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Organization Alignment using Policy Deployment
Created with funds from WIRED NW
Organization Alignment and Policy DeploymentAfter the class today you should be able to:
Identify the top goals of your companyUnderstand “break though” goalsProduce your own “X” MatrixKnow what a “bowler “ is and how it is usedCreate actions plans Develop a countermeasure
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Roots of Policy DeploymentCalled “Hoshin Kanri”
Hoshin- DirectionKanri- Map or plan
1960’s- Originated in Japan as part of TQC (Total Quality Management)
1980’s- Widely used in JapanBased on MBO (Management by Objectives)
and Plan-Do-Check-act improvement cycles
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To align all efforts management must translate
Goals into Actions
• Actions must be tracked and measured to assure
Results meet Goals
This policy deployment process is called
Hoshin Kanri
Policy Deployment
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Need for AlignmentFocus change energy on area with the “mass”
to move the needleAlign all levels to Corporate GoalsTransform long range plans to actionsConsistent methodologyDrive actions and accountability
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GOAL
OBJECTIVES
MANAGEMENT CREATES STRATEGIES
SUPERVISORS CREATE ACTION PLANS
ASSOCIATES CREATE RESULTS
ANA
Safety
EmployeeInvolvement
Delivery
Quality
Cost
Early LaunchInvolvement
o r m T e a m
Heijunka
o r m T e a m
Prevent ProblemRecurrence
rmT
Engage Mgmt.At Worksite
QualitySafety Delivery EmployeeInvolvement Cost
Goals
Actions
Act
ions
Res
ults
Hoshin Kanri – Harness the Power
Created with funds for WIRED NW
Created with funds from WIRED NW
Lean Conversion ProcessEducation-
All levels on Lean PrinciplesPolicy Deployment
Establish key projects, metrics, linkages, accountabilities
Value Stream Mapping Establishment of future state and work plans
Work plan executionLean tool applicationsBest practices cross linking
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Strategic Planning:
Linking Long-term Strategic Goals to Current Action Plans
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Strategic Planning Process1. Assessment: Candid analysis of where you
are today
2. Mission: What you do
3. Vision: Where you want to be
4. Strategic Plan: How do we get from where we are to where we want to be?
5. Action Plan: How do you set short-term action plans to get to your long-term goals?
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Strategic Planning
How do we bridge the gap from where we are to where we
want to be?
Policy Deployment Map
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Policy DeploymentComponents of a Policy Deployment
Statement:
1. Start with a Vision2. Strategic Results Required3. Strategic Objectives4. Near-term Goals5. Current Action Items6. Tracking Metrics
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Policy DeploymentPolicy Deployment
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Performance Expectation Setting
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Organizational Business ResultsWhat are some of the desired business
results of your organization?
Write down the three most important “business results” expected of your organization.
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“Setting expectations” discussions will be effective when you and individual:
Have the same understandingunderstanding of the expectations
See how all expectations alignalign with the group’s or organization’s goals
Reach agreement agreement that the individual will meet each expectation
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Making Expectations ClearDraw a picture of a ball……
What are the major questions you would ask me to gain more understanding of what I expected?
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”In God we trust – everybody else bring data”
”You don’t have to change – after all survival isn’t mandatory”
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SMART CriteriaSMART
Specific
Measurable
Attainable
Relevant
Time Bound
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SMART Card ActivityDetermine if your assigned “goals” meet the
SMART criteria
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Created with funds from WIRED NW
Created with funds from WIRED NW
Performance Expectations & Timing
Visualize a football field…100 yards Visualize a football field…100 yards longlong
Your “game plan” can take multiple Your “game plan” can take multiple paths…paths…
Overall goal – win the game on the Overall goal – win the game on the scoreboardscoreboard
Interim goals – score by quarter, Interim goals – score by quarter, number of first downs, etc.number of first downs, etc.
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Performance Expectations & Timing
Setting interim goals, with Setting interim goals, with adequate timing and adequate timing and rhythm, is essential to rhythm, is essential to sustain improvement and sustain improvement and meet overall goalsmeet overall goals
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Performance Expectations & Timing
What “rhythm” is your work group on?What “rhythm” is your work group on?
Annual?Annual?
Quarterly?Quarterly?
Monthly?Monthly?
Weekly?Weekly?
Daily?Daily?
Hourly?Hourly?
