CHAPTER 5

Strategic Focus for Performance Excellence 2

CHAPTER 4Strategic Focus for Performance ExcellenceTeaching NotesThis chapter centers on strategic management as the basis of all managerial activities relating to total quality management. While leadership is acknowledged as the "driver" for an effective TQ focus, this chapter focuses on the planning process, while leaving the details of leadership theory to be addressed in Chapter 9. Strategic planning and management have become more important in organizations that aspire to high quality levels, so leaders must understand how to "deploy" plans and quality efforts throughout the organization.

One of the key functions of strategic focus is to provide alignment of quality goals and plans with the overall strategy of the firm. Poor deployment of quality can generally be traced back to poor strategy development and alignment. The internal environment of the organization must also develop and encourage alignment, as well as the focus on doing quality at the grassroots level.

Students should be encouraged to focus on what to do, how to do it, when to do it, and how strategic leadership must actively be involved in doing it as they look at strategic quality planning and management. The Baldrige Criteria provide a frame of reference for assessing organizational effectiveness and for benchmarking strategic planning. Key objectives for this chapter should include:

To define strategy as the pattern of decisions that determines and reveals a companys goals, policies, and plans to meet the needs of its stakeholders. Strategic planning is the process of envisioning the organizations future and developing the necessary goals, objectives, and action plans to achieve that future.

To develop the process and content of planning for quality in organizations. Steps in strategy formulation begin with determining the organization's mission, vision, and guiding principles. These lead to strategies, strategic objectives, and action plans that set the direction for achieving the mission.

To emphasize the critical role of strategic leadership in strategic management.

To become aware that key practices for effective strategic planning include active participation by both top management and lower-level employees, a strong customer focus, supplier involvement, and well-established measurement and feedback systems.

To learn that deploying strategy effectively is often done through a process called hoshin kanri, or policy deployment, that emphasizes organization-wide planning and setting of priorities, providing resources to meet objectives, and measuring performance as a basis for improving it and is essentially a total quality approach to executing strategy.

To understand how the seven management and planning tools can help managers to implement policy deployment and are useful in other areas of quality planning.

To learn that the strategic planning process is fundamental to the Baldrige criteria, ISO 9000:2000, and Six Sigma. Although the relative emphasis varies, each of these frameworks views strategic planning and deployment as a critical means of focusing the organization, successfully implementing an effective quality management system, and ensuring that longer-term directions are achieved.

The Instructors Resource materials found on the website, have a number of Baldrige video clips which give an inside view of organizations that have received the Baldrige award. One of those, featuring Baldrige award recipient, Texas Nameplate Corporation, has a number of scenes that show how a small business can exemplify world-class strategic planning and leadership principles. These can be used to supplement the numerous examples of many of the Baldrige winners that we provide in the text. It can also put faces to some of the names that are mentioned, such as Dale Crownover, CEO of Texas Nameplate.ANSWERS TO QUALITY IN PRACTICE KEY ISSUESIntegrating Six Sigma with Strategic Planning at Cigna1. Cigna has five strategic imperatives:

a. Establish a meaningful cost advantage relative to the competition.

b. Help improve the health and well-being of members and the people Cigna insures.

c. Bring innovative products and services to market.

d. Become the partner of choice to its customers.

e. Create a winning environment in the organization.

Six Sigma can and does help meet these strategic imperatives. Cignas Holistic Six Sigma Model shows how Six Sigma is being used to help it address its five strategic imperatives. Their approach appears to be consistent with the discussion of Six Sigma and competitive strategy at the end of this chapter. Six Sigma is a way to turn performance improvement needs into reality. To be effective, it must be integrated into strategic planning processes. In Cigna, their Holistic Six Sigma Model corresponds to the three levels of strategy: corporate, strategic business unit (SBU), and competitive (tactical). At the corporate strategy level, the question of How do we, as an organization, grow? is partially answered by using Six Sigma methodology to define which areas of improvement to pursue. At the SBU or divisional level, the strategic question of: Where does the organization focus its resources to enhance its value offering? is addressed by metrics for QA, standard operating procedures, and change management. Finally, at the tactical level, where competitive strategy focuses on value enhancement the questions of: Where are the organizations best opportunities for widening a value advantage or closing a disadvantage? On what basis does the organization widen or close the value gap? How does the organization get its best return on investment for these efforts? are answered by carrying out specific projects or events using DMAIC, DFSS, and Kaizen and other Six Sigma tools. These tools of are particularly effective for improving business processes. The challenge lies in directing those tools toward improvements that will have a direct impact on value gaps. That requires aligning Six Sigma with the organizations competitive strategy. 2. Some Six Sigma projects that might support the objectives could include: 1) cost reduction projects in areas such as underwriting or claims handling, in order to establish a meaningful cost advantage relative to the competition.; 2) health improvement projects to improve the health and well-being of members and the people Cigna insures; 3) product development in order to bring innovative products and services to market; 4) improve P.R. in order to become the partner of choice to its customers; 5) communication, training, and celebration of successes within Cigna to help develop a winning environment.Strategic Planning at Branch Smith Printing Division

1. Branch-Smiths strategic planning process (SPP) is unique in several ways. First, it is unusual to find such a comprehensive planning process in a small business. Second, they have been especially careful to include monthly tracking and updates to permit them to proactively respond to opportunities and risks. Although the company covers the key stages of the strategic planning process presented in the chapter environmental assessment, strategies, strategic objectives, and action plans they have tailored the process to their organization. Note that they have three steps in their model before doing their business analysis, which is equivalent to environmental assessment. These three steps in Branch-Smiths process focus on the prior years performance and lessons learned, before moving on to new and revised plans. They also take partner capabilities into account in their business analysis. In steps 5-8 the plan is updated and action plans in the form of cascaded deployment and budget are incorporated. Step 8 is ongoing review on a monthly basis, mentioned above.

2. Branch-Smiths strategic challenges revolve around the competitiveness of the industry. The company competes on its ability to service customers needing high quality, short run, quick turnaround orders. To cost-effectively serve their niche, they use appropriate technology and management of customer and partner relationships. Objective 1 points at the need for effective process improvement and healthy supplier relationships in order to enhance financial performance. Objective 2 reinforces their customer focus and their goal to become the partner of choice to their customers. Objective 3 points to the key role of employees as internal partners and the goal to become the employer of choice in their region by providing the same quality environment to coworkers as we extend to our customers. To achieve these goals, Branch-Smith should (and generally does) provide for deployment through specific, cascaded activities such as continuous process improvement, customer relationship planning, employee involvement and empowerment, customer and employee surveys, etc.

ANSWERS TO REVIEW QUESTIONS1.Strategy is the pattern of decisions that determines and reveals a companys goals, policies, and plans to meet the needs of its stakeholders. Strategic planning is the process of envisioning the organizations future and developing the necessary goals, objectives, and action plans to achieve that future.

Thus, a strategy provides a roadmap to achieve a vision of what the organization should and could be three, five, or more years in the future. A good strategy should build a competitive posture that is so strong in selective ways that the organization can achieve its goals despite unforeseeable external forces.

Making it happen is the essence of strategic planning, which generally requires strong, participative strategic leadership. Formal strategies contain three elements:

a. Goals to be achieved.

b. Policies that guide or limit action.

c. Action sequences, or programs, that accomplish the goals.

2. The key practices for a strategic focus on performance excellence include:

Understand the organizations operating environment and its key relationships with customers, suppliers, partners, and stakeholders.

