Strategy & Policy Deployment
Renault-Nissan Consulting’s Managing Director David Howells shares his view on Strategy & Policy Deployment principles.
I was asked recently to talk to a group of eager, but still developing, Lean Experts to share my experience of strategy & the deployment of that strategy. I thought afterwards I should document the key points in the form of this article in order to share it with a larger audience.
First of all, I was surprised how little was really understood by my audience. They had little appreciation for the theory of Strategy/Policy Deployment, and even less awareness of how that theory is currently being deployed by mature organisations.
This is even more worrying when one considers that whenever one looks at research results for the top characteristics of successful businesses, Hoshin Kanri (Strategy/Policy Deployment) is always shown at or near the top.
However the fact that Hoshin Kanri is rated so highly is perhaps not at all surprising, as in my experience organisational success usually comes from understanding what the critical things are that you are trying achieve, knowing how you are going to achieve them and harnessing everyone to help you do it.
Anyway, this is not intended as a full lecture on Strategy/Policy Deployment, but I do need to give just a little context.
The Japanese characters for kanri mean management. You can translate the characters for hoshin as direction and shining needle or, taken together, as compass but usually this is translated as “policy”, which is why you will often see hoshin kanri translated as policy management or policy deployment.
Hoshin Kanri emerged during the 1950s and 1960s as Japanese companies struggled with structural changes to become competitive in the open, post-war economy. Under the influence of Peter Drucker’s teachings on market focus and long-term planning, the Japanese Union of Scientists and Engineers (JUSE) added “Policy and planning” to the Deming Prize Checklist in 1958.
In 1964, Bridgestone Tire coined the term hoshin kanri and in 1965 published its Hoshin Kanri Manual which codified the principles of hoshin, based on an analysis of what Deming Prize winners had been doing.
Toyota and Komatsu successfully combined Bridgestone’s version of hoshin with their own innovative implementations of cross-functional management and daily control of quality, cost, and delivery (the so-called QCDs).
If that is a little of the context, what about the theory?
Policy Deployment is built around a Plan, Do, Check & Act (PDCA) cycle. It is a methodology for making strategic decisions, focussing the organisations resources on the vital few critical initiatives necessary to accomplish the strategic intent and deploying those initiatives throughout the organisation.
Done correctly, it will also give guidance on the type and nature of the governance required to ensure you achieve success.
The first thing of course is that you need your strategy. My advice here is do not believe that it already exists – whatever you are told. It usually is, at best, a foggy picture of the combined thinking of the top team. It will not provide the direction & drive required, and will probably not be documented in any way that communicates and inspires the people who have to deliver it.
I would suggest you need to define the terms you want to use (everyone has a different understanding and interpretation of strategic terms) and ensure you can summarise your whole strategy on one page and one page only. You may well have lots of interesting analysis, but if you cannot tell a compelling story with one page, your strategy is too complicated. Try to come up with 3 to 5 key things that are going to make the biggest difference to your organisation. This may therefore mean that developing your strategy will, in reality, be more about getting the top team to deselect things rather than thinking about what should be included.
I do not have the space to go into the theory in any great depth, but here is a checklist of the key elements that you might consider researching as a result of this article to support your efforts:
- Contribution Matrix
- Boston Matrix
- Policy Deployment Teams (Hoshin, Tactical, Operational & Action)
- Team Charters
- A3 Planning
- Visual Management
- Presidents Audit
You may, at this point, be thinking that this is all a lot of hard work. In reality, if you’re planning the strategic direction of your organisation it probably should be!
If despite all this you still have some desire and belief that you need to do something, let me leave you with some easy first steps to implementation.
If you were to ask me where do I begin – I would have to say “well it depends….”
It depends on such things as the lean maturity of the organisation, the change readiness of the organisation, and if you have a “burning platform”.
And remember, it all takes time.
Anyway, in most cases, organisations have followed some version of the following:
- Start with a small part of the organisation where there is willingness (Belief & Desire)
- Clarify & agree the strategic intent (3-5 breakthroughs)
- Win commitment to this with your one pager
- Build the X- Matrix (for the next 12-18 months)
- Charter one or two teams only
- Win commitment through “light” informal Catch-ball
- Support the teams by coaching PDCA
- Use the success from the pilot to expand scope
Good luck, and happy deployment of your strategy!