Organization Alignment using Policy Deployment

1. Organization Alignment using Policy Deployment Created with funds from WIRED NW

2. Organization Alignment and Policy Deployment After the class today you should be able to: Identify the top goals of your company Understand “break though” goals Produce your own “X” Matrix Know what a “bowler “ is and how it is used Create actions plans Develop a countermeasure Created with funds from WIRED NW

3. Roots of Policy Deployment Called “Hoshin Kanri” Hoshin- Direction Kanri- Map or plan 1960’s- Originated in Japan as part of TQC (Total Quality Management) 1980’s- Widely used in Japan Based on MBO (Management by Objectives) and Plan-Do-Check-act improvement cycles Created with funds from WIRED NW

4. Policy Deployment • 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 • HoshinKanri Created with funds from WIRED NW

5. Need for Alignment Focus change energy on area with the “mass” to move the needle Align all levels to Corporate Goals Transform long range plans to actions Consistent methodology Drive actions and accountability Created with funds from WIRED NW

6. Hoshin Kanri – Harness the Power Goals Results Actions Actions GOAL OBJECTIVES Created with funds for WIRED NW MANAGEMENT CREATES STRATEGIES SUPERVISORS CREATE ACTION PLANS ASSOCIATES CREATE RESULTS Created with funds from WIRED NW

7. Lean Conversion Process Education- All levels on Lean Principles Policy Deployment Establish key projects, metrics, linkages, accountabilities Value Stream Mapping Establishment of future state and work plans Work plan execution Lean tool applications Best practices cross linking Created with funds from WIRED NW

8. Strategic Planning: Linking Long-term Strategic Goals to Current Action Plans Created with funds from WIRED NW

9. Strategic Planning Process • Assessment: Candid analysis of where you are today • Mission: What you do • Vision: Where you want to be • Strategic Plan: How do we get from where we are to where we want to be? • Action Plan: How do you set short-term action plans to get to your long-term goals? Created with funds from WIRED NW

10. Strategic Planning How do we bridge the gap from where we are to where we want to be? Policy Deployment Map Created with funds from WIRED NW

11. Policy Deployment • Components of a Policy Deployment Statement: • Start with a Vision • Strategic Results Required • Strategic Objectives • Near-term Goals • Current Action Items • Tracking Metrics Created with funds from WIRED NW

12. Policy Deployment Created with funds from WIRED NW

13. Performance Expectation Setting Created with funds from WIRED NW

14. Organizational Business Results What are some of the desired business results of your organization? Write down the three most important “business results” expected of your organization. Created with funds from WIRED NW

15. Have the same understanding of the expectations See how all expectations align with the group’s or organization’s goals Reach agreement that the individual will meet each expectation “Setting expectations” discussions will be effective when you and individual: Created with funds from WIRED NW

16. Making Expectations Clear Draw a picture of a ball…… What are the major questions you would ask me to gain more understanding of what I expected? Created with funds from WIRED NW

17. ”In God we trust – everybody else bring data” ”You don’t have to change – after all survival isn’t mandatory” Created with funds from WIRED NW

18. SMART Criteria S M A R T Specific Measurable Attainable Relevant Time Bound Created with funds from WIRED NW

19. SMART Card Activity Determine if your assigned “goals” meet the SMART criteria Created with funds from WIRED NW

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21. Continue to strengthen relationships Created with funds from WIRED NW

22. Performance Expectations & Timing Visualize a football field…100 yards long Your “game plan” can take multiple paths… Overall goal – win the game on the scoreboard Interim goals – score by quarter, number of first downs, etc. Created with funds from WIRED NW

23. Performance Expectations & Timing Setting interim goals, with adequate timing and rhythm, is essential to sustain improvement and meet overall goals Created with funds from WIRED NW

24. Performance Expectations & Timing What “rhythm” is your work group on? Annual? Quarterly? Monthly? Weekly? Daily? Hourly? Created with funds from WIRED NW

25. Applied Goal Setting Is it S.M.A.R.T.? How will you measure your success? Do all of the people on your team have an understanding of the desired outcome? How will you get their involvement and support (for your stretch goal)? Created with funds from WIRED NW

26. Daily Management Smaller, incremental, performance expectations Measure daily – where you ARE vs. where you WANT TO BE Examples: Schedule goals Quality goals Productivity goals Safety goals Inventory goals Created with funds from WIRED NW

27. Share Best Practices Share best practices with others: How do you set expectations in smaller increments (hourly, daily, by shift)? How do you measure performance? What works best to gauge performance? How do you communicate actual performance? What doesn’t work? Why not? What are the options? Created with funds from WIRED NW

28. Hoshin Kanri Steps Establish organizational vision Develop 3-5 year strategic plan Develop annual objectives Deploy/roll down to departments Departments develop plans and means Focus deployment – not everyone needs to be involved in everything Iterative (catchball) nature may take time Created with funds from WIRED NW

29. Hoshin Kanri Steps Implementation of plans Review progress regularly Annual review Drop or continue incomplete policies Check results What caused us to miss targets Created with funds from WIRED NW

30. Key Deliverable from Strategic Planning: Top Level Policy Deployment Relationship Between Strategic Plan & PD WorldClassPerf.In: QDC&S VOC Strategic Plan Policy Deployment Breakthroughs Created with funds from WIRED NW

31. 7 Phase Policy Deployment Process Establish Organizational Mission PLANNING Strategic Planning/ Develop 3-5Year Breakthrough Objectives Develop Annual BreakthroughObjectives and ImprovementPriorities Self-Diagnosis Deploy Improvement Priorities Implement ImprovementPriorities IMPLEMENTATION Root Cause Countermeasures REVIEW Monthly Review Annual Review Annual Review Created with funds from WIRED NW

