from lean six sigma to strategy execution
DESCRIPTION
This presentation focuses on how strategy execution can make your lean six sigma efforts more strategic and sustainable. Fundamentally, a strategy execution system needs 3 main components: 1) Goal management - Hoshin planning. Hoshin is all about forcing the executive team to think about breakthrough objectives. These are those few things that will really move the business forward. This type of thinking really leads to focus and ensures that the strategy execution system is grounded in focused action rather than the usual suspects. The actual stage of Hoshin look fairly standard at face value, however it is the concepts within these stages that make Hoshin different. Catchball is an example of this. Catchball is the process of ensuring that breakthrough objectives and related planning are validated with lower levels of management before being set in stone for the period. This process increases the levels of ownership throughout the business for the goals. The focus purely on breakthrough objectives and the tight alignment and control delivered by the X matrix are also noteworthy. 2) Project and program management - operational excellence. Only those projects or actions that specifically support the achievement of the annual breakthroughs should be selected. Particualr attention should also be paid to resource planning. Hoshin is all about focus and this applies to where project resources spend their time. 3) Performance management - balanced scorecards or similar, In order to execute effectively, we do need to know at all times whether we're on track (and if not, what we're doing about it) and importantly, will the actions we're taking when aggregated get us to where we want to be? MAAR and bowling charts are excellent and much underused tools in achieving these objectives. The visibility provided in the Hoshin process enables the tools of operational excellence to be used to best effect. Early identification of deviation from the desired progress can then be acted upon. In this way, Hoshin and operational excellence fit together tightly. i-nexus is the world's leading strategy execution software tool and is specifically designed to help complex organizations to translate their aspirations into reality.TRANSCRIPT
© i-nexus 2010
From LSS to Business Execution…Is Your Organization Ready to Build a Robust Business Execution System?
© i-nexus 2010 Slide 2
Most Companies Follow A Similar Journey....The Performance Improvement Maturity Model (PIMM)
Consider Align andIntegrateInternalise
Scale andReplicateProve
PIMMLevels
KeyGoals
Generate Enthusiasm
Demonstrate Success
Accelerate Benefit Delivery
Make Improvement Sustainable
Align Improvement With Goals
Level 0 Level 1 Level 2 Level 3 Level 4
Decision to ‘Test Water’ Via Piloting
Use of Structured Performance ImprovementMethodology
Decision to Commit to a Company
Wide Operational ExcellenceProgram
Decision to Progressively Shift Responsibility
for On-goingPerformance Improvementto Operational Managers
Decision to Align Performance Improvement
Activity On a Company Wide BasisWith Strategic Goals
Pilot Not ConsideredA Success
AllInitiatives
Die(Eventually)
Rowing WellIn The Wrong
Stream
FailureModes
TypicalDecisions
Push Pull
© i-nexus 2010 Slide 3
The Topics for Today’s Webinar
How Does Business Execution Make Your Lean Six Sigma Efforts More Strategic and Sustainable?
Links Project SelectionTo Critical Performance
Gaps
Transitions Ownership ofImprovement to Operational
Managers
© i-nexus 2010 Slide 4
LSS + BSC + ? = Superior Execution
HoshinPlanning
Operation
al
Excellence
Balanced
Scorecar
ds
• LSS project selection typical driven by operational priorities.
• Impact of LSS projects on strategic indicators rarely articulated.
• BSC focuses predominantly on building a measurement system.
• BSC doesn’t really guide goal deployment/action identification.
© i-nexus 2010 Slide 5
Hoshin Planning – The Concept
方Ho
管KanShin Ri
針 理Direction Needle
ControlChanneling
ReasonLogic
Direction Needle, or Compass Management
Hoshin Planning is a systematic and disciplined process to align, communicate and execute strategy by focusing on those few breakthrough objectives that give you competitive advantage.
A ‘Vision Compass’
© i-nexus 2010 Slide 6
Hoshin Planning – The Process
1. Establish Vision
2.Develop 3-5 Year Breakthrough Objectives
3.
4.
5. Implement Annual Objectives
6. Monthly Review
7. Annual Review
P
DC
A
Reflection
Hoshin Process in Concept
Develop Annual Objectives
Deploy Annual Objectives
Catch-ball Planning
© i-nexus 2010 Slide 7
The X Matrix – A Powerful Tool to Drive Alignment
© i-nexus 2010 Slide 8
Catch-ball ‘handshake’ ensures commitment and meaningful targets at every level
• What does achieving this goal mean I/my team have to do?
• Does it need further breakdown to be implemented?
• Given feedback from my team are the targets achievable?
