WHO S GOT THE BALL? THE CHALLENGE OF ALIGNMENT

WHO’S GOT THE

BALL?

THE CHALLENGE OF ALIGNMENT

Roger E Olson ASQ 0701

On Change

“There is nothing more difficult to take

in hand, more perilous to conduct, or

more uncertain in its success, than to

take the lead in the introduction of a

new order of things.”

Niccolo Machiavelli 1469 – 1527

(Historian, politician, diplomat, philosopher, humanist, and writer, who is recognized as the founder of modern political science and political

70% of strategic plans and change efforts fail to

Meet the goals (that number has remained

What a Waste!

When change efforts fail, When strategic plans fail, So much of the time and effort

Is just a waste!

And most companies will do it again without

considering what went wrong, and more importantly, what to do differently.

What They Have in Common

Strategic plans and Change Initiatives both:

•

Start from on high

•

Are passed down through the organization

•

Need involvement & commitment from the top

•

Need involvement & commitment from the front

line

•

Require great ongoing communication

Causes of Failure:

• Failure to create executable plans

• Failure to plan for obstacles, setbacks and resistance.

• Executives frequently fail to step up their regular communications throughout the process

• Executives tend to forget they need to remind their people why the change is necessary (or why goals are important)

• Failure to realign the resources necessary for the plan/change to succeed

• Lack of alignment

A Lack of Alignment

Executives

Leadership

Employees Customers

What We Want

Executives Leadership Employees Customers Implementation Plan Suppliers

Typical Strategic Planning Approach

1. Exec team has an offsite

a. Decide on priorities

b. Decide on goals

c. Create a “plan”

2. “Communicates” the plan to directors and managers

3. “Communicates” the plan to front line workers

Who’s Got the Ball?

• Exec’s tell directors and managers what the goals are,

and pass the ball

• Directors and managers tell front line workers what the goals are, and pass the ball

• Front line workers have enough to do, and don’t want the

ball

• When communication is vague, when responsibility is not

clear, when accountability is poor, the ball gets dropped.

Leaders Directors Managers Front Line Employees

10 Priorities 15 Priorities 20 Priorities 25 Priorities Increasing number of messages as information

cascades through the organization

Information Overload

(Actual example)

Leaders Directors Managers Front Line Employees

10 Vital 8 Vital 5 Vital 3 Vital Priorities Priorities Priorities Priorities Insight and recommendations tailored to each

Manager’s level, challenges and resources

Reducing Information Overload

Goals and Objectives

• “Top management shall ensure that quality objectives,

including those needed to meet requirements for product [see 7.1 a)], are established at relevant functions and

levels within the organization. “ (ISO 9001/AS9100)

• “designation of responsibility for achieving objectives and targets at relevant functions and levels of the

organization, and the means and time-frame by which

they are to be achieved” (ISO 14001)

There Is A Better Way:

Deploy Improvement Priorities Develop Annual Breakthrough Objectives and Improvement

Priorities

Monthly Review Implement

Improvement Initiatives

7 Phase Hoshin Planning Process

Annual Review PLANNING IMPLEMENTATION REVIEW Establish Organizational Vision Strategic Planning/ Develop 3-5

Year Breakthrough Objectives

Annual Review Self-Diagnosis Root Cause Countermeasures Catchball Critical Step

P

D

C

A

Source: freeleansite.com

Nested Deming Cycles

Plan Do Check Act Plan Do Check Act Plan Do Check Act Plan Do Check Act Plan Do Check Act Plan Do Check Act Plan Do Check Act Exec Team Manager 1 Manager 2 Front Line Teams

• Catchball creates constant dialogue between the people

doing the work at the 500 foot process level and management at a 25,000 foot process level to ensure that resources are

provded, key performance indicators are being impacted, and • Key activities and objectives are cascading down through the

organization.

• Everyone is encouraged to think, engage with, and become a part of the improvement process versus being told “this is how it will be.”

