Strategy deployment

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  • Key Criteria for Performance Excellence – Leadership, Strategic Planning, Customer and Market Focus, Information and Analysis, Human Resource Focus, Process Management, and Business Results. Information Resource: http://www.baldrige.nist.gov/PDF_files/Issue_Sheet_SS.pdf
  • Strategy VS Tactics - In military terms, tactics is concerned with the conduct of an engagement while strategy is concerned with how different engagements are linked. In other words, how a battle is fought is a matter of tactics: whether it should be fought at all is a matter of strategy. Strategic Management - is the process of specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs While preparing this discussion, I found the military definitions interesting and useful. In some ways, they helped me clarify my thoughts that seem to all to easily become jumbled up and over lapping with all of the different business words, phrases, new ideas, various definitions and interpretations. Strategy = A plan of action (i.e whether or not to fight the battle) Tactics = The method(s) of actually carrying out the action (i.e. how a battle is fought) Deployment = Preparing, arranging, and positioning to move appropriately (i.e. a level between strategy and tactic = the process of transferring the plan into action)
  • Yesterday, the Clipper Assembly Supervisors were discussing systems with Gary Nesteby. Gary mentioned that the human body is an excellent example of a system. Especially when thinking about the brain’s influence or control over the many sub-systems within the body. When taking this one step further and thinking about what actually carries out the brain’s direction we realize it’s our nervous system. The nervous system transforms our thoughts, ideas, and plans into action. What serves that purpose in each of our company’s? What is your company’s nervous system? Strategic Planning is the brain envisioning what needs to happen and how it needs to happen, but what actually communicates and transforms the vision into actions and reality?
  • The Hoshin process developed in Japan during the 1960’s from quality management practices at the Bridgestone Tire Company, Toyota, Nippon Denso, Komatsu, and Matsushita. It was strongly influenced by the PDCA cycle of Deming, Management by Objectives of Peter Drucker, and the lectures by Dr. Juran on general management. The term was widely accepted in Japan by the 1970’s While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950’s and the work of French process engineers (who created the Tableau de Bord – literally, a "dashboard" of performance measures) in the early part of the 20th century SMART Goals part of Peter Drucker’s Management by Objective – Originated 1954
  • First Outlined by Peter Drucker in 1954 in his book “The practice of Management.” MBO relies on the defining of objectives for each employee and then to compare and to direct their performance against the objectives which have been set. It aims to increase the performance of the organization by matching organizational goals with the objectives of subordinates throughout the organization. Ideally, employees receive strong input to identify their objectives, time lines for completion, etc. MBO include continuous tracking of the processes and providing feedback to reach the objectives.
  • If I’m marketing or encouraging this I’d suggest that Benefits and Advantages of MBO are Motivation, Improved Communication and Coordination, and clarity of goals. In my own opinion, these are the marketing traits that can be difficult to realize without effective application. We can all buy the diet pills from TV, but the fine print always say “results may vary” and “intended for use with diet and exercise.” For the information I was able to collect, these are the thought that came to my head regarding the advantages of MBO. It seems that they’re only realized when the most difficult parts of making it happen (the diet and exercise or the employee involvement and follow-up) are actually pursued. Unfortunately, those items are typically the ones that should already be taking place.
  • Point 7 of Deming's 14 Points encourages managers to abandon objectives in favor of leadership because he felt that a leader with an understanding of systems was more likely to guide workers to an appropriate solution than the incentive of an objective
  • The purpose of Hoshin Kanri (or Policy Deployment) is to make it possible to get away from the status quo and make a major performance improvement by analyzing current problems and deploying strategies that respond to environmental conditions. Policy Deployment cascades, or deploys, top management policies and targets down the management hierarchy. At each level, the policy is translated into policies, targets and actions for the next level down. With Policy Deployment, top management vision can be translated into a set of coherent, consistent, understandable and attainable policies and actions that can be applied at all levels of the company and in all functions of the company. When these actions and policies are applied, they result in a vision becoming a reality - and major, continual improvement in performance. At the beginning of the Policy Deployment process, top management sets the overall vision and the annual high-level policies and targets for the company. At each level moving downward, managers and employees participate in the definition—from the overall vision and their annual targets—of the strategy and detailed action plan they will use to attain their targets. They also define the measures that will be used to demonstrate that they have successfully achieved their targets. Then, targets, in turn are passed on to the next level down. Each level under top management is, in turn, involved with the level above it to make sure that its proposed strategy corresponds to requirements. Regular reviews take place to identify progress and problems, and to initiate corrective action. Policy Deployment ensures that everyone in the company is made aware of the overall vision and targets, and the way that these are translated into specific requirements for their own behavior and activities
  • PDCA implies that once one cycle of the sequence is completed with the ' ACT ' step (in which corrective action is identified), the ' PLAN ' step (in which a plan to address how corrective action will be generated) of the next cycle should be started. Plan = Corresponding control points and control parameters are created. The plan is reviewed and agreed. Do = Implement the plan Check = The actual results are compared to the expected results. Act = Causes of any differences between expected and actual results are identified, discussed and agreed.
