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 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 Strategy, Policy, Benchmarking and Target Focus Established deployment implementation process Feedback Mechanisms Must include TQM Adapted from: Hutchins D., (2008)

Comparisons of other concepts and Hoshin Kanri HOSHIN KANRIMANAGEMENT BY OBJECTIVES BUSINESS PROCESS REENGINEERING BALANCED SCORECARD VISION Long TermShort termRadical Long Term FOCUS ProcessTargetsPerform Strategy IMPLEMENTATION PrioritizeTroubleshootMake it work Prioritize MEASURES RealisticIncentivesGrowth Realistic/daily REVIEW ImprovementFailureRenewal Updated COMMUNICATION Deployment of targets Job evaluationTangible messages Deployment of targets FEEDBACK Top down and bottom-up Top – Down Multiple channels Operational and strategic Table adapted from: Tennant C., Roberts P., (2001) and Whitcher & Chau, 2007, 519

Advantages and Drawbacks 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.  Rigid implementation system.  Long-term commitment.  Objectives must be static over a 3-5 year period.  Lack of understanding.  Resistance to change. Advantages of Hoshin Kanri Drawbacks of Hoshin Kanri 12Manage (2011)

Management of Hoshin Kanri Drawbacks Lack of Understanding TrainingCommunication Leadership involvement and commitment Resistance to change Training Engagement and empowerment Robust strategy Rigid Implementation system Communication.Training. Long term Commitment Leadership commitment and involvement. Engagement of employees. Continued feedback and monitoring. Static objectives Robust objectives Manageable and achievable objectives. Drawbacks obtained from 12Manage (2011)

The Hoshin Kanri Planning Process Organisations’ current situation. Determine the future situation. Prioritise and Select action. What Needs to be done? Create the plan. Improve the vision. Deploy the plan. (“Catchball”) How do we make changes? Implement the plan. Review the plan. Annual Review. How did we do? Adapted from: Cowley M., Domb E., (1997) Do CheckAct Plan Do CheckAct Plan Do CheckAct Plan

Strategic Policy Deployment Overview Tennant C., and Roberts P. (2001)

…Applying the theory practically. Implementing Hoshin Kanri at Wave Riders

Creating the Vision - SWOT Analysis STRENGTHSWEAKNESSES Top 5 company. Originated and established in the UK. Highly experienced workforce. Multi-design product (Military & Search and Rescue) 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. OPPORTUNITIESTHREATS Opportunities in UK and European markets. Increasing demand from leisure markets. Possibility of repeat business from the military. 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

Operational and Financial Plan

An Example…

Policy Deployment Model Tennant C., Roberts P., (2001) These plans fit into the overall business plan…

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. Modelled on GE Healthcare’s Catchball Process. GE (2010) Departmental Operational/Fin ancial Plan Wave Riders Strategic Plan Wave Riders Operational/Financial Plan Wave Riders Key value streams Wave Riders Departmental Plan Departmental Key Initiatives Employee goals and objectives Programme Management Tennant C., & Roberts P., (2001b)

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:  Tennant C. and Roberts P., (2001b) “Hoshin Kanri: Implementing the Catchball Process!. Long Range Planning, Vol 34. Pages:  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: feet-in-lean-for-healthcare.php feet-in-lean-for-healthcare.php Last updated: 28/10/2010 Last accessed: 12/02/2011.