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Applied Goal SettingIs it S.M.A.R.T.?Is it S.M.A.R.T.?How will you measure your success? How will you measure your success? Do all of the people on your team have an Do all of the people on your team have an
understanding of the desired outcome?understanding of the desired outcome?How will you get their involvement and How will you get their involvement and
support (for your stretch goal)?support (for your stretch goal)?
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Daily ManagementSmaller, incremental, performance Smaller, incremental, performance
expectationsexpectationsMeasure daily – where you ARE vs. where Measure daily – where you ARE vs. where
you WANT TO BEyou WANT TO BEExamples:Examples:
Schedule goalsSchedule goals Quality goals Quality goals Productivity goalsProductivity goals Safety goalsSafety goals Inventory goalsInventory goals
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Share Best PracticesShare best practices with others:Share best practices with others:
How do you set expectations in smaller How do you set expectations in smaller increments (hourly, daily, by shift)?increments (hourly, daily, by shift)?
How do you measure performance?How do you measure performance?What works best to gauge performance?What works best to gauge performance?How do you communicate actual performance?How do you communicate actual performance?What doesn’t work? Why not? What are the What doesn’t work? Why not? What are the
options?options?
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Hoshin Kanri StepsEstablish organizational visionDevelop 3-5 year strategic planDevelop annual objectivesDeploy/roll down to departments
Departments develop plans and meansFocus deployment – not everyone needs to be
involved in everythingIterative (catchball) nature may take time
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Hoshin Kanri StepsImplementation of plansReview progress regularlyAnnual review
Drop or continue incomplete policiesCheck resultsWhat caused us to miss targets
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VOC StrategicPlan
Policy Deployment
Breakthroughs
WorldClassPerf.In: QDC&S
Key Deliverable from Strategic Planning:Top Level Policy Deployment
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Deploy Improvement Priorities
Develop Annual BreakthroughObjectives and Improvement
Priorities
Monthly Review
Implement ImprovementPriorities
Annual Review
PLANNING
IMPLEMENTATION
REVIEW
Establish Organizational Mission
Strategic Planning/ Develop 3-5Year Breakthrough Objectives
Annual Review
Self-Diagnosis
Root Cause Countermeasures
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Step 1 : WHATBreakthrough Thinking
Step 3 : HOWIdentify Key Driver Process
Step 4 : HOW MUCH/WHENDetermine Measures & Track
Step 5 : WHOIdentify Key Resources &
Deploy
Step 2 : HOW FARAnnual Breakthroughs
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Who do you compare your company and its performance to?CompetitorsIndustry StandardsBest in ClassWorld Class
How do you get to be World Class?
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Current Situation
BreakthroughObjective
CurrentSituation
World-Class
Industry Standard
Best-In-Class
GAP
Breakthrough Thinking Drives to World ClassCreated with funds from WIRED NW
Annual BT Objectives Yr 2
Annual BT Objectives Yr 3
Annual BT Objectives Yr 1
BreakthroughObjective
Yr 1Yr 2
Yr 3
Identify First Year Breakthrough Objective
Current Situation
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Why?
GAP
Annual BreakthroughObjective
Current Situation
Why?
Why?
Why?
Why?
ImprovementPriority
Identify Key Driver Processes
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Determine Measures & Track
0
100
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17%
40%
20%
20%
Identify Key Resources & Deploy
RelativeImpact On
Improvement Priorities
CurrentResource
s
Resource A
Team B
Resource C
Resource D
Team E
100%
0% 0%
100%
3%
Created with funds from WIRED NW
What Is A Breakthrough? Represents SIGNIFICANT change in
process improvement, especially as seen through the eyes of the customer.
Requires the organization to stretch itself.
Usually requires multi-functional efforts and teamwork.
Usually, no standard or system exists for this level of breakthrough.
Can be characterized as a “Big Win.”
Created with funds from WIRED NW
1. Are daily management systems in place that allow us to improve?
2. Is it a stretch goal ?3. Is it measurable ? (SMART?)4. Is it linked to Voice of the Customer ?5. Will it provide significant competitive advantage?6. Does it require multi-functional involvement?7. Will it result in a new standard and/or system? 8. Is the answer to how to do it unknown? 9. Have you checked that no problems exist in other areas
that need to be fixed first?
