policy deployment
TRANSCRIPT
1
POLICY (STRATEGY) DEPLOYMENT
A proven process for strategy execution.
2
PRESENTATION AGENDA
1. A FEW COMMENTS ON STRATEGY DEVELOPMENT.
2. THE POLICY DEPLOYMENT PROCESS EXPLAINED.
3. A CASE STUDY ; BORAL Ltd.
3
WHAT IS STRATEGY ALL ABOUT?
STRATEGY EXPLAINS HOW AN ORGANISATION, FACED WITH COMPETITION, WILL ACHIEVE SUPERIOR PERFORMANCE.
•WHAT VALUE WILL THE ORGANISATION CREATE?
•HOW WILL THE ORGANISATION OFFER A UNIQUE PRODUCT OR SERVICE TO CUSTOMERS?
4
Research consistently identifies reasons for failure include:
1. People cannot implement what they do not know.
2. People do not implement properly what they do not understand.
3. People do not implement what they are not committed to.
4. People give up on a strategy, the implications of which, have not been anticipated and thought through.
5. Management overlook the importance of the “HOWS” of executing the strategy.
WHY DO SOME BRILLIANT STRATEGIES FAIL?
“Policy deployment will help Management identify and practically manage the implementation of a strategy of the Company’s products, markets, customers, organisation structure, systems, processes, personnel and culture”
5
The key to success is to focus on doing the right things and getting the right results.
Problems in operations often originate in other functional areas. P.D. provides the means to cement all functions together by aligning objectives. (This is equally applicable to any process, in any industry wherever there is a customer)
There are so many things to do, we need to de-select some worthy initiatives!
It starts with correctly identifying the business critical issues.
Then it’s about developing the plan to resolve the issues and deliver the strategy.
Policy (strategy) Deployment keeps everyone focused on the real prize ; creating value for the customer. All our lean tools are means to this end and not ends in themselves.
Lean must be supported from the top of the organisation. Anything less will not be sustained.
Policy Deployment directs people to do what they should do, rather than what they want to do by aligning all activities to the top level Strategic Vision
THE LEAN CONNECTION
What has Policy Deployment got to do with Lean and continuous improvement?
6
POLICY DEPLOYMENT ISSUES
Because;• It is dealing with a multitude of complex issues.
• It addresses the many conflicting goals which can arise between functions.
• It puts people and culture centre stage.
However, once mastered, the benefits are significant and include;
• It aligns people and actions to the true “North Star”
• It generates synergies via teamwork.
• It helps each part of the organisation become aware of the effect of its own actions on every other part.
• Cross functional learning is fast tracked.
• It builds confidence in the plan knowing every facet has been empirically considered.
• It identifies and prioritises the business critical issues and deselects the unimportant.
POLICY DEPLOYMENT IS THE PIECE THAT
IS THE MOST DIFFICULT TO MASTER;
7
THE PROCESS EXPLAINED
8
Purpose
To support the achievement of the business strategy through the alignment of all employees, functions and divisions to the business goals
To execute the strategic plan, identifying and focusing on the business critical issues and de-selecting non essential activities.
To achieve ownership, focus, direction and commitment through the involvement of everyone
The Foundation Stone
W Edwards Deming’s PLAN, DO, CHECK, ACT (P.D.C.A.) cycle is at the heart of Policy (Strategy) Deployment.
(The planning normally gets done well but the Do, Check and Act don't!)
WHAT IS IT ALL ABOUT?
9
We assemble the entire top team. This must include all the people that contribute to the business performance : Engineering, Sales, Marketing, Divisional Heads, Production, Purchasing, Legal, Finance, HR, IT, Logistics, etc.
The first analysis is focused entirely on what the customer
really, really wants. (which may be different from what we think he wants!)
