Organization Alignment using Policy Deployment

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


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


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


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


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


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


Strategic Planning:

Linking Long-term Strategic Goals to Current Action Plans


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?


Strategic Planning

How do we bridge the gap from where we are to where we

want to be?

Policy Deployment Map


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


Policy DeploymentPolicy Deployment


Performance Expectation Setting


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.


“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


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?


”In God we trust – everybody else bring data”

”You don’t have to change – after all survival isn’t mandatory”


SMART CriteriaSMART

Specific

Measurable

Attainable

Relevant

Time Bound


SMART Card ActivityDetermine if your assigned “goals” meet the

SMART criteria




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.



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



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?


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)?


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


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?


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


Hoshin Kanri StepsImplementation of plansReview progress regularlyAnnual review

Drop or continue incomplete policiesCheck resultsWhat caused us to miss targets


VOC StrategicPlan

Policy Deployment

Breakthroughs

WorldClassPerf.In: QDC&S

Key Deliverable from Strategic Planning:Top Level Policy Deployment


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


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


Who do you compare your company and its performance to?CompetitorsIndustry StandardsBest in ClassWorld Class

How do you get to be World Class?


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



BreakthroughObjective

Yr 1Yr 2

Yr 3

Identify First Year Breakthrough Objective

Current Situation


Why?

GAP

Annual BreakthroughObjective

Current Situation

Why?

Why?

Why?

Why?

ImprovementPriority

Identify Key Driver Processes


Determine Measures & Track

0

100


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%


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.”


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:


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



MeasurableThe objective you write must be

something that can be measured

But, not a Measure!



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


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?


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?


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


RESOURCES

AnnualBreakthrough

Objectives

Targetsto Improve

3-5 Year Breakthrough

Objectives


Priorities



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


3-5 YearBreakthroughs

TargetsTo

Improve

Top Level Improvement

PrioritiesAnnualBreak-through

Objective

Dots showlinkage from

Target back to Breakthroughfor that level


Policy DeploymentPolicy Deployment


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


Resources


Priorities

3-4 yearBreakthrough

Objectives

Annual Breakthrough

Objectives

TOP LEVEL - CompanyTOP LEVEL - Company


Priorities

Targets to

Improve

SECOND LEVEL - PlantSECOND LEVEL - Plant

Second Level Improvement

Priorities


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


RESOURCES

Target to Improve

SECOND LEVEL SECOND LEVEL – Plant/Business– Plant/Business

Danaher Business System Office - Policy Deployment 1998


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



SecondLevelImprovementPriorities

ThirdLevelImprovementPriorities


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.


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


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


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)


Improve

SECOND LEVELSECOND LEVEL

BOWLING CHARTBOWLING CHART


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


Priorities

Targets to

2nd LevelImprovement

Priorities


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

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ion

Dep

artm

ent

Mar

ketin

g D

epar

tmen

t

Eng

inee

ring

Dep

artm

ent

Fin

ance

Dep

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ent

Sal

es D

epar

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t

Hum

an R

esou

rces

Dep

t.

Mat

eria

ls D

epar

tmen

t



TOP LEVEL MATRIXTOP LEVEL MATRIXCreated with funds from WIRED NW

Personal Tracking Report


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?


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!


• 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


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


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?


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


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


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.


Documents

Organization Alignment using Policy Deployment