WHO S GOT THE BALL? THE CHALLENGE OF ALIGNMENT

1 WHO S GOT THE BALL? THE CHALLENGE OF ALIGNMENT Roger E Olson ASQ 0701 October 30, 2015

2 On Change There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Niccolo Machiavelli 1469 1527 (Historian, politician, diplomat, philosopher, humanist, and writer, who is recognized as the founder of modern political science and political ethics)

70% of strategic plans and change efforts fail to Meet the goals (that number has remained unchanged for over 20 years) 3

4 What a Waste! When change efforts fail, When strategic plans fail, So much of the time and effort Is just a waste! And most companies will do it again without considering what went wrong, and more importantly, what to do differently.

5 What They Have in Common Strategic plans and Change Initiatives both: Start from on high Are passed down through the organization Need involvement & commitment from the top Need involvement & commitment from the front line Require great ongoing communication Require resources

6 Causes of Failure: Failure to create executable plans Failure to plan for obstacles, setbacks and resistance. Executives frequently fail to step up their regular communications throughout the process Executives tend to forget they need to remind their people why the change is necessary (or why goals are important) Failure to realign the resources necessary for the plan/change to succeed Lack of alignment Lack of commitment

7 A Lack of Alignment Leadership Executives Customers Employees The Implementation Plan

8 What We Want Customers Executives Leadership Suppliers Employees Implementation Plan

9 Typical Strategic Planning Approach 1. Exec team has an offsite a. Decide on priorities b. Decide on goals c. Create a plan 2. Communicates the plan to directors and managers 3. Communicates the plan to front line workers 4. Wait for results

10 Who s Got the Ball? Exec s tell directors and managers what the goals are, and pass the ball Directors and managers tell front line workers what the goals are, and pass the ball Front line workers have enough to do, and don t want the ball When communication is vague, when responsibility is not clear, when accountability is poor, the ball gets dropped. Most of the time it s too late before it is noticed.

11 Increasing number of messages as information cascades through the organization Leaders Directors Managers Front Line Employees 10 15 20 25 Information Overload (Actual example) Source: Most Change Initiatives Fail -- But They Don't Have To by David Leonard and Claude Coltea

12 Insight and recommendations tailored to each Manager s level, challenges and resources Leaders Directors Managers Front Line Employees 10 Vital 8 Vital 5 Vital 3 Vital Reducing Information Overload Source: Most Change Initiatives Fail -- But They Don't Have To by David Leonard and Claude Coltea

13 Goals and Objectives Top management shall ensure that quality objectives, including those needed to meet requirements for product [see 7.1 a)], are established at relevant functions and levels within the organization. (ISO 9001/AS9100) designation of responsibility for achieving objectives and targets at relevant functions and levels of the organization, and the means and time-frame by which they are to be achieved (ISO 14001) Yet most organizations fail to do this

14 There Is A Better Way: Hoshin Planning

7 Phase Hoshin Planning Process 15 PLANNING P Establish Organizational Vision Strategic Planning/ Develop 3-5 Year Breakthrough Objectives Self-Diagnosis Develop Annual Breakthrough Objectives and Catchball IMPLEMENTATION REVIEW A Root Cause Countermeasures Deploy Implement Initiatives Monthly Review Annual Review C D Critical Step

16 Nested Deming Cycles Plan Plan Act Do Plan Plan Act Manager 1 Do Check Act Do Act Exec Team Check Do Plan Plan Act Do Check Check Act Manager 2 Do Check Plan Check Act Do Check Front Line Teams

Catchball creates constant dialogue between the people doing the work at the 500 foot process level and management at a 25,000 foot process level to ensure that resources are provded, key performance indicators are being impacted, and Key activities and objectives are cascading down through the organization. Everyone is encouraged to think, engage with, and become a part of the improvement process versus being told this is how it will be. 17

18 Executive Team Round 1 Round 2 Here s where We re going Here s how we Would do it, Here what We need Here s where We re going Here s how we Would do it, Here what We need Managers

19 Managers Round 1 Round 2 Here s where We re going Here s how we Would do it, Here what We need Here s where We re going Here s how we Would do it, Here what We need Front Line Teams

20 Catchball addresses: Failure to create executable plans Failure to plan for obstacles, setbacks and resistance. Executives frequently fail to step up their regular communications throughout the process Executives tend to forget they need to remind their people why the change is necessary (or why goals are important) Failure to realign the resources necessary for the plan/change to succeed Lack of alignment Lack of commitment

The Process of Critical Thinking (PCT) 21 Step 1 : WHAT Breakthrough Thinking Step 2 : HOW FAR Annual Breakthroughs Step 3 : HOW Identify Key Driver Process Step 4 : HOW MUCH/ WHEN Determine Measures & Track Step 5 : WHO Identify Key Resources & Deploy

