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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

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StrategyStrategy

A formal strategy includes: Goals to be achieved Policies to guide or limit action Action sequences, or programs,

that accomplish the goals

“A strategy is a pattern or plan that integrates an organization’s major goals, policies, and action sequences into a cohesive whole.”

James Quinn

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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.

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Tasks Accomplished by Strategic Planning

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

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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

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Unexploited

Opportunities

Unarticulated

Needs

Served

Customer Type

Un-served

Articulated

Strategic Opportunities Hamel & Prahalad, Competing for the Future, HBP

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Leading PracticesLeading 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

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Strategic Planning ProcessStrategic Planning Process

Mission Vision Guiding Principles

Environmental assessment

Strategies

Strategic Objectives

Action Plans

Broad statements of direction

Capabilities and risks

Things to change or improve

Implementation

Reason for existence Future intent Attitudes and policies

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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”

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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.”

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Identifying Key Business Factors

Nature of products and services

Principal customers and market segments

Customer quality requirements

Competitive environment

Facilities, technologies, suppliers

Regulatory environment

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Order-Winners and Qualifiers

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.

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Policy Deployment (Hoshin Kanri)

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!See Figure 5.7!

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Key Steps in the Policy Deployment Cycle

1. Carry out self-assessment

2. Gather information on business environment

3. Determine each unit’s vision and priorities

4. Agree on metrics and targets

5. Develop plans

6. Agree on personal objectives

7. Monitor progress and review

8. Refine priorities and process

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Hoshin Kanri versus MBO

Hoshin Planning MBO

Focus on process Focus on results

Top down/bottom up Top down

Focus on how Focus on who

Goals and actions negotiated using facts and data

“Strong arm” tactics for goal delegation

Group-oriented Individualistic

Doesn’t need superstars Relies on superstars

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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

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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

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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