Strategy Deployment

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<p>Strategy DeploymentA discussion of both methods and challengesChris Yockey Clipper Windpower cyockey@clipperwind.com</p> <p>1</p> <p>Discussion Outline</p> <p>Intro and Background Clipper Windpower Definitions Deployment Methods </p> <p>Management by Objective Hoshin Kanri Balanced Score Card ISO Baldrige</p> <p>Quality Management Systems that Support Strategy Deployment </p> <p>Discussion Points The Mind of the Lean Manager by Jim Womack Resources and References</p> <p>2</p> <p>My Background and Experience</p> <p>Education </p> <p>B.A. in Business Management from UNI Working on Masters of Manufacturing Operations at Kettering Human Resource Intern at Beef Products Inc. (Waterloo) Department Manager for Pella Windows and Doors. (Clear Lake)</p> <p>Work Experience </p> <p>Developed interest and passion for Continuous Improvement</p> <p>Quality Supervisor for Beef Products Inc. (Waterloo) Assembly Supervisor for Clipper in March 2007 (Cedar Rapids) Continuous Improvement Manager for Clipper in November 2009</p> <p>3</p> <p>Clipper Windpower </p> <p>Company Incorporated in 2001 Manufacturing began at Cedar Rapids in 2006 </p> <p>2006 - 8 units produced 2007 - 137 units produced 2008 - 289 units produced 2009 projecting 117 units (no orders cancelled, only delays) Approx. 190 assembly Others include Engineering, Quality, RMDC, Clipper Fleet Service, etc.</p> <p>Approximately 280 employees in Cedar Rapids </p> <p>The Facility is 330,000 sq. ft. Manufacturing the 2.5 MW Liberty Wind Turbine </p> <p>Gearbox, Hub, Machine Base, Rectifiers, Parts Containers Assembled Nacelle, Towers, Generators, Transformers, etc. outsourced4</p> <p>Clipper Windpower Continued </p> <p>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</p> <p>no material processing or fabrication work</p> <p>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 year5</p> <p>The Disclaimer </p> <p>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 Ive been dedicating extra time to this particular topic Ive collected and condensed some SD information Many of you probably have relevant experience</p> <p>Please, stop me at any time for discussion or if youd like to contribute by further clarifying a particular item.6</p> <p>Focus of Todays Discussion </p> <p>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.</p> <p>My Approach </p> <p>Basic Overview of the different Methods Tools associated with those methods Open Discussion Thought Provoking Article7</p> <p>Why Focus on Strategy Deployment? </p> <p>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. Its a Criteria for Performance Excellence (Baldrige)</p> <p>Strategic Planning and Business Results are two key criteria for performance excellence</p> <p>The transition away from command and control, and the frustrating that may accompany it. Bottom line, its a necessary part of realizing success.8</p> <p>Definitions</p> <p>Strategy </p> <p>Is a plan of action designed to achieve a particular goal.</p> <p>The word strategy has a strong military connotation.</p> <p>Strategy is different from tactics.</p> <p>Deployment </p> <p>To arrange in a position of readiness, or to move strategically or appropriately. </p> <p>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</p> <p>Strategic Management </p> <p>Developing, evaluating and making decisions that will enable an organization to achieve its long-term objectives9</p> <p>What is Strategy Deployment?</p> <p>The nervous system of a business systemGuides planning and action across an organizations total value stream Provides a closed circuit between an organizations business needs and day-to-day activities.</p> <p>10</p> <p>Pre-requisites to Deployment</p> <p>Company Philosophy and Quality Policy Basic Strategic Planning</p> <p>Vision and Mission Values Statement SWOT Analysis</p> <p>Strengths, Weaknesses, Opportunities, and Threats</p> <p>Any others?11</p> <p>Discussion Points</p> <p>Questions we should be asking as strategic planners.</p> <p>How widely understood is our companys mission and/or vision and the companys top strategy among our employees?</p> <p>Are certain industries better at this than others? If so, why?</p> <p>Does your company have a published set of values or beliefs? </p> <p>How widely known are they? Do they make a difference?</p> <p>The answers to these simple questions will serve as indicators of the companys ability to effectively deploy a strategy.</p> <p>A commander cant effectively deploy troops without each of them clearly understanding the mission.12</p> <p>Methods of Deployment</p> <p>Management by Objectives </p> <p>Cascading Objectives and Goals SMART Goals </p> <p>Specific Measurable Achievable Relevant Time bound</p> <p>Hoshin Kanri</p> <p>Catchball, A3-X, and A3-T13</p> <p>Balanced Score Card</p> <p>Management By Objective (MBO)</p> <p>The Principles of Management by Objective</p> <p>Cascading of organizational goals and objectives </p> <p>Mission Critical Objectives at the CEO Level Mission Critical Objectives at the Plant Level</p> <p>Specific objectives for each member</p> <p>Cascaded Goals through Success Factors</p> <p>Performance evaluation and provide feedback</p> <p>Performance Evaluation System14</p> <p>Management By Objective</p> <p>Important features and advantages of MBO are:</p> <p>Motivation </p> <p>Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. Frequent reviews and interactions between superiors and subordinates helps to maintain relationships within the enterprise and also solve many problems faced during the period. The concept of SMART goals15</p> <p>Better communication and Coordination </p> <p>Clarity of goals </p> <p>Limitations and Arguments Against </p> <p>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</p> <p>argued that a lack of understanding of systems commonly results in the misapplication of objectives</p> <p>16</p> <p>Discussion Points</p> <p>When done properly MBO ideally: </p> <p>improves motivation and communication involves employees in goals setting provides frequent feedback on performance</p> <p>Is this typically what would be found if a companys 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</p> <p>Definitions </p> <p>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:</p> <p>Policy deployment, Strategic Initiatives, Management By Policy, Hoshin Planning, Policy Management, Managing for Results, Strategic Deployment and Goal Deployment.