22 PCT Step 1 WHAT? World-Class Best-In-Class Industry Standard Breakthrough Objective GAP Current Situation Current Situation Breakthrough Thinking Leads us to World Class

23 PCT Step 2 - HOW FAR? Breakthrough Objective Annual BT Objectives Yr 3 Annual BT Objectives Yr 2 Annual BT Objectives Yr 1 Yr 2 Yr 1 Yr 3 Current Situation Identify First Year Breakthrough Objective

24 PCT Step 3 - HOW? Why? Why? Why? Why? Priority Why? Annual Breakthrough Objective GAP Current Situation Identify Key Driver Processes

25 PCT Step 4 - HOW MUCH/ WHEN? 100 0 Determine Measures & Track

PCT Step 5 - WHO? 26 100% Resource A 5% 100% Current Distribution Of Resources Team B Resource C 45% 20% Relative Impact On Resource D 15% Team E 15% 0% 0% Identify Key Resources & Deploy

27 Daily Management and Hoshin Planning Once Breakthrough is achieved process is standardized to Daily Management! Hoshin Planning Strategic Objective is Achieved! Hoshin Planning KAIZEN Foundation for HP Daily Mgmt Hoshin Planning KAIZEN Daily Mgmt KAIZEN Daily Mgmt Daily Mgmt Daily Mgmt Year 0 Year 1 Year 2 Year 3 Year 4

28 PCT & the Top Level HP Matrix HOW HOW FAR Annual Metrics Top Level All items are listed Annual Targets Breakthrough in Objectives priority order to Improve starting 3-5 Year from Breakthrough the center Objectives HOW MUCH WHO RESOURCES WHAT = Primary Responsibility = Secondary Responsibility OWNER

29 Complete Top Level HP Matrix Use dots to show relationship of to Annual Objectives 3- HOW Use dots to show relationship of Targets and Resources to the Priority 5- WHO 2- HOW FAR Annual Breakthrough Objectives Top Level 3-5 Year Breakthrough Objectives Targets to Improve NOTE: Only Solid dots on a resource deploy to the next level 1- WHAT 4- HOW MUCH RESOURCES = Primary Responsibility = Secondary Responsibility OWNER The whole picture of your company on one sheet of paper!

30 Linkage on the Matrix Dots show linkage from Target back to Breakthrough for that level Annual Breakthrough Objective Top Level 3-5 Year Breakthroughs Targets To Improve

31 Points to Remember about the Matrix As soon as a solid dot is placed above a resource, that resource will get a lower level matrix or an action plan. Clear circles indicate support resources. They do NOT get a lower level matrix or action plan unless they get a solid dot on another matrix. The dots are to be used as a sanity check The Priority is deployed to the lower level matrix or an action plan TOP LEVEL - Company Danaher Business System Office - Policy Deployment 1998 Annual Breakthrough Objectives Top Level 3-4 year Breakthrough Objectives Targets to Improve Resources Primary Responsibility m Secondary Responsibility SECOND LEVEL - Plant Second Level Policy Deployment Top Level Second Level Annual Breakthrough Objectives Targets to Improve RESOURCES Primary Responsibility m Secondary Responsibility

Transferring to the 2nd Level 32 Imp. and Annual Objectives are copied directly onto the 2 nd Level HP. Matrices. TOP LEVEL TOP LEVEL Policy Deployment 2004 Top Level Annual Target to Breakthrough Improve Objectives 3-5 Year Breakthrough Objectives Resources Primary Responsibility m Secondary Responsibility The 2 nd level 12 o clock and 3 o clock positions have all new text in them nothing is rotated into them from level 1. Typically, a 2 nd Level Matrix is created for a primary resource for each top-level Priority. SECOND LEVEL Second Level Policy Deployment Second Level Top Level Target to Improve Annual Breakthrough Objectives RESOURCES Primary Responsibility m Secondary Responsibility

Transferring To The 3rd Level 33 Top Level and Second Level Imp. are copied directly onto the 3 nd Level HP Matrices. SECOND LEVEL SECOND LEVEL Policy Deployment 2004 Second Level Top Level Target to Improve Annual Breakthrough Objectives Resources Primary Responsibility m Secondary Responsibility THIRD LEVEL THIRD Level Policy Deployment Not always suggesting you need 3 rd Level. Based on size, complexity, breadth, and maturity of organization. If necessary, a 3 rd Level Matrix is created for a primary resource for each secondlevel Priority. Third Level Second Level Target to Improve Top Level RESOURCES Primary Responsibility m Secondary Responsibility