10. When we accomplish the above objectives, does the customer/shareholder benefit?Created with funds from WIRED NW
1. Did you consider the pace of meeting the 3 yr breakthrough when developing the annual objective??
2. Does it divide the 3-5 Year Breakthrough into annual amounts?
3. Does it quantify the first year goal?4. Is it still a stretch goal?5. When we accomplish the annual objective, does the
customer/shareholder benefit?6. Will it provide significant competitive advantage?7. Does it require multi-functional involvement?8. Will it result in a new standard and/or system? 9. Is the answer to how to do it unknown? 10. Have you checked that no problems exist in other areas
that need to be fixed first?Created with funds from WIRED NW
Focused• Meets Current or Emerging
Customer Needs• Limited to a Critical Few
Process Oriented• Should lead to the creation of
sustainable, results-oriented processes… not short-term tasks.
Effective Top Level Improvement Priorities Are:
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Clear• Easy to Communicate• Simple Flow of Logic• Team understands what is
to be achieved and why
If you can’t easily communicate… Go back, Simplify, Clarify
Effective Top Level Improvement Priorities Are:
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MeasurableThe objective you write must be
something that can be measured
But, not a Measure!
Effective Top Level Improvement Priorities Are:
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We apply problem solving techniques to
identify the key process that drives the
improvement priority.
This will enable us to reach our overall annual breakthrough objective.
Why?GAP
Annual BreakthroughObjective
Current Situation
Why?Why?
Why?Why?
Improvement Priority
Identify Key Driver Processes
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Top Level Improvement Priority Checklist1. Does it lead to creation of a sustainable process?2. Does it lead to creation of a results-oriented process?3. Does it meet current or emerging customer needs?4. Is it easy to communicate?5. Does it demonstrate a simple flow of logic?6. Is it measurable, but not a measure itself?7. Does it enable the implementation of a process which
exceeds budget targets, if and where applicable?
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Targets are measures of the effectiveness of a given process
Think in terms of process capability (statistics)
Improvement Priorities tell “how”, Targets tell “how much” & “by when”
Identify Targets To ImproveFor Each Improvement Priority
Determine Measures & Track
0
100
• Typically a from:___to:___by:___ statementCreated with funds from WIRED NW
Targets to Improve Checklist1. Does it track progress toward full
implementation of the Improvement Priority?2. Can it be broken down into at least monthly
progress increments?3. Does it exceed budget targets? 4. Does it track progress toward achieving the
Annual Objective?5. Does it reflect if the Improvement Priority has
an impact on the Annual Objective? 6. Does it measure results, rather than action plan
milestones?7. Is it easy to calculate and communicate?8. Does it demonstrate a simple flow of logic?
Created with funds from WIRED NW
Top LevelImprovement
Priorities
HOW
AnnualBreakthrough
Objectives
HOWFAR
3-5 Year Breakthrough
Objectives
WHAT
Targetsto Improve
HOW MUCH
All itemsare listed
in priority orderstarting from
the centerRESOURCES
= Primary Responsibility
= Secondary Responsibility
WHO
OWNER
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RESOURCES
AnnualBreakthrough
Objectives
Targetsto Improve
3-5 Year Breakthrough
Objectives
Top LevelImprovement
Priorities
= Primary Responsibility
= Secondary Responsibility
5- WHO
4- HOW MUCH
Use dots to show relationship of Targets and Resources to the Improvement Priority
3- HOW
Use dots to show relationship of
Improvement Priorities to Annual Objectives
2- HOW FAR
1- WHAT
NOTE: Only Solid dots on a resource deploy to the
next level
The whole picture of your company on one sheet of paper!
Complete Top Level PD Matrix
OWNER
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3-5 YearBreakthroughs
TargetsTo
Improve
Top Level Improvement
PrioritiesAnnualBreak-through
Objective
Dots showlinkage from
Target back to Breakthroughfor that level
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Policy DeploymentPolicy Deployment
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Points to Remember about the Matrix
As soon as a solid dot is placed above a resource, that resource will get a lower level matrix or an action plan.
Clear circles indicate support resources. They do NOT get a lower level matrix or action plan unless they get a solid dot on another matrix.
