Unlike traditional planning, strategy deployment is not an annual exercise but an iterative approach to transformation. With so many schools of thought when it comes to strategy, a fair conclusion is that the term “Strategy” has different meanings to different organizations. It’s therefore necessary for organizations to provide their own definitions and parameters. Our recommended approach to improvement strategy deployment is to use PDCA (Plan-Do-Check-Act) as the basis of the methodology supported by a combination of Lean and Hoshin tools, namely A3s, Catchball, and Visual Management. Geoff Schreiner shares his wisdom on getting to grips with strategy deployment.
Strategy deployment has proved a major challenge for most global organizations ever since its first emergence in Japan in the late 1950s through Professor Ishikawa, who boldly declared that “each person is an expert in their own job”: Strategy deployment is elusive because it is both so simple and at the same time so very complex. The challenge therefore is — without being simplistic — to make strategy deployment practical and impactful.
Let’s start with the question “what is strategy?”
There are many major schools of thought on the topic including the Positioning School (Michael Porter), the Learning School (Prahalad and Hamel) and the contingency theorists of the Environmental School. All have very different perspectives on what strategy is and what its role should be. A fair conclusion is that strategy has different meanings across different organizations and consequently when discussing the concept it is imperative that one provides one’s own definition.
We have found it very useful to distinguish between a corporate strategy, a business (or competitive) strategy and an improvement strategy in the following ways:
- Corporate strategy supports the organization’s vision, defines the playing fields (markets) and sets the overall direction for the organization (what it wants to become)
- Business strategy or competitive strategy focuses on how the organization plans to compete in the market (the game plan) — it takes into specific account the competitive environment and the competencies of the organization
- An improvement strategy supports a vision for improvement in a part of, or across the whole organization
In practice corporate and business strategies are often interlinked. They will define the series of high-level actions expressed as goals (longer term) and objectives (shorter term) to realize a vision for the organization. They will also generally provide detail on how and when the goals and objectives which have been set will be realized.
A fair conclusion is that strategy has different meanings across different organizations and consequently when discussing the concept it is imperative that one provides one’s own definition.
Improvement strategies can either be focused, for example improving quality in the warehouse, or broad, for example improving OTIF across a range of value streams. They should at all times be aligned with the corporate and business strategies. The main contributors to the field of strategy deployment have been Peter Drucker (management by objective) and more recently a range of writers on Hoshin Kanri, as well as the seminal works of Kaplan and Norton (The Balanced Scorecard and the Strategy-Focused Organization).
Distilling the best from all of these writers, we have developed the following principles or architecture to define effective deployment:
- Strategy and execution should be treated as an integrated and ongoing process based on continuous improvement and PDCA cycles
- Unlike traditional planning, strategy deployment is not an annual exercise but an iterative approach to transformation
- Senior levels of the organization should develop a deep understanding of the “way things really work”
- “Hard data” is often inaccurate and can cover only a small part of the reality
- Knowledge and experience exist at all levels of the organization and employees have important contributions to make
- Effective execution requires context-specific knowledge that only exists at the “doing” level
- Leaders don’t tell but ask questions, and don’t command but rather engage
- Communicating interesting case studies or stories about the successful or unsuccessful deployment of the strategy is often the best way to transfer understanding and garner interest effectively
At root, the achievement of effective deployment is dependent on organizations making the transition from traditional planning approaches — where the emphasis is on a mechanical selection of the right measures — to focus more intensively on the realities of the deployment process itself.
When it comes to the tools for deployment we are of the view that the Balanced Scorecard, combined with strategy mapping, provides the most effective manner of deploying key performance metrics which support the business strategy.
The Balanced Scorecard can certainly be combined and integrated with other “balancing frameworks” such as PQCDSEM (Productivity, Quality, Cost, Delivery, Safety, Environment and Morale), which are often used at lower levels of the organization, especially in manufacturing.
When it comes to improvement strategies we have already indicated that these can be distinguished on a continuum between focused/specific through to broad-based. Our recommended approach to their deployment through the organization is to use PDCA as the basis of our methodology supported by a combination of Lean and Hoshin tools, namely A3s, Catchball, and Visual Management. This is illustrated in the diagram below.
Borrowing from Pascal Dennis, the integration of PDCA and deployment can be represented in the following way:
This integrated approach can then be spelt out in the following way:
PLAN — Develop the high-level plan
- Start the process by developing the “Mother A3” for the improvement strategy
- Follow the broad A3 logic and process when compiling the first draft of the plan
- Appoint a deployment leader that takes overall responsibility for the strategy
DO — Deploy the plan and implement
- Develop “Baby A3s” as appropriate in support of the higher-level A3
- Ensure alignment and focus through processes like “Catchball” to ensure strong and wide participation
- Repeat the process down the levels as practical (depends on maturity)
CHECK — Review the progress and results
- Establish an appropriate management process with review cycles (macro, annual and micro)
- Develop a review system consisting of detailed agendas and procedures
- Make abnormalities/deviations visible through exception management
- Agree which structures will be responsible for each type of review
ACT — Solve problems and improve plans
- Introduce changes to the plans as a result of the ongoing formal reviews
- Introduce structured problem-solving at all levels in the organization
- Introduce standardization to enable further improvement and enhance sustainability
Reflect and improve on the deployment system
- Reflect thoroughly on the effectiveness of the system and identify improvement opportunities
- Introduce refinements and repeat the cycle
The tools supporting this deployment approach for improvement strategies have been indicated via A3s, Catchball and Visual Management.
The deployment of both business and improvement strategies has to be supported by a range of key HR practices which will build a high-performance culture of engagement. These practices include managing individual performance, recognition and reward, as well as coaching and mentoring.
This resource has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained herein without obtaining specific professional advice. Competitive Capabilities International (CCi) does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this resource or for any decision based on it.