Affiliate Policies and Standards of Operation

1

Affiliate Policies and Standards of Operation

Lean Global Network, Inc.

(Revised Draft October 21, 2009)

BACKGROUND & PURPOSE:

All affiliates of the Lean Global Network, Inc.agree to adhere to the policies, standards and expectations contained in the legal and governance documents approved by the LGN Board of Directors on September 17, 2007. These documents have been provided to all affiliates. Asummary of each document is contained in Appendix Aand a complete set of these documents is available on the LGN extranet

In addition, all affiliates of the Lean Global Network, Inc. agree to adhere to the policies, standards and expectations contained in this document -- “Affiliate Policies and Standards of Operation” – per Article II, Section 5 of LGN’s By-Laws. These policies and standards of operation clarify and more specifically define the requirements and expectations of LGN affiliates that are contained in the legal and governance documents cited above.

The formation of the Lean Global Network was based on three guiding principles for affiliate operations and behavior – 1) create awareness of the lean knowledge throughout the network, 2) facilitate sharing of knowledge and expertise, and 3) promote collaboration in the development and dissemination of knowledge. One purpose of this document is to clarify expectations related to sharing lean knowledge and establish guidelines for the use of lean knowledge. In addition, this document provides further guidance to affiliates on how to meet obligations to support the LGN community and to remain in good standing via the use of annual plans or A3s and through a periodic review of its operations.

Section 1:LEGAL AND GOVERNANCE DOCUMENTS:

All affiliates shall receive the following governance documents and agree to adhere to the policies and standards contained therein

•Action by Written Consent of Sole Incorporator

•Certification of Participation and Appointment

•Articles of Organization

•By-Laws

•Conflict of Interest Policy and Certification and Disclosure Form

•Affiliate Policies and Standards of Operation (August 2009 version)

All affiliates shall review and sign the following documents

•Certification of Participation and Appointment (Existing affiliates signed the Certification upon formationof LGN, Inc in September 2007. New affiliates sign upon acceptance as a Participating Organization / Affiliate of LGN, Inc.)

•Conflict of Interest Policy and Certification and Disclosure Form (Signed annually)

•Affiliate Policies and Standards of Operation (Existing affiliates will sign when the document is approved by the Board and whenever modified. New affiliates will sign upon acceptance as a Participating Organization / Affiliate of LGN, Inc.)

Section 2:FINANCIAL & REPORTING REQUIREMENTS:

Affiliates shall submit the following reportsor information annually (or as specified below) and shall make an annual dues payment. The information contained in the reporting requirements listed below will be used to assess the development and progress of affiliates.

1. Annual A3 / Business Plan

Purpose: An affiliate’s operations and value stream activities shall be guided by sound business plans– an annual A3 and subsequent revisions. The A3 shall contain information at the strategic planning and deployment level, but problem solving or value stream-specific A3’s may be submitted as well. The A3 shall describe the affiliate’s current state, performanceto the existing plan,planned future state and activities, gaps, and technical support desired from the LGNmanagementteam and the network of affiliates.

Affiliate A3s:

•Shall be submitted to LGN within one month of the start of the affiliate’s fiscal year

•Will be posted on the LGN extranet (along with subsequent revisions)

•Will be available for discussion at the annual Board meeting

•Should contain goals and metrics to enable the measurement of progress – revenues, costs, volume of materials sold, number of workshops and attendees, company partnerships, new product development activities, etc.

•Describe gaps that could be addressed by LGN and other affiliates

•Describe technical support that could be provided to other network affiliatesor opportunities for collaboration such as train-the-trainer sessions, new publications or education programs, collaborative research activities, etc

1. Annual Financial Statement

Purpose:To track an affiliate’s development andeconomic viability and providedocumentation pertaining to the organization’s nonprofit corporation, non-government organization (NGO),or other legal status. Eachaffiliate shall submitan audited financial statement that will:

•Clearly state the affiliate’s revenues and costs for the preceding two years

•Provide data on the level of economic activity by value stream (at least as a percentage of total revenues)

•Be submitted within sixmonths of the end of the affiliate’s fiscal year

If an affiliate is unable to submit an audited financial statement, it shall submit a letter report signed by the CEO providing the financial information contained in Appendix Band any other financial and operational information required. REMOVED -- All affiliate financial statements will be posted on the LGN extranet and will be available to Board members for review.

1. Annual Dues Payment

Purpose: To support the operations of the LGN management team and provide products and services that will enhance the value streams and institute operations of LGN affiliates.

