3-06 Enterprise Strategic Planning

8/16/2019 3-06 Enterprise Strategic Planning

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Enterprise Strategic Planning

Developing the organization’s strategy anddeploying it throughout the organization


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BA 553: Business Process Management 2

Aligning Strategy with Process Metrics

This is a process or ensuring alignment among the organization’s

perormance measures! strategic plans! improvement pro"ects! and#udgets$ The items in grey %ill #e covered in session &$

1. Establish the organization’s key goals

2$ 'sta#lish (P)s associated %ith the organization’s *ey goals! and measureperormance in these

3. Develop and deploy the enterprise strategy to the process level

+$ 'sta#lish process measures ,i not already e-isting.

5$ 'nterprise (P)s are then recali#rated and aligned %ith process/levelmetrics

0$ 1nce the metrics are aligned at all levels! process improvement pro"ectscan #e identiied

&$ Budget must #e allocated aligned %ith the process improvements neededto achieve the strategic goals$ This is %hy it is critical to align the #udgetingprocess %ith the strategic planning process


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ypes o! Strategic Planning

hat is the Purpose o trategic Planning4

To identiy and deine strategic gaps and #rea*through goals%hich the company is committed to achieving$

hy nderta*e trategic Planning4

To ocus and motivate all employees to achieve the changesneeded to achieve and sustain a leadership position in themar*etplace$

6o% do you nderta*e trategic Planning4

1ption 7 8 The Traditional Approach: Management #y 1#"ectives 1ption 2 8 6oshin Planning Approach: proven to #e more

successul than the traditional approach


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BA 553: Business Process Management +

he "#portance o! E#ployee "nvolve#ent There are many methods or conducting strategic planning in organizations

)n most cases! the strategic plans are developed #y senior management! anddeployment only involves the higher management levels

Those at the lo%er levels o the organization are not involved in identiying theirstrategic goals! and oten are not even inormed o the goals ater they aredeveloped

This ma*es it diicult ,or impossi#le. or employee actions to #e aligned %ith the

organization’s *ey goals

9rom: Dil#ert / A Treasury 1 unday trips: ;ersion


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$oshin% De!inition

The %ord 6oshin is ormed rom t%o >hinese %ords / 6o=meaning method or orm? and hin= meaning shiny metalsho%ing direction or compass=

>om#ined together! it stands or methodology or strategicdirection setting=

)t is a management system that emphasizes customer ocus!process management! employee participation and *no%ledge/#ased decision ma*ing

)ts aim is to align people! activities! and perormance metrics!rom the highest to the lo%est level in the organization! %ithstrategic priorities


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$oshin Planning at e&as "nstr'#ents

)mprovements achieved at Te-as )nstruments emiconductor@roup using 6oshin planning included:

eduction in missed committed delivery dates #y &5 inone year$

eduction o manuacturing cycle times #y 0


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BA 553: Business Process Management &

(haracteristics o! $oshin Planning

'na#les alignment o organizational goals %ith changes in thee-ternal environment$

)dentiies and communicates the vital e% strategic gaps thatmust #e closed to achieve mar*et leadership$

Provides a lin*ing #et%een annual o#"ectives and strategicpriorities$

'na#les measures o daily activity to #e lin*ed to measures ostrategic outcomes$


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BA 553: Business Process Management C

"ntrod'ction o! $oshin Planning in the ).S.

6oshin Planning %as irst implemented in the nited tates in the

7Corporation! Te-as )nstruments and many other companieshas resulted in its increasing use #y organizations see*ing %ays to

achieve high perormance levels

6oshin Planning %as irst developed in Eapan and played essentialrole in helping many companies achieve the coveted Deming prize

6oshin Planning is one o many names given to this improved

strategic planning methodology$ 1thers include management #yplanning and *ey o#"ectives planning


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BA 553: Business Process Management

M*+ vs. $oshin Planning

M*+ $oshin Planning

Deploys proit goals Deploys voice o the customer

9ocus on results 9ocus on process

Fuarterly management>ontinuous management

Top/do%n communications only Go%er/level learning eeds #ac* to topo organization

9ocus on individual #ehavior 9ocus on system #ehavior

)ndividuals have little or no input totheir measures >atch/#all process ena#les input romindividuals to measures


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BA 553: Business Process Management 7<

,hy (hange -ro# M*+

)nconsistent %ith a participative or empo%ering %or* environment

People have no input to the measures they’re #eing evaluatedagainst

)nconsistent %ith a learning organization environment

Ho documentation o learning a#out %hy measures %ere notachieved

Ho sharing o learning! either up the organization or acrossunctional #oundaries

)nconsistent %ith process approach

Ho lin* #et%een daily activities o employees and strategic goals

Addresses symptoms only / no e-amination o root causes todiscover and eliminate systemic pro#lems

9ocuses on results! not the process used to achieve them ,nounderstanding o %hy targets %eren’t met.


