility to see that others in his/her organisation have experiences where they can gain the same insight.

Leaders who choose to disregard the principles that govern business outcomes do so at great risk. Whether we acknowledge them or not, the principles of operational excellence always govern the consequence of our leadership and management behaviours. An example may help.

If we encourage, enable or simply allow a culture to emerge where employees are thought of merely as an unfortunate cost burden, or that the smartest people are those that rise to the top, the consequence will be a workforce that is not fully engaged, ideas for improvement are never articulated and acted on, people feel unfulfilled in their work and turnover is very high. Labor costs become excessively high, business systems stagnate, and innovation is not fast enough to compete in a rapidly changing business climate.

When people understand principles for themselves, the “why”, they become empowered to take personal initiative. Leaders who teach associates the principles behind the tactics or the tools can be confident that innovation from each individual will be pointed in the right direction. It is not necessary for a leader to define ideal behaviours for others. If the principle is truly a principle, diverse people with different values even, will readily be able to define ideal behavior for themselves and be very consistent with others.

Dr. Shingo understood this and taught that the primary role of a leader is to drive the principles of operational excellence into the culture.


All work in organisations is the outcome of a system. Systems are either designed to produce a specific end goal or they evolve on their own. Systems drive the behavior of people; or rather they create the conditions that cause people to behave in a certain way. One of the outcomes of poorly designed systems is enormous variation in behaviour or even consistently bad behaviour. Variation in behaviour leads to variation in results. Operational excellence requires ideal behaviour that translates into consistent and ideal results.

The Shingo transformation process illustrates the critical need to align every business, management and work system of the organisation with the principles of operational excellence. When systems are properly aligned with principles, they strategically influence people’s behaviour toward the ideal.

Shingo also taught that the primary role of managers must shift from fire fighting to designing, aligning and improving systems.


A tool is nothing more than a point solution or a specific means to a specific end. Shingo referred to tools as techniques for problem solving; necessary but not sufficient. He taught that tools should be selected to enable a system to perform its intended purpose. In many ways, a system may be thought of as a collection of tools, working together to accomplish an intended outcome. A successful enterprise is usually made up of complex business systems that can be further divided into layers of sub-systems, each having embedded in them the necessary tools to enable a successful outcome.

Perhaps the largest mistake made by corporations over the last three or four decades has been the inappropriate focus on a specific tool set as the basis for their improvement efforts. Tools do not answer the question of “why”, only the question of “how”. Knowing the “how” without fully understanding the “why” leaves people waiting for instructions and powerless to act on their own. Organisations can never sufficiently release the full potential of their people by creating a tool-oriented culture.


One of the principles of operational excellence is scientific thinking, which is intended to foster a culture of experimentation and deep learning. People must be able to put to the test each of the principles espoused by the principle-based leader. Only when people see for themselves the cause-and-effect relationship of results relative to the principle, will they come to deeply understand the value of the principle to them personally. Repetition through many cycles of learning in the experiment gives people a personal insight about the principle and empowers them to make personal judgments about its validity.


Operational excellence is end game of all organisations focusing on continuous improvement. Programmes, titles, tools, projects, events and personalities are insufficient to create lasting change. Real change is only possible when timeless principles of operational excellence are understood and deeply embedded into culture. The focus of leaders must change to become more oriented towards driving principles and culture while managers’ focus becomes more on designing and aligning systems to drive ideal principlebased behaviour.

The ultimate mission of The Shingo Prize is to assist organisations of all kinds in building operational excellence. The Shingo model may be used as a benchmark for what excellence at the highest level should look like. It may be used to align all elements of an organisation around a common set of guiding principles and a proven methodology for transformation. Some use the Shingo model as the basis for organisational assessment and improvement planning. A few use the Shingo model as a way to recognise their associates for excellent work and others use it to demonstrate to current and prospective customers that they can compete with anyone in the world. Some use the Shingo model for all of the above.

The real Shingo Prize, however, is represented by the business results that come from the relentless pursuit of a standard of excellence that is without question, the most rigorous in the world. Those who use the Shingo model will embark on a journey that will accelerate the transformation of their organisations into powerful, dynamic, nimble competitors.

No obstacle – affordable healthcare, efficient transportation, emerging global environmental concerns – will be beyond the reach of those who embrace principles of operational excellence and make certain that every person in their extended value stream deeply understands the principles behind the tools