We must insist on reality
Agree Debate
Challenge
THE PROCESS STARTS BY CONSIDERATION OF THE WHOLE VALUE STREAM
Co. A
10
TIME
Procurement
Engineering
Manufacture
Design
Contracts
Sales
Test
Peoples objectivesInconsistent
Working hard achievingDepartmental goals
Peoples objectives aligned
Working hard achievingBusiness goals
Policy Deployment
Process
THE POLICY DEPLOYMENT PROCESS
11
Business Long Term Plan
1 Year Plan
Company Objectives
Divisional Objectives
Site Objectives
Individual Objectives
Purpose & Values
Strategic Vision
Cas
cade
Power of processPower of process
STAGES OF POLICY DEPLOYMENT
12
CORPORATE STRATEGY
DIVISIONALSTRATEGY
COMPANY/ PLANT
STRATEGIC PLAN
THE BIG PICTURE; STRATEGIC FIT & ALIGNMENT
Function / Departmental
Objectives
Individuals
Objectives
13
…SO, WHAT IS THE DIFFERENCE BETWEEN BEING “INVOLVED” AND BEING “COMMITTED”?
Well think of a nice breakfast of Eggs and Bacon
THE CHICKEN IS INVOLVED, BUT THE PIG IS COMMITTED!
14
THE MOST ADMIRED COMPANIES;What do they do? How do they do it? What do they measure?
15
Requirements
Criteria (examples)Improvement Measure
Current Group Perform. 2013 2014 2015
Best in Class Measures
Where we need to be in 2016
Safety and Environment
Quality
Cost
Market Share
Profit
Cost
On Time Delivery
Working Capital
Innovation
Management and Organization
etc. etc.
LONG TERM PLAN WALLCHART
16
Criteria“Measures that matter” Improvement Measure
Current Group performance
Reqt. in 2013 Gap Statement
Safety & Environment LTIFR 2 1.5
The i care programme must be implemented across all sites by end 2012. We must eliminate all accidents on the front line and back offices. The root causes of muscular stress need to be determined
Internal auditing 5 issues 2 issuesWe should strive to obtain ISO 18001 in year 1.
We should record all scrap and disposal bin details
Green house gas emissions 3.2 2.9 Evaluate alternative fuels
PIN 5 2 Dust controls required
Quality Process ppm 10,000
Cost $ per c.m. $ 5 $ 4
We must improve process efficiency through value stream mapping. 20% reduction is required.We must negotiate better terms of payment with suppliers.
Cash Generation $750k $1.5mWe must reduce our w.i.p by implementing a pull system, getting better ontrol of suppliers and forecasting capability.
Delivery DIFOT 78% 95%We must achieve significant improvement in supplier performance in
support of our requirements for delivery and cost
Lead Time 9 hrs 2 hrsWe must improve our systems to reduce throughput times. Lead times should be halved in 12 months.
Development
Management Forecast accuracy +/_ 20% +/_ 5%We must implement a Sales and Operations planning process and
reduce product complexity.
DEVELOPING GAP STATEMENTS ; An example
When determining the Gap statements consider;What is the gap; what are we trying to improve?What is preventing us from meeting our target?What are the root causes in order of importance?
17
COMPANYOBJECTIVES
FEEDBACKFROM
CUSTOMERS
STRATEGICISSUESFROM
LONG TERMVISION
MANAGEMENTFEEDBACK
CARRIED OVER
OBJECTIVES
FEEDBACK FROM THE
WORKFORCE
BUDGETARY & BUSINESS
PLAN REQ’TS
DIVISIONAL/PLANT
OBJECTIVES
SPECIFICPROJECT
ALIGNMENT
OUTSTANDINGFUNCTIONALOBJECTIVES
RESOURCEALLOCATION
FUNCTIONALISSUES
FUNCTIONAL/DEPART-MENTAL
OBJECTIVES
PROJECTALIGNMENT
RESOURCE ALLOCATION & DEPARTMENTAL
ISSUES
INDIVIDUALOBJECTIVES
INDIVIDUALNEEDS
INDIVIDUAL & DEPARTMENTAL
ISSUES
ESTABLISHING COMPANY OBJECTIVES - REFERENCES
18The only daft questions are the ones that don’t get asked!
• Are we facing reality?• What are the critical issues facing the business?• Do we understand what our customers really want? (internal and external)• We need to double our stock-turns. How can it be improved? What help do
you want?• Do we have the best suppliers? Do we have too many suppliers? How do we
improve them?• Do we have the best people? Are they suitably rewarded?• Do you understand the Plant objectives and what are you working on to help
achieve them?• What keeps you awake at night? (work related of course)• If you had 3 wishes what would they be? • If you travel at the speed of light, do your headlights work?• How do you know when you are out of invisible ink?