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$oshin Planning and the Process Enterprise

1rganizational success depends on the united eorts o all employees$

9or employees to #e partners in achieving organizational o#"ectives! theyhave to understand what the o#"ectives are! why they are important! andhow they can help achieve them$

The traditional command and control= style o management and a relatively

chaotic %or* environment result in employees not understanding the %holeo %hich they are a part$

This lac* o systems thin*ing results in employees ocusing on the tas*sthey are assigned %ithout an a%areness o ho% their tas*s relate to theorganization’s o#"ectives$

1rganizations that involve the %or*orce in strategic planning create arame%or* %ithin %hich all employees can %or* together to optimize theiractivities %ith the success o the %hole organization in mind$


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,hat Does $oshin Planning /ook /ike

6oshin Planning deploys the voice o the customer! not "ustproit goals$

6oshin Planning deploys #rea*through strategies$

6oshin Planning controls the means and methods! not "ust the

results$

6oshin Planning is a continuous management process! not acalendar/driven system$

6oshin Planning emphasizes reIuent revie%s up and do%nthe organization$

6oshin Planning is not tied to perormance appraisals$


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$oshin Planning% "#pact in the renches

'sta#lishes priorities or local pro"ect planning and resourceallocation$

Demands active! #ottom/up involvement in proposing #udgetsand targets$

esources are allocated to support plans or improvement!not #ased on last yearJs #udget$

'nsures corporate visi#ility at even a local level! since allpro"ects contri#ute to targets ,aligning vectors.$

Motivates all participating employees #y ma*ing clear theirlin* to the core #usiness and to customers / total involvement$


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BA 553: Business Process Management 7+

$oshin Planning *ene!its

Deploys the company visionKmission

Achieves #rea*through #y aligning vectors

Provides a disciplined process to achieve total customer satisaction

)ntegrates the activities o organizational groups

'na#les company/%ide participation in planning

)ncreases communication across departments

Provides a common language

Provides a systematic process or continuous process improvement

)ncreases le-i#ility and responsiveness to change


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$oshin Planning%

-actors that (ontrib'te to S'ccess

The company vision is aligned %ith customer needs$

1ne ,and only one. #usiness planning system is used$

The 6oshin Planning cycle is aligned %ith the #udget cycle$

esources ,#oth people and L. are committed to implementing theimprovement plans$

Participation o all levels o the company! #oth in planning and insetting targets ,catch #all process.$

Targets are set #ased upon an understanding o #oth ho% they %ill#e achieved and the limits o process and organizational

capa#ilities$ Management demonstrates a tangi#le commitment to open and

honest communication! on/going education! and meaningulrecognition$


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A Strategy0Aligned Process Enterprise

Imagine an organization %here the president communicates the vital e%

strategic priorities! and every person participates in deining ho% his or her %or*provides a measura#le contri#ution

Imagine an organization %here every#ody *no%s the methods to ollo% toguarantee that the organization %ill meet its o#"ectives

Imagine an organization %here employees integrate daily management %ith

contri#utions to%ards the long/term strategic priorities

Imagine an organization %here each manager routinely communicatesdeviations rom plan to ena#le diagnosis and timely corrective action

Imagine an organization %here the *ey #usiness systems and organizationaldesign routinely adapt to changes in the environment

Imagine an organization %here every employee understands and participates indeveloping plans to improve perormance #y improving the %or* processes andthe organizational culture

Bechtell! M$! The Management Compass: Steering the Organization Using Hoshin Planning !New York: AMA Membership Publications, 1995


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BA 553: Business Process Management 7&

$ow to (ond'ct $oshin Planning

Daily Management (run the ship)

Hoshin Management(plot voyage)

Functional Management(set course and speed)

Future Direction

All ports of call

Current Course

Next port of call


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BA 553: Business Process Management 7C

Manage#ent oles in $oshin Planning

Daily Management

Hecessary activities or each department %ithin theorganization to underta*e in order to operate eectively$

9unctional Management

Activities at the corporate level needed to achievecompany o#"ectives or Iuality! cost! delivery! etc$

6oshin Management ,6oshin Planning.

>oordination o corporate level activities to achieve thepresidentJs annual policy and meet organizational long/term o#"ectives$


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he Seven Principles o! $oshin Planning

Participation by

all managers

Focus onprocess

Catch ballunderstanding

Quality

first

Individualinitiative andresponsibility

Focus onroot causes

No tie toperformanceappraisals

King, Bob,Hoshin Planning: The Developmental Approach, Methuen, MA: GOAL/QPC, 1989.


