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Policy Deployment. Peter Sylvest Sylvest Consulting

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Policy Deployment

Peter Sylvest

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Policy Deployment

 Policy Deployment known as “Hoshin Kanri” originates from Japan  It was developed and refined by Japanese companies during the 1960s

 It derives from ideas of Deming (PDCA), Juran (quality policy), and Drucker (MBO)  It was introduced in the U.S. as Policy Deployment in the 1980s

 Sometimes referred to as:

 Hoshin Kanri

 Management By Policy  Management By Planning

 Danish based companies that have embraced it:

 Radiometer (Danaher), Vestas (Nacelle), Novo Nordisk (partly), Danfoss (partly) mfl.

 U.S. based companies that have embraced it:

 Danaher, Hewlett-Packard, Proctor & Gamble, Xerox, Florida Power and Light (FP&L)

The idea is to translate selected strategic objectives and goals of the organisation into

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Why do we need Policy Deployment in general?

 Why Projects Fails

 Too many example of strategic initiatives set off full of vision, energy, and high hopes  ……but make little progress

 ……because they work in a thousand directions, i.e. going “mile wide – inch deep”  ……and without review of actions or accountability

 ……and without sufficient resources allocated

 What you need to do is

 Prioritise and focus on a few selected projects  ……form a vision

 ……focus on the “vital few – not the evil many”

 ……select the 3-5 most important steps to get you to your vision  ……postpone the other steps

 ……designate people and resources for the projects

 ……establish numerical improvement targets to be achieved

Strategy deployment can help avoid the negative effects of poorly managed change initiatives. When practically applied, PD makes business improvement efforts more ambitious, easier to manage, less stressful, and more successful.

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Year 0 Year 1 Year 2 Year 3 Year 4 Im provem en t Base Base KAIZEN Base Base Base KAIZEN KAIZEN PD Planning PD Planning PD Planning KAIZEN PD Planning Strategic Objective is Achieved!

Policy Deployment is an active relationship between 2 parts

Policy Deployment Management is special actions/plans required to achieve a

desired result and Daily Management (Routine KPI Management) is targets that can

be achieved with usual improvement activity and resources (Goal Directed Management)

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Top Mgt Middle Mgt Supervisor Front Line Associate

Breakthrough

Daily

Management

Kaizen

Adapted From Beyond Strategic Vision, Effective Corporate Action With

Policy Deployment; Cowley, Domb, 1997 pg. 57

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HOW TO USE POLICY

DEPLOYMENT?

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Deploy Improvement Priorities Develop Annual Breakthrough

Objectives and Improvement Priorities Monthly Review Implement Improvement Initiatives 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

7 Phases in the Policy Deployment Process

The Policy Deployment process starts with the formulation of the Vision and

the 3 year strategic objectives

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= 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

l Primary Responsibility m Secondary Responsibility RESOURCES Target to Improve SECOND LEVEL – Plant/Business

Danaher Business System Office - Policy Deployment 1998

l Primary Responsibility m Secondary Responsibility Resources Annual Breakthrough Objectives 3-5 Year Breakthrough Objectives Target to Improve TOP LEVEL – Company/Group

POINT OF IMPACT - ACTION PLAN Manager

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

l Primary Responsibility m Secondary 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

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Timing of Policy Deployment

The PD process is an integrated part of the strategic planning and budgeting

process and the planning process is normally completed before the new year

July August September October November December January

STRATEGIC PLANNING PD LEVEL 1 COMPLETE ACTION PLAN DEV COMPLETE NEW YEAR PD BEGINS PD LEV 2 & 3 COMPLETE

CONCURRENT BUDGETING PROCESS

Breakthrough Objectives

Improvement priorities

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• Establish the Agenda for Today’s PD Review

• Financial Review • Policy Deployment

• Road Blocks, Major Predetermined Topics • Established PD initiatives • Remaining PD Elements (Q, D,C) • KPI’s • People/Org. Issues • Other Business 5% 15% 60% 20% Mon thl y P D is typi call y an 8 hou r meet ing

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Deploy Improvement Initiatives Develop Annual Breakthrough

Objectives and Improvement Initiatives Monthly Review Implement Improvement Initiatives 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

How to start?

A good way to start is by identifying your current strategic projects and hook

them up to the existing vision and strategic objectives (reverse engineering)

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Tips and Tricks

 To identify Breakthrough Objectives is a top management issue and CAN NOT BE DELEGATED!

 Use maximum two levels and then go to ACTION

 It takes often longer to define, plan and initiate the strategic projects than you think – often 2-3 months

 Spend the time you need!

 Target setting for projects with a timeline longer than 6 months can be difficult

 Spilt between progress, result and effect targets and do always demand effect targets! If it is not possible then cut up the project in smaller chunks (3 months)

 You might find out that you are missing procedures, standards and tools for running internal projects in general – not just PD projects

 Just another thing on the to-do list!

 PD will change the way you as a manager prioritize and runs your daily business!

 PD interferes with the way you do decision making – run with it, do not fight it!

Remember: Policy Deployment Management is special actions/plans

References

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