Understand the competitive environment, the principal factors that determine success, the organizations core competencies, and strategic challenges business, operational, and human resource-related associated with organizational sustainability.

Gather and analyze relevant data and information pertaining to such factors as the organizations strengths, weaknesses, opportunities, and threats; emerging trends in technology, markets, customer preferences, competitions, and the regulatory environment; long-term organizational sustainability; and the ability to execute strategic plans.

Develop and refine a systematic approach for conducting strategic planning and setting strategic objectives, including identifying blind spots, leveraging strengths, and addressing challenges over appropriate time horizons.

Develop and align short-term action plans with long-term strategic objectives, ensure adequate resources and the ability to sustain outcomes, assess financial and other risks associated with the plans, and communicate them throughout the organization.

Derive human resource plans required to accomplish longer-term strategic objectives and shorter-term action plans that address the potential impacts on the workforce and potential changes to workforce capability and capacity needs.

Identify key measures or indicators for tracking progress on action plans, ensure that the measurement system reinforces organizational alignment, and project performance of these key measures compared with competitors or comparable organizations to identify gaps and opportunities.

Determine the organizations core competencies, and understand how they relate to the mission, competitive environment, and strategic objectives.

View the work performed within the organization as a system, and make rational decisions about the mix of internal and external work processes that can best achieve the organizations mission.

3. Strategic leadership can be defined as a person's ability to anticipate, envision, maintain flexibility, think strategically, and work with others to initiate changes that will create a viable future for the organization, and its competitive advantage to the organization in this way. Strategic leaders must be actively involved in creating and communicating a vision of the future, sustaining an effective organization culture, making strategic decisions, developing key competencies and responsibilities, managing multiple constituencies, selecting and developing the next generation of leaders, and infusing ethical value systems into an organizations culture. Effective strategic leaders also have the capability to create and maintain absorptive capacity (the ability for an organization to learn) and adaptive capacity (the ability of an organization to change) in order to deal with increasingly hyper-turbulent environments. They must also exhibit managerial wisdom, with the ability to perceive variation in their environment and understand the social actors and their relationship in the system.

4.The Baldrige Organizational Profile provides a frame of reference to help an organization better understand the internal and external factors that shape its operating environment, the key requirements for current and future business success and organizational sustainability; and the needs, opportunities, and constraints placed on the organizations performance management system.

Information is sought and classified into two principle categories, including: 1) organization description, with sub-categories of organization environment and organization relationships; and 2) organization situation with sub-categories of competitive environment, strategic context, and performance improvement system.

The value to the organization is that by understanding these factors, it can better focus strategic thinking within the organization. Thus, knowing an organizations strengths, vulnerabilities, and opportunities for both improvement and growth helps to identify those products, service and program offerings, processes, competencies, and performance attributes that are unique; and that set it apart from other organizations. Those strengths can help to sustain a competitive advantage.5.The steps in the strategic planning process are shown in such examples as Eastman Chemical Company (Figure 4.1) and Park Place Lexus (Figure 4.2). Once the company's mission, vision, and guiding principles have been determined, the organization must assess the gap as to where it is now, and where it wants to be as described in its vision. Using this assessment, it must then develop goals, strategies, and objectives that will enable it to bridge this gap.

Key business factors include:

the nature of a company's products and services, its principal customers, major markets, and key customer quality requirements

position in market and competitive environment

facilities and technologies

suppliers

other factors, such as the regulatory environment, industry changes, etc.

Strategic plans must be consistent with the important business factors of the company. For example, plans for a company in a highly competitive, fast-changing market might include fast cycle time and more attention to understanding emerging customer needs than plans for a company with a low-cost focus on a mature market.

6.The purpose, or mission, of the organization is a statement of "why the organization is in business." In the past, the purpose of the organization was frequently stated in terms of products or services produced or profitability to stockholders. TQ-focused firms are now stating their purpose in terms of their customer focus and their commitment to strive for higher levels of quality.

The vision statement is a statement of guiding values, principles, and direction of expected growth of an organization or some segment of it, and is generally developed by key managers and others who are responsible for planning and carrying out that vision. Vision statements may be developed at any level within the organizational hierarchy from top to bottom. This is a very worthwhile activity, as long as the statements are coordinated so as to fit with those of the next higher level and the overall organization's vision.

Values, or guiding principles, guide the journey to that vision by defining attitudes and policies for all employees, which are reinforced through conscious and subconscious behavior at all levels of the organization. The mission, vision, and guiding principles serve as the foundation for strategic planning. Top management and others who lead, especially the CEO, must articulate them. They also have to be transmitted, practiced, and reinforced through symbolic and real action before they become "real" to the employees, and the people, groups, and organizations in the external environment that do business with the firm.

7.Hoshin kanri, known as policy deployment or management by planning in the U.S.A., is the Japanese process of deploying management strategy. Various companies have various definitions for policy deployment. In all cases, it emphasizes organization-wide planning and setting of priorities, provides resources to meet objectives, and measures performance as a basis for improving performance. Essentially, it is a TQ-based approach to executing a strategy. (See Figure 5.5 in the text).8.Catchball is the term for the negotiating process used within an organization to determine long- and short-term quality objectives. Leaders communicate mid-term objectives and measures to middle managers who develop short-term objectives and recommend necessary resources, targets, and roles/responsibilities. Catchball is not an autocratic, top-down management style. It marshals the collective expertise of the whole organization and results in realistic and achievable objectives that do not conflict.

Policy deployment is a planning and implementation method that ties improvement activities to long-term strategies of the organization. It is driven by data, supported by documentation, emphasizes company-wide planning, and includes setting of priorities for improvement. It is somewhat similar to MBO, but has a different focus. First, MBO focuses on the performance of the individual employee, while policy deployment focuses on the organization as a whole. Objectives in MBO are tied to performance evaluation and rewards. Second, MBO objectives do not support the company's objectives, but are set independently. Third, the focus of MBO is as a control mechanism between supervisors and subordinates. Fourth, MBO objectives usually are not emphasized in daily work, but are brought out only at performance review time.

9.The seven management and planning tools described in this chapter include:

1. Affinity diagrams--This is a tool for organizing a large number of ideas, opinions, and facts relating to a broad problem or subject area, i.e. a vision statement.

2. Interrelationship digraphs--Identifies and explores casual relationships among related concepts or ideas. It shows that every idea can be logically linked with more than one idea at a time, and allows for "lateral thinking" rather than "linear thinking."

3. Tree diagram--Maps out the paths and tasks necessary to complete a specific project or reach a specified goal.

4. Matrix diagrams--These are "spreadsheets" that graphically display relationships between ideas, activities, or other dimensions in such a way as to provide logical connecting points between each item.

5. Matrix data analysis--Takes data and arranges it to display quantitative relationships among variables to make them more easily understood and analyzed.

6. Process decision program chart--A method for mapping out every conceivable event and contingency that can occur when moving from a problem statement to possible solutions.

7. Arrow diagrams-- Arrow diagrams are another name for PERT/CPM project planning diagrams. Students who have had a basic operations management course may be familiar with the term network diagrams for project planning and scheduling.

10.Key contextual factors that affect organizational structure include:

Company organizational and organizational guidelines

Management style

Customer influences

Company size

Diversity and complexity of product line

Stability of product line

Financial stability

Availability of personnel

The implications for quality are that the quality philosophy, systems, procedures, and people must be aligned with the organization structure and vice-versa. It has been said that structure follows strategy, so, the quality strategy will ideally drive the development of a structure in order to carry it out. In reality, structures that have been in place for a long time are often difficult to change when the strategy changes, which creates significant misalignment and organizational stress. For example, when a highly regulated industry, such as telecommunications or electric power is deregulated, then the need for customer focus, increased service quality, and organizational structural change becomes painfully apparent, but difficult to accomplish.

11.Many variations of organization structure exist, but they are commonly based on one of the following three forms: 1) line organization, 2) line and staff organization, or 3) matrix organization forms. The line organization is a simple form that is most successful in small firms. It is not generally used in large organizations, where the line and staff structure is most prevalent. Neither the pure line organization nor line and staff organization works very well where the environment of the firm and its industry is changing very rapidly. That is because these types of organizations tend to be rigidly structured. The matrix organizational form is better suited to rapidly changing environments, but it is more difficult to develop effective control of outcomes in order to meet goals using this form of organization.

12.TQ focused organizations are often taking a process view of organization. Therefore, they are increasingly structuring their organization around functional or cross-functional teams. To carry out the work, high performance teams that focus on core processes, quality improvement or other targets are often formed. These are frequently coordinated through cross-functional coordinating committees, management (or quality management) councils, etc. to overcome the problems of lack of control and accountability inherent in such matrix-form organizations.

13. Core competencies are an organizations areas of greatest expertise that provide a sustainable competitive advantage in the marketplace or service environment. A core competency should meet three conditions: a. contribute significantly to customer benefits

b. provides access to many products and markets

c. be difficult for competitors to imitate

Core competencies may involve technology expertise, unique service offerings, a marketplace niche, or a particular business acumen (e.g., business acquisitions). Some examples of core competencies might be quality and productivity practices (e.g., Toyota), superior customer relationship management (e.g. Nordstroms), innovation in design and new product development (e.g., Apple), supply chain management (e.g., Dell), or marketing/branding expertise (e.g., Procter & Gamble). An organization needs to understand its core competencies and how they support the organizations mission, enable it to compete against its competitors, and help drive strategic objectives and action plans.

14. Work systems coordinate the internal work processes and the external resources necessary to develop, produce, and deliver products and services to customers and to succeed in marketplace. Work systems involve the workforce, key suppliers and partners, contractors, collaborators, and other components of the supply chain needed to produce and deliver products, services, and business and support processes. Decisions about work systems are strategic. These decisions involve protecting and capitalizing on core competencies and deciding what should be procured or produced outside the organization in order to be efficient and sustainable in the marketplace.

Outsourcing is the practice of transferring the operations of a business function to an outside supplier and may be done through offshoring, in which the outsourced function is relegated to foreign shores. The opposite of outsourcing is vertical integration, by which certain business functions are acquired and consolidated within a firm. The decision to outsource or vertically integrate should be examined relative to all factors that can affect organizational performance. In many cases, the decision is based solely on costs without considering the impact on other business priorities such as quality and customer satisfaction or risks associated with protecting intellectual property. Because outsourcing can have significant impacts on an organizations work system effectiveness, it must be dealt with strategically.15.Category 2 of the Baldrige Criteria is Strategic Planning. It focuses on drivers of customer satisfaction, customer retention, and market share that lead to higher competitiveness, profitability, and business success. The category is divided into two sections, labeled as Strategy Development and Strategy Deployment. Strategy Development requires applicants to outline how they create a view of the future that takes into account the market factors in which they compete and the process of how they compete. Strategy Deployment seeks information about specific action plans that a company develops, how they are deployed, and a projection of performance. The Strategic Planning category requirements are intended to encourage strategic thinking and action, but do not imply that formalized plans or planning systems must be developed.

Strategic planning is not addressed as broadly in ISO 9000 as it is in the Baldrige criteria, but the standards do require that top management ensure that quality objectives are established at relevant functions and levels within the organization, that they be measurable and consistent with the quality policy, that planning be carried out in order to meet quality system requirements and the quality objectives, and that the integrity of the quality management system is maintained when changes are planned and implemented.

Strategic leadership is one of the most fundamental values of Six Sigma. Driving organizational change to create and sustain a Six Sigma culture simply cannot be done without strong leadership. In other words, Six Sigma cannot be an add-on or a flavor of the month. It must become the way business is done in organizations that adopt it. Leaders in Twenty-first Century organizations are finding that not only must they move from hierarchically structured organizations to learning organizations, but also they must then take the next step of moving from learning organizations to teaching organizations.

ANSWERS TO DISCUSSION QUESTIONS1. The Johnson and Johnson credo serves as a reminder to every employee of their ultimate responsibility to their direct customers (doctors and nurses, for many products) and the ultimate consumer -- patients, mothers, and fathers, for their product quality. In its leadership approaches, J&J would have to ensure that managers (leaders) "walk the talk" of the importance of quality. In addition, it would have to set up a strategic planning process to perform the 5 steps in the process developed in question 8, above, in order to be a world class competitor in quality and product safety. Students should be encouraged to research the actions that J&J took during the Tylenol product tampering case of the 1980s, which has become a classic case study on how to handle a product recall where the integrity of the product has been compromised. This situation showed that J&J did not just pay lip service to its credo.

2. The mission statement of an organization should define the reason for its existence and answers the question "Why are we in business?" The mission statement should address the anticipated quality that the organization will strive to attain, how it plans to reach it, and how it will behave toward its publics during the journey.

It is difficult to see how any of the mission statements, except possibly the last one, would inspire employees or customers to loyalty or long-term commitments to the company or its products. Most of the statements appear to be generic and might be applied to all of the companies in an industry, or even to several industries.

3. a) Caterpillar

b) DHL Worldwide Express

c) Volvo

d) AT&T

e) The International Red Cross (Note: Frances Hesselbein, one of the most widely hailed leaders of the 1990s stated that she thought that this mission statement was the best she had ever come across for its clarity, brevity, and focus.)

4. As in 2, above, it is difficult to see how any of these vision statements would inspire employees or customers to loyalty or long-term commitments to the company or its products.

a. The first statement is a vague, general statement that will be of little use to the organization. It would appeal primarily to stockholders

b. The second statement is more specific than the first, although it is also very general in tone, and would appeal to the PR department of the company.

c. The third statement is the most specific and is a customer-focused vision of the future state of the firm; it specifies the customers, including employees, shareowners and communities in which the organization does business. It promises something for everyone, but makes no mention of what the company is going to be the best at doing. It would need to be even more specific in order to be operationalized.

5. This list may vary widely, depending on the imaginations of the students. For example, an affinity diagram might be used to brainstorm and classify ways to obtain ideas about planning for, and funding the design of a new sorority or fraternity house. An interrelationship digraph might be used to clarify issues and problems for the same project. Arrow diagrams might be used to develop planning and sequencing for a thesis or term project.