•Calculation is based on 3% of the affiliate’s total revenue from the most recently completed fiscal year as reported in the affiliate’s annual financial statement

•Gross revenue equals all revenues from an institute’s operations, minus any revenue transfers to other LGN affiliates (such as funds to support collaborative company or research projects)

•Affiliate shall report the expected dues payment to LGN within six months of the end of its fiscal year, LGN will invoice the affiliate, and the payment is due 30 days from invoice date

•All affiliates shall make anominal annual payment of at least $5,000 (US) and the maximum annual payment will be $100,000 (US)

•A dues payment may be deferred during the start up period for new affiliates or given unforeseen economic circumstances upon request and by approvalof the Executive Committee

1. Affiliate-specific Information on the LGN Website and Extranet

Purpose: In order to facilitate and enhance communications about the LGN to the external lean community and to improve intra-network information sharing and collaboration, all affiliatesshall keep affiliate profile data and information current. Affiliates agreeto respondto requests for information in a timely way and shall designate a point-of-contact at the affiliate to work with LGN staff on value stream and institute operations data and informationrequirements. Affiliate profile data will be posted on the LGN extranet and will beupdated when new information is obtained, but at a minimum annually.

1. Affiliate in “Good Standing” / Three Year Review and Re-evaluation

Purpose: In accordance with the By-Laws, an affiliate must be in “good standing” to participate in LGN activities. In order to monitor the development and progress of individual affiliates and provide information that will allow the LGN management team to summarize the activities and operations of all affiliates across the network, each affiliate shall participate in periodic reviews of its operations by the LGN Executive Director.

According to the By-Laws, an affiliate must undergo a review and re-evaluation of its value stream activities and institute operations every three years to remain a Participating Organization of the Lean Global Network. The review will assess how aninstitute has progressed in fulfilling the mission and objectives of LGN affiliates – build a local lean community via lean knowledge generation and diffusion; support thedevelopment of lean practitioners and leaders; and support lean transformations with organizations and industries. Criteria to be used as part of this re-evaluation will beconsistent with the criteria established for theadmission of new affiliatesinto LGN; as wellas the criteria cited todetermine if an affiliate is in “good standing” ascontained in LGN’sBy-Laws.

An affiliate will be considered in “good standing” when it:

•Adheres to LGN By-Laws and all governing affiliation and operations policies

•Actively develops, shares and disseminates lean knowledge via

• learning materials and publications(new and translations)
• education and coaching programs (public and in-company workshops)
• public events such as technical conferences and summits
• action research, networks, and industry partnerships (gemba learning)
• collaborative learning and development activities with LGN affiliates

•Maintains a website to disseminate lean knowledge, sell lean publications and materials, promote events and workshops, and build a local leancommunity

•Certifies its nonprofit corporation or non-government organization (NGO) status; or submits an affidavit declaring its legal and financial status in its country of operation – see Appendix C

•Submits anannual A3 (and subsequent revisions) to guide operations

•Submits an audited financial statement (or approved equivalent) annually

•Participates in a review of its operations by the LGN Executive Director annually

•Attends the annual LGN Board of Director’s meeting and shares new lean knowledge

•Is current with all dues payments

It is recommended that institutes establish a Board of Directors or Advisory Board to provide independent, external guidance and oversight of the operations, plans and development of the institute.

The LGN Executive Director will present an overview of the current state of all LGN affiliates at the annual Board meeting, will summarize performance issues and counter- measures being taken for specific institutes as needed, and will submit a memo acknowledging each institute’s “good standing” status, or corrective actions needed, annually. If it is determined that an affiliate is not making progress over a three year period, then the Executive Director shall submit a report to the Board recommending what, if any, actions should be taken.

Section 3:SHARING LEAN KNOWLEDGE

Access to the lean knowledge and experts throughout the network is one of the primary benefits of Lean Global Network membership. This knowledge is embodied in publications, learning materials, company project case studies, education programs, games and simulations, action research, summit and technical conference materials, and effective institute operations; as well as in the people of LGN -- instructors, coaches, experts and institute staff. Identifying, sharing, and assisting in the use of lean knowledge and content are performance expectationsfor all members. Therefore, all affiliates shallmake every effort to identify the lean knowledge, experts, and associated materials it has created and uses in its value stream activities and provide this information to LGN to be shared within the network.

LGN will maintain an inventory of lean knowledge and associated materials existing throughout the network, keep the inventory current, provide access to all existing materials to the participating organizations, and share updates with all affiliates. Affiliates shall look for opportunities to collaborate on projects and the development of new learning materials, educational programs and events to the extent possible.