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$oshin Planning Principles De!ined

Participation by all #anagers

'very manager is as*ed to give hisKher input to the companyJs ive/yearvision

Participation in planning helps create o%nership and acceptance o the plan

Process gives top management valua#le insights rom lo%er organizationallevels! and oten suicient cause to ad"ust the plan

"ndivid'al initiative and responsibility

Managers are responsi#le or setting and evaluating their o%n personalgoals

The goals that are esta#lished are aligned %ith the goals o the rest o theorganization

'ach manager *no%s %hat to e-pect o related unctions in measura#leterms

educes the li*elihood that unrealistic commitments %ill #e made %hichmight negatively inluence organizational perormance


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$oshin Planning Principles De!ined 2(ontd.4

-oc's on root ca'ses

As pro#lems are identiied! their root causes are sought

As root causes are identiied and eliminated! the process is improved andstandardized! leading to a sustaina#le increase in process eectiveness

5o tie to per!or#ance appraisals

The assumptions upon %hich 6oshin Planning is #ased is that systemperormance is a unction o the system and not the individual! and is thusnot tied to individual compensation

6'ality !irst

Fuality in the process is stressed over proit

The rationale is that proit %ill ollo% rom emphasizing Iuality 6oshin Planning is #ased upon the vie%point that providing customer value

#y means o Iuality is the #asis or long/term success


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$oshin Planning Principles De!ined 2(ontd.4

(atch ball

A communication analogy used to encourage open and accuratee-change o ideas

)n catch #all! inormation lo%s #oth vertically and horizontally! i$e$!the receiver catching a communication tosses it #ac* to the senderto ensure correct interpretation and understanding

-oc's on process

Monthly and yearly numerical targets are used to evaluateprocesses

9actors %hich help the process #etter achieve the targets are

enorced

9actors %hich hinder the process are e-amined or elimination


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he $oshin Planning Syste#

5-year vision

President’sannualaudit

Monthly

diagnosis

Detailed

implementation

Deploy todepartments

1-year plan

Plan

Audit Execute



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he Si& Steps in $oshin Planning

Step 1% he -ive0year 7ision

The ive/year plan sets the strategy the organization %ill use to achieveits long/term vision$ )t includes a e% *ey o#"ectives$ A drat is created#y top management! and then all other managers provide input to theplan$ )n this %ay! the plan is understood #y all %ho %ill act on the plan$The ive/year plan is revie%ed and ad"usted! sometimes as oten aseach year! to assure that it remains on target$

Step 8% he +ne0year Plan

peciic activities are outlined in the one/year plan$ These activitieslo% rom the ive/year plan #ased on easi#ility! environment! customerreIuirements! and past perormance$ The top activities are thenrevie%ed #y various su#"ective and o#"ective means to determine the

appropriate integrated plan o activities$Step 3% Deploy#ent to Depart#ents

Measura#le targets and methods are determined at this step$Prioritization o plans is accomplished #y methods %hich ma-imizeli*elihood o success$ Baseline measurements and e-pected goals are

put in place using standard charts$


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he Si& Steps in $oshin Planning 2(ontd.4

Step 9% E&ec'tion

imple tools are used at this step to provide detailed implementationand contingency plans$ Because the individuals doing the %or* areputting the plan in place! they are #eing empo%ered to guide it tocompletion$ 'mployees are thus encouraged to ta*e remedial action%hen necessary #ased upon their o%n anticipation o contingencies$

Step :% Monthly a'dit

Progress is assessed at this point to determine help and hindrances tothe process$ or*ers revie% the control charts or trends in Iuality!cost! delivery and other *ey aspects$ ) necessary! pro#lem diagnosista*es place to determine and eliminate root causes$

Step ;% President’s ann'al a'dit

This revie% o the previous yearJs results loo*s at target indicators othe process eectiveness$ The annual audit ocuses greatly on theprocesses! rather than the numerical targets$ The purpose o the auditis improvement o the previous yearJs results$ The updated visionandKor annual plan %ill incorporate the indings o this revie%$


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$oshin Planning E&a#ple

The ollo%ing e-ample is rom a po%er generationutility %here the Proessor led a pro"ect


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$oshin Planning E&a#ple

This module provides an overvie% o a training session that %as

conducted #y the Po%er @eneration Division to help introduce6oshin Planning to *ey sta*eholders and to initiate the 6oshinPlanning process$