“CATCHBALL” DISCUSSIONS UP AND DOWN THE ORGANISATION EXAMPLES
“Outstanding Leaders know how to ask questions – the right questions”
19
people
systems
cost
quality
safety
environment
delivery
innovation
”CATCHBALL” REFERENCES & IDENTIFYING THEMES
20
1. WORK SAFELYStrive to create a harm free work place and business environment which is best in class
2. ACHIEVE OUR BUDGETMeet or exceed financial and efficiency improvement targets
3. GROW THE BUSINESSBe recognised by our customers as a “World Class” service provider
4. DEVELOP OUR PEOPLEPlan and execute a Training and Development program to create customer focused leaders and develop a skill base which will constantly improve our business
5. CONTINUOUSLY IMPROVEBecome an agile and lean organisation, built upon a foundation of continuous improvement that is recognised as “Best in Class”
COMPANY / PLANT OBJECTIVES – AN EXAMPLE
21
THE OBJECTIVES MUST BE “SMART”
Specific
Measurable
Agreed/Achievable
Realistic
Time related
TESTING THE OBJECTIVES
22
DETERMINING THE TOP LEVEL COMPANY TARGETS
(THE DASHBOARD ON THE BRIDGE)
Profitability
Safety/Envir. People Customers InnovationOperations
HMAS COMPANY X
Sales
23
For each objective consider how it could be achieved
What actions can we take to achieve them? These are the potential projects to be considered
We identify the projects required to achieve each objective and list them.
We then prioritise them using the “seriousness, urgency and growth” analysis process
Then we consider the improvement that each project will make and set quantifiable targets and completion dates.
PROJECT SELECTION
24
When determining the Projects ask;
1. What are we trying to improve?
2. What is preventing us from meeting our target?
3. What are the causes in order of importance?
4. What actions will address the most important causes?
PROJECT SELECTION Cont.
25
POLCY DEPLOYMENT MATRIX
PLANT XXX
COMPILED BY; THE MANAGEMENT TEAM
THE POLICY DEPLOYMENT MATRIX EXPLAINED .
26
THE MATRIX EXPLAINED cont.
27
THE MATRIX EXPLAINED cont.
28
POLCY DEPLOYMENT MATRIX
PLANT XXX
COMPILED BY; THE MANAGEMENT TEAM
THE MATRIX EXPLAINED cont.
29
COMPLETING THE MATRIX
Next:
Decide who, from the senior team, will lead each project, who will support as a cross functional team member, and who will facilitate it
Work your way round the matrix completing the boxes to show the alignment of the Company objectives ( LH envelope) to the Improvement targets (bottom envelope) and the
Company projects, (top envelope) to the project metrics (RH envelope)
The first cut of the PD matrix can now be completed.
Hint! An important part of policy deployment is growing strong deployment leaders who help develop trust and collaboration between functions necessary to acknowledge and address deeply rooted problems.
30 30
DepartmentalObjectives
Personal Objectives(held by employee)
Company Policy Deployment
Matrix
Divisional/Functional/plant
Deployment Matrix
A POLICY DEPLOYMENT MATRIX EXAMPLE
31
A CASE STUDY; BORAL LTD
32
MONITORING PROGRESS & ACOUNTABILITY
33
Now the entire team can see the complete landscape and not just the next
mountain.In the time allowed I have only been able to provide an overview of the process. There are many related issues including hints and tips regarding such questions as; • How best to manage projects using A3s.• How to deal with non committed bosses.• How to conduct follow up reviews and at what frequency.• What if the process does not start at the very top?
I will be covering these and more in the workshop discussion session later.
In summary let me say this is a process, not an event. The key is to develop commitment through involvement whilst giving people the freedom to make decisions, but within a framework of a “box”, or “Russian Doll”, aligned to the top level strategy, focused on the important few projects whilst having the courage to deselect or defer the less critical.
CONCLUDING COMMENTS
34
THE END THANK YOU FOR LISTENING.