34 Completing the Second Level PD Matrix Use dots to show relationships between and Annual Objectives 3- HOW Use dots to show relationship of Targets and Resources to the 5- WHO 2- HOW Top Level 2 nd Level Annual Breakthrough Objectives Targets to Improve Use dots as a check to make sure the & Targets meet the goal and support the Annual Breakthrough Objectives 1- HOW FAR 4- HOW MUCH/WHEN RESOURCES = Primary Responsibility = Secondary Responsibility OWNER

( P a st D ue i n R e d ) 35 Cascading to ACTION TOP LEVEL Company/Group Danaher Business System Office - Policy Deployment 1998 Top Level Target to Annual Improve Breakthrough Objectives 3-5 Year Breakthrough Objectives Resources Primary Responsibility m Secondary Responsibility SECOND LEVEL Plant/Business Second Level Policy Deployment Point of Impact - Action Plan The level where root causes are addressed! Action Plans can be initiated out of any matrix level. Second Level Top Level Target to Improve Annual Breakthrough Objectives Cascade as many times as necessary to the Root Cause Level RESOURCES Primary Responsibility m Secondary Responsibility ROOT CAUSE LEVEL- Sub Plant/Dept Second Level Policy Deployment Second Level Third Level Top Level Target to Improve POINT OF IMPACT - ACTION PLAN Engineer/Supv Priority Title: * Core Objective: * Policy Deployment Action Plan Department/Location: * Management Ow ner: * Timeline = Original Plan x = Progress at Review Planned 2003 Action Step/ Kaizen Events Ow ner (Lead is bold) Milestone Dates Jan Feb M ar Apr M ay June July Aug Sept Oct Nov Dec Date: * Review Team: * Next Review : * Environmental Situation Summary: * POINT OF IMPACT Target Status Impact RESOURCES Primary Responsibility m Secondary Responsibility

Creating Action Plans 36 Priority Title: * Hoshin Planning Action Plan Department/Location: * Management Ow ner: * Date: * Review Team: * Next Review : * Environmental Situation Summary: * Timeline Target Core Objective: * = Original Plan x = Progress at Review Planned 2004 Status Impact Action Step/ Kaizen Events Ow ner (Lead is bold) Milestone Dates Jan Feb M ar Apr M ay June July Aug Sept Oct Nov Dec ( P a st D ue i n R e d) Create an Action Plan For every Priority at the Point of Impact Step 4: Identify the impacts on the improvement priority and top level breakthrough objective Step 1: Determine actions & write on worksheets Step 2: Record ownership and timing of the actions Step 3: What is the current status of the action. Color code background as red to show items past due.

ction Steps Complete the Cause & Effect Chain 37 Breakthrough Objective: Attain competitive advantage in Delivery Performance Annual BT Objective #1: Streamline Engineer-to-Order Processes Top Level Priority: Use HOS Tools to improve value stream of Engineer-to-Order Process Effect = Results! Effect = Cause Second Level Priority: Implement Improved Order Entry Process Effect = Cause Action Step 1: VSM Customer Service Process Action Step 2: SW Kaizen to improve productivity by 35% Action Step 3: VRK to reduce Quote processing time by 50% POINT OF IMPACT POINT OF IMPACT POINT OF IMPACT Actions = Cause

Action Plans Drive The Rate Of 38 Priority Title: * Hoshin Planning Action Plan Department/Location: * Management Ow ner: * Date: * Review Team: * Next Review : * Environmental Situation Summary: * Timeline Target Core Objective: * = Original Plan x = Progress at Review Planned 2004 Status Impact Action Step/ Kaizen Events Ow ner (Lead is bold) Milestone Dates Jan Feb M ar Apr M ay June July Aug Sept Oct Nov Dec ( P a st D ue i n R e d) DASHBOARD/SCORECARD

Scorecards 39 Targets To Improve are entered in priority order JOP Jumping Off Point from which you started tracking the target YTD ACT Each month this field gets updated (is YTD from the monthly fields located to the right) Planned targets are established for each month based on the overall Target to Improve. An actual that is a miss from the plan, is color coded red

Increase Market Share to 60% Dev. Cycle to 120 Days by 12/95 Production Department Materials Department Engineering Department Marketing Department Sales Department Finance Department Human Resources Dept. Each Target is Copied to the Top Level Scorecard 40 Reduce New Prod. Dev. Cycle TOP LEVEL IMPROVEMENT PRIORITIES ANNUAL BT OBJECTIVES TARGET TO IMPROVE 3-5 YEAR BREAKTHROUGH OBJECTIVE RESOURCES = Primary Responsibility = Secondary Responsibility TOP LEVEL MATRIX TOP LEVEL SCORECARD CHART