6. Core competencies of colleges and universities generally revolve around the traditional areas of teaching, research, and service. In order for a specific college, such as a college of business or engineering, to develop a strategic niche, they must do one or several things very well. For example if the focus is on undergraduate teaching, the core competencies might include an outstanding co-op or internship program, faculty-student collaborative research, development of faculty mentoring skills, and/or partnership development with business and industry to ensure that students skill and knowledge bases meet the needs of the target organizations and industries in which the graduates will work. If the strategy is develop an outstanding theoretically-focused graduate program, the core competencies would require a cadre of outstanding researchers and support staff on the cutting edge of their field, well-equipped laboratories and computer support, and partnerships and research projects with recognized leading firms and organizations that could assist in advancing knowledge in the field. The leverage from a strategic perspective is generated by a focused mission and vision, an integrated strategic management system, and a focus on continuously improving the organization and processes that lead to success.7.A complete answer to this question would take up more space than is feasible for this instructors manual. It is suggested that you use the discussion in the text under Leadership and Strategic Planning in the Baldrige Criteria and Part 2 of the detailed Baldrige Criteria for Performance Excellence, as found in the Bonus materials on the Premium website, as a basis for discussion.

SUGGESTIONS FOR PROJECTS, ETC.Projects, Etc.

1. This project is designed to familiarize students with the Baldrige Organizational Profile questions and the process of using them to prepare an organizational profile for your college or a local company. Use the format of the Novel Connect case study should provide them with ideas on how those questions might be answered by the representatives of the target organization when writing the profile.2.Strategic planning styles will vary widely, depending on such factors as the type of organization, its size, and the philosophy of the top management. Students will no doubt find that some organizations will have well-developed mission and vision statements, but few guiding principles. Strategic planning may be a neglected task that only occurs when someone has time to do it. In other organizations, an elaborate planning process may exist, plans may be developed periodically, but plans are rarely reviewed or acted on. Only the most sophisticated organizations are likely to have the type of process that Solectron has that is fully articulated, deployed, systematically evaluated, and used to inform decision-making on a regular and timely basis.

5. As in discussion questions 2, 3, and 4, above, even Fortune 500 companies will often be found not taking the time, or having the expertise, to develop mission and vision statements that are useful, relevant, and inspire and motivate employees or customers.

4. More and more colleges and universities are developing well-defined mission and vision statements and strategic planning processes to develop objectives and plans. See Northern Kentucky Universitys website, for a comprehensive mission, vision, and strategic planning outline at: http://www.nku.edu/about/plan.php5.This project will provide an opportunity for students to delve into the strategic planning requirements of a high quality performance management system. See, for example, the Strategy Development and Deployment (SDD) process of 2008 Baldrige Award winner Poudre Valley Health Systems, in their award application at: http://www.quality.nist.gov/PDF_files/2008_Poudre_Valley_Application_Summary.pdf

The approaches of other Baldrige Award winners can be researched on the Baldrige website at: http://www.quality.nist.gov/Contacts_Profiles.htm6. Personal mission, vision, and statements of guiding principles can be extremely beneficial to college students. One of the most popular guides for developing this is Stephen Coveys, et al.s book: First Things First, New York: Simon and Schuster, 1994.

7. As pointed out in review question 10, above: the key contextual factors that affect organizational structure include:

Company organizational and organizational guidelines

Management style

Customer influences

Company size

Diversity and complexity of product line

Stability of product line

Financial stability

Availability of personnel

The implications for quality are that the quality philosophy, systems, procedures, and people must be aligned with the organization structure and vice-versa. Students may find that structures that have been in place for a long time are often difficult to change when the strategy changes, which creates significant mis-alignment and organizational stress. Quality approaches and results will also vary, depending on their contextual factors.

8.Answers will vary, depending on the organizations compared. For example, Dells strategy is to provide rapid turnaround with high volume, essentially commodity type computers while still providing for custom configurations for each customer. Apple has the strategy of providing products with unique design characteristics, fewer configurations, and more customer-centric marketing through their stores and authorized dealers. Supply chain is much more important than long-term strategic direction for Dell, than Apple.ANSWERS TO CASE QUESTIONS

I. A Strategic Bottleneck

The company finally realized that by developing a cooperative culture and creating common goals it could improve both quality and morale, while contributing substantially to the bottom line. It required a strategic approach with strong leadership support.

It began with the development of an order fulfillment process psyche that transcended departmental thinking regarding purchasing, forming, selection and shipping. Management and union leadership were engaged to explain and communicate this new psyche throughout the plants. The business then developed performance measures for the forming department that focused improvement efforts on quality yields. Self-managed work teams were formed and trained in process improvement and measurement methodologies.

In the selection department, improvement efforts focused on increasing the sensitivity of the devices that could detect product variability, which would help send earlier warnings to the forming department that bottles were about to be produced out of the range of specification. The result was a customer and business focused workforce whose measurement and compensation systems tied everyone to the same overall performance objectives.

II. Clifton Metal Works

1.The current mission statement of Clifton Metal Works (CMW) appears to lack focus. It doesn't tell why the company is in business, other than to "improve return on investment." Therefore, it is not adequate to provide the strategic direction necessary for CMW to move forward. Using this mission statement CMW could be making light bulbs or personal computers rather than castings.

2.The mission statement could be improved by including a definition of products or services, types of markets, important customer needs, or distinctive competencies. Their mission statement might be:

CMW's mission is to produce superior customized cast metal products for markets in the Midwestern United States using teamwork and unique advanced technology in order to meet or exceed customer requirements, while still providing an above average return to our shareholders.

Their vision might be:

CMW's vision is to be an outstanding company that leads the industry in quality, technological innovations, service, and productivity. We will strive to accomplish our vision by embracing superior customer focus, flexibility, adaptability, innovation, employee involvement and teamwork, with a constant awareness that productivity, cost effectiveness, and competitive pricing are vital to business profitability and success.

Their values seem to be:

Quality and service using a Deming philosophy

Teamwork

Financial accountability

Competitiveness

Pride in workmanship

IV. Novel Connect Core Competencies and Work Systems Design

Although not explicitly required for this exercise, the feedback report comments for this case, based on the Baldrige criteria, are used below, since they are enlightening and serve the purpose of responding to the issues of the Category 6 and the response of Novel Connect to the key questions. The companys response in their application will not be duplicated here. See the Novel Connect case materials in the Bonus materials folder on the Premium website for this chapter.

Answers to case questions

(1) The information provided in 6.1a(1) and 6.1a(2) relating to how the organization determines its core competencies outlines how Novel Connect defined its initial set of core competencies in 2000. The core competencies have been reviewed and modified as needed annually as part of the SPP. Figure 6.1-1 indicates that the organizations core competencies are communications, agility and rapid response, innovative niche product/feature design, and technology development and sourcing. Their relationship to the mission, competitive environment, and action plans is also shown in Figure 6.1-1. Some strengths and OFIs for category 6.1 follow, after discussion of question (2).(2) Section 6.1b(3) of Novel Connects Baldrige application describes how they design and innovate your overall work systems and how they decide which processes within the overall work systems will be internal to the organization (key work processes) and which will use external resources. They use the PFPD process (Figure 6.1-4 on page 29 of the application) to ensure that new products and services are created to better satisfy the needs of its external customers and to ensure that its existing work processes are executed in a daily manner that meets the needs of its employees and the organization as a whole. The company recognized early on that its ability to provide innovative niche product and feature designs for cell phones represented a competitive advantage. In turn, Novel Connect chose to focus on identifying, designing, and producing proprietary products and features that allow it to satisfy unique and ever-changing market needs.In assessing the companys approaches and effectiveness in addressing the questions of design and innovation of work systems, and which are key work processes, it can be seen that they have some obvious strengths. However, it is also possible to identify opportunities for improvement (OFIs). See below.6.1 Work Systems Design

STRENGTHS

Novel Connects four core competencies (Figure 6.1-1) were established during a two day workshop in 2000, and they have been reviewed annually since 2002. Review inputs include data from customer focus groups, surveys, sales trend analysis, and call center data. The data are integrated and validated using a quality function deployment (QFD) matrix. The reviews are conducted as part of the SPP cycle, and the process aligns with the voice of the customer, which helps ensure that the core competencies evolve with changing customer needs. Further, the QFD matrix is used as part of the analysis to determine if processes remain internal or use external resources. The analysis determines correlations among process performance, customer satisfaction, and a current competency.