</p> <p>18</p> <p>Hoshin Kanri</p> <p>Purpose and Usage </p> <p>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</p> <p>19</p> <p>Hoshin Kanri</p> <p>Steps and Skills Required</p> <p>Planning and Communication </p> <p>Get Involvement Set the course X-Chart Two Deployment Styles or Target Top-down and Bottom-up</p> <p>Project Initiation and Execution </p> <p>Catch Ball Target Deployment</p> <p>Project Charter Standard Process for follow through Review of what worked and what didnt work20</p> <p>Reflection</p> <p>Hoshin Kanri</p> <p>Hoshin Kanri can be thought of as the application of Deming's Plan-DoCheck-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.</p> <p>21</p> <p>Hoshin Kanri</p> <p>Three key elements </p> <p>Catchball Project Charter (A3-T) X-Charts (A3-X)</p> <p>22</p> <p>Catchball</p> <p>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.</p> <p>23</p> <p>Project Charter (A3-T) </p> <p>Boil things down to one page Clarifies that no one person can accomplish a strategy Very reminiscent of PDCA and DMAIC</p> <p>24</p> <p>25</p> <p>X-Charts (A3-X) </p> <p>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 communication26</p> <p>27</p> <p>Strategy Area Contains the highest level mandates Start here Should link directly to corporate strategy, one levelabove the group for which you are planning.</p> <p>28</p> <p>Metrics Area Fill this in second Put in standard and/or mandatedoperational figures your group needs to meet</p> <p>29</p> <p>Tactics Area Work on this third Will lay out specific projects Will become the basis for managing implementation</p> <p>30</p> <p>Team Members Area Work on this fourth List Names of the people who will be responsible forimplementing the tactics</p> <p>Use proper names, not titles</p> <p>31</p> <p>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 yourteam and in your company</p> <p>32</p> <p>Strategy-to-Tactics Correlation Does a tactic really support one or morestrategies?</p> <p>Is there a more effective tactic? Is there a non-necessary tactic? Do you really understand the individualstrategy statements?</p> <p>33</p> <p>Tactics-to-Metrics Correlation &amp; Contribution Does a tactic improve a specificmetric's)?</p> <p>Will it move the metric adequately? Does each metric have some tacticto improve it?</p> <p>Do you really understand theindividual metrics?</p> <p>34</p> <p>Tactics-to-Team Member Accountability Does each tactic have a skilled person tolead it? lead?</p> <p>Does one individual have too many tactics to Are there other people who need to belisted?</p> <p>Does each individual understand his/heraccountability?35</p> <p>Metrics-to-Results Correlation/Contribution Does each metric contribute to oneor more financial results which we value?</p> <p>How much does each metriccontribute?</p> <p>Are we measuring the right things inour results?</p> <p>Can we compare plan to actual overthe period covered by the plan?</p> <p>36</p> <p>Strategy-to-Results Correlation Does each strategy contribute to oneor more financial results which we value?</p> <p>How much does each strategycontribute?</p> <p>Is a strategy for show or forresults (e.g. a Super Bowl ad)?</p> <p>37</p> <p>38</p> <p>Hoshin Kanri</p> <p>Strengths </p> <p>Limitations </p> <p>Focuses organization on the vital few Communication of a shared vision Creates alignment through participation Encourages cross functional cooperation Planning is systematic</p> <p>A rigid implementation is necessary Requires a long term commitment Relatively Static the breakthrough objective must be stable during a 5 year period</p> <p>39</p> <p>Discussion Points</p> <p>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 its use effective or ineffective? Would you recommend this system to others? Why?40</p> <p>Balanced Score Card</p> <p>A Strategic planning and management system</p> <p>May mean different things to different people (the BSC spectrum) </p> <p>From a Performance Measurement Framework = Dashboard To a Robust Organization-wide Strategic Planning, Mgmt, and Communication System</p> <p>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 organizations strategic plan from a document into marching orders.41</p> <p>Balanced Score Card</p> <p>View the organization from four perspectives Develop Metrics Collect Data Analyze Data to each perspective PDCA42</p> <p>Balanced Score Card Continued</p> <p>Why Implement a Balanced Scorecard? </p> <p>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 organizations Vision and Strategy Prioritize Projects / Initiatives43</p> <p>Balanced Score Card Continued </p> <p>Scorecards simply for organizing measures arent 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 </p> <p>The pieces are strategic components They have to be checked for fit</p> <p>44</p> <p>Recall Lou Novikoff, a.k.a.The Mad Russian, Chicago Cubs, 1940s</p> <p>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</p> <p>BSC Continued</p> <p>The major system components: </p> <p>Engaged Leadership Interactive Communications and Change Management Vision and Mission Core Values Organization Weaknesses and Strengths</p> <p>Customers and Stakeholders Customer Value Proposition Strategy, Strategic Objectives, and Initiatives Performance Measures Performance Information Reporting Rewards and Recognition Evaluation</p> <p>46</p> <p>Questions and Discussion?</p> <p>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 arent using either method, what else is being done in order to fill this need?47</p> <p>Quality Measurement Systems that Support Strategy DeploymentBaldrige Criteria1. Leadership 2. Strategic Planning 3. Customer and Market Focus 4. Measurement, Analysis, and Knowledge Management 5. Human Resources 6. Process...</p>