41 Scorecards are Created for All HP Matrices TOP LEVEL Title Danaher Business System Office - Policy Deployment 1998 SCORECARD Top Level Annual Breakthrough Objectives Target s to Improve 3-5 year Breakthrough Objective Resources Primary Responsibility m Secondary Responsibility SECOND LEVEL Second Level Policy Deployment SCORECARD 2nd Level Top Level Targets to Improve Annual Breakthrough Objectives RESOURCES Primary Responsibility m Secondary Responsibility

The Review Process Ensure Plan and Learn 42 Execute To The Plan P Conduct Regular Reviews A D Execute to the plan and perform daily, weekly and monthly reviews of each action plan (Daily Mgt.) Reviews are designed to keep the Hoshin Plan on track Action owners don t come to be evaluated The intent is to present the results of self assessment C The review team provides focused assistance primarily around the owner s analytical process and preparation. What did you plan to do? (Plan) What did you actually achieve? (Do) How does actual vs. target compare (CHECK) Standardize what s working, implement countermeasures and/or plan again as required. (ACT)

43 Manage Daily Management Through Leadership Standard Work Embed the Hoshin Plans into Leadership Standard Work Make the Hoshin review process part of the daily, weekly and monthly audit process The key is to constantly monitor progress and drive accountability to the lowest level

Priority: Targets to Improve: Third Level HP Countermeasure Sheet Process and organization to grow Printos sales in textiles and ceramics Increase Printos valve/module sales in textiles & ceramics from $100k to $2,500k in 2003 44 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 2003 Plan 2003 Actual Plan 2003 Actual Run Chart JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2003 Plan $0 $20 $3 $65 $65 $123 $345 $397 $286 $333 $400 $453 2003 Actual $0 $21 $22 $61 $136 $164 $330 $350 $150 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% Pareto (the "Why" you missed) 0% 0% Delayed Delayed Evaluation Insufficient Kit Insufficient Delayed Sales Print Delayed Print Engine Evaluation Development Kit Sales Prospects Engine Delivery Development Prospects Delivery Percent % 45% 45% 35% 35% 20% 20% Problem Statement: $136k monthly miss is due to Delayed Evaluation Kit Development, Insufficient Sales Prospects and Delayed Print Engine Delivery. What Addressed Root Cause: Delayed Evaluation Kit Development Short-Term: Assign additional Engineer to complete evaluation kit development (delayed one month) in time for ITMA show. Long-Term: Update Tollgate process to include Engineering development for necessary targeted-vertical launch kits. Addressed Root Cause: Insufficient Sales Prospects Execute Sales Funnel Targets for UK 'T' Shirt outlet twice per week follow-up on Sales Funnel Targets with Sales Engineer. Addressed Root Cause: Delayed Print Engine Delivery Execute kanban re-sizing process for Printos at once per quarter frequency (currently twice-per-year which is not frequent enough for ramping production). Countermeasures Who Short-Term: MJF Long-Term: JBR DW/HW RZ/ MJF When Short-Term: 10/28/03 Long-Term: 12/15/03 10/15/03 10/22/03 How Much (Impact) $61 $48 $27

45 5 Why Analysis Systematic method to drive to the true root cause(s) of a problem Simply ask why in a step ladder approach until fundamental root cause is discovered. Root cause is not simply listing the symptoms of a problem Normally, after up to 5 steps, the true root cause(s) will be exposed

Action Plans vs. Countermeasures? 46 60 50 40 30 20 10 0 HP miss Plan Actual J F M A M J J A S O N D Inventory Reduction Plan Countermeasures are reactive they address how to get back to plan when a goal is missed for a period Jump Off Point (JOP) to stretch target Action Plans are proactive they address how to achieve a particular goal from the jump off point (JOP) to the stretch target

Monthly HP Review Agenda Format 47 Establish the Growth Agenda for Today s HP Review Financial Review Hoshin Planning - Road Blocks to Growth, Major Predetermined Topics - Established HP Growth Initiatives - New Product Development - Remaining HP Elements (Q, D,C) KPI s People/Org. Issues Other Business 5% 15% 60% 20%

48 Hoshin Planning Summary Aligns Strategy and Execution Systematically develops and links plans from organizational vision to operational tactics Ensures deep and common understanding and maximizes ownership and buy-in to plan Requires thoughtful, detailed planning for each and every improvement action Consistently assesses actual performance vs. plan and addresses issues and learns from the process All Employees are Engaged in the Process

49 Hoshin Planning addresses: Failure to create executable plans Failure to plan for obstacles, setbacks and resistance. Executives frequently fail to step up their regular communications throughout the process Executives tend to forget they need to remind their people why the change is necessary (or why goals are important) Failure to realign the resources necessary for the plan/change to succeed Lack of alignment Lack of commitment And, we always know, Who s Got The Ball

QUESTIONS? 50