Hoshin Kanri: Creating a Strategy Deployment Plan That Gets Results

Hoshin Kanri: Creating a Strategy Deployment Plan that Gets Results Webinar December 5, 2013

Welcome! • • • • • • • • • Argentina Australia Canada Denmark France Great Britain Israel India Latvia • • • • • • • • • Morocco Malaysia Netherlands New Zealand Norway Qatar Russia Saudi Arabia United States www.ksmartin.com/subscribe © 2013 The Karen Martin Group, Inc.

 Coach / Facilitator / Consultant / Trainer: Lead Lean transformations & develop people across all industries.  Teacher: University of California, San Diego  Author & Speaker: Karen Martin, President The Karen Martin Group, Inc. www.ksmartin.com 2013 Shingo Prize winner! © 2013 The Karen Martin Group, Inc. 3

Before the webinar… • The materials are available on: – www.ksmartin.com/files/webinarmaterials/MM‐ DD‐YYYY_slides.pdf (or _handout.pdf) After the webinar… • All recordings are available on: – – – – www.vimeo.com/karenmartingroup www.youtube.com/karenmartingroup www.slideshare.net/karenmartingroup www.ksmartin.com/webinars • The materials are available on: – www.slideshare.net/karenmartingroup © 2013 The Karen Martin Group, Inc.

70% Organization is attempting “more than” or “significantly more than” we can reasonably handle.* * Poll of 700+ Subscribers 9

Sporting Goods Manufacturer – Product Launches Per Year 80 73 70 No additional resources; higher quality products launched 60 50 40 30 24 20 10 0 Pre‐Focus © 2013 The Karen Martin Group, Inc. Post‐Focus 11

A Key to Apple’s Success? “…saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much. We’re always thinking about new markets we could enter, but it’s only by saying no that you can concentrate on the things that are really important.” — Steve Jobs © 2012 Karen Martin & Associates, LLC 14

For Further Study

Using A3 for Strategy Deployment: Undergoing “Mother” (macro) and “Baby” (micro) PDSA Cycles • • • • © 2013 The Karen Martin Group, Inc. What’s the gap? What’s preventing us from meeting targets? Why? What actions do we need to take? 21

Strategy Deployment Plan ‐ Fiscal Year XX Last Revised: XX/XX/XX Quarterly Update: Q1 20XX Mission ‐ Type the mission that is trying to be achieved by the organization. Performance, Gaps, and Targets Metric 20XX Actual 20XX Target 20XX Actual This Year's Action Plan Goal Success Metric 1) 2) Current Business Conditions Reflection of the current business conditions that could cause work needed to be done or work that needs to stop. What will be driving this years work? 3) 4) Rationale for 20XX Plans Explain how the current business conditions will affect your plans for the coming year. 5) 6) Follow‐Up / Un‐resolved Issues Anything from the current that needs to be carried over to the next year. Why? Owner Initiative / Priority / Project A B C D E F A B C D E F A B C D E F A B C D E F A B C D E F A B C D E F Template is provided courtesy of Matt Wrye www.beyondlean.com Will be available for download by Thursday, December 12 – www.ksmartin.com/downloads © 2013 The Karen Martin Group, Inc. 22

“Hoshin‐Lite” Annual Work Plan PRE ‐ Gain clarity around overarching business needs. 1. List everything you could do (and that you are doing). 2. Categorize into: – – – – Must‐do, can’t fail Maybe Eliminate Delay (next fiscal year) 3. Decide what you will do; gain consensus. 4. Prioritize and create plan. POST ‐ Manage plan via weekly updates (may be able to reduce to monthly reviews – but be careful!). © 2013 The Karen Martin Group, Inc. 23

What matters? To whom? Why? 25

PLAN DEVELOPMENT PRE WORK Reflect on the organization’s current performance & its position in the marketplace/community. Where are we having problems? What opportunities can we leverage?? © 2013 The Karen Martin Group, Inc. 26

PLAN DEVELOPMENT PRE WORK Gather lists of: • • • • • All active projects and initiatives All stalled projects and initiatives All planned projects and initiatives All desired projects and initiatives All “stealth/rogue” projects and initiatives © 2013 The Karen Martin Group, Inc. 27

