Align Strategy and Execution
When it comes to assessing market conditions and internal capabilities, I’ve found that most business leaders have a fairly clear understanding of the strengths, weaknesses, opportunities and threats. From a strategy standpoint they know what they need to do to keep moving forward and grow their businesses. Execution is where their strategic planning efforts fail.
No organization can afford to waste energy and resources on efforts that do not support its strategic vision and objectives. Strategy deployment (also known as policy deployment, hoshin planning or hoshin kanri) is a process for focusing a company’s limited resources on the critical few objectives and projects that will improve execution and drive above average growth.
Strategy deployment:
- Gives everyone involved in the process equal input into the desired outcomes.
- Ensures that the necessary buy-in and resources exist before the strategic plan is implemented.
- Demands relentless accountability and follow-up to achieve objectives.
- Delivers results aligned with leadership’s vision for growth.
The Power of Alignment: How Strategy Deployment Works
The strategy deployment process begins with the strategy and vision, SWOT analysis, leadership alignment, and the creation of a strategic plan. The second phase translates that plan into specific objectives and projects, eliminates unfocused activity, and establishes mechanisms for monitoring progress and instituting countermeasures.
Step 1 – Build a Common Understanding of the Facts
Everyone directly involved in identifying strategies and executing plans should share the same information. They should have a common understanding of the external and internal environment, short- and long-term goals, and strategic direction.
Step 2 – