WINNING STRATEGIES PART 1 - POLICY DEPLOYMENT Team B3: Paula Urrego-Riveros David Ibagon Lydia Duro-Emanuel Sabrina Tsai Chi-Wen Shih Nazish Leghari An Introduction to Hoshin Kanri Defined as: Capability enhancement towards improved performance. Unified policy planning and deployment. Effective employment of resources. Origins: Originated in Japan in 1950’s. Developed by Bridgestone Tire Company in 1962. Objectives: Identifies areas of opportunity for the organisation to change or improve. Prioritises the most cost effective actions across the organisation to achieve these changes. Creates a detailed implementation plan. Provides a review mechanism to identify corrective actions and embed learning. Tennant C., and Roberts P. (2001) Elements of Hoshin Kanri Goals derived from Vision Must include TQM Elements of Hoshin Kanri Feedback Mechanisms Adapted from: Hutchins D., (2008) Strategy, Policy, Benchmarking and Target Focus Established deployment implementation process Comparisons of other concepts and Hoshin Kanri HOSHIN KANRI MANAGEMENT BY OBJECTIVES BUSINESS PROCESS REENGINEERING Long Term Short term Radical Long Term Process Targets Perform Strategy Prioritize Troubleshoot Make it work Prioritize MEASURES Realistic Incentives Growth Realistic/daily REVIEW Improvement Failure Renewal Updated COMMUNICATION Deployment of targets Job evaluation Tangible messages Deployment of targets Top down and bottom-up Top – Down VISION FOCUS IMPLEMENTATION FEEDBACK Multiple channels BALANCED SCORECARD Operational and strategic Table adapted from: Tennant C., Roberts P., (2001) and Whitcher & Chau, 2007, 519 Advantages and Drawbacks of Hoshin Kanri Advantages of Hoshin Kanri Focuses on what is important. Shared vision communicated. Involves and engages the organisation. Progress is monitored. Continuous improvement of the strategic plan. Enables organisational learning. 12Manage (2011) Drawbacks of Hoshin Kanri Rigid implementation system. Long-term commitment. Objectives must be static over a 3-5 year period. Lack of understanding. Resistance to change. Management of Hoshin Kanri Drawbacks Lack of Understanding Resistance to change Training Training Rigid Implementation system Communication. Communication Leadership involvement and commitment Engagement and empowerment Long term Commitment Leadership commitment and involvement. Static objectives Robust objectives Engagement of employees. Training. Robust strategy Drawbacks obtained from 12Manage (2011) Continued feedback and monitoring. Manageable and achievable objectives. The Hoshin Kanri Planning Process Plan Do Plan Do Act Check Act Check • Organisations’ current situation. • Determine the future situation. • Prioritise and Select action. What Needs to be done? How do we make changes? • Create the plan. • Improve the vision. • Deploy the plan. (“Catchball”) Adapted from: Cowley M., Domb E., (1997) • Implement the plan. • Review the plan. • Annual Review. How did we do? Plan Do Act Check Strategic Policy Deployment Overview Tennant C., and Roberts P. (2001) Implementing Hoshin Kanri at Wave Riders …Applying the theory practically. Creating the Vision - SWOT Analysis STRENGTHS •Top 5 company. •Originated and established in the UK. •Highly experienced workforce. •Multi-design product (Military & Search and Rescue) OPPORTUNITIES •Opportunities in UK and European markets. •Increasing demand from leisure markets. •Possibility of repeat business from the military. WEAKNESSES •Too much stock. •Overstaffed. •Lack of/Out of date strategy. •Inefficient use of resources (i.e. people, assets e.t.c.) •Impact analysis methods not robust. THREATS •Poor market conditions. •Competition from other key players. •High Stock levels from the previous year. •Declining military demand. Proposed Vision Wave Riders Vision “In 5 years, Wave riders aims to become a key player in the European markets by focusing our resources, engaging our employees and satisfying our customers through the production of high quality products towards excellence.” Proposed Values Wave Riders Values: We pride ourselves in satisfying our customers. We are committed to conduct ourselves in a manner consistent with the highest standards of integrity. We are honest, ethical, and fair in all our activities. We ensure exceptional and reliable quality in all aspects of our work and recognise that quality determines the breath of our success. The 5 year Strategic Plan Proposed Strategic Goals: Increase market share in Europe by 40% in 5 years. 