Executive Team

Managers

Here’s where We’re going Here’s how we Would do it, Here’ what We need Here’s where We’re going Here’s how we Would do it, Here’ what We need Round 1 Round 2

Managers

Front Line Teams

Here’s where We’re going Here’s how we Would do it, Here’ what We need Here’s where We’re going Here’s how we Would do it, Here’ what We need Round 1 Round 2

Catchball addresses:

Failure to create executable plans

Failure to plan for obstacles, setbacks and resistance.

• Executives frequently fail to step up their regular communications throughout the process

• Executives tend to forget they need to remind their people why the change is necessary (or why goals are important)

Failure to realign the resources necessary for the plan/change to succeed

Lack of alignment

The Process of Critical Thinking (PCT)

Step 1 : WHAT

Breakthrough Thinking

Step 3 : HOW

Identify Key Driver Process

Step 4 : HOW MUCH/ WHEN

Determine Measures & Track

Step 5 : WHO

Identify Key Resources & Deploy

Step 2 : HOW FAR

Annual Breakthroughs

PCT Step 1 –

WHAT?

Current Situation Breakthrough Objective Current Situation World-Class Industry Standard Best-In-Class GAP

Breakthrough Thinking Leads us to World Class

PCT Step 2 -

HOW FAR?

Annual BT Objectives Yr 2 Current Situation Annual BT Objectives Yr 3 Annual BT Objectives Yr 1 Breakthrough Objective Yr 1 Yr 2 Yr 3

Identify First Year Breakthrough Objective

PCT Step 3 -

HOW?

Why? GAP Annual Breakthrough Objective Current Situation Why? Why? Why? Why? Improvement Priority

Identify Key Driver Processes

PCT Step 4 -

HOW MUCH/ WHEN?

Determine Measures & Track

0 100

PCT Step 5 -

WHO?

45% 5%

Identify Key Resources & Deploy

Relative Impact On Improvement Priorities Current Distribution Of Resources Resource A Team B Resource C Resource D Team E 100% 0% _0% 100% 15% 15% 20% Source: freeleansite.com

Daily Management and Hoshin Planning

Im prove m ent Daily Mgmt Daily KAIZEN

Year 0 Year 1 Year 2 Year 3 Year 4

Daily Daily Daily KAIZEN KAIZEN Hoshin Planning Hoshin Planning

Once Breakthrough is achieved… process is standardized to Daily Management! Strategic Objective is Achieved! Mgmt Mgmt Mgmt Mgmt Foundation for HP Hoshin Planning Source: freeleansite.com

Top Level Improvement Priorities HOW Annual Breakthrough Objectives HOW FAR 3-5 Year Breakthrough Objectives WHAT Targets to Improve HOW MUCH

PCT & the Top Level HP Matrix

All items are listed in priority order starting from the center RESOURCES = Primary Responsibility = Secondary Responsibility WHO OWNER Annual Metrics Source: freeleansite.com

RESOURCES Annual Breakthrough Objectives Targets to Improve 3-5 Year Breakthrough Objectives Top Level Improvement Priorities = Primary Responsibility = Secondary Responsibility 5- WHO 4- HOW MUCH

Use dots to show relationship of Targets and

Resources to the Improvement Priority

3- HOW

Use dots to show relationship of Improvement Priorities to Annual Objectives 2- HOW FAR 1- WHAT

NOTE: Only Solid dots on a resource deploy to the next

level

The whole picture of your company on one sheet of paper!

Complete Top Level HP Matrix

OWNER

3-5 Year Breakthroughs Targets To Improve Top Level Improvement Priorities

Linkage on the Matrix

Annual Breakthrough Objective Dots show linkage from Target back to Breakthrough for that level

Points to Remember about the Matrix

• As soon as a solid dot is placed above a resource, that resource

will get a lower level matrix or an action plan.

• Clear circles indicate support resources. They do NOT get a

lower level matrix or action plan unless they get a solid dot on another matrix.