Label Four Flip Chart Pages & Hang on Wall Must do Maybe 1. List what you could do on 3x6” post‐its (active or planned initiatives, projects & improvement activities). Gain consensus. 2. Categorize them (place post‐it on appropriate page. Gain consensus. Delay Eliminate 3. Decide what you will do. (Move “maybe’s” onto one of the other three pages.) Gain consensus. © 2013 The Karen Martin Group, Inc. 29

PACE Improvement Prioritization Grid ‐ Example Easy 9 5 22 23 10 13 17 8 3 21 4 Ease of Implementation 15 20 14 7 2 1 19 16 6 11 18 Difficult 12 Low © 2013 The Karen Martin Group, Inc. Anticipated Benefit High

Highest priority Prioritization Grid 0.7 0.6 Ease of Implementation 0.5 0.4 0.3 0.2 0.1 0 0 0.1 0.2 0.3 0.4 0.5 0.6 Potential Benefit See The Outstanding Organization, p. 83 for an extensive list of prioritization considerations. © 2013 The Karen Martin Group, Inc.

Free Downloadable Excel Prioritization Chart The Outstanding Organization: Achieving Focus Prioritization Chart Chart Title To use this Template: 1) Enter the title of the chart in Cell B2 2) Enter the number of items (e.g. projects, improvement activities, etc.) in cell B4 3) Enter the item name and ranking information into A8-D8 and so on. 5 Number of Items 4 Item Name 1 2 3 4 5 Execution Ease 1 3 5 7 9 Degree of Urgency* 1 2 3 4 5 Prioritization Chart 10 9 8 Execution Ease Item Item Item Item Item Organizational Benefit 9 7 5 3 1 7 6 5 4 3 2 1 0 0 1 2 3 4 5 6 7 8 9 Organizational Benefit * Degree of urgency is indicated by bubble size. www.ksmartin.com/TOO See The Outstanding Organization, p. 83 for a list of prioritization list considerations © 2013 The Karen Martin Group, Inc. 10

