Winning Strategies Part 1 - Policy Deployment

1. Winning Strategies Part 1- Policy Deployment Team B3: Paula Urrego-Riveros David Ibagon Lydia Duro-Emanuel Sabrina Tsai Chi-Wen Shih NazishLeghari

2. An Introduction to Hoshin Kanri Defined as: • Capability enhancement towards improved performance. • Unified policy planning and deployment. • Effective employment of resources. Origins: • Originated in Japan in 1950’s. • Developed by Bridgestone Tire Company in 1962. Objectives: • Identifies areas of opportunity for the organisation to change or improve. • Prioritises the most cost effective actions across the organisation to achieve these changes. • Creates a detailed implementation plan. • Provides a review mechanism to identify corrective actions and embed learning. Tennant C., and Roberts P. (2001)

3. Elements of Hoshin Kanri Adapted from: Hutchins D., (2008)

4. Comparisons of other concepts and Hoshin Kanri Table adapted from: Tennant C., Roberts P., (2001) and Whitcher & Chau, 2007, 519

5. Advantages and Drawbacks of Hoshin Kanri Advantages of Hoshin Kanri Drawbacks of Hoshin Kanri • Focuses on what is important. • Shared vision communicated. • Involves and engages the organisation. • Progress is monitored. • Continuous improvement of the strategic plan. • Enables organisational learning. • Rigid implementation system. • Long-term commitment. • Objectives must be static over a 3-5 year period. • Lack of understanding. • Resistance to change. 12Manage (2011)

6. Management of Hoshin Kanri Drawbacks Drawbacks obtained from 12Manage (2011)

7. The Hoshin Kanri Planning Process Adapted from: Cowley M., Domb E., (1997)

8. Strategic Policy Deployment Overview Tennant C., and Roberts P. (2001)

9. Implementing Hoshin Kanri at Wave Riders …Applying the theory practically.

10. Creating the Vision - SWOT Analysis

11. Proposed Vision Wave Riders Vision “In 5 years, Wave riders aims to become a key player in the European markets by focusing our resources, engaging our employees and satisfying our customers through the production of high quality products towards excellence.”

12. Proposed Values Wave Riders Values: • We pride ourselves in satisfying our customers. • We are committed to conduct ourselves in a manner consistent with the highest standards of integrity. • We are honest, ethical, and fair in all our activities. • We ensure exceptional and reliable quality in all aspects of our work and recognise that quality determines the breath of our success.

13. The 5 year Strategic Plan Proposed Strategic Goals: • Increase market share in Europe by 40% in 5 years. • 85% customer satisfaction in 5 years. • Engagement of employees in 5 years. Chosen Strategy: STRATGEY 3

14. Proposed Strategic Plan

15. Operational and Financial Plan

16. An Example…

17. Policy Deployment Model These plans fit into the overall business plan… Tennant C., Roberts P., (2001)

18. Implementation Process – “Catchball” • Hoshin Kanri is implemented using the “Catchball” process. • Involves communication at all levels of the organisation • Ensures commitment at all levels through the engagement of employees. Wave Riders Strategic Plan Wave Riders Departmental Plan Wave Riders Operational/Financial Plan Departmental Operational/Financial Plan Wave Riders Key value streams Programme Management Departmental Key Initiatives Employee goals and objectives Modelled on GE Healthcare’s Catchball Process. GE (2010) Tennant C., & Roberts P., (2001b)

19. Conclusion • Hoshin Kanri is an execution tool to effectively deploy a strategic plan. • The ‘Catch ball’ process helps eliminate many of the drawbacks of the tool. • TQM is essential to the core concepts of Hoshin Kanri.

20. Appendix 1 - Selected Strategy 3 Strategy Aim: Increase market share in Europe Actions and costs • Research European market pricing structure, discounts, distribution, competition, product and safety specifications etc. Identify a distributor who could take on the European sales and handle any future expansion of the market. Need new computerised finance package for Euros and to reduce Finance workload (estimated cost £25,000) • Identify successful European promotional campaigns and put together a winning promotions strategy. Increase marketing spend to £250k. • Increase price of both products by approximately 2.5% (in line with inflation). • Reorganize the Leisure sales team to three external sales representatives and three internal sales people to handle client follow-up by taking on two new salespeople and take on a European sales representative in the Rescue/Military sales team. • Continue to invest in new technology costing an estimated £150k on capital expenditure. • Reorganize Finance and HR departments by moving wages and salaries manager into the Finance department. Reduce the remaining clerical staff in HR to a total of one.

21. References • Witcher B.J., Chau V.S. (2007) Balance Scorecard and Hoshin Kanri: Dynamic Capabilities For Managing Strategic Fit, Management Decision, Vol: 45, No: 3, pp: 518 – 538, UK, Emerald Group Publishing Ltd. • Witcher B.J., Chau V.S., Harding P. (2007) Top Executive Audits: Strategic Reviews of Operational Activities, Managerial Auditing Journal, Vol: 22, No: 1, pp: 95 – 105, UK, Emerald Group Publishing Ltd. • Tennant C. and Roberts P., (2001) “Hoshin Kanri: A Tool for Strategic Policy Deployment” Knowledge and Process Management, Vol. 8 No. 4, Pages: 262-269 • Tennant C. and Roberts P., (2001b) “Hoshin Kanri: Implementing the Catchball Process!. Long Range Planning, Vol 34. Pages: 287-308. • Cowley M., Domb E., (1997) Beyond Strategic Vision: Effective corporate action with Hoshin planning. Boston, Mass: Butterworth-Heinemann. • GE Healthcare (2010) “Leadership Strategy” Obtained from: http://nextlevel.gehealthcare.com/leadership-strategy/its-time-to-stop-dangling-our-feet-in-lean-for-healthcare.php Last updated: 28/10/2010 Lastaccessed: 12/02/2011.