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Akhilesh Gulati

Six Sigma

Strategy Isn't Enough

Having a strategy is good, but it's the implementation that leads to results.

Published: Monday, June 8, 2009 - 14:30

Recently a strategy consultant was overheard saying she writes romantic novels. Look into many organizations and, although said in jest, it has more than a modicum of truth to it.

Don’t get me wrong. The high-level strategic plans are important and necessary. But, the devil is in the details, the down-and-dirty task and activities that really make things happen. Back in 1999, a Fortune magazine study suggested that 70 percent of CEOs who fail do so not because of bad strategy, but because of bad execution. ("Why CEOs Fail," R. Charan and G. Colvin, Jun 21, 1999.)

Strategy implementation is an internal, operations-driven activity that involves organizing, budgeting, motivating, culture-building, supervising, and leading to make the strategy work as intended. It involves people understanding their role in the big scheme, how it links throughout the organization, and the impact it has along the way. Hoshin Planning is one methodology that helps organizations through this process. This tool helps to cascade out detailed work plans: it indicates how projects are to be led and resourced, shows linkages to the organization’s vision and mission, identifies the accountable or responsible parties, aligns the work plans, and indicates how progress and results will be measured.

In today’s fast paced world, strategic planning is critical. It is akin to the guidance system on an airplane; if not programmed to reach its destination, it cannot keep the plane on course in rough weather. A pilot has to log his destination and flight plan, get clearance from the tower, check the meteorological conditions and plan accordingly, check the aircraft and deliver a smooth flight for passengers and cargo, and then land safely. Everything has to work exactly to reach the destination safely and can only be done by the pilot and crew performing many interim checks to make sure they are on track. That is strategy and implementation in perfect harmony.

Similarly, in an organization, a strategy provides an overall journey plan against which management can align itself during day-to-day bumps or turbulent times. Strategic planning and disciplined implementation work hand in hand to deliver planned, predictable results.

Typically, most operational improvement (e.g., lean Six Sigma) and strategy initiatives exist in their own silos. Strategic planning becomes an annual exercise while performance excellence projects create ongoing pockets of excellence.

However, when lean and Six Sigma are planned and executed as part of overall strategy, these become clear examples of strategy and implementation working in perfect harmony. Ideally, an organization starts with a roadmap that begins with stabilization and ends with sustainability and includes vision and mission, expected interim goals, and clearly defined timelines. The end result, a comprehensive strategic plan, will have addressed the following:

  • Leadership development clarifying vision, mission, values and strategy
  • Culture change (a.k.a. change management)
  • Workforce training and development
  • Project definition, execution, and control

 

The tactical plan, or shorter-term action based activities, will focus on operational excellence and waste and variation reduction across the organization through projects designed to deliver business results (e.g., inventory turns, time to delivery, quality, increased sales, market share, etc.).

Strategic planning should not be only about an annual exercise. It is not about creating pretty PowerPoint slides. It is not about projecting numbers that look good. It's about linking the vision, mission, and goals to specific actions down in the trenches. It's about getting to the destination. It's about getting results.

Referencing back to the airplane analogy, why do airlines have a low probability of crashing (a high process sigma value)? It's because of the discipline of the systems (in other words, the regiment of the processes that produced that product or service): design, assemble, test, and training. It's because of developing as failsafe a system as possible. Compared to this, why is the ratio of successful companies to unsuccessful ones so small? Why is the ratio of new product successes to new product launches so small? Is it because of the due diligence (or lack thereof) that that goes into it? Can a good strategy incorporating lean Six Sigma be a sensible solution?

What do you think? Is strategic planning a must? Is disciplined implementation critical? Do you want to know more about Hoshin Planning? We would love to hear your opinion. Write to us at gulati@pivotmc.com.  

Discuss

About The Author

Akhilesh Gulati’s picture

Akhilesh Gulati

Akhilesh Gulati has 25 years of experience in operational excellence, process redesign, lean, Six Sigma, strategic planning, and TRIZ (structured innovation) training and consulting in a variety of industries. Gulati is the Principal consultant at PIVOT Management Consultants and the CEO of the analytics firm Pivot Adapt Inc. in S. California. Akhilesh holds an MS from the University of Michigan, Ann Arbor, and MBA from UCLA, is a Six Sigma Master Black Belt and a Balanced Scorecard Professional.

Comments

What is the no. 1 barrier to effective Hoshin Planning?

Absolutely agree! The devil is in the execution, not the strategy!

In today’s competitive economic climate, organizations stand or fall by how well they deliver against the promises they make to stakeholders. There are two likely causes of the failure to deliver on promises made: either the strategy itself was fundamentally flawed, or the process through which strategy gets disseminated and executed was ineffective.  In the majority of cases, it is this execution process that lies at the heart of the problem with the root causes of this being one of the following: 

·         Lack of alignment between top level corporate strategy and the initiatives which take place at a tactical level

·         Management reviews are predominantly focused around lagging measures which measure outcomes, and not leading measures which predict what the outcomes will be

·         Organizations are unable to accurately predict the impact that the successful completion of actions will have on the Key Performance Indicators, and ultimately, strategy. 

The process of Hoshin Planning or goal deployment, using the powerful X-Matrix, is being implemented by a number of organizations to help address these root causes however, as discussed above, many organizations still fail to achieve their goals.  

As part of my ongoing efforts to understand the challenges companies face in successfully using Hoshin I have created a LinkedIn poll. Click here to participate in this poll and share your thoughts.

 

Strategy Isn't Enough

I think strategy is a must because everyone within an organization needs to know the direction of the company and how their job/function supports the strategy. Disciplined implementation is also a must if you want a near flawless execution....chaos cost's a company time, money, and resources. However, the most important and often overlooked aspect of both strategy and implementation is communication. I've implemented large scale, multi-site projects that went smoothly because of the time that I took to communicate to all parties directly and indirectly impacted by the project.

I'm not sure, but I would think that writing a romance novel requires a lot of strategic planning to understand the role of each character before the novel is even written....very similar to strategy and implementation planning in Corporate.

I would like to learn more about Hoshin Planning and look forward to any future articles.

Sandra Gauvin
http://CurrentQuality.com