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