32. Critical Thinking Process (CTP) Step 1 : WHAT Breakthrough Thinking Step 2 : HOW FAR Annual Breakthroughs Step 3 : HOW Identify Key Driver Process Step 4 : HOW MUCH/WHEN Determine Measures & Track Step 5 : WHO Identify Key Resources &Deploy Created with funds from WIRED NW

33. Who do you compare your company and its performance to? Competitors Industry Standards Best in Class World Class How do you get to be World Class? Created with funds from WIRED NW

34. CTP Step 1 WHAT? Breakthrough Thinking World-Class Breakthrough Objective Best-In-Class IndustryStandard GAP Current Situation Current Situation Breakthrough Thinking Drives to World Class Created with funds from WIRED NW

35. CTP Step 2 HOW FAR? Identify First Year Breakthrough Objective Breakthrough Objective Yr 3 Annual BT Objectives Yr 3 Yr 2 Annual BT Objectives Yr 2 Yr 1 Annual BT Objectives Yr 1 Current Situation Identify First Year Breakthrough Objective Created with funds from WIRED NW

36. CTP Step 3 HOW?Identify Key Driver Processes Annual Breakthrough Objective Improvement Priority Why? Why? GAP Why? Why? Current Situation Why? Identify Key Driver Processes Created with funds from WIRED NW

37. CTP Step 4 HOW MUCH/WHEN? Determine Measures & Track 100 0 Determine Measures & Track Created with funds from WIRED NW

38. CTP Step 5 WHO? Identify Key Resources & Deploy 100% 100% 17% Resource A 3% Team B Current Resources 20% Relative Impact On Improvement Priorities 20% Resource C 40% Resource D Team E 0% 0% Identify Key Resources & Deploy Created with funds from WIRED NW

39. What Is A Breakthrough? • Represents SIGNIFICANTchange in processimprovement, especially as seen through the eyes of the customer. • Requires the organization to stretch itself. • Usually requires multi-functional effortsand teamwork. • Usually, no standard or systemexists for this level of breakthrough. • Can be characterized as a “Big Win.” Created with funds from WIRED NW

40. Breakthrough Objective Summary Checklist • Are daily management systems in placethat allow us to improve? • Is it a stretch goal ? • Is it measurable ? (SMART?) • Is it linked to Voice of the Customer ? • Will it provide significant competitive advantage? • Does it require multi-functional involvement? • Will it result in a new standard and/or system? • Is the answer to how to do it unknown? • Have you checked that no problems exist in other areas that need to be fixed first? • When we accomplish the above objectives, does the customer/shareholderbenefit? Created with funds from WIRED NW

41. Annual Breakthrough Objective Checklist Did you consider the pace of meeting the 3 yr breakthrough when developing the annual objective?? Does it divide the 3-5 Year Breakthroughinto annual amounts? Does it quantifythe first year goal? Is it still a stretchgoal? When we accomplish the annual objective, does the customer/shareholderbenefit? Will it provide significant competitive advantage? Does it require multi-functionalinvolvement? Will it result in a new standard and/or system? Is the answer to how to do it unknown? Have you checked that no problems exist in other areas that need to be fixed first? Created with funds from WIRED NW

42. Effective Top Level Improvement Priorities Are: • Process Oriented • Should lead to the creation of sustainable, results-oriented processes… not short-term tasks. • Focused • Meets Current or Emerging Customer Needs • Limited to a Critical Few Created with funds from WIRED NW

43. 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 Created with funds from WIRED NW

44. Effective Top Level Improvement Priorities Are: Measurable • The objective you write must be something that can be measured But, not a Measure! Created with funds from WIRED NW

45. Top Level Improvement Priorities Contribute to the Annual Breakthrough Objective 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. Improvement Priority Annual Breakthrough Objective Why? Why? GAP Why? Why? Why? Current Situation Identify Key Driver Processes Created with funds from WIRED NW

46. Top Level Improvement Priority Checklist 1. 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? Created with funds from WIRED NW

47. 100 0 Identify Targets To Improve For Each Improvement Priority • Targets aremeasuresof the effectiveness of a given process • Think in terms of process capability (statistics) • Improvement Priorities tell “how”, Targets tell “how much” & “by when” Determine Measures & Track • Typically a from:___to:___by:___ statement Created with funds from WIRED NW

48. Targets to Improve Checklist • Does it track progress toward full implementation of the Improvement Priority? • Can it be broken down into at least monthly progress increments? • Does it exceed budgettargets? • Does it track progress toward achieving the Annual Objective? • Does it reflect if the Improvement Priority has an impact on the Annual Objective? • Does it measure results, rather than action plan milestones? • Is it easy to calculate and communicate? • Does it demonstrate a simple flow of logic? Created with funds from WIRED NW

49. HOW HOWFAR HOW MUCH All itemsare listedin priority orderstarting from the center Top Level Improvement Priorities Annual Breakthrough Objectives Targets to Improve 3-5 Year Breakthrough Objectives WHAT Critical Thinking Process & the Top Level PD Matrix WHO RESOURCES = Primary Responsibility = Secondary Responsibility OWNER Created with funds from WIRED NW

50. Complete Top Level PD Matrix The whole picture of your company on one sheet of paper! 3- HOW Use dots to show relationship of Targets and Resources to the Improvement Priority 5- WHO Use dots to show relationship of Improvement Priorities to Annual Objectives Top Level Improvement Priorities NOTE: Only Solid dots on a resource deploy to the next level Annual Breakthrough Objectives 2- HOW FAR Targets to Improve 3-5 Year Breakthrough Objectives 4- HOW MUCH RESOURCES = Primary Responsibility 1- WHAT = Secondary Responsibility OWNER Created with funds from WIRED NW