WINNING STRATEGIES PART 1

- POLICY DEPLOYMENT

Team B3:

Paula Urrego-RiverosDavid IbagonLydia Duro-EmanuelSabrina TsaiChi-Wen ShihNazish Leghari

An Introduction to Hoshin KanriDefined as:

Capability enhancement towards improved performance. Unified policy planning and deployment. Effective employment of resources.

Origins: Originated in Japan in 1950’s. Developed by Bridgestone Tire Company in 1962.

Objectives: Identifies areas of opportunity for the organisation to change or improve. Prioritises the most cost effective actions across the organisation to

achieve these changes. Creates a detailed implementation plan. Provides a review mechanism to identify corrective actions and embed

learning.

Tennant C., and Roberts P. (2001)

Elements of Hoshin Kanri

Elements of Hoshin Kanri

Goals derived

from Vision

Strategy, Policy,

Benchmarking and Target Focus

Established deploymen

t implement

ation process

Feedback Mechanism

s

Must include

TQM

Adapted from: Hutchins D., (2008)

Comparisons of other concepts and Hoshin Kanri

HOSHIN KANRI MANAGEMENT BY

OBJECTIVES

BUSINESS PROCESS

REENGINEERING

BALANCED SCORECARD

VISION Long Term Short term Radical Long Term

FOCUS Process Targets Perform Strategy

IMPLEMENTATION

Prioritize Troubleshoot Make it work Prioritize

MEASURES Realistic Incentives Growth Realistic/daily

REVIEW Improvement Failure Renewal Updated

COMMUNICATION

Deployment of targets Job evaluation Tangible

messagesDeployment of targets

FEEDBACKTop down and bottom-up Top – Down Multiple

channelsOperational and strategic

Table adapted from: Tennant C., Roberts P., (2001) and Whitcher & Chau, 2007, 519

Advantages and Drawbacks of Hoshin Kanri

Focuses on what is important.

Shared vision communicated.

Involves and engages the organisation.

Progress is monitored. Continuous

improvement of the strategic plan.

Enables organisational learning.

Rigid implementation system.

Long-term commitment.

Objectives must be static over a 3-5 year period.

Lack of understanding. Resistance to change.

Advantages of Hoshin Kanri Drawbacks of Hoshin Kanri

12Manage (2011)

Management of Hoshin Kanri Drawbacks

Lack of Understand

ing

Training

Communication

Leadership involvement

and commitment

Resistance to change

Training

Engagement and

empowerment

Robust strategy

Rigid Implement

ation system

Communication.

Training.

Long term Commitme

nt

Leadership commitment

and involvement.

Engagement of

employees.

Continued feedback

and monitoring.

Static objectives

Robust objectives

Manageable and

achievable objectives.

Drawbacks obtained from 12Manage (2011)

The Hoshin Kanri Planning Process

• Organisations’ current situation.

• Determine the future situation.

• Prioritise and Select action.What Needs

to be done?

• Create the plan.

• Improve the vision.

• Deploy the plan. (“Catchball”)

How do we make

changes?• Implement

the plan.• Review the

plan.• Annual

Review.How did we

do?

Adapted from: Cowley M., Domb E., (1997)

Do

CheckAct

Plan

Do

CheckAct

Plan

Do

CheckAct

Plan

Strategic Policy Deployment Overview

Tennant C., and Roberts P. (2001)

…Applying the theory practically.

Implementing Hoshin Kanri at Wave Riders

Creating the Vision - SWOT Analysis

STRENGTHS WEAKNESSES•Top 5 company.•Originated and established in the UK.•Highly experienced workforce.•Multi-design product (Military & Search and Rescue)

•Too much stock.•Overstaffed.•Lack of/Out of date strategy.•Inefficient use of resources (i.e. people, assets e.t.c.)•Impact analysis methods not robust.

OPPORTUNITIES THREATS•Opportunities in UK and European markets.•Increasing demand from leisure markets.•Possibility of repeat business from the military.

•Poor market conditions.•Competition from other key players.•High Stock levels from the previous year.•Declining military demand.

Proposed VisionWave Riders Vision

“In 5 years, Wave riders aims to become a key player in the European markets by focusing our resources, engaging our

employees and satisfying our customers through the production of high quality

products towards excellence.”

Proposed ValuesWave Riders Values: We pride ourselves in satisfying our

customers. We are committed to conduct ourselves in

a manner consistent with the highest standards of integrity.

We are honest, ethical, and fair in all our activities.

We ensure exceptional and reliable quality in all aspects of our work and recognise that quality determines the breath of our success.

The 5 year Strategic PlanProposed Strategic Goals: Increase market share in Europe by

40% in 5 years. 85% customer satisfaction in 5 years. Engagement of employees in 5 years.

Chosen Strategy:

STRATGEY 3

Proposed Strategic Plan

Engagement of employees

Reorganize Finance and HR departments by moving wages and salaries manager into the Finance department.

Increase price of both products by approximately 2.5% (in line with inflation)

Customer Satisfaction

Continue to invest in new technology.

Reorganize the Leisure sales team to three external sales representatives and three internal sales people to handle client follow-up by taking on two new salespeople and take on a European sales representative in the Rescue/Military sales team.

