Business is an ongoing series of decisions. In some cases, it can be a definitive one, for example, to pursue a new line of business. Other times, it can be to delay deciding while gathering or collecting more data or to give it more time. Worse yet, it can be an arrogance that no one can compete with your company and become irrelevant as the marketplace moves forward such as Blackberry and Kodak. We shift from our conversation on the importance of active and dynamic leadership last week to an essential element of leadership work of policy development, also known as Hoshin Kanri.
Strategy is about making choices, trade-offs; it's about deliberately choosing to be different. - Michael Porter
A few weeks ago, I posted on LinkedIn an overview of Love Your Competitors - How Great Businesses Do Strategy, a TED Talk by Alex Smith. He recommends shifting away from the "Business is competition" mindset, an ingrained principle for most people in that sector. In his TEDx Talk, Alex Smith takes a different perspective when he states that "you win when you refuse to compete" by disengaging with our competitors, stepping back, and letting our competitors have theirs. Smith further shares that we should choose not to be bad at things that our competitors are good at doing where your company drives customers to them for what they excel in providing. Declustering is a better option, per Smith, where businesses should focus on segmenting the market and concentrate on what they do best.
While I continue to advocate the SOAR framework for strategic planning, we can enhance that approach by using elements of other methods. One is the Japanese lean manufacturing strategy planning process of Hoshin Kanri or policy deployment. A definition is "A method for ensuring that a company's strategic goals drive progress and action at every level within that company. This method eliminates the waste from inconsistent direction and poor communication." The work aligns all organization members through strategic goal alignment with tactical plans to carry them out, led by middle management and done in concert with the workforce's efforts. The methodology is another viable approach to support an organization in achieving what it can do best.
Policy deployment is a structured approach to ensure everyone in the organization works towards common goals. Here is how to use policy deployment:
• Define Your Organizational Goals and Objectives – The leadership team works with representatives of the various levels and disciplines of the organization to define long-term strategic goals and objectives that align with its mission and vision.
• Break Down Objectives into Annual Goals – The organization divides the long-term 3-5 year objectives into SMART goals for the upcoming year.
• Identify Key Metrics – The company defines quantifiable and trackable performance indicators (KPIs) to measure progress toward the annual goals.
• Create a Deployment Plan – The SMART goals are further segmented into specific strategies, tactics, and action steps to implement the annual plan.
• Cascade Goals and Objectives – The leadership communicates the plans to implement annual goals by sharing the strategic goals and objectives for achieving the higher-level goals.
• Hoshin X-Matrix – The matrix is a tool that efficiently and effectively visually aligns the objectives, strategies, KPIs, and responsible parties so that everyone understands their role in achieving the goals.
• Regularly Review Progress – A schedule of regular reviews should include periodic meetings, such as weekly, monthly, or quarterly reviews, as a way to understand the need to make any necessary adjustments to the planning process.
• Problem-Solving and Continuous Improvement – An essential element of lean manufacturing is to develop a strong culture of continuous improvement and problem-solving. When issues arise that require adapting plans, techniques like root cause analysis and PDCA (Plan-Do-Check-Act) are used to realign the annual goals.
• Communication and Engagement – The leadership team must engage employees at all levels through solid communication to gather insight and feedback to ensure the completion of the annual goals.
• Sustain the Process – Policy deployment is an ongoing process integral to an organization's management system.
• Technology and Tools – A properly selected software package can enhance the process and streamline strategy deployment.
• Training and Development – The successful use of policy deployment requires the organization to provide training and development opportunities that allow employees to acquire the skills and knowledge necessary to make a positive contribution.
Remember that policy deployment is a dynamic process requiring commitment from leadership and employees. It is a powerful method for aligning organizational efforts with strategic goals and ensuring the organization achieves its vision.
Policy deployment is essential to leadership work, also known as Hoshin Kanri. It is a structured approach to ensure everyone in the organization works towards common goals. A robust method for aligning organizational efforts with strategic goals and ensuring the organization achieves its vision.
Individuals interested in learning more about the Hoshin X-Matrix should review the article on the Hoshin Kanri X-Matrix Template for Lean Policy Deployment. The website does an effective job of providing an overview of the various aspects of the matrix. There is also a video providing additional perspective on the topic.
I am grateful to Professor Yoji Akao, who first developed the management technique of Hoshin Kanri in Japan in the 1950s. In particular, his belief that "Each person is the expert in his or her job." The methodology is an approach that can maximize the collective thinking power of all employees to contribute to the organization's success.
Next week's blog will shift to the essential element of a proactive review of planned targets integral to becoming a humanist manufacturing organization.
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