Key work process requirements are initially defined in individual process flow diagrams by process owners using a standard approach that includes collecting requirements from both internal and external customers. These process requirements are maintained by the respective process owners, who use an annual evaluation and update process to assess how well the process is meeting the requirements. For example, through this process, improvements were made to the Internet order fulfillment process and the returns process. Requirements for all value creation and value stream support processes are identified in Figure 6.1-2.

Novel Connect uses the PFPD Process (Figure 6.1-4) to design new products, features, and process options. The PFPD Process is used to transform data and requirements into sample products and to test production runs. The resulting challenge tests are performed by a sample group of internal or external customers.

OPPORTUNITIES FOR IMPROVEMENT

The SLT uses performance information related to meeting customer expectations, coupled with a process synergy map (Figure 6.1-3), to design and innovate the overall work system. However, it is not clear (1) whether the steps and methods used by the SLT are systematic or (2) whether they are integrated with establishing the roles of the workforce, suppliers, and partners in producing and delivering products and services. The lack of a systematic approach to designing the overall work system may limit Novel Connects ability to realize its success factors of responding rapidly to marketplace changes with new products and optimizing process performance to maintain strong margins.

While Novel Connect uses input from customers to define and maintain process requirements, it is not evident that input from key suppliers and partners is sought and used in this process. Without such input, Novel Connect may have difficulty ensuring that its processes are responsive to all stakeholders, including critical partners such as its cell carrier and retailers, and Novel Connect may not be able to fully leverage its strategic advantage of lowered costs from offshore suppliers.

It is not clear how the PFPD Process (Figure 6.1-4) systematically incorporates all key requirements, agility, new technology, and organizational knowledge, as well as cycle time, productivity, cost control, and other efficiency/effectiveness factors, into process design. Without a systematic approach for consideration of these factors, Novel Connect may have difficulty ensuring that its processes are optimized, which may in turn impact its ability to address the strategic challenge of volatility in niche markets.V. Novel Connect Strategic Planning

Although not explicitly required for this exercise, the feedback report comments for this case, based on the Baldrige criteria, are used below, since they are enlightening and serve the purpose of responding to the issues of the Category 6 and the response of Novel Connect to the key questions. The companys response in their application will not be duplicated here. See the Novel Connect case materials in the Bonus materials folder on the Premium website for this chapter.

Answers to case questions

The following factors in the Organizational Profile appear to be most important in evaluating their strategic planning and deployment approaches. 4,188 employees make up a virtual, distributed workforce: 1,200 in innovation (sales, R&D, marketing, IT, and product engineering), 2,738 in operations, and 250 in administration and support. There is no employee union.

Key customer requirements: allease of use, reliability; personal consumerstrendiness, convenience, secure/encrypted data and transmission, personal/home safety and security, low cost, ruggedness; business consumersruggedness, personal safety and security, data and voice capability, sustained signal/strength across distances, secure/encrypted data and transmission; business/government consumerssecurity, data and voice capability, secure/encrypted data and transmission, sustained signal/strength across distances

Facilities: Headquarters in Rochester, NY (1,622 employees, or about 39%) includes offices, the only company-owned manufacturing plant, a research laboratory, and a distribution center. Also, throughout the U.S., 11 podsleased office spaces that serve as hubs for home-based employees, including a call center and a customer briefing center (2,566 employees, or about 61%).

Key suppliers/partners: two offshore manufacturing suppliers (in China and India), a cell carrier, retailers, transportation companies, integrated component/software manufacturers, universities, IT support, a security company, and a law firm

Key competitors: five of the largest cell phone manufacturers, two other niche market competitors, several manufacturers of integrated communication devices, and several dozen competitors in the fragmented cell phone component and ringtone markets

Principal success factors: a strong relationship with carriers, ability to respond to rapid changes in the marketplace with new product design and/or superior hardware/software quality, and collaborations with key suppliers/partners

Strategic advantages: product/feature design innovation, business model innovation, lowered costs from offshore supplier/partnership relationships

Strategic challenges: availability of a highly skilled workforce, communication, logistics, rapidly changing customer/market needs (volatility in niche markets), protection of intellectual property, volatility of the overseas environment, market forces driving the cost of cell phones and market penetration

Based on Novel Connects response in Category 2 to the 2008 Baldrige criteria questions for this category, their strengths and their weaknesses and opportunities for improvement are listed below. In reference to strategy development, Novel Connects management might be advised to develop systematic processes for determining strategic challenges, strategic advantages, or time horizons in order to fully align action plans with improving overall organizational effectiveness and capability. Also, they should address and include analysis of data specific to opportunities, major shifts in technology or competition, and long-term sustainability within the SPP, to meet its strategic challenge of volatility in niche markets. Finally, Novel Connect should be advised to use a fact-based approach to evaluate and improve its SPP. Related to strategy deployment, Novel Connects senior leadership teams should be advised to:

clarify the process and methods to be used by the SLT-led teams to develop action plans for key strategic objectives. This may be significant given the volatility of the environment and the strategic challenge of rapidly changing customer/market needs.

ensure that adequate financial and other resources are available and allocated to accomplish its plans and to develop an approach that assesses and addresses financial and other risks associated with Novel Connects plans, potential impacts on people, changes to workforce capability and capacity needs, or changes to strategic challenges.

Tools and techniques that Novel Directs managers and policy analysts might find useful include the Seven Management and Planning Tools and Six Sigma projects, to implement strategic planning and deployment improvements.DETAILS OF STRENGTHS AND OPPORTUNITIES FOR IMPROVEMENT

2.1 Strategy Development

STRENGTHS

An annual, systematic Strategic Planning Process (SPP, Figure 2.1-1) involves participation from the SLT, representatives from higher education partners, the BOD, and members of local workforce boards, as well as carrier representatives, key customers, manufacturing and other key partners (including offshore suppliers), and niche market subject-matter experts.

The process begins with a review and validation of the organizations mission, vision, core values, core competencies, Novel Path, and goals. After information is gathered from many sources (e.g., from markets, customers, the carrier, the industry, and manufacturing and higher education partners), the SLT analyzes and aligns the data with the organizations mission, vision, core competencies, and goals, and it delineates Novel Connects objectives, goals, and risks. Following a review of internal requirements, action plans are created and assigned to members of the SLT. Balanced scorecard metrics are established, and MAP database reports are reviewed at monthly Triple-M meetings by the SLT.

Novel Connect has defined five key strategic objectives (profit; customer satisfaction and market position; innovation, agility, and rapid response; value creation; and workforce satisfaction) and established related goals, implementation profiles, and measures, as well as relationships to strategic advantages and challenges (Figure 2.1-2). The implementation profiles are manufacturing; new products; enhancements; value creation; customer satisfaction; changing customer demands; rapid response to changes; technology and resources; new customer requirements; relationships with the carrier, suppliers, and partners; new pod locations; and maintenance of virtual workforce guidelines. Collectively, these planning elements provide a systematic approach to help ensure that the identified needs of stakeholders are balanced.

