Policy Deployment
Peter Sylvest
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
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.
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)
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
HOW TO USE POLICY
DEPLOYMENT?
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
= 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
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
• 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
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)
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!