  • .
  • “ Ideas generated at one level of an organization are passed up or down to people at other organization levels. Those receiving the idea ‘catch’ it, modify it so that it is relevant to the work done at their level, and pass it along to another level. This is called catchball . A major benefit of catchball is that it helps to vertically integrate an organization. Communication is enhanced, people participate in developing ideas, and when the ideas are implemented, the chances of success are high because people at all levels in the organization shaped it so that it would work best in their environment. Each person will know how his or her work relates to the strategic and tactical operation of the business.
  • Information Source - http://www.baldrige.nist.gov/PDF_files/Issue_Sheet_SS.pdf
  • Strategy deployment

    1. 1. Strategy Deployment A discussion of both methods and challenges 1
    2. 2. Discussion Outline Intro and Background Clipper Windpower Definitions Deployment Methods  Management by Objective  Hoshin Kanri  Balanced Score Card Quality Management Systems that Support Strategy Deployment  ISO  Baldrige Discussion Points “The Mind of the Lean Manager” by Jim Womack Resources and References 2
    3. 3. My Background and Experience Education  B.A. in Business Management from UNI  Working on Masters of Manufacturing Operations at Kettering Work Experience  Human Resource Intern at Beef Products Inc. (Waterloo)  Department Manager for Pella Windows and Doors. (Clear Lake)  Developed interest and passion for Continuous Improvement  Quality Supervisor for Beef Products Inc. (Waterloo)  Assembly Supervisor for Clipper in March 2007 (Cedar Rapids)  Continuous Improvement Manager for Clipper in November 2009 3
    4. 4. Clipper Windpower Company Incorporated in 2001 Manufacturing began at Cedar Rapids in 2006  2006 - 8 units produced  2007 - 137 units produced  2008 - 289 units produced  2009 projecting 117 units (no orders cancelled, only delays) Approximately 280 employees in Cedar Rapids  Approx. 190 assembly  Others include Engineering, Quality, RMDC, Clipper Fleet Service, etc. The Facility is 330,000 sq. ft. Manufacturing the 2.5 MW Liberty Wind Turbine  Gearbox, Hub, Machine Base, Rectifiers, Parts Containers Assembled  Nacelle, Towers, Generators, Transformers, etc. outsourced 4
    5. 5. Clipper Windpower Continued As a whole, Clipper is in the Energy Business The Cedar Rapids Operations is generally considered a Heavy Manufacturing facility The process is entirely assembly based  no material processing or fabrication work The company is in the process of developing a 7.5 to 10 MW offshore wind turbine Projected Capacity of the Cedar Rapids facility is approx. 550-600 turbines per year 5
    6. 6. The Disclaimer Not an Strategy Deployment expert Interest in Learning about Strategy Deployment That interest all too quickly transformed into an opportunity to lead this IQC network meeting I’ve been dedicating extra time to this particular topic I’ve collected and condensed some SD information Many of you probably have relevant experience  Please, stop me at any time for discussion or if you’d like to contribute by further clarifying a particular item. 6
    7. 7. Focus of Today’s Discussion When suggesting that we discuss strategy deployment, I was most interested in the transition from planning to action. Effectively moving from Plan to Do in the PDCA cycle.My Approach Basic Overview of the different Methods Tools associated with those methods Open Discussion Thought Provoking Article 7
    8. 8. Why Focus on Strategy Deployment? The feeling of many good but unaligned goals The need for a consistent top-to-bottom message The importance of management effectively communicating directives in a way that all can engage with and implement. The importance of knowing what activities align with goals. It’s a Criteria for Performance Excellence (Baldrige)  Strategic Planning and Business Results are two key criteria for performance excellence The transition away from command and control, and the frustrating that may accompany it. Bottom line, it’s a necessary part of realizing success. 8
    9. 9. Definitions Strategy –  Is a plan of action designed to achieve a particular goal.  The word strategy has a strong military connotation.  Strategy is different from tactics. Deployment –  To arrange in a position of readiness, or to move strategically or appropriately.  Again, deployment has a strong military connotation  In business, it stands for a methodical procedure of introducing an activity, process, program, or system to all applicable areas of an organization Strategic Management –  Developing, evaluating and making decisions that will enable an organization to achieve its long-term objectives 9
    10. 10. What is Strategy Deployment? The nervous system of a business system Guides planning and action across an organization’s total value stream Provides a closed circuit between an organization’s business needs and day-to-day activities. 10
    11. 11. Pre-requisites to Deployment Company Philosophy and Quality Policy Basic Strategic Planning  Vision and Mission  Values Statement  SWOT Analysis  Strengths, Weaknesses, Opportunities, and Threats Any others? 11
    12. 12. Discussion Points Questions we should be asking as strategic planners.  How widely understood is our company’s mission and/or vision and the company’s top strategy among our employees?  Are certain industries better at this than others? If so, why?  Does your company have a published set of values or beliefs?  How widely known are they?  Do they make a difference? The answers to these simple questions will serve as indicators of the company’s ability to effectively deploy a strategy.  A commander can’t effectively deploy troops without each of them clearly understanding the mission. 12