OPPORTUNITIES FOR IMPROVEMENT

Although Novel Connect notes that it identifies key strategic challenges as part of the SPP, a systematic process is not described for determining strategic challenges, strategic advantages, or time horizons. Without a systematic approach for determining these planning elements,

Novel Connects action plans may not be fully aligned with improving overall organizational effectiveness and capability in the rapidly changing cell phone industry.

While the SPP includes a review of internal requirements to help ensure Novel Connects ability to execute the strategic plan, it is not apparent that the SPP addresses and includes the analysis of data specific to opportunities, major shifts in technology or competition, and long-term sustainability. Without a plan for addressing these considerations, Novel Connect may find it difficult to meet its strategic challenge of volatility in niche markets.

There is little evidence that Novel Connect uses a fact-based approach to evaluate and improve its SPP. Without such a mechanism, Novel Connect may find it difficult to ensure that the process remains current with market and business needs. This may be especially important given Novel Connects strategic challenge of market volatility and the rate of growth in its gross revenue, as depicted in Figure 7.3-1.2.2 Strategy Deployment

STRENGTHS

Action plans are developed by a team that is assembled and led by a member of the SLT who

has been assigned responsibility for a strategic objective. The plans are then reviewed and

ratified by the full SLT. The responsible senior leader assigns strategies for deploying the

plans to key partners and suppliers, as well as to appropriate work groups, sites, or

individuals. The SLT conducts monthly virtual Triple-M meetings to review MAP data and

modify action plans if necessary. Adjustments in action plans and goals are communicated to

the work areas, project leaders, and other individuals by senior leaders in weekly one-on-one

meetings and/or weekly work group meetings with pod leaders.

Novel Connect has developed ten short-term action plans with deployment strategies,

measures, and goals (Figure 2.2-1a) and seven longer-term action plans, also with

deployment strategies, measures, and goals (Figure 2.2-1b). The action plans are aligned with

measures on the Novel Compass Scorecard (Figure 4.1-1) through key strategic objectives:

profit; customer satisfaction and market position; innovation, agility, and rapid response;

value creation; and workforce satisfaction.

Novel Connect has defined its performance projections and comparisons for quantitative

measures (Figure 2.2-2) that are associated with its strategic objectives and most of its

related short- and long-term action plans. Performance projections are defined by measures

through 2011, and performance comparisons are identified for the current year. Get-Better-

Quick (GBQ) plans are put in place when measures do not meet benchmark or projected

performance.

OPPORTUNITIES FOR IMPROVEMENT

It is not clear what steps or methods are used by the SLT-led teams to develop action

plans for key strategic objectives. Without a systematic process to develop action plans,

Novel Connects ability to effectively use these plans to accomplish its strategic

objectives and reach its goals may be impaired. This may be significant given the

volatility of the environment and the strategic challenge of rapidly changing

customer/market needs.

Novel Connect maintains a 70/30 resource split between short- and long-term action plans to

increase the focus on short-term goals. It is not clear, however, how this ensures that

adequate financial and other resources are available and allocated to accomplish its plans. It

also is not apparent how this approach assesses and addresses financial and other risks

associated with Novel Connects plans, potential impacts on people, changes to workforce

capability and capacity needs, or changes to strategic challenges. Without these linkages,

Novel Connect may find it difficult to ensure the desired outcomes from its ActivitiesBonus MaterialsCase: The Creative Design Group

1. See the Affinity Diagram for the Creative Design Group, below. It is constructed similar to Figure 5.4 (looking forward to the next chapter). The diagram for CDG shows categories that include customer service, team environment, facilities/technology, design goals, worker amenities, project/financial controls, competitive personnel issues, and business/financial issues.

From this analysis, Trendy began to see that human resources and technology had some issues that needed to be addressed in her long-range plans. In addition, she suspected that the competitive business/financial issues had impacts on, but were also impacted by, the competitive personnel and technology issues.

AFFINITY DIAGRAM FOR CREATIVE DESIGN GROUPCustomer ServiceSpeed

Quality

Creativity

Value

Design GoalsWow customer

Meet/exceed deadline

Superior quality

Reasonable price

Value over price

Team Environment Independent design

Creative direction

CSE project costing

Worker AmenitiesCasual dress code

Casual policies

Health insurance

Flextime

Vacation policy

Leave policy

401K retirement

Competitive wages

Competitive Personnel IssuesFewer design graduates

Difficulty in recruiting talent

Difficulty in retaining designers

Salaries being bid up

Technology trails state of the art

Facilities/TechnologyModern computers

Modern software

Excellent lighting

Modern communications

Project/Financial ControlCSE- project contact point

Project estimating

Project proposal

Project tracking

Client communications

Status updates and changes

Advertising and promotion

Regular financial reports

Competition (Business/Financial Issues)Decreasing % of bids accepted

Declining ROI

2. See the tree diagram, below. It can be seen how plans are cascaded going from left to right. They become more specific, resulting in action plans to deal with competitive business issues of advertising and estimating by taking action to improve advertising and visibility. In order to deal with competitive personnel issues, recruiting and retention of talented designers are addressed.

3.a.Matrix Data Analysis

The Matrix Data Analysis chart shown below confirms that by using the weighted ratings across all competitors, the correct selection is CCG. CCG has a total of 7.0 points (out of a possible 10), while the next closest competitor is COG, with a total of 6.1.

PRIVATE Supplier CharacteristicsWeights Rating for

CCG Rating for

COG Rating for

COW Wtd. Value

CCG Wtd. Value

COGWtd. Value

COW

System design reliability0.38652.41.81.5

Delivery timeliness0.27491.40.81.8

Cost0.25761.01.41.2

System service0.29641.81.20.8

Experience0.14960.40.90.6

Totals1.03333317.06.15.9

Note: Independent ratings on a scale of 1-10 (where 10 is best) were performed by the Small Business Council of Qualdale, where CDG is located.

Suppliers: CCG = Creative Computer Group

COG = Computer Organizational Group

COW = Computer Operations Workgroup

3.b) Questions that CDGs management should ask Charlie include:

1. Will we be able to continue working while youre installing the new system?

2. If not, how long will we be down?

3. Can you provide us with a detailed project plan so that we will know when various milestones have been reached?

4. What warranties will be provided for the hardware, software, and CCGs installation?

5. How much training will be required for the new system?

6. How much training will you provide versus the total training needed?

7. Will you work with us or a contractor that we select to structure the proper training?

8. If unforeseen difficulties arise, what is the procedure for initiating and approving changes?

9. How is the payment schedule structured, and is financing available?Case The Graduation Party

1. In order to develop a PERT-type network diagram activities must first be labeled, and precedence relationships must be established.

Activity

Precedent(s)A. Pick date

-

B. Estimate costs

A

C. Determine budget

B

D. Locate and book a hall

C

E. Hire a DJ

C

F. Select music

E

G. Plan menu

C

H. Plan decorations

D

I. Set up mailing list

A

J. Plan ceremony for seniors

C

K. Design and print invitations

C, D, E

L. Mail invitations

I, K

M. Determine how much will be paid from treasury vs. special assessment

C

N. Dress rehearsal (dummy) *

F, H, J, L

O. Rehearse ceremony

N

P. Setup, decorate hall

N

Q. Get food delivered

G, P

R. Have the party

Q

S. Cleanup and pay bills

R

See the interrelationship digraph below.

b) Activity C (Determine budget) is obviously a critical activity on which a number of others depend. Designing and printing (Activity K) and the Dress rehearsal (dummy activity N) are ones in which the long-range results terminate.

* The dummy activity (N) was actually included as a milestone to remind the project team that they needed to check final arrangements at that point, in order to ensure that no major problems still existed.

3. a) and b) Using data from the interrelationship digraph (see problem 1), an arrow diagram can be established. The Arrow Diagram, shown above, shows precedent relationships for each activity.

The technique has been extended a little further by the use of the PERT/CPM technique in order to calculate the critical path and the estimated project completion time, which are shown on the diagram. The arrow diagram indicates that Joe and his team have a minimum of 21 days to complete the project, if their single time estimates for each activity are accurate.

If a PERT-type analysis were to be used, then the probability of completion within a specified time frame could also be established. However, this method requires that three time estimates be made for each activity, which is a little more difficult and time consuming.

Case - Baldrige Assessment of Strategic Planning Part 1Share Foods, IncAlthough not explicitly required for this exercise, the feedback report comments for this case, based on the Baldrige criteria, are used below, since they are enlightening and serve the purpose of responding to the issues of the Category 2 and the response of Share Foods to the key questions. The companys response in their application will not be duplicated here. See the Share Foods case materials in the Bonus materials folder on the Premium website for this chapter.

Assignment 1The most important business or organizational factors relevant to this item in the Organizational Profile appear to be:

Mission, Vision, Values (MVV). Mission: A community-based food bank dedicated to feeding the hungry residents of its communities. Vision: Iowas heartland is hunger-free. Values: We work together, we do what we say, everyone deserves respect, and we follow through.

10 full-time equivalent (FTE) employees (8 full-time and 5 part-time); 8 of 13 employees with bachelor-level or above degrees, 5 employees with high school diplomas or associate degrees

More than 500 volunteers, including a core team of 20 volunteers, contributed 28,600 hours in 2006. Volunteers include university nutrition and management students, government and foundation fellows, and court-ordered community-service placements. Nearly half of volunteers are over age 55.

Competes with other social services for funds and volunteers; collaborates with these organizations in emergency and disaster relief

Key success factors (same as strategic advantages for this organization): its ability to feed the food-insecure through member agencies, network of food suppliers, tight management of overhead costs (12.1% of operating expenses), and volunteer base. Other success factors: food availability and quality; fiscal agility; funding and food resources; organizational effectiveness; optimization of human, financial, food, and other resources; organizational learning, collaboration, and innovation; dedicated, experienced employees and volunteers; and the satisfaction of member agencies, donors/suppliers, and the community

Key changes: shifting groups of temporarily food-insecure persons, seasonal needs (e.g., related to school vacation times and migrant populations), and the doubling of Hispanic and Hmong populations in the past year. The nutritional quality of food, along with quantity, has become a key consideration in the past decade.

Five strategic challenges: ensure food reaches those most in need when they need it most; optimize human resources and partnerships; respond to member agency needs; obtain and maintain adequate financial resources; recruit volunteers from a broad range of age segments

Assignment 2Baldrige examiners are taught to develop statements of strengths and OFIs within the framework of the Baldrige criteria and leading questions. They must also ensure that the strengths and OFIs are congruent with the key business and organizational factors laid out in the organizational profile, in order to ensure that quality practices fit organizational functioning and key objectives. Thus, in the context of the case study response and the given Baldrige criteria questions, the examiner team identified the strengths of Share Foods to fit the criteria questions very well.2007 Baldrige Strategy Development (Item 2.1) Questions

a. Strategy Development ProcessCriteria questions of:

(1) How does your organization conduct its strategic planning? What are the key process steps? Who are the key participants? How does your process identify potential blind spots? How do you determine your strategic challenges and advantages, as identified in response to P.2 in your Organizational Profile? What are your short- and longer-term planning time horizons? How are these time horizons set? How does your strategic planning process address these time horizons?appear to have been answered in the first strength. The examiner team felt that Share Foods 12-step SPP and the fact that the organization identifies strategic challenges in the Current State step represented a well-developed approach and deployment of leading-edge strategic planning practices. Also, the fact that Share Foods includes inputs from the SWOT Analysis, Environmental Scan, and Funding Mandate Review were very well-defined practices that clearly answered the initial questions, above.Other Criteria questions were:(2) How do you ensure that strategic planning addresses the key factors listed below? How do you collect and analyze relevant data and information pertaining to these factors as part of your strategic planning process:

your organizations strengths, weaknesses, opportunities, and threats

early indications of major shifts in technology, markets, customer preferences, competition, or the regulatory environment

long-term organizational sustainability your ability to execute the strategic plan

The second strength refers to how the SPP uses SWOT Analysis, an Environmental Scan, and performance analyses to identify potential blind spots. It appears to answer the second set of questions from the Criteria.Other Criteria questions were:(1) What are your key strategic objectives and your timetable for accomplishing them? What are your most important goals for these strategic objectives?

(2) How do your strategic objectives address your strategic challenges and strategic advantages? How do your strategic objectives address your opportunities for innovation in products and services, operations, and the business model? How do you ensure that your strategic objectives balance short- and longer-term challenges and opportunities? How do you ensure that your strategic objectives balance the needs of all key stakeholders?These were addressed by the third strength, which refers to the fact that the organization has identified its strategic objectives, as well as its short- and longer-term goals (for FY2007, FY2008, FY2009, and FY2010), along with associated timetables for their accomplishment. The organization aligns its strategic objectives with strategic challenges, values, key success factors, and stakeholder requirements.Alignment of OFIs with Criteria questionsAlthough there were strengths present in the approaches and deployment of the strategy development process, there were several obvious gaps that the examiner team noted. In summary form, the following OFIs were aligned with each set of questions, above, and identified the gaps that were apparent.

It is unclear how the organization ensures that strategic planning addresses key factors in some areas that have been identified as important threats. It also is unclear how strategic planning addresses the need to obtain and maintain adequate financial resources, which may be of particular significance. Although the organization notes innovations in specific areas, it is not clear how its strategic objectives address larger opportunities for innovation in products, services, operations, and its business model. It is unclear how the organization ensures that its strategic objectives balance short- and longer-term challenges and opportunities.It can be seen that the strengths and OFIs align well with the key factors identified in the question in Assignment 1. For example, the first OFI relates to maintaining adequate financial resources, which correlates directly with the strategic challenges of the last key issue in the list in Assignment 1. Most observers would agree that these are key strengths and opportunities for improvement for this organization. One suggestions that the team did not identify relates to the fact that the SPP is only updated biennially, raising the question of whether the SPP adequately addresses the key issue of providing early indications of major shifts in technology, markets, customer preferences, competition, or the regulatory environment.Case - Baldrige Assessment of Strategic Planning Part 2

1. The most relevant business and organization factors from the Organizational Profile pertaining to Item 2.2 are similar to Item 2.1 and appear to be:

Paid employees and volunteers acquire, warehouse, transport, and distribute food to the food-insecure through partnerships with 58 member agencies.

10 full-time equivalent (FTE) employees (8 full-time and 5 part-time)

More than 500 volunteers, including a core team of 20 volunteers, contributed 28,600 hours in 2006. Volunteers include university nutrition and management students, government and foundation fellows, and court-ordered community-service placements. Nearly half of volunteers are over age 55.