Modified Strategy Deployment Annual Plan < Company Name > 2013 Priorities 2013 Goals & Objectives 1. Increase sales 5%. 3. Achieve 10% profit. 2. Achieve 50% gross margin. 4. Improve morale (metric TBD). X = Planned Priority 5 8 9 17 29 32 33 10 30 31 25 26 15 20 22 Content removed for confidentiality 21 ● = Actual Jan Feb 3,500 uni ts s ol d by 12/31/2013 through a l l cha nnel s (a pprox. $700K) 2 11 Goal or Measurable Objective X X X X X X Devel op & del iver tra i ni ng to top 50 Dea l ers X X X X X X X X Educa tion: 1 s chool di s tri ct s pec'd/underperforming COM dis tri butor (25) by 12/31 va l ued a t mi n $35K ea ch 10 new dea lers on boa rd (net) ($500K per dea l er thi s yea r) 5 new di s tri butors bri ngi ng $200K a nnua l rev (& 5 termi na ted) X X X X X X X X X X X X X X Howa rd Mi cha el S X X X X X X X X X Howa rd X X Mktg Ops 3 HR Fin 3 3 Bob 2 PE Pario COM CDs / PD PD BMD SWS Direct AMs Rec Mgmt 3 1 1 3 2 1 3 2 3 3 3 2 3 1 3 3 3 Mi ke B 3 3 2 3 3 2 X X X X X X X X X X Howa rd Howa rd 2 3 X X X X X X X X X X Howa rd Da na 1 3 3 X X X X X X X X X Howa rd Ma rk H 2 3 Howa rd Howa rd X X X X X X X X X Howa rd Howa rd Ji m Ra nda l l Ji m Jos h TBD X X X TBD Useful reporti ng a nd metri cs a re es ta bl i shed a nd i n pl a ce X X TBD X X TBD X X X X X X X X X 1 3 X X X X X X X X X Jos h Ji m Sys tem 7.0's i n pl a ce 1 1 X Sha nnon 1 Ji m Ra nda l l 1 3 1 X X X Phyl l is 1 Mi cha el M 2 Ma tt D 3 Nea l l X 1 Da na Da vi d R 1 1 1 1 1 1 1 1 1 1 1 1 1 3 2 Sus a n X 3 3 Nea l l X 3 1 Jos h X 3 1 Mi cha el M X 3 1 1 1 1 3 Ji m TBD © 2013 The Karen Martin Group, Inc. Josh R? X X La y out compl ete; equi pment i ns ta l led 2 X X 30 pa rts s ourced in U.S.; compl eted pl a n for ma na gi ng Chi na ‐s ourced pa rts Wa rehous e l a id out; ka nba n revi s ed; Sys pro i mplemented Da na Rex/Tim X X Des ign cha nged to s ol ve dela m i ss ue l ong‐term Bob X 20 by yea r‐end 1 14 X X 10 projects s pec'd by 12/31; $300K rev by 12/31 100% a ccura te pa yrol l ; 100% ma na gement s a ti sfa cti on a t Apri l mgmt. meeting Internet ta s k l is t is si mpl i fi ed a nd strea ml i ned for PDs then pl a n is rol led out to PDs Des ign Ca l cul a tor i s upda ted success ful l y a nd rol l ed out Level of Effort/Involvement Required IT Exec Owner X Competi tive Ana l ys i s compl ete a nd di stri buted for us e 13 Aug Sep Oct Nov Dec Tactical Owner Bob Mar Apr May Jun Jul Revis ed cours e ma teri a l s by 6/30/2013 Plan review dates: Bob X 24 12 Created: 01‐14‐13 Revised: 1 2 3 1 1 3 3 3 2 1 X X X Susa n Sha nnon 3 X X X Susa n Sha nnon X X Susa n Da vi d R 3 2 2 3 3 X X X X X X 2 3 3 3 3 2 3 3 3 X 3 3 1 2 2 3 35

POST: Plan Management • Weekly status meetings to start, then 2x a month, then monthly (required attendance). – Focus: how to turn yellow & red items into green. – Expectation: Full team helps remove obstacles. – Tone: supportive but tough. • Visibility matters: post progress physically! • Plan is adapted to changing conditions, but avoid Org‐ADD (organizational attention deficit disorder) and falling prey to unnecessary distractions. © 2013 The Karen Martin Group, Inc. 36

Strategy Deployment Key Feature: Catchball What? How? Who? When? Executive Team What? How? Who? When? Year 1 Senior Mgmt Year 2 Year 3 What? How? Who? When? Middle Mgmt What? How? Who? When? © 2013 The Karen Martin Group, Inc. Frontlines 39

Cascading Goals is the Means to Organizational Alignment Organization Division/Business Unit Department Division/Business Unit Department Department Division/Business Unit Department Department Department Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual Individual © 2013 The Karen Martin Group, Inc.

Productivity (Pounds Produced / Hr Worked) 115.0 Pactiv Implements Strategy Deployment 108.0 105.9 101.0 95.2 93.0 94.0 90.6 87.0 84.8 86.3 80.0 FY '06 FY '07 FY '08 FY '09 FY '10 YTD '11 42

Avoiding the Shiny Ball Syndrome (Organizational ADD) Requires… • Clarity – about what really matters & organizational direction. • Consensus – about how best to get there. • Courage – to actively choose to “not do” or “not do now.” • Commitment – to stick with the plan. © 2013 The Karen Martin Group, Inc. From the Focus chapter: The Outstanding Organization, Karen Martin

For Further Questions Karen Martin, President 7770 Regents Road #635 San Diego, CA 92122 858.677.6799 ksm@ksmartin.com Blog & newsletter: www.ksmartin.com/subscribe © 2013 The Karen Martin Group, Inc. 46

Your Questions • How can we relate Hoshin Kanri to the Balanced Scorecard Method for strategic management/measurement? (Ahmad) • How does this work in a highly siloed organization? (Anne) © 2013 The Karen Martin Group, Inc. 47

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