WINNING STRATEGIES PART 1 POLICY DEPLOYMENT Team B

WINNING STRATEGIES PART 1 - POLICY DEPLOYMENT Team B 3: 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 1962. 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 Must include TQM Element s of Hoshin Kanri Feedback Mechanisms Adapted from: Hutchins D. , (2008) Strategy, Policy, Benchmarkin g and Target Focus Established deployment implementati on process

Comparisons of other concepts and Hoshin Kanri HOSHIN KANRI MANAGEMENT BY OBJECTIVES BUSINESS PROCESS REENGINEERING Long Term Short term Radical Long Term FOCUS Process Targets Perform Strategy IMPLEMENTATIO N Prioritize Troubleshoot Make it work Prioritize MEASURES Realistic Incentives Growth Realistic/daily REVIEW Improvement Failure Renewal Updated COMMUNICATIO N Deployment of targets Job evaluation Tangible messages Deployment of targets FEEDBACK Top down and bottom-up Top – Down Multiple channels Operational and strategic VISION BALANCED SCORECARD Table adapted from: Tennant C. , Roberts P. , (2001) and Whitcher & Chau, 2007,

Advantages and Drawbacks of Hoshin Kanri Advantages of Hoshin Kanri Focuses on what is important. Shared vision communicated. Rigid implementation system. Long-term commitment. Objectives must be static over a 3 -5 year period. Involves and engages the organisation. Lack of understanding. Progress is monitored. Resistance to change. Continuous improvement of the strategic plan. Enables organisational 12 Manage (2011) learning. Drawbacks of Hoshin Kanri

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

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

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

Implementing Hoshin Kanri at Wave Riders …Applying theory practically.

Creating the Vision - SWOT Analysis STRENGTHS • Top 5 company. • Originated and established in the UK. • Highly experienced workforce. • Multi-design product (Military & Search and Rescue) OPPORTUNITIES • Opportunities in UK and European markets. • Increasing demand from leisure markets. • Possibility of repeat business from the military. WEAKNESSES • 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. THREATS • 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 These plans fit into the overall business plan… Tennant C. , Roberts P. , (2001)

Implementation Process – “Catchball” Hoshin Kanri is Wave Riders Strategic Plan implemented using Wave Riders Departmental the “Catchball” Plan Wave Riders process. Operational/Financial Departmental Plan Operational/Fin Involves Wave ancial Plan Riders Key communication at all value streams Programme levels of the Manageme nt organisation Departmental Key Initiatives Ensures Employee goals and commitment at all objectives levels through the Modelled on GE Healthcare’s Catchball Process. GE Tennant C. , & Roberts P. , (2001 b)

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 £ 250 k. 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 £ 150 k on capital expenditure.

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: 262269 Tennant C. and Roberts P. , (2001 b) “Hoshin Kanri: Implementing the Catchball Process!. Long Range Planning, Vol 34. Pages: 287 -308. 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: http: //nextlevel. gehealthcare. com/leadership-strategy/its-time-to-stop-danglingour-feet-in-lean-for-healthcare. php Last updated: 28/10/2010 Last accessed: 12/02/2011.