Strategic Planning

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Strategic Planning
in the Baldrige Criteria
Examines how an organization develops strategic
objectives and action plans. Also examined are how
the chosen strategic objectives and action plans are
deployed and how progress is measured.
2.1 Strategy Development
a. Strategy Development Process
b. Strategic Objectives
2.2 Strategy Deployment
a. Action Plan Development and Deployment
b. Performance Projection
1
Strategy
“A strategy is a pattern or plan that integrates an
organization’s major goals, policies, and action
sequences into a cohesive whole.”
James Quinn
A formal strategy includes:
 Goals to be achieved
 Policies to guide or limit action
 Action sequences, or programs,
that accomplish the goals
2
Characteristics of an Effective
Strategy – S. C. Wheelwright

It is driven by customer wants and needs.

It makes a significant contribution to the success
of the business.

It matches the organization’s unique resources
with opportunities in the environment.

It is durable and difficult for competitors to copy.

It provides a basis for further improvement.

It provides direction and motivation to the entire
organization.
3
Tasks Accomplished by
Strategic Planning

Understand important customer and operational
requirements

Optimize use of resources and ensure bridging
between short-term and longer-term requirements

Ensure that quality initiatives are understood at all
organizational levels

Ensure that organizations and structures will
facilitate accomplishment of strategic plan
4
Consideration in Strategic Planning

Strives for breakthrough thinking

Has a clear process

Be on-going

Addresses unique characteristics in each market
segment

Understand the role in the value chain

Has a well-defined process for continuous
improvement in strategic planning
5
Strategic Opportunities
Hamel & Prahalad, Competing for the Future, HBP
Unarticulated
Unexploited
Needs
Opportunities
Articulated
Served
Un-served
Customer Type
6
Leading Practices

Active participation of top management,
employees, key customers and suppliers

Systematic planning systems for strategy
development and deployment, including
measurement, feedback, and review

Use of a variety of external and internal data

Align short-term action plans with long-term
objectives, communicate them, and track progress
7
Strategic Planning Process
Reason for existence
Mission
Future intent
Attitudes and policies
Vision
Guiding Principles
Environmental assessment
Strategies
Broad statements of direction
Strategic Objectives
Action Plans
Capabilities and risks
Things to change or
improve
Implementation
8
Vision


Where the organization is headed and what it
intends to be
• Brief and memorable - grab attention
• Inspiring and challenging - creates excitement
• Descriptive of an ideal state - provides
guidance
• Appealing to all stakeholders - employees can
identify with
Solectron: “Be the best and continuously improve”
9
Mission

Definition of products and services, markets,
customer needs, and distinctive competencies

Solectron: “…to provide worldwide
responsiveness to our customers by offering the
highest quality, lowest total cost, customized,
integrated, design, supply chain, and
manufacturing solutions through long-term
partnerships based on integrity and ethical
business practices.”
10
Identifying Key Business
Factors

Nature of products and services

Principal customers and market segments

Customer quality requirements

Competitive environment

Facilities, technologies, suppliers

Regulatory environment
11
Order-Winners and Qualifiers

Qualifiers
Those criteria that an organization must
meet for a customer to even consider as a
possible supplier. However, providing or
attaining these criteria do not win orders.

Order-winners
Those criteria that win an order.
12
Policy Deployment
(Hoshin Kanri)

Top management vision leading to long-term
objectives

Structured deployment through annual
objectives and action plans

Negotiation for short-term objectives and
resources (catchball)

Periodic reviews
See Figure 5.7!
13
Key Steps in the Policy
Deployment Cycle
1.
2.
3.
4.
5.
6.
7.
8.
Carry out self-assessment
Gather information on business environment
Determine each unit’s vision and priorities
Agree on metrics and targets
Develop plans
Agree on personal objectives
Monitor progress and review
Refine priorities and process
14
Hoshin Kanri versus MBO
Hoshin Planning
MBO
 Focus on process
 Focus on results
 Top down/bottom up
 Top down
 Focus on how
 Focus on who
 Goals and actions
negotiated using facts
and data
 Group-oriented
 “Strong arm” tactics
for goal delegation
 Individualistic
 Doesn’t need superstars  Relies on superstars
15
Seven Management and
Planning Tools ( 1 of 3)

Affinity diagram
• To determine and organize a large number of
ideas, options, and facts related to a problem
or subject

Interrelationship digraph
• To explore and determine cause-and-effect
relationships among related ideas
16
Seven Management and
Planning Tools (2 of 3)

Tree diagram
• To map out the paths and tasks to complete
a project or reach a goal

Matrix diagram
• To graphically display relationships between
ideas, activities, etc. and to determine if
there are missing pieces
17
Seven Management and
Planning Tools (3 of 3)

Matrix data analysis
• To compare alternatives using multiple
criteria

Process decision program chart
• To map out all the possible situations to a
problem or action

Arrow diagram
• To establish precedent relationships among
tasks
18
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