The 0< participants in the training meeting included: Division vice presidents >orporate legal representatives >orporate inance department representatives >orporate human resource representatives Management teams rom all generation division plants

9ront/line supervisors rom selected departments The trade union #usiness manager Trade union ste%ards Plant planning group mem#ers


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Meeting P'rpose

To provide participants %ith an understanding o 6oshin

Planning principles and processes$

To understand the division’s strategic goals and esta#lishprimary plant level hard and sot o#"ectives$

To identiy concerns o all sta*eholders associated %ithimplementing 6oshin Planning$

To esta#lish a top/level division 6oshin Planningimplementation process$


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Meeting Agenda

Session 1 0 /eadership


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Meeting Agenda 2(ont’d.4

Session 8 0 +verview o! $oshin Planning

The o#"ective o this session %as to provide participants %ith ageneral training on o the principles and process associated %ith6oshin planning and an understanding o the %ay in %hich processmanagement tools can #e used to help in designing a plant level

6oshin planning process$

Session 3 0 Establishing Preli#inary $ard and So!t +b=ectives

This session provided an opportunity or #oth plant %or*ing groupsto identiy preliminary plant o#"ectives and revie% these %ith

meeting participants$


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Meeting Agenda 2(ont’d.4

Session 9 0 Designing a $oshin Planning Process

This session provided participants %ith *no%ledge and s*illsto support their 6oshin planning process design eort$

Session : 0 ,orking


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,orkshop opics

Session opic

A A / The Gearning >ycle

5$ nderstanding 1rganizational >apa#ilities

0$ eeing the 1rganization as a Het%or* o Processes

&$ 'mployee )nterest in Participating in Process )mprovement 'ortsC$ ;ision o the 9uture

> $ or*ing @roups to 'sta#lish Preliminary 6ard and ot 1#"ectives

D 7


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Session 1% /eadership % Establishing Preli#inary


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Session >% Establishing Preli#inary

$ard and So!t +b=ectives

Plant Priorities

'mployee saety Protect the eIuipment @enerate mega%atts 'nvironmental compliance

Plant hange management style to reduce the level o ear in the

%or* environment ,sot.

Session 11% Deploying ?ey +b=ectives


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Session 11% Deploying ?ey +b=ectives 0

)tility (ase E&a#ple

)magine you are a planning team or a po%er plant

enior management has esta#lished a set o priorities orimprovement over the ne-t year! using eed#ac* rom all typeso customers

1ne area needing improvement is the relia#ility o po%er toratepayers$

6o% do you move rom this high level goal to esta#lishdepartment o#"ectives and speciic targets or process

improvement teams4

Deploying ?ey +b=ectives%


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)tility (ase E&a#ple 2(ont’d.4

Mid0ter# Plans Short0ter# Plans

7$ Achieve customer satisaction 7$ )mprove the relia#ility o electricservice

2$ hape the environment 2$ trengthen eectiveness in dealing

%ith regulatory agencies

3$ trengthen organizationaleectiveness

3$ )mprove the >orporate Planning=process

+$ 'ectively utilize resources +$ 'sta#lish and achieve relia#ilitytargets



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Achieve customer satisfactionPresident

Improve the reliability of electric serviceCoordinatingExecutive

Reduce service unavailabilityFunctionalManagement

Reduce the duration of customer outagesDepartmentManagement

Reduce customer minutes interruptedto 48.0 by 1989

First LineManagement

Modifydistributionsubstationoperations

Changetransmissionswitchingpriorities

Improvefield crewresponsetimes

Reducegenerationforcedoutages

Upgradeequipmentand

facilities

others

others

others



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Measure / '91

Measures

• amount oeIuipment i-ed

• %or* orderscompleted

• overtime costs

• cost o e-pedited

parts

Measures

• %ait time orparts

• N o times partsnot availa#le

Measures

• N o parts in%arehouse

• correct minKma- orparts in materialmanagement system

)tility Division

2)D4 /evel

Power Plant

2PP4 /evel )mprovementPlan

,Plant 7.

)mprovementPlan

,Plant 2.

)mprovementPlan

,Plant 3.

AdditionalPJs

AdditionalPlants

)mprovementpec

)mprovementpec

)mprovementpec

)mprovementPlan

)mprovementPlan

)mprovementPlan

,ork Process

2,P4 /evel

Additional

)Js

)mprovementpec

)mprovementpec

)mprovementpec

,ork Process

"#prove#ent

Section 2"S4

/evel

)mprovement )mprovement )mprovement

)mprovementpec

"ntegration

"ntegration

"ntegration

Improvemaintenance

Reduce forced

outages

Improvefuel supply

Etc.

Improve partsavailability Improve pre- dictive maint. Etc.