• Do I believe this action will deliver the result expected?
• What does achieving this action mean I/my team have to do?
• Do I have the resources to make it happen in the time allowed?
• What are the sub-goals?• Who needs to drive them?• How will I track their achievement?• What do I think are meaningful
stretch targets?Executive
Senior
Manager
Sub-goalsand ProposedTargets
Departmental
Manager
Sub-goals/actions and target timelines
Accepted goals or counter-proposed targets/goals
Accepted goals/actions or counter-proposed timelines
© i-nexus 2010 Slide 9
Consistent execution fundamentally depends on being able to answer 3 questions...
1.Are we on track?
2.If we are not on track – are we doing something about it?
3.In aggregate, will the actions underway get us where we want to go?
© i-nexus 2010 Slide 10
Paradigm Shift 1 -Review execution not historic performance
From: Are we meeting our targets? To: Will the actions we have underway enable us to achieve our goals?
FebJan Mar MayApr Jun
10
20
40
30
50
70
60
90
80
100
Action: ABCTarget Date: AugImpact: +20 UOMs
Action: XYZTarget Date: OctImpact: +35 UOMs
SepJul Aug NovOct Dec
© i-nexus 2010 Slide 11
Execution Bowling Chart –Based on the actions underway are we likely to hit our goals?
© i-nexus 2010 Slide 12
Keeping on Track – Implementing Countermeasures via MAAR Charts
Cause
Action Owner
Due
Status
A Reduce instances of A
PTD Jan
B Remove instances of B
ABC Feb
Measure Analyse
ActionReview
Fault Resolution Cycle Time Analysis of Root Causes
Action Planning/ProgressValidation of Improvement
A B C D
RC
J F M A M J J A S O N
A 10
21 16 18 0 0 0 0 0
B 18
23 24 16 2 9 0 2 6
© i-nexus 2010 Slide 13
Keeping on Track – Implementing Countermeasures via MAAR Charts
Cause
Action Owner
Due
Status
A Reduce instances of A
PTD Jan
B Remove instances of B
ABC Feb
Measure Analyse
ActionReview
On-time Delivery Analysis of Root Causes
Action Planning/ProgressValidation of Improvement
A B C D
RC
J F M A M J J A S O N
A 10
21 16 18 0 0 0 0 0
B 18
23 24 16 2 9 0 2 6
© i-nexus 2010 Slide 14
Keeping on Track – Implementing Countermeasures via MAAR Charts
Cause
Action Owner
Due
Status
A Reduce instances of A
PTD Jan
B Remove instances of B
ABC Feb
Measure Analyse
ActionReview
On-time Delivery Analysis of Root Causes
Action Planning/ProgressValidation of Improvement
A B C D
RC
J F M A M J J A S O N
A 10
21 16 18 0 0 0 0 0
B 18
23 24 16 2 9 0 2 6
• Focus on Moving the Dial Not Just % Complete on Action
• Focus on Elimination of Root Cause Not Just Alleviation of Symptom
© i-nexus 2010 Slide 15
How can we ‘get fit’ for Business Execution?
DevelopCore Execution Competencies
•Causal Thinking Skills•Prioritisation/
Improvement Tools•PDCA Approach to
Operational Reviews•Process Thinking
CrystallizeVision/Hoshin
Planning Approach
•Establish Annual Hoshin Timetable
•Provide Guidance on Stretch Goal Setting
•Codify the Review Process
Align Resource and Reward
Planning
•Synchronise the Budgeting/ Forecasting Process
•Align With Annual Performance Reviews
•Align Rewards with Catch-ball Targets
Underpin With aBusiness Execution
Platform
•Create Single Version of Truth
•Ensure Line-of-Sight for Every Employee
•Take Effort/ Complexity out of Catch-ball/Review
•Make Performance Transparent
© i-nexus 2010 Slide 16
Business Execution – The Potential
Business Execution can:•Motivate and align every employee•Eliminate unnecessary internal competition•Focus energy on real breakthroughs•Ensure action is followed through
•But ultimate value lies superior results from superior execution.....
An organisation which executes well on a mediocre strategy will always outperform an organisation that executes badly on the most brilliantly crafted strategy.
© i-nexus 2010 Slide 17
How can i-nexus help you realise the full potential of Business Execution?
The i-nexus on-demand Platform provides the most complete foundation available today for organisation-wide Business Execution.
Our global consulting partners have a deep understanding of what it takes to establishbusiness execution disciplines and are ready to help you build the competencies you need.
Learn More: www.i-nexus.com
© i-nexus 2010 Slide 18
Contact us
• www.i-nexus.com