1. A FEW COMMENTS ON STRATEGY DEVELOPMENT.
2. THE POLICY DEPLOYMENT PROCESS EXPLAINED.
3. A CASE STUDY ; BORAL Ltd.
WHAT IS STRATEGY ALL ABOUT?
STRATEGY EXPLAINS HOW AN ORGANISATION, FACED WITH COMPETITION, WILL
ACHIEVE SUPERIOR PERFORMANCE.
•WHAT VALUE WILL THE ORGANISATION CREATE?
•HOW WILL THE ORGANISATION OFFER A UNIQUE
PRODUCT OR SERVICE TO CUSTOMERS?
Research consistently identifies reasons for failure include:
1. People cannot implement what they do not know.
2. People do not implement properly what they do not understand.
3. People do not implement what they are not committed to.
4. People give up on a strategy, the implications of which, have not been
anticipated and thought through.
5. Management overlook the importance of the “HOWS” of executing the strategy.
WHY DO SOME BRILLIANT STRATEGIES FAIL?
“Policy deployment will help Management identify and practically manage the
implementation of a strategy of the Company’s products, markets, customers,
organisation structure, systems, processes, personnel and culture”
The key to success is to focus on doing the right things and getting the right results.
Problems in operations often originate in other functional areas. P.D. provides the
means to cement all functions together by aligning objectives. (This is equally
applicable to any process, in any industry wherever there is a customer)
There are so many things to do, we need to de-select some worthy initiatives!
It starts with correctly identifying the business critical issues.
Then it’s about developing the plan to resolve the issues and deliver the strategy.
Policy (strategy) Deployment keeps everyone focused on the real prize ; creating
value for the customer. All our lean tools are means to this end and not ends in
Lean must be supported from the top of the organisation. Anything less will not be
Policy Deployment directs people to do what they should do, rather than what they want to do
by aligning all activities to the top level Strategic Vision
THE LEAN CONNECTION
What has Policy Deployment got to do with Lean and continuous improvement?
POLICY DEPLOYMENT ISSUES
• It is dealing with a multitude of complex issues.
• It addresses the many conflicting goals which can arise between functions.
• It puts people and culture centre stage.
However, once mastered, the benefits are significant and include;
• It aligns people and actions to the true “North Star”
• It generates synergies via teamwork.
• It helps each part of the organisation become aware of the effect of its own actions on
every other part.
• Cross functional learning is fast tracked.
• It builds confidence in the plan knowing every facet has been empirically considered.
• It identifies and prioritises the business critical issues and deselects the unimportant.
POLICY DEPLOYMENT IS THE PIECE THAT
IS THE MOST DIFFICULT TO MASTER;
To support the achievement of the business strategy through the alignment of all
employees, functions and divisions to the business goals
To execute the strategic plan, identifying and focusing on the business critical issues
and de-selecting non essential activities.
To achieve ownership, focus, direction and commitment through the involvement of
The Foundation Stone
W Edwards Deming’s PLAN, DO, CHECK, ACT (P.D.C.A.) cycle is at the heart of
Policy (Strategy) Deployment.
(The planning normally gets done well but the Do, Check and Act don't!)
WHAT IS IT ALL ABOUT?
We assemble the entire top team. This must include all the people that contribute to
the business performance : Engineering, Sales, Marketing, Divisional Heads,
Production, Purchasing, Legal, Finance, HR, IT, Logistics, etc.
The first analysis is focused entirely on what the customer
really, really wants. (which may be different from what we think he wants!)
We must insist on reality
THE PROCESS STARTS BY CONSIDERATION OF THE WHOLE VALUE STREAM
Business Long Term Plan
1 Year Plan
Purpose & Values
Power of processPower of process
STAGES OF POLICY DEPLOYMENT
“Measures that matter”
2013 Gap Statement
Safety & Environment LTIFR 2 1.5
The i care programme must be implemented across all sites by end
2012. We must eliminate all accidents on the front line and back offices.
The root causes of muscular stress need to be determined
Internal auditing 5 issues 2 issues
We should strive to obtain ISO 18001 in year 1.
We should record all scrap and disposal bin details
Green house gas
emissions 3.2 2.9 Evaluate alternative fuels
PIN 5 2 Dust controls required
Quality Process ppm 10,000
Cost $ per c.m. $ 5 $ 4
We must improve process efficiency through value stream mapping.