)mplement)mprovement Plan



Partsavailability

Predictivemaintenance

Etc.


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Session 1:% Planning Process +verview

Identify plant objective categoriesand preliminary objectives

(what and why)

Leadership GroupPlant StrategicPlanning Groups

Department Managers

DepartmentPlanning Groups

All DepartmentEmployees

Prepare information package,communicate plant objectives

to departments

Dave, Mark,uddy, !rudy

Dept" managers and somerepresented workers

Departmentmanagers and P!#$s

Meet to surface departmentobjectives, barriers, andimprovements needed to

achieve plant objectives

%ort out employee input usingprocess improvement tools,identify high&leverage dept"

objectives, align with plant obj"

Prepare department$sstrategic plan as a draft

document%upport

'eview

'eviewcomment ondepartmentsstrategic plan

*pdate department strategicplan as needed, reviewwith +eadership roup

-inali.e and issue departmentsstrategic plan


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BA 553: Business Process Management +<

Session 1;% Per!or#ance "ndicators (ase E&a#ple

Gast Oear’s Gast Oear’s >urrent Oear

Measurement Area 1#"ective Actual 1#"ectivetart 9ailures , $9$. tart nrelia#ility ,@T. tart navaila#ility ,@TA. Trips o/line ,T$9$. Maintenance 1utage ate

Planned 1utage ate'Iuipment Availa#ility 9actor 6eat ate@enerationGost/time Accidents ,6ours.Medical Treatment ate

9irst/aid >ase eductions;ehicular Accident ate1QM Budget6eadcount1utage Budget>apital Budget


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BA 553: Business Process Management +7

Deploying hange style o

management to reduceear in the %or*environment

+$7 )ncrease communications rom management onplant decision/ma*ing

+perations Depart#ent +b=ectives /inked


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+perations Depart#ent +b=ectives /inked

to *'siness Priorities and Plant Priorities

/egend

BBB Strongly s'pportsBB Moderately s'pportsB Mildly s'pportso )nrelated

*'siness Priorities

*1. "ncrease e#ployee val'e*8. "ncrease plant asset val'e*3. "ncrease c'sto#er val'e*9. "ncrease shareholder val'e

Plant Priorities

P1. E#ployee sa!etyP8. Protect eC'ip#entP3.


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$oshin Planning "#ple#entation Deploying


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BA 553: Business Process Management ++

Maintenance Depart#ent +b=ectives /inked

to *'siness Priorities and Plant Priorities

/egend

BBB Strongly s'pportsBB Moderately s'pportsB Mildly s'pportso )nrelated

*'siness Priorities

*1. "ncrease e#ployee val'e*8. "ncrease plant asset val'e*3. "ncrease c'sto#er val'e*9. "ncrease shareholder val'e

Plant Priorities

P1. E#ployee sa!etyP8. Protect eC'ip#entP3.


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"np't to +ne ear Plan%

Ad#in Services Depart#ent +b=ective 8

Prepared by% Date% -iscal year% Plant% /ocationFDept%

ay ;ogel 2K7


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$oshin Planning "#ple#entation

Deploying So!t ommitment to >ustomer atisaction

se o ystems Thin*ing

Process )mprovement

'mployee )nvolvement and Participation

'mployee Training and Development

Plant and ystems/Gevel Measurement

egular Fuality evie%s and Assessments


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E&a#ple So!t ommitment to >ustomer atisaction 'sta#lish measures and measurement systems to help the plant develop the capa#ility to

meet and e-ceed internal and e-ternal customer reIuirementsse o ystems Thin*ing Apply concepts o systems thin*ing to planning and measurement as %ell as

understanding #asic plant %or* processes and system interaces

Process )mprovement 9ocus on understanding and improving *ey plant processes / initial ocus areas to #e the

maintenance and uel systems

'mployee )nvolvement and Participation Train Process )mprovement Teams in systems thin*ing and process improvement! and %ill

#e encouraged to participate in *ey improvement eorts

'mployee Training and Development Train employees and managers in >hange eadiness! >ustomer 9ocus! Malcolm Baldrige

A%ard >riteria! ystems Thin*ing! Process )mprovement! Geadership! 6oshin Planning

Plant and ystems/Gevel Measurement 'sta#lish a plant/level measurement system ocused on identiying ho% the plant is

operating against customer reIuirements! and ho% plant %or* processes are perorming tosupport overall plant eorts to meet customer reIuirements

egular Fuality evie%s and Assessments chedule regular sessions %ith all employees to revie% perormance and status o goals

3-06 Enterprise Strategic Planning

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Transcript of 3-06 Enterprise Strategic Planning