Two categories of products and materials will be identified as part of the inventory:

1)Products and materials that affiliates will provide to LGN that can be openly shared and used by all affiliates, always with proper attribution given; and

2)Products and materials that will be identified by an affiliate as available to others, but cannot be openly shared or used by affiliates without the written consent of the owning/creating affiliate or party. Restrictions to use may be related to ownership rights, cost recovery considerations, desire to obtain information about how the materials will be used or the ability of institute staff to effectively use or teach, etc.

In addition, LGN staff will undertake special projects for affiliates on a case-by-case (pull) basis. Projects may include conducting research on specific lean knowledge or content topics (such as support to the development of Intervention or Certification Programs), performing industry scans (such as the use of lean thinking in public sector agencies), or surveying affiliates or other sources for specific lean materials. Lean knowledge and materials developed as a result of collaborative affiliateresearch and development activities will be shared with all affiliates via the LGN extranet.

Policies and expectations related to sharing and using LGN lean knowledge are as follows:

Policy Topic / Event Materials Policies / Company & Research Project Materials Policies
Purpose / Share new lean knowledge and content, event operations best practices and lessons learned from affiliate events (summits, technical conferences, etc)
Help affiliates learn from completed events and plan future events – themes, speakers, formats, event operations, schedules, etc / Create awareness of past and ongoing company and action research projects and share lessons learned and best practices from projects
Future State / 1)Affiliates shall have access to materials from LGN conferences and events as soon as possible – GOAL: what is shared with attendees will be shared with all affiliates
2)Materials include programs/agenda; presentation slides; videos; session summaries; presenter bios; participant feedback; affiliate lessons learned reports; etc
3)Keynote speeches shall be videotapedto the extent possible and practical / 1)Affiliates shall have access to learning from company and action research projects as soon as possible
2)LGN will maintain a searchable database (by industry sector, company name, institute name, key staff, etc) where affiliates can search for basic information on company and research projects
3)LGN will maintain a library of company project case studies and/or A3s
Cost Considerations / 1)Access to all event materials (electronic versions) shall be free of charge to LGN affiliates
2)Affiliate staff shall receive a 50% discount off the advertised fees to attend LGN-sponsored events / 1)LGN will support the development of company project case studies on a case-by-case basis
Expected Contribution to
the Network / 1)Affiliates are expected to hold a summit every two years and technical conferences or eventsduring the course of the year
2)Affiliates will share event schedules with LGN as soon as possible
3)Affiliates shall promote events organized by other members of the network
4)Event summaries shall be prepared by the host affiliate and shared with LGN / 1)Each affiliate shall contribute at least one company project case study and/or A3 annually and share the case study via a WebEx presentations
2)Each affiliate shall present findings from a company or action research project at the annual Board meeting
3)Each affiliate shall share company project profile information on past company projects (profile information template under development)
Language / 1)To the extent possible, event materials shall be provided in English
2)If translation is not possible or economically practicable then materials may be submitted in the native language
3)LGN will translate materials to English to facilitate wider use when deemed cost effective / 1)To the extent possible, new materials shall be developed and shared in English
2)LGN will translate materials to English to facilitate wider use when deemed cost effective
Process / 1)Affiliates shall share event materials with the LGN management team within 60 days of the completion of an event -- CD/DVDs, flash drives, web links, etc
2)LGN will post materials on the LGN extranet – an electronic copy of the files or a link to the host affiliate’s website
3)All materials from past events will be archived on the LGN extranet / 1)Case studies, A3s and WebEx videos will be posted and shared on the LGN extranet
2)LGN will establish a calendar for WebEx presentations and each affiliate will identify a case and select a day for presenting learning from a company or research project
Ownership / 1)The host of the event owns the materials and controls ALL access and use of such materials beyond internal affiliate educational uses / 1)Lean knowledge and content from company and research projects are owned by the originating affiliate
Usage / 1)Content and materials are for affiliate internal educational use only
2)Materials may not be distributed or used beyond the LGN network or with another audience (in any form) without permission from the event host
3)Affiliates shall respect and protect the intellectual property rights of others if an affiliate uses the materials to enhance existing value stream products and services
4)Summaries of LGN events will be posted on the public LGN website to enhance the public image of LGN and its affiliates / 1)Content and materials are for affiliate internal educational use only
2)Materials may not be distributed or used beyond the LGN network or with another audience (in any form) without permission from the originating affiliate
3)Affiliates shall respect and protect the intellectual property rights of others when using company and research project materials to enhance existing value stream products and services
4)Two categories of content shall be established:
a)Content that can be used without permission, but must be referenced
b) Content that cannot be used without permission (proprietary information, etc)