Identify a distributor who could take on the European sales and handle any future expansion of the market

Identify successful European promotional campaigns and put together a winning promotions strategy.

2014/15 2015/16

Increase Market Share in Europe

Research European market pricing structure, discounts, distribution, competition, product and safety

WAVE RADERS

Strategic Goals ACTION PLANS 2011/12 2012/13 2013/14

Operational and Financial Plan

DEPARTMENT

Marketing and Sales

Identify successful European promotional campaigns and put together a winning promotions strategy.

Increase Market Share in Europe

Guarantee Commercial support to UK and Europe &

Decrease Administrative burden

Finances And HR

Production R&D

OBJECTIVES

Entry to European Market

Benchmarking Market in Europe

Remains at the forefront of the Market and meet

Customer expectationsContinue to invest in new

technology.

Reorganize the Leisure sales team to three external sales representatives and three internal sales people to handle Reorganize Finance and HR departments by moving wages and salaries manager into the Finance department.

Strategic Goals ACTIONS PLAN

Research European market pricing structure, discounts, distribution, competition, product and safety specifications etc.

Identify a distributor who could take on the European sales and handle any future expansion of the market

OPERATIONAL PLANFINANCIAL

REQUIREMENTS

£150000 Capital Expanditure £25000 Finance Workload

£250000 Marketing Spend

An Example…

Production R&D

TIME REVIEW

Marketing and Sales

DEPARTMENT

quarters

Marketing indicators

Designs

Increase Market Share in Europe

Entry to European Market

Research European market pricing structure, discounts, distribution, competition, product and safety

Identify a distributor who could take on the European sales and handle any

future expansion of the market

Benchmarking Market in Europe

Identify successful European promotional campaigns and put together a winning promotions

Remains at the forefront of the Market and meet

Customer expectationsContinue to invest in new technology.

Strategic Goals OBJECTIVES ACTIONS PLAN MEASUREMENT

OPERATIONAL PLAN

Policy Deployment Model

Tennant C., Roberts P., (2001)

These plans fit into the overall business plan…

Implementation Process – “Catchball” Hoshin Kanri is

implemented using the “Catchball” process.

Involves communication at all levels of the organisation

Ensures commitment at all levels through the engagement of employees.

Modelled on GE Healthcare’s Catchball Process. GE (2010)

Departmental

Operational/Financial Plan

Wave Riders Strategic

Plan

Wave Riders Operational/Financ

ial PlanWave

Riders Key value

streams

Wave Riders Departmenta

l Plan

Departmental Key

InitiativesEmployee goals and objectives

Programme

Management

Tennant C., & Roberts P., (2001b)

Conclusion Hoshin Kanri is an execution tool to

effectively deploy a strategic plan.

The ‘Catch ball’ process helps eliminate many of the drawbacks of the tool.

TQM is essential to the core concepts of Hoshin Kanri.

Appendix 1 - Selected Strategy 3

Strategy Aim: Increase market share in Europe

Actions and costs Research European market pricing structure, discounts, distribution,

competition, product and safety specifications etc. Identify a distributor who could take on the European sales and handle any future expansion of the market. Need new computerised finance package for Euros and to reduce Finance workload (estimated cost £25,000)

Identify successful European promotional campaigns and put together a winning promotions strategy. Increase marketing spend to £250k.

Increase price of both products by approximately 2.5% (in line with inflation).

Reorganize the Leisure sales team to three external sales representatives and three internal sales people to handle client follow-up by taking on two new salespeople and take on a European sales representative in the Rescue/Military sales team.

Continue to invest in new technology costing an estimated £150k on capital expenditure.

Reorganize Finance and HR departments by moving wages and salaries manager into the Finance department. Reduce the remaining clerical staff in HR to a total of one.

References Witcher B.J., Chau V.S. (2007) Balance Scorecard and Hoshin Kanri:

Dynamic Capabilities For Managing Strategic Fit, Management Decision, Vol: 45, No: 3, pp: 518 – 538, UK, Emerald Group Publishing Ltd.

Witcher B.J., Chau V.S., Harding P. (2007) Top Executive Audits: Strategic Reviews of Operational Activities, Managerial Auditing Journal, Vol: 22, No: 1, pp: 95 – 105, UK, Emerald Group Publishing Ltd.

Tennant C. and Roberts P., (2001) “Hoshin Kanri: A Tool for Strategic Policy Deployment” Knowledge and Process Management, Vol. 8 No. 4, Pages: 262-269

Tennant C. and Roberts P., (2001b) “Hoshin Kanri: Implementing the Catchball Process!. Long Range Planning, Vol 34. Pages: 287-308.

Cowley M., Domb E., (1997) Beyond Strategic Vision: Effective corporate action with Hoshin planning. Boston, Mass: Butterworth-Heinemann.

GE Healthcare (2010) “Leadership Strategy” Obtained from: http://nextlevel.gehealthcare.com/leadership-strategy/its-time-to-stop-dangling-our-feet-in-lean-for-healthcare.php Last updated: 28/10/2010 Last accessed: 12/02/2011.