• The dots are

to be used as a sanity check

• The Improvement

Priority is deployed to the lower level matrix or an action plan

Second Level Policy Deployment

lPrimary Responsibility mSecondary Responsibility RESOURCES Annual Breakthrough Objectives Targets to Improve

Danaher Business System Office - Policy Deployment 1998

lPrimary Responsibility mSecondary Responsibility Resources Top Level Improvement Priorities 3-4 year Breakthrough Objectives Annual Breakthrough Objectives

TOP LEVEL - Company

Top Level Improvement Priorities Targets to Improve

SECOND LEVEL - Plant

Second Level Improvement Priorities

Second Level Policy Deployment lPrimary Responsibility mSecondary Responsibility RESOURCES Top Level Improvement Priorities Annual Objectives Target to Improve SECOND LEVEL

TOP LEVEL Policy Deployment 2004

lPrimary Responsibility mSecondary Responsibility Resources Annual Breakthrough Objectives Breakthrough 3-5 Year Objectives Target to Improve TOP LEVEL Breakthrough Second Level Improvement Priorities Top Level Improvement Priorities Typically, a 2nd _Level

Matrix is created for a primary resource for each top-level Improvement Priority. Imp. Priorities and Annual Objectives are copied directly onto the 2nd Level HP. Matrices.

The 2nd level 12 o’clock and 3

o’clock positions have all new text in them – nothing is rotated into them from level

1.

Transferring Improvement Priorities To The 3rd Level

SECOND LEVEL If necessary, a 3rd Level Matrix is created for a primary resource for each second-level Improvement Priority.

Top Level and Second Level Imp. Priorities are copied

directly onto the 3nd _{Level HP}

Matrices.

THIRD Level Policy Deployment

lPrimary Responsibility mSecondary Responsibility RESOURCES Top Level Improvement Priorities Target to Improve THIRD LEVEL

SECOND LEVEL Policy Deployment 2004

lPrimary Responsibility mSecondary Responsibility Resources Target to Improve Second Level Improvement Priorities Top Level Improvement Priorities Annual Breakthrough Objectives Second Level Improvement Priorities Third Level Improvement Priorities

Not always suggesting you need 3rd _Level.

Based on size, complexity, breadth, and maturity of

organization.

Annual Breakthrough Objectives Targets to Improve 2nd _Level Improvement Priorities RESOURCES = Primary Responsibility = Secondary Responsibility 5- WHO 4- HOW MUCH/WHEN

Use dots to show relationship of Targets and Resources to

the Improvement Priorities

1- HOW FAR 3- HOW

Use dots as a check to make sure the Improvement Priorities & Targets

meet the goal and support the Annual Breakthrough Objectives

Top Level Improvement

Priorities

Use dots to show relationships between Improvement Priorities and Annual Objectives

2- HOW

OWNER

Cascading Priorities to

ACTION

= Original Planx= Progress at Review Action Step/ Kaizen Events Milestone Jan Feb M ar Apr M ay June July Aug Sept Oct Nov Dec

Im provem ent Priority Title: * Departm ent/Location: *

Managem ent Ow ner: * Date: *

Core Objective: *

Tim eline

Target Im provem ent Planned

Dates Policy Deployment Action Plan

Review Team : * Next Review : * Environm ental Situation Sum m ary: *

Status

( P a st D u e i n R e d) Im pact Ow ner (Lead is bold)

2003

Second Level Policy Deployment

lPrimary Responsibility mSecondary Responsibility RESOURCES Target to Improve SECOND LEVEL – Plant/Business

Danaher Business System Office - Policy Deployment 1998

lPrimary Responsibility mSecondary Responsibility Resources Annual Breakthrough Objectives 3-5 Year Breakthrough Objectives Target to Improve TOP LEVEL – Company/Group POINT OF IMPACT - ACTION PLAN Engineer/Supv

Cascade as many times as necessary to the Root Cause Level

Point of Impact - Action Plan The level where root causes are

addressed! Action Plans can be initiated out of any matrix level.

