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Achieving Breakthroughs by Using Policy Deployment

Some companies approach strategic planning in a way that lends ammunition to those who would question its purpose. Typically, during strategic planning time, executives sequester themselves in a retreat-like setting armed with sales and market projections and some semblance of customer input. The output of this event is a nice, bound presentation that sits on the shelf and collects dust until the next planning session begins. At that time, the executives take it off the shelf and refresh their memory as to the grandiose plan of yesteryear, wondering how they ever got so far off course. Such a fresh reminder of recent failure serves little purpose in motivating the executives for the upcoming strategic planning session and a sense of defeat can set in before the session even begins.

A major contributor to this problem is the typical strategic planning process. Many companies fail to properly execute using information systems intended for planning and then fail to properly execute a plan driven by data gathered from those same information systems. The fault lies not in the information systems, rather in the planning process and in the execution process.

The Policy Deployment Model

How can a company properly plan and execute a strategy? Today’s best model, like many of the tools of today’s Lean businesses, originated in the Far East as a mechanism to align the resources of a company to its most critical tasks. This model, Hoshin Kanri, is better known in American circles as policy deployment or strategy deployment. In terms of its specific functions, policy deployment:

  • Guides executive management in the process of creating a shared vision.
  • Helps executives understand how current or new customers fit in that vision.
  • Focuses on the current, emerging, and strategic pressing needs of those customers.
  • Guides the company in the best use of its resources to meet those needs.
  • Ensures that company resources have the tools needed to turn the plan into reality.
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Under a policy deployment system, a strategic plan driven solely by the voice of the customer (VOC) is cascaded to the point of impact, where the work gets done. Specific objectives are developed that help determine what is considered a breakthrough in the customer’s eyes. Tools such as bowling charts are used at least on a monthly basis to make sure the plan is on track and to facilitate regular adjustments to the plan. By following this framework, the company reminds itself on a continuous basis of the customer’s critical to satisfaction elements. This ensures that the company focuses on the things that really matter.

Ensuring Success of the Model

To ensure successful execution of the policy deployment model, the company must concentrate on several key factors. They are:

1. Capture the true voice of the customer. This is not the voice of the marketing director, nor the voice of the vice president of sales. The true VOC is the data that reflects exactly what the customer values in terms of the products and services offered or not offered by the company. Collection of this data is accomplished in many ways such as through surveys, warranty or return data or focus groups. No matter how it is collected, it must be direct, unbiased feedback from the customer. There is no room for internal massaging of the raw information to influence the strategic plan.

2. Policy deployment is all about focus. It originated as a tool to assist companies with the alignment of resources to bring about the most important objectives. Associates must realize that to function in a policy deployment environment, they will give up many of their former duties in favor of those that bring about the company’s objectives. This can create some sense of uneasiness or even fear because standard practices are challenged and, in many cases, changed. Meanwhile, the company must recognize that associates are now responsible for new tasks and need the tools and training to perform these new duties effectively and efficiently.

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3. It is important to determine breakthrough objectives on a sliding scale relative to time. Breakthrough objectives typically cover a timeframe of three to five years. In today’s global trade environment with the competition it fosters, what is considered breakthrough today will represent standard practice in as little as three years. Therefore, companies must understand technological and market trends to anticipate the level of a true breakthrough in the years to come. Companies that are unable to make this distinction will congratulate themselves three years later for achieving mediocrity. Achievement of a breakthrough objective implies that a breakthrough has occurred. At the time a company sets the objective, the method for achieving it is not known. Working toward its achievement allows the company to discover innovative ways to meet customer needs, creating a best-in-class environment.

4. To maximize the policy deployment process, cascade the strategic objectives all the way through the organization to the point of impact, where the work gets done. A strategic objective to achieve a 150-percent improvement in productivity for an entire company during a three-year period might mean a 100-percent improvement for Plant A, which translates into a 150-percent improvement for the ABC department and a 75-percent improvement for the XYZ department. Breaking the objective into specific pieces associated with each point of impact allows the entire company to strive for success, a more sustainable and efficient way to attain global achievement of the objective. Failure to cascade the plan to the point of impact will focus the strategy solely on the formulation process, hindering the organization’s ability to successfully execute the plan.

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5. Many companies find that implementing policy deployment alone is not enough, particularly those that have an unsuccessful history of problem solving. Inclusion of other initiatives, such as self-directed work teams, as part of the policy deployment initiative can assist in the culture change required to truly achieve a breakthrough. Companies must carefully consider the strategic goal. In cases where the company must develop ownership of its workforce in better delivering against customer needs, a combination of policy deployment with self-directed work teams is typically a more successful approach than using policy deployment alone.

6. Some of the best policy deployment-driven companies in the world select only three breakthrough objectives for their strategic plan. A company new to policy deployment would do well to limit the number of objectives, thereby avoiding overstretching the company’s resources and its ability to successfully implement breakthrough changes.

Conclusion: Dust Off Strategic Planning

Companies suffering from the dusty printed strategy syndrome should take heart. They are not alone. Other companies have emerged from the same situation to become breakthrough organizations. Policy deployment serves as a critical tool to help organizations focus on what is important and to create and retain customer satisfaction by sustaining an innovative environment to deliver what their customers want.

Comments 3

  1. Marcin Leon Kempka

    This is a very good and informative article. Thanks a lot for sharing.

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  2. Marcin Leon Kempka

    Thank you very much for this very informative article.

    0

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