    13. 13. Methods of Deployment Management by Objectives  Cascading Objectives and Goals  SMART Goals  Specific  Measurable  Achievable  Relevant  Time bound Hoshin Kanri  Catchball, A3-X, and A3-T Balanced Score Card 13
    14. 14. Management By Objective (MBO) The Principles of Management by Objective  Cascading of organizational goals and objectives  Mission Critical Objectives at the CEO Level  Mission Critical Objectives at the Plant Level  Specific objectives for each member  Cascaded Goals through Success Factors  Performance evaluation and provide feedback  Performance Evaluation System 14
    15. 15. Management By Objective Important features and advantages of MBO are:  Motivation –  Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment.  Better communication and Coordination –  Frequent reviews and interactions between superiors and subordinates helps to maintain relationships within the enterprise and also solve many problems faced during the period.  Clarity of goals –  The concept of SMART goals 15
    16. 16. Limitations and Arguments Against Over-emphasizes setting of goals, as opposed to the working of a plan Could lead companies to evaluate employees by comparing them to the “ideal employee” “What gets measured gets done” W. Edwards Deming  argued that a lack of understanding of systems commonly results in the misapplication of objectives 16
    17. 17. Discussion Points When done properly MBO ideally:  improves motivation and communication  involves employees in goals setting  provides frequent feedback on performance Is this typically what would be found if a company’s MBO process were reviewed? Does MBO provide an opportunity for all employees to provide their input and understand their importance? Any other challenges or short comings experienced by those who have utilized or been a part of MBO? 17
    18. 18. Definitions Hoshin = direction, a course, a policy, a plan, an aim Kanri = management, administration, or control Hoshin Kanri – A method of implementing strategy to get the right thing done. Often referred to as:  Policy deployment, Strategic Initiatives, Management By Policy, Hoshin Planning, Policy Management, Managing for Results, Strategic Deployment and Goal Deployment. 18
    19. 19. Hoshin Kanri Purpose and Usage–  Long term strategic planning for systems  Developing shared strategic goals (compare Balanced Score Card)  Continuous organizational improvement  Cascading or deploying top management policies and targets down the management hierarchy 19
    20. 20. Hoshin Kanri Steps and Skills Required  Planning and Communication  Get Involvement  Set the course  X-Chart  Project Initiation and Execution  Two Deployment Styles or Target – Top-down and Bottom-up  “Catch Ball” Target Deployment  Project Charter  Standard Process for follow through  Reflection  Review of what worked and what didn’t work 20
    21. 21. Hoshin Kanri Hoshin Kanri can be thought of as the application of Demings Plan-Do- Check-Act (PDCA) cycle to the management process. The PDCA cycle represents a generic approach to continual improvement of activities and processes. PLAN = a plan of action is developed to address a problem. DO = the plan is implemented. CHECK = information is collected on the control parameters. ACT = the results are analyzed. Corrective action is identified. 21
    22. 22. Hoshin Kanri Three key elements  Catchball  Project Charter (A3-T)  X-Charts (A3-X) 22
    23. 23. Catchball A participative approach to decision-making. Used in policy deployment to communicate across management levels when setting annual business objectives. The analogy to tossing a ball back and forth emphasizes the interactive nature of policy deployment. Used when establishing the terms of the organizational contracts or project charters. Provides employees with an opportunity to review the plan and objective and to respond with their thoughts and ideas. 23
    24. 24. Project Charter (A3-T) Boil things down to one page Clarifies that no one person can accomplish a strategy Very reminiscent of PDCA and DMAIC 24
    25. 25. 25
    26. 26. X-Charts (A3-X) A bundle of contracts called team charters A visual tool for planning Can appear complex at first Becomes simple quickly The key is the Linkage of high and low level action with people and results Mostly an aid to communication 26
    27. 27. 27
    28. 28. Strategy Area•Contains the highest level mandates•Start here•Should link directly to corporate strategy, one level above thegroup for which you are planning. 28
    29. 29. Metrics Area•Fill this in second•Put in standard and/or mandatedoperational figures your group needs tomeet 29
    30. 30. Tactics Area•Work on this third•Will lay out specific projects•Will become the basis for managing implementation 30
    31. 31. Team Members Area•Work on this fourth•List Names of the people who will be responsible forimplementing the tactics•Use proper names, not titles 31
    32. 32. Connectional Areas•The absolute key to making this work•Forces reflection, debate and conversation in an open manner.•Do these last, in a back-and-forth manner, with others on your team and inyour company 32
    33. 33. Strategy-to-Tactics Correlation•Does a tactic really support one or morestrategies?•Is there a more effective tactic?•Is there a non-necessary tactic?•Do you really understand the individual strategy 33statements?
