Strategic Planning in the Baldrige Criteria Examines how an organization develops strategic objectives and action plans. Also examined are how the chosen strategic objectives and action plans are deployed and how progress is measured. 2.1 Strategy Development a. Strategy Development Process b. Strategic Objectives 2.2 Strategy Deployment a. Action Plan Development and Deployment b. Performance Projection

Strategy “A strategy is a pattern or plan that integrates an organization’s major goals, policies, and action sequences into a cohesive whole.” James Quinn A formal strategy includes: Goals to be achieved Policies to guide or limit action Action sequences, or programs, that accomplish the goals Do the “point north” thing

Characteristics of an Effective Strategy – S. C. Wheelwright It is driven by customer wants and needs. It makes a significant contribution to the success of the business. It matches the organization’s unique resources with opportunities in the environment. It is durable and difficult for competitors to copy. It provides a basis for further improvement. It provides direction and motivation to the entire organization.

Tasks Accomplished by Strategic Planning Understand important customer and operational requirements Optimize use of resources and ensure bridging between short-term and longer-term requirements Ensure that quality initiatives are understood at all organizational levels Ensure that organizations and structures will facilitate accomplishment of strategic plan

Consideration in Strategic Planning Strives for breakthrough thinking Has a clear process Be on-going Addresses unique characteristics in each market segment Understand the role in the value chain Has a well-defined process for continuous improvement in strategic planning

Strategic Opportunities Hamel & Prahalad, Competing for the Future, HBP Unexploited Unarticulated Needs Opportunities Articulated Un-served Served Customer Type

Leading Practices Active participation of top management, employees, key customers and suppliers Systematic planning systems for strategy development and deployment, including measurement, feedback, and review Use of a variety of external and internal data Align short-term action plans with long-term objectives, communicate them, and track progress

Strategic Planning Process Reason for existence Future intent Attitudes and policies Mission Vision Guiding Principles Environmental assessment Capabilities and risks Broad statements of direction Strategies Strategic Objectives Things to change or improve Action Plans Implementation

Vision Where the organization is headed and what it intends to be Brief and memorable - grab attention Inspiring and challenging - creates excitement Descriptive of an ideal state - provides guidance Appealing to all stakeholders - employees can identify with Solectron: “Be the best and continuously improve”

Mission Definition of products and services, markets, customer needs, and distinctive competencies Solectron: “…to provide worldwide responsiveness to our customers by offering the highest quality, lowest total cost, customized, integrated, design, supply chain, and manufacturing solutions through long-term partnerships based on integrity and ethical business practices.”

Identifying Key Business Factors Nature of products and services Principal customers and market segments Customer quality requirements Competitive environment Facilities, technologies, suppliers Regulatory environment

Order-Winners and Qualifiers Those criteria that an organization must meet for a customer to even consider as a possible supplier. However, providing or attaining these criteria do not win orders. Order-winners Those criteria that win an order.

Policy Deployment (Hoshin Kanri) Top management vision leading to long-term objectives Structured deployment through annual objectives and action plans Negotiation for short-term objectives and resources (catchball) Periodic reviews See Figure 5.7!

Key Steps in the Policy Deployment Cycle Carry out self-assessment Gather information on business environment Determine each unit’s vision and priorities Agree on metrics and targets Develop plans Agree on personal objectives Monitor progress and review Refine priorities and process

Hoshin Kanri versus MBO

Seven Management and Planning Tools ( 1 of 3) Affinity diagram To determine and organize a large number of ideas, options, and facts related to a problem or subject Interrelationship digraph To explore and determine cause-and-effect relationships among related ideas

Seven Management and Planning Tools (2 of 3) Tree diagram To map out the paths and tasks to complete a project or reach a goal Matrix diagram To graphically display relationships between ideas, activities, etc. and to determine if there are missing pieces

Seven Management and Planning Tools (3 of 3) Matrix data analysis To compare alternatives using multiple criteria Process decision program chart To map out all the possible situations to a problem or action Arrow diagram To establish precedent relationships among tasks