Demand for organizations services has doubled in the last three years

Competes with other social services for funds and volunteers; collaborates with these organizations in emergency and disaster relief

Key changes: shifting groups of temporarily food-insecure persons, seasonal needs (e.g., related to school vacation times and migrant populations), and the doubling of Hispanic and Hmong populations in the past year. The nutritional quality of food, along with quantity, has become a key consideration in the past decade.

2. Strengths that the organization has relative to the criteria questions (given below) are: The SPP (Figure 2.1-1) and the PDCA Process (Figure 6.1-3) are used for the development of action plans. Action plans are created to support the strategic objectives during Step 9 of the SPP. Champions (chosen from senior leaders, board members, volunteers, and LDP graduates) are assigned to each action plan to lead development and deployment throughout the organization and to perform quarterly reviews.

SF uses its SPP (Figure 2.1-1) to ensure that adequate financial and other resources are available and allocated to support the accomplishment of its action plans. For example, adequate financial resources are addressed as part of Steps 8 and 10. In Step 8, the Executive Director, with help from other senior leaders, develops annual fiscal and capital budgets in order to support the objectives and goals established in Step 7. The Finance/Audit Committee reviews these budgets and an outline of resources needed to support the Strategic Plan. The Finance/Audit Committee recommends allocations of resources based partly on action plans, and the budgets are presented for approval by the board in Step 10.

As circumstances warrant, SF uses the Emergent Strategy Alert Process (Figure 2.2-1) to establish and deploy modified action plans. For example, circumstances may arise as the result of the Environmental Scan done on the years when there is no SPP or as the result of the Community Needs Assessment. The four-step Emergent Strategy Alert Process, which includes a rapid-cycle SWOT Analysis, guides SF to develop and deploy new or modified strategies, goals, and actions.

SF has identified key short- and longer-term action plans that are mapped to strategic objectives and goals (Figure 2.2-2). For example, achieving a rating of 10 on the American Association of Food and Nutrition for a Healthier America (AAFNHA) Nutrition Scale by FY2010 is a long-term action plan, and increasing the number of pounds of food per person in poverty by 5% by FY2007 is a short-term action plan. Both are linked to the strategic objective to increase the amount and quality of food delivered. SF also has identified key changes planned for products and services. For example, in this fiscal year it will increase the variety of nutritional food offered to member agencies to reflect the Dietary Guidelines for Americans, 2005 and look for innovative ways to use Internet communication.3. Opportunities for improvement relative to the criteria questions include: While champions are responsible for the deployment of action plans, a systematic approach is not described for deploying the plans to achieve strategic objectives or for ensuring that the key outcomes of action plans can be sustained. For example, it is not clear how the boards oversight at quarterly meetings ensures sustainability or what other actions are taken to integrate action plans into processes and approaches to ensure they are maintained. Without systematic approaches to deploy action plans and sustain their outcomes, SF may find it difficult to attain its strategic performance goals.

It is unclear how SF assesses financial and other risks associated with its action plans (e.g., possible financial risks associated with its long-term action plan to achieve a rating of 10 on the AAFNHA Nutrition Scale, which might result in increased costs from purchasing food to supplement possibly less-nutritious, donated food). The lack of an effective, systematic approach may hamper SFs ability to evaluate the feasibility of each action plan as it strives to consistently acquire, warehouse, transport, and distribute food to the food-insecure through partnerships with its 58 member agencies.

It is not clear how the key human resource plans SF has noted will accomplish its strategic objectives and action plans. More specifically, because the human resource plans are nearly identical to short- and longer-term action plans listed for the first strategic objective in Figure 2.2-2, it is not evident how the former will help accomplish the latter. In addition, while the human resource/action plans include goals (e.g., increase volunteers hours by 10% each year), they do not include specific actions, including resource commitments, to accomplish those goals and the related strategic objective. Further, it is unclear how the human resource plans will address potential impacts on the workforce and potential changes to workforce capability and capacity. The lack of an effective, systematic approach and specific plans may impede SFs ability to meet its annual strategic goals as well as its ability to continue and expand its services for the food-insecure.

While senior leaders and board committee chairs set performance projections during Step 7 of the SPP (Figure 2.2-2), it is not clear how these short- and longer-term performance projections are determined. Additionally, it does not appear that projected performance is compared with that of comparable organizations or past performance. Also, while goals are presented for FY2008, FY2009, and FY2010, it is not clear whether these differ from performance projections and if so, how. The lack of a fact-based, systematic approach may limit SFs ability to assess its relative performance and prepare for projected changes, such as the growing demand for its services, which has doubled in the last three years.2007 Baldrige Strategy Deployment (Item 2.2) Questions

a. Action Plan Development and Deployment(1) How do you develop and deploy action plans throughout the organization to achieve your key strategic objectives? How do you ensure that the key outcomes of your action plans can be sustained?

(2) How do you ensure that adequate financial and other resources are available to support the accomplishment of your action plans? How do you allocate these resources to support the accomplishment of the plans? How do you assess the financial and other risks associated with the plans? How do you balance resources to ensure adequate resources to meet current obligations?

(3) How do you establish and deploy modified action plans if circumstances require a shift in plans and rapid execution of new plans?

(4) What are your key short- and longer-term action plans? What are the key planned changes, if any, in your products and services, your customers and markets, and how you will operate?

(5) What are your key human resource plans to accomplish your short- and longer-term strategic objectives and action plans? How do the plans address potential impacts on people in your workforce and any potential changes to workforce capability and capacity needs?

(6) What are your key performance measures or indicators for tracking progress on your action plans? How do you ensure that your overall action plan measurement system reinforces organizational alignment? How do you ensure that the measurement system covers all key deployment areas and stakeholders?

b. Performance Projection For the key performance measures or indicators identified in 2.2a(6), what are your performance projections for both your short- and longer-term planning time horizons? How are these projections determined? How does your projected performance compare with the projected performance of your competitors or comparable organizations? How does it compare with key benchmarks, goals, and past performance, as appropriate? How do you ensure progress so that you will meet your projections? If there are current or projected gaps in performance against your competitors or comparable organizations, how will you address them?

AnswerAs noted in the previous case analysis, Baldrige examiners are taught to develop statements of strengths and OFIs within the framework of the Baldrige criteria and leading questions. They must also ensure that the strengths and OFIs are congruent with the key business and organizational factors laid out in the organizational profile, in order to ensure that quality practices fit organizational functioning and key objectives. Thus, in the context of the case study response and the given Baldrige criteria questions, the examiner team identified the strengths of Share Foods to fit the criteria questions very well.

It can be seen that the strengths and OFIs align well with the key factors identified in the question in Question 1 of this case. For example, the third OFI relates to volunteer resources, which correlates directly with the third business and organization factor from the Organizational Profile in the list in Question 1.

Most observers would agree that these are key strengths and opportunities for improvement for this organization.Develop plan to

attract/retain employees

Develop plan to

meet competition

Determine interest in job sharing

Pay a sign-on bonus

Develop co-op position

Improve

recruiting

Take course in

graphics estimating

Use QFD

approach

Keep and use job

cost/time data

Improve

estimating

Increase recognition/incentives

Add child care allowance

Develop stock

option plan

Improve

retention

Place ads in business newspapers

Redesign website

Place spot ads on

radio

Make advertising

more effective

Develop action

plans

TREE DIAGRAM FOR CDG ACTION PLANNING

1

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