    34. 34. Tactics-to-Metrics Correlation& Contribution•Does a tactic improve a specific metrics)?•Will it move the metric adequately?•Does each metric have some tactic toimprove it? 34•Do you really understand the individual
    35. 35. Tactics-to-Team MemberAccountability•Does each tactic have a skilled person to lead it?•Does one individual have too many tactics to lead?•Are there other people who need to be listed?•Does each individual understand his/her 35accountability?
    36. 36. Metrics-to-ResultsCorrelation/Contribution•Does each metric contribute to one ormore financial results which we value?•How much does each metric contribute?•Are we measuring the right things in ourresults?•Can we compare plan to actual over theperiod covered by the plan? 36
    37. 37. Strategy-to-Results Correlation•Does each strategy contribute to one ormore financial results which we value?•How much does each strategy contribute?•Is a strategy “for show” or for results (e.g.a Super Bowl ad)? 37
    38. 38. 38
    39. 39. Hoshin Kanri Strengths  Limitations  Focuses organization  A rigid implementation on the vital few is necessary  Communication of a  Requires a long term shared vision commitment  Creates alignment  Relatively Static – the through participation breakthrough objective  Encourages cross must be stable during a functional cooperation 5 year period  Planning is systematic 39
    40. 40. Discussion Points How many currently use or have experience with this method of planning and deployment utilized? Where HK has been utilized, was it well structured and routine or informal and possibly haphazard? In what ways was it’s use effective or ineffective? Would you recommend this system to others? Why? 40
    41. 41. Balanced Score Card A Strategic planning and management system  May mean different things to different people (the BSC spectrum)  From a Performance Measurement Framework = Dashboard  To a Robust Organization-wide Strategic Planning, Mgmt, and Communication System Originated by Drs. Robert Kaplan and David Norton as a performance measurement framework Added strategic non-financial performance measures to traditional financial metrics to give managers a “balanced” view of performance. The “new” balanced scorecard transforms an organization’s strategic plan from a document into “marching orders.” 41
    42. 42. Balanced Score Card View the organization from four perspectives Develop Metrics Collect Data Analyze Data to each perspective PDCA 42
    43. 43. Balanced Score Card Continued Why Implement a Balanced Scorecard?  Increase focus on strategy and results  Improve organizational performance by measuring what matters  Align organization strategy with the work people do on a day-to-day basis  Focus on the drivers of future performance  Improve communication of the organization’s Vision and Strategy  Prioritize Projects / Initiatives 43
    44. 44. Balanced Score Card Continued Scorecards simply for organizing measures aren’t justified. Start with the end in mind, focus on the desired results Stephen Covey – “People and their managers are working so hard to be sure things are done right , that they hardly have time to decide if they are doing the right things.” Developing a balanced scorecard system is like putting a puzzle together  The pieces are strategic components  They have to be checked for fit 44
    45. 45. Recall Lou Novikoff, a.k.a.“The MadRussian”, Chicago Cubs, 1940s Stole third base with the bases loaded “I got a good jump” he explained. Unfortunately, there is no point in being fast at doing the wrong thing. 45
    46. 46. BSC Continued The major system components:  Engaged Leadership  Customers and Stakeholders  Interactive Communications and  Customer Value Proposition Change  Strategy, Strategic  Management Objectives, and Initiatives  Vision and Mission  Performance Measures  Core Values  Performance Information  Organization Weaknesses and Reporting Strengths  Rewards and Recognition  Evaluation 46
    47. 47. Questions and Discussion? How many currently use or have experience with the BSC method of planning and deployment? Do you notice any added benefits or disadvantages of Hoshin Kanri vs. Balanced Score Card? If we aren’t using either method, what else is being done in order to fill this need? 47