85% customer satisfaction in 5 years. Engagement of employees in 5 years. Chosen Strategy: STRATGEY 3 Proposed Strategic Plan WAVE RADERS Strategic Goals ACTION PLANS Research European market pricing structure, discounts, distribution, competition, product and safety Increase Market Share in Europe Identify a distributor who could take on the European sales and handle any future expansion of the market Identify successful European promotional campaigns and put together a winning promotions strategy. Continue to invest in new technology. Customer Satisfaction Reorganize the Leisure sales team to three external sales representatives and three internal sales people to handle client follow-up by taking on two new salespeople and take on a European sales representative in the Rescue/Military sales team. Reorganize Finance and HR departments by moving wages and salaries manager into the Finance department. Engagement of employees Increase price of both products by approximately 2.5% (in line with inflation) 2011/12 2012/13 2013/14 2014/15 2015/16 Operational and Financial Plan OPERATIONAL PLAN Strategic Goals OBJECTIVES Entry to European Market ACTIONS PLAN Research European market pricing structure, discounts, distribution, competition, product and safety specifications etc. DEPARTMENT FINANCIAL REQUIREMENTS Marketing and Sales £250000 Marketing Spend Identify a distributor who could take on the European sales and handle any future expansion of the market Increase Market Share in Europe Benchmarking Market in Europe Remains at the forefront of the Market and meet Customer expectations Guarantee Commercial support to UK and Europe & Decrease Administrative burden Identify successful European promotional campaigns and put together a winning promotions strategy. Continue to invest in new technology. Reorganize the Leisure sales team to three external sales representatives and three internal sales people to handle Reorganize Finance and HR departments by moving wages and salaries manager into the Finance department. Production R&D £150000 Capital Expanditure £25000 Finance Workload Finances And HR An Example… OPERATIONAL PLAN Strategic Goals Increase Market Share in Europe OBJECTIVES ACTIONS PLAN Entry to European Market Research European market pricing structure, discounts, distribution, competition, product and safety Identify a distributor who could take on the European sales and handle any future expansion of the market Benchmarking Market in Europe Remains at the forefront of the Market and meet Customer expectations DEPARTMENT MEASUREMENT Marketing and Sales Marketing indicators quarters Identify successful European promotional campaigns and put together a winning promotions Continue to invest in new technology. TIME REVIEW Production R&D Designs Policy Deployment Model These plans fit into the overall business plan… Tennant C., Roberts P., (2001) Implementation Process – “Catchball” Hoshin Kanri is implemented using the “Catchball” process. Involves communication at all levels of the organisation Ensures commitment at all levels through the engagement of employees. Tennant C., & Roberts P., (2001b) Wave Riders Strategic Plan Wave Riders Departmental Plan Departmental Operational/Fin ancial Plan Wave Riders Operational/Financial Plan Wave Riders Key value streams Programme Management Departmental Key Initiatives Employee goals and objectives Modelled on GE Healthcare’s Catchball Process. GE (2010) Conclusion Hoshin Kanri is an execution tool to effectively deploy a strategic plan. The ‘Catch ball’ process helps eliminate many of the drawbacks of the tool. TQM is essential to the core concepts of Hoshin Kanri. Appendix 1 - Selected Strategy 3 Strategy Aim: Increase market share in Europe Actions and costs Research European market pricing structure, discounts, distribution, competition, product and safety specifications etc. Identify a distributor who could take on the European sales and handle any future expansion of the market. Need new computerised finance package for Euros and to reduce Finance workload (estimated cost £25,000) Identify successful European promotional campaigns and put together a winning promotions strategy. Increase marketing spend to £250k. Increase price of both products by approximately 2.5% (in line with inflation). Reorganize the Leisure sales team to three external sales representatives and three internal sales people to handle client follow-up by taking on two new salespeople and take on a European sales representative in the Rescue/Military sales team. Continue to invest in new technology costing an estimated £150k on capital expenditure. Reorganize Finance and HR departments by moving wages and salaries manager into the Finance department. Reduce the remaining clerical staff in HR to a total of one. References Witcher B.J., Chau V.S. (2007) Balance Scorecard and Hoshin Kanri: Dynamic Capabilities For Managing Strategic Fit, Management Decision, Vol: 45, No: 3, pp: 518 – 538, UK, Emerald Group Publishing Ltd. Witcher B.J., Chau V.S., Harding P. (2007) Top Executive Audits: Strategic Reviews of Operational Activities, Managerial Auditing Journal, Vol: 22, No: 1, pp: 95 – 105, UK, Emerald Group Publishing Ltd. Tennant C. and Roberts P., (2001) “Hoshin Kanri: A Tool for Strategic Policy Deployment” Knowledge and Process Management, Vol. 8 No. 4, Pages: 262-269 Tennant C. and Roberts P., (2001b) “Hoshin Kanri: Implementing the Catchball Process!. Long Range Planning, Vol 34. Pages: 287-308. Cowley M., Domb E., (1997) Beyond Strategic Vision: Effective corporate action with Hoshin planning. Boston, Mass: Butterworth-Heinemann. GE Healthcare (2010) “Leadership Strategy” Obtained from: http://nextlevel.gehealthcare.com/leadership-strategy/its-time-to-stop-dangling-ourfeet-in-lean-for-healthcare.php Last updated: 28/10/2010 Last accessed: 12/02/2011.