POINT OF IMPACT

Second Level Policy Deployment

lPrimary Responsibility mSecondary Responsibility RESOURCES Target to Improve ROOT CAUSE LEVEL- Sub Plant/Dept Annual Objectives Breakthrough Top Level Improvement Priorities Second Level Improvement Priorities Top Level Improvement Priorities Top Level Improvement Priorities Second Level Improvement Priorities Third Level Improvement Priorities Source: freeleansite.com

= Original Plan x = Progress at Review

Action Step/ Kaizen Events Milestone Jan Feb M ar Apr M ay June July Aug Sept Oct Nov Dec

Target Im provem ent Planned

Dates

Status

( P a st D u e i n R e d ) Im pact

Hoshin Planning Action Plan

Review Team : * Next Review : * Environm ental Situation Sum m ary: *

Im provem ent Priority Title: * Departm ent/Location:

*

Managem ent Ow ner:

* Date: *

2004

Core Objective: *

Tim eline Ow ner (Lead is bold)

Step 4: Identify the impacts on the improvement priority

and top level breakthrough objective

Step 1: Determine actions & write on worksheets

Step 2: Record ownership and timing

of the actions

Step 3: What is the current status of the action. Color code background as red to

show items past due.

Create an Action Plan For every Improvement Priority at the Point of Impact

Breakthrough Objective:

Attain competitive advantage in Delivery Performance

Action Step 1:

VSM Customer Service Process

Action Step 2:

SW Kaizen to improve productivity by 35%

Action Step 3:

VRK to reduce Quote processing time by 50% POINT OF IMPACT POINT OF IMPACT POINT OF IMPACT Actions = Cause Effect = Cause Effect = Cause Effect = Results!

Action Steps Complete the Cause & Effect Chain

Top Level Improvement Priority: Use HOS Tools to improve value stream of

Engineer-to-Order Process Annual BT Objective #1:

Streamline Engineer-to-Order Processes

Second Level Improvement Priority: Implement Improved Order Entry Process

= Original Plan x = Progress at Review

Action Step/ Kaizen Events Milestone Jan Feb M ar Apr M ay June July Aug Sept Oct Nov Dec

Target Im provem ent

Planned Dates

Status

( P a st D u e i n R e d ) Im pact

Hoshin Planning Action Plan

Review Team : * Next Review : *

Environm ental Situation Sum m ary: *

Im provem ent Priority Title: * Departm ent/Location:

*

Managem ent Ow ner:

* Date: *

2004 Core Objective: *

Tim eline

Ow ner (Lead is bold)

DASHBOARD/SCORECARD

Targets To Improve are entered in

priority order

Planned targets are established for each month based on the overall Target to Improve.

An actual that is a miss from the plan, is color coded red

JOP – Jumping Off Point from

which you started tracking the target YTD ACT – Each month this field gets updated (is YTD from the monthly fields located to the right)

TOP LEVEL SCORECARD CHART

Reduce New Prod. Dev. Cycle

ANNUAL BT OBJECTIVES TARGET TO IMPROVE 3-5 YEAR BREAKTHROUGH OBJECTIVE TOP LEVEL IMPROVEMENT PRIORITIES In c re a s e M a rk e t Sh a re to 6 0 % D e v . C y c le to 1 2 0 D a y s b y 1 2 /9 5 RESOURCES P rod uc ti on Dep artm en t Ma rk eti ng Depa rtm en t E ng ine erin g De pa rtm en t F ina nc e De pa rtm en t S al es Dep artm en t Hum an Res ou rc es Dept . Ma teri al s Depa rtm en t = Primary Responsibility = Secondary Responsibility

Second Level Policy Deployment lPrimary Responsibility mSecondary Responsibility RESOURCES Annual Breakthrough Objectives Top Level Improvement Priorities Targets to Improve SECOND LEVEL SCORECARD

Danaher Business System Office - Policy Deployment 1998

lPrimary Responsibility mSecondary Responsibility Resources Top Level Improvement Priorities 3-5 year Breakthrough Objective Annual Breakthrough Objectives Target s to Improve TOP LEVEL SCORECARD

Scorecards are Created for All HP Matrices

2nd Level Improvement

Priorities

Title

• Execute to the plan and perform daily, weekly and monthly reviews of

each action plan (Daily Mgt.)