    48. 48. Quality Measurement Systems thatSupport Strategy DeploymentBaldrige Criteria ISO Standards 1. Leadership 1. Customer Focus 2. Strategic Planning 2. Leadership 3. Customer and Market Focus 3. Involvement of People 4. Measurement, Analysis, and 4. Process Approach Knowledge Management 5. Systems Approach to Management 5. Human Resources 6. Fact Based Decision Making 6. Process Management 7. Mutually Beneficial Supplier 7. Results Relationship2.2 Strategy Deployment: With ISO-How do you deploy your strategy? Describe how The concentration is on the quality systems your organization converts its strategic objectives into action plans. Summarize your Takes an adoption of process approach organization’s action plans, how are they deployed, and KEY action plan performance measures or indicators. Project your With Baldrige- organization’s future performance relative to Performance excellence for entire organization KEY comparisons on these performance measures or indicators. Focus upon business results 48
    49. 49. Discussion Topics How many have experience working for companies that utilize either ISO and/or Baldrige? Does it seem that one system is utilized more often or more commonly accepted? Why? Does the industry affect which system is utilized?  What else might affect which system is selected?  Is there a need for the use of both systems? 49
    50. 50. Discussion Points All methods seem to have a distinct tie back to Plan-Do-Check-Act  Are we informally utilizing these methods on a daily basis, in some cases without realizing it?  If so, would it be beneficial to formalize and document the process?  If so, what ways can we go about that or how have you seen it done in the past? 50
    51. 51. The Mind of the Lean Manager Thoughts from Jim Womack Finding companies with X-Charts, completed A3 analysis, and all the elements of standardized work.  What’s missing?  Success in Achieving the Goals  Inability to actually read and interpret A3  No standardized work or not following it Lean management techniques are quickly becoming tools (which are necessary). Every manager loves a tool because it seems to provide a short cuts to doing a better job. They can’t achieve their potential results or even any results without managers with a lean state of mind to wield them. 51
    52. 52. What is a lean state of mind? The Lean manager embraces the role of problem solver The Lean manager realizes the no manager at a higher level can or should solve a problem at a lower level.  Instead assign responsibility to the manager at the lower level The Lean manager believes that all problem solving is about experimentation by PDCA The Lean manager knows that no problem is ever solved for ever 52
    53. 53. Other Sources of Information Books In IQC’s Library  Hoshin Kanri: Policy Deployment for Successful TQM - Yoji Akao  The Balanced Score Card – Translating Strategy into Action  Kaizen Sketch Book  http://www.kaicomm.com/KaizenSketchbook.html  And Multiple Others…. 53
    54. 54. Hoshin Kanri for the Lean Enterprise Technical description of Hoshin Has a CD with all forms Good resource; tough reading 54
    55. 55. Getting the Right ThingsDone Novel style, a la “The Goal” Author has terrific experience Has excellent examples 55
    56. 56. Leadership and Self-Deception Deals with root cause of people problems Novel style You can use it instantly “Outside the Box” Thinking 56
    57. 57. Resources and References Balanced Scorecard and Hoshin Kanri by Marketing Partners, Inc.  http://www.mpicompanies.com/PDFs/Balanced%20Scorecard%20and%20Hoshin%20Kanri.pdf Management Coaching and Training Services  http://www.mcts.com/Hoshin-Kanri.htm Hoshin Kanri – Lean Strategic Planning by Joe Ely  Director of Operations for Cook Biotech Baldrigeplus.com  http://www.baldrigeplus.com/Exhibits/Exhibit%20-%20Catchball%20processes.pdf Strategy Deployment in Action: One Executive’s Perspective  http://www.lean.org/Events/WebinarHome.cfm (Lean Enterprise Institute)  Pascal Dennis and Dave Brule II Balanced Score Card Institute  http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx Management By Objective  http://www.12manage.com/methods_smart_management_by_objectives.html The Mind of the Lean Manager  Jim Womack – Founder and Chairman of Lean Enterprise Institue 57

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