The dots are to be used as a sanity check
The ImprovementPriority is deployedto the lower levelmatrix or an actionplan
Second Level Policy Deployment
Primary Responsibility Secondary Responsibility
RESOURCES
Annual Breakthrough
Objectives
Targets to Improve
Danaher Business System Office - Policy Deployment 1998
Primary Responsibility Secondary Responsibility
Resources
Top Level Improvement
Priorities
3-4 yearBreakthrough
Objectives
Annual Breakthrough
Objectives
TOP LEVEL - CompanyTOP LEVEL - Company
Top Level Improvement
Priorities
Targets to
Improve
SECOND LEVEL - PlantSECOND LEVEL - Plant
Second Level Improvement
Priorities
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Improvement Priorities Cascade to the Point of Impact
= Original Plan x = Progress at Review
Action Step/ Kaizen Events Milestone J an Feb Mar Apr May J une J uly Aug Sept Oct Nov Dec
Improvement Priority Title: *Department/Location:
* Management Owner: *
Date: *
Core Objective: *
TimelineTarget Improvement
Planned Dates
Policy Deployment Action Plan
Review Team: * Next Review: *
Environmental Situation Summary: *
Status (Past Due in Red )
ImpactOwner (Lead is bold)
2003
Second Level Policy Deployment
Primary Responsibility Secondary Responsibility
RESOURCES
Target to Improve
SECOND LEVEL SECOND LEVEL – Plant/Business– Plant/Business
Danaher Business System Office - Policy Deployment 1998
Primary Responsibility Secondary Responsibility
Resources
AnnualBreakthrough Objectives
3-5 Year Breakthrough Objectives
Target to Improve
TOP LEVEL – TOP LEVEL – Company/GroupCompany/Group
POINT OF IMPACT - POINT OF IMPACT - ACTION PLANACTION PLANEngineer/SupvEngineer/Supv Cascade as many times as
necessary to the Root Cause Level
Point of Impact - Action Plan The level where root causes are addressed! Action Plans can be initiated out of any matrix level.
POINT OF IMPACTTarget to
Improve
ROOT CAUSE ROOT CAUSE LEVEL-LEVEL- Sub Plant/Dept Sub Plant/Dept
Annual
ObjectivesBreakthrough
TopLevelImprovementPriorities
SecondLevelImprovementPriorities
TopLevelImprovementPriorities
TopLevelImprovementPriorities
SecondLevelImprovementPriorities
ThirdLevelImprovementPriorities
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Step 4: Identify the impacts on the
improvement priority and top level breakthrough
objective
Step 1: Determine
actions & write on worksheets
Step 2: Record ownership and
timing of the actions
Create an Action PlanFor every ImprovementPriority at the Point ofImpact
Creating Action Plans
Step 3: What is the current status of the action. Color code background as red to
show items past due.
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If there are multiple TTI’s (metrics) for a
single Improvement Priority, they
are listed here in Core
Objective
Milestones are discrete events
that indicate that action step has
occurred
Planned date could become the
revised date if there is a change
to the original plans
These are specific tasks to be accomplished, they are
generally in chronological order for simplicity. Use
outlining to better communicate.
Shade the month the action step is to be completed – shade several months
if needed. Place “x” where activity actually takes place.
The impacts should sum to the improvement priority
goal with specific numbers and/or actions
Status should be: -Complete OR-On time OR
-Past Due OR -% complete
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How long should Action Plans be?Long enough to track progress weekly.Include key actions and kaizen events.No prize for length. Keep brief and to the
point.
Notes about Action Plans
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1. Does it “tie” to PD (is the Improvement Priority it “ties” to
clear)?
2. Are all the top-part sections of the Action Plan complete?
3. Are the Actions clearly documented?
4. Are there appropriate number of Actions? Litmus test is
should be able to track improvement actions on a
monthly/weekly basis.
5. Is the Ownership of each Action identified?
6. Is the timing of each Action identified?
7. Is the impact of each or grouping of Action(s) quantified
and is there enough to get you to reach your Objective?
8. Is the correct timing legend used (plan vs. progress at
review)?Created with funds from WIRED NW
Targets To Improve
are entered inpriority order
Planned targets are established for each month basedon the overall Target to Improve.
An actual that is a miss from the plan, is color coded red
JOP – Jumping Off Point fromwhich you started tracking the target
YTD ACT – Each month this field getsupdated (is YTD from the monthlyfields located to the right)
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Improve
SECOND LEVELSECOND LEVEL
BOWLING CHARTBOWLING CHART
Top Level Improvement
Priorities
3-5 year Breakthrough
Objective
Annual
Breakthrough
Objectives
Target s to
Improve
TOP LEVELTOP LEVEL
BOWLING CHARTBOWLING CHART
Bowling Charts Are Created For All Policy Deployment Matrices
Annual BreakthroughObjectives
Top LevelImprovement
Priorities
Targets to
2nd LevelImprovement
Priorities
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TOP LEVEL BOWLING CHARTTOP LEVEL BOWLING CHART
Each Target Is Copied To The Top Level Bowling Chart
Reduce New Prod. Dev. Cycle
ANNUALBTOBJECTIVES
TARGET
TO
IMPROVE
3-5 YEARBREAKTHROUGH
OBJECTIVE
TOP LEVELIMPROVEMENT
PRIORITIES
Incr
ea
se M
ark
et S
har
e t
o 6
0%
Dev
. C
ycle
to
120
Day
s b
y 12
/95
RESOURCES
Pro
duct
ion
Dep
artm
ent
Mar
ketin
g D
epar
tmen
t
Eng
inee
ring
Dep
artm
ent
Fin
ance
Dep
artm
ent
Sal
es D
epar
tmen
t
Hum
an R
esou
rces
Dep
t.
Mat
eria
ls D
epar
tmen
t
= Primary Responsibility
= Secondary Responsibility
TOP LEVEL MATRIXTOP LEVEL MATRIXCreated with funds from WIRED NW
Personal Tracking Report
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Countermeasures are actions plans designed from problem solving techniques designed to bring you back to your PD target• Written for any monthly miss on Policy
Deployment
• Can also be required for KPIs based on the manager’s discretion
What are Countermeasures?
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Format: can use A3 or matrix formatInclude trend charts, pareto diagrams, or any visual
tools to help speak with data and tell the storyMust be at Point of Impact Assure the countermeasures are tied to the greater
visionDefine the root causes and quantify amount of “miss”Focus on the critical few… may not get to 100% of the
“miss” in 30 days-Sometimes you will have short-term and long-term countermeasures
Clearly define ownership and timingCreated with funds from WIRED NW
Focus on the critical few…
May not get to100% of the
“Miss” in 30 days
Must be at“Point ofImpact!”
Run chart ofPlan vs. ActualSame data from
PD Bowler
Clearly defineOwnershipAnd timing!
Quantify theImpact!
Do you haveEnough?
Sometimes youWill have
Short-term andLong-term CMs
May needMore Paretos to“Peel-back-the
Onion”Define the RootCauses and
Quantify amount Of “Miss”
Know the “tie”to PD!
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• Having a PD miss and having to write countermeasures does not mean that someone has failed
• PD Targets, by their nature, should be aggressive stretch targets
• Outstanding organizations will normally be required to write numerous countermeasures each month
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Countermeasures• Good countermeasure preparation will
drive an organization to productive self-criticism, more robust systems, closer customer contact, a higher level understanding of the marketplace, etc.
• Effective Countermeasure development is a team effort. Writing them in a vacuum normally does not yield the best results or plans
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Countermeasure Checklist1. Does it “tie” to policy deployment (is the “tie” clear)?2. Does it have a run chart showing plan versus actual data?3. Does the Pareto show the why versus the where (i.e., get
to root cause)?4. Is the Root Cause Statement made with quantified
amount of miss?5. Are the Countermeasures focused on the critical few?6. Are there short-term as well as long-term
countermeasures (if appropriate)?7. Is the Ownership of each Countermeasure identified?8. Is the timing of each Countermeasure identified?9. Is the impact of each Countermeasure quantified and is
there enough to get you back to Plan?
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Do a Monthly Review of Your Action Plan
Policy Deployment meetings are held monthly (a meeting for each PD matrix)
Countermeasures are fact based Countermeasures are specific, with due dates
and responsibilities listedProblem solving tools are used to determine
countermeasuresPD targets are measured frequently enough
to provide adequate data
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Top Management’s Role in Policy Deployment
Conduct lively policy deployment sessions that test people’s understanding. Information must be fact-based.
Evaluate effectiveness of specific projects & action plansEvaluate effectiveness of the overall improvement
processDecide when to take action & what type of action to takeCommunicate Stretch vs. Budget and hold associates
accountable
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Summary1. ASSESSMENT - Take careful stock of where you are today
2. VISION - Decide where you want to be in the future
3. STRATEGIC PLAN - Work out a Policy Deployment Map to bridge the gap from now to your vision
4. AOP - Ensure that current year actions are included in your Annual Operating Plan
5. MEASURE PROGRESS - Establish formal tracking for management team for their short term action items
6. ACCOUNTABILITY - Keep the plan alive by getting monthly strategic updates regarding progress
7. CELEBRATE your victories!Created with funds from WIRED NW
Independent Assignment #2Meet with your mentor and review the
materials discussed in today’s session.Mutually agree on opportunities to apply what
was learned today, using as many tools as possible.
Bring a completed X matrix to the next session.
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