• Reviews are designed to keep the Hoshin Plan on track

• Improvement Action owners don’t come to be evaluated • The intent is to present the results of self assessment

• The review team provides focused assistance primarily around the

owner’s analytical process and preparation. • What did you plan to do? (Plan)

• What did you actually achieve? (Do)

• How does actual vs. target compare (CHECK)

• Standardize what’s working, implement countermeasures and/or plan again as

required. (ACT) Execute To The Plan Conduct Regular Reviews P C A D Source: freeleansite.com

Manage Daily Management Through Leadership Standard Work

• Embed the Hoshin Plans into Leadership Standard

Work

• Make the Hoshin review process part of the daily,

weekly and monthly audit process

• The key is to constantly monitor progress and drive

accountability to the lowest level

$136k monthly miss is due to Delayed Evaluation Kit Development, Insufficient Sales Prospects and Delayed Print Engine Delivery. Problem Statement: What Short-Term: 10/28/03 Long-Term: 12/15/03 Countermeasures

How Much (Impact)

$61

Who

Short-Term: MJF

Long-Term: JBR

RZ/ MJF

Addressed Root Cause: Delayed Print Engine Delivery

Execute kanban re-sizing process for Printos at once per quarter frequency (currently twice-per-year…which is not frequent enough for ramping production).

DW/HW

Addressed Root Cause: Delayed Evaluation Kit Development

Short-Term: Assign additional Engineer to complete evaluation

kit development (delayed one month) in time for ITMA show.

Long-Term: Update Tollgate process to include Engineering

development for necessary targeted-vertical launch kits.

Addressed Root Cause: Insufficient Sales Prospects

Execute Sales Funnel Targets for UK 'T' Shirt outlet…twice per week follow-up on Sales Funnel Targets with Sales Engineer.

$48 When $27 10/15/03 10/22/03 Run Chart $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2003 Plan 2003 Actual 2003 Plan $0 $20 $3 $65 $65 $123 $345 $397 $286 $333 $400 $453 2003 Actual $0 $21 $22 $61 $136 $164 $330 $350 $150

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Pareto (the "Why" you missed)

0% 10% 20% 30% 40% 50% Percent 45% 35% 20% Delayed Evaluation Kit Development Insufficient Sales Prospects Delayed Print Engine Delivery Run Chart $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2003 Plan 2003 Actual 2003 Plan $0 $20 $3 $65 $65 $123 $345 $397 $286 $333 $400 $453 2003 Actual $0 $21 $22 $61 $136 $164 $330 $350 $150

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Pareto (the "Why" you missed)

0% 10% 20% 30% 40% 50% % 45% 35% 20%

Delayed Evaluation Kit Development

Insufficient Sales Prospects

Delayed Print Engine Delivery

5 Why Analysis

• Systematic method to drive to the true root cause(s) of a problem

• Simply ask “why” in a step ladder approach until fundamental root

cause is discovered. Root cause is not simply listing the symptoms of a problem

• Normally, after up to 5 steps, the true root cause(s) will be

exposed

Inventory Reduction Plan 0 10 20 30 40 50 60 J F M A M J J A S O N D Plan Actual

Action Plans are proactive – they address how to achieve a particular goal from the jump off point (JOP) to the stretch target

Countermeasures are

reactive – they address how to get back to plan when a goal is missed for a period

HP miss _{Jump Off Point (JOP)}

to stretch target

• Establish the Growth Agenda for

Today’s HP Review

• Financial Review • Hoshin Planning

- Road Blocks to Growth, Major Predetermined Topics

- Established HP Growth Initiatives - New Product Development

- Remaining HP Elements (Q, D,C) • KPI’s • People/Org. Issues • Other Business 5% 15% 60% 20% Source: freeleansite.com

Hoshin Planning Summary

• Aligns Strategy and Execution

• Systematically develops and links plans from organizational vision to operational tactics

• Ensures deep and common understanding and

maximizes ownership and buy-in to plan

• Requires thoughtful, detailed planning for each and every improvement action

• Consistently assesses actual performance vs. plan and

addresses issues and learns from the process

All Employees are Engaged in the Process

Hoshin Planning addresses:

Failure to create executable plans

Failure to plan for obstacles, setbacks and resistance.

Executives frequently fail to step up their regular communications throughout the process

Executives tend to forget they need to remind their people why the change is necessary (or why goals are important)

Failure to realign the resources necessary for the plan/change to succeed

Lack of alignment

Lack of commitment