20% reduction is required.
We must negotiate better terms of payment with suppliers.
Cash Generation $750k $1.5m
We must reduce our w.i.p by implementing a pull system, getting better
ontrol of suppliers and forecasting capability.
Delivery DIFOT 78% 95%
We must achieve significant improvement in supplier performance in
support of our requirements for delivery and cost
Lead Time 9 hrs 2 hrs
We must improve our systems to reduce throughput times. Lead times
should be halved in 12 months.
Management Forecast accuracy +/_ 20% +/_ 5%
We must implement a Sales and Operations planning process and
reduce product complexity.
DEVELOPING GAP STATEMENTS ; An example
When determining the Gap statements consider;
What is the gap; what are we trying to improve?
What is preventing us from meeting our target?
What are the root causes in order of importance?
The only daft questions are the ones that don’t get asked!
• Are we facing reality?
• What are the critical issues facing the business?
• Do we understand what our customers really want? (internal and external)
• We need to double our stock-turns. How can it be improved? What help do
• Do we have the best suppliers? Do we have too many suppliers? How do we
• Do we have the best people? Are they suitably rewarded?
• Do you understand the Plant objectives and what are you working on to help
• What keeps you awake at night? (work related of course)
• If you had 3 wishes what would they be?
• If you travel at the speed of light, do your headlights work?
• How do you know when you are out of invisible ink?
“CATCHBALL” DISCUSSIONS UP AND DOWN THE ORGANISATION EXAMPLES
“Outstanding Leaders know how to ask questions – the right questions”
1. WORK SAFELY
Strive to create a harm free work place and business
environment which is best in class
2. ACHIEVE OUR BUDGET
Meet or exceed financial and efficiency improvement targets
3. GROW THE BUSINESS
Be recognised by our customers as a “World Class” service provider
4. DEVELOP OUR PEOPLE
Plan and execute a Training and Development program to
create customer focused leaders and develop a skill base which
will constantly improve our business
5. CONTINUOUSLY IMPROVE
Become an agile and lean organisation, built upon a foundation
of continuous improvement that is recognised as “Best in Class”
COMPANY / PLANT OBJECTIVES – AN EXAMPLE
THE OBJECTIVES MUST BE “SMART”
TESTING THE OBJECTIVES
DETERMINING THE TOP LEVEL COMPANY TARGETS
(THE DASHBOARD ON THE BRIDGE)
Safety/Envir. People Customers InnovationOperations
HMAS COMPANY X
For each objective consider
how it could be achieved
What actions can we take to
achieve them? These are the
potential projects to be
We identify the projects
required to achieve each
objective and list them.
We then prioritise them using
the “seriousness, urgency and
growth” analysis process
Then we consider the
improvement that each project
will make and set quantifiable
targets and completion dates.
When determining the Projects ask;
1. What are we trying to improve?
2. What is preventing us from meeting our target?
3. What are the causes in order of importance?
4. What actions will address the most important causes?
PROJECT SELECTION Cont.
COMPLETING THE MATRIX
Decide who, from the senior team, will lead each project, who will support as a cross
functional team member, and who will facilitate it
Work your way round the matrix completing the boxes to show the alignment of the
Company objectives ( LH envelope) to the Improvement targets (bottom envelope) and the
Company projects, (top envelope) to the project metrics (RH envelope)
The first cut of the PD matrix can now be completed.
Hint! An important part of policy
deployment is growing strong
deployment leaders who help
develop trust and collaboration
between functions necessary to
acknowledge and address deeply
Now the entire team can see the
complete landscape and not just the next
In the time allowed I have only been able to provide an overview of the
process. There are many related issues including hints and tips regarding
such questions as;
• How best to manage projects using A3s.
• How to deal with non committed bosses.
• How to conduct follow up reviews and at what frequency.
• What if the process does not start at the very top?
I will be covering these and more in the workshop discussion session later.
In summary let me say this is a process, not an event. The key is to develop
commitment through involvement whilst giving people the freedom to make
decisions, but within a framework of a “box”, or “Russian Doll”, aligned to the
top level strategy, focused on the important few projects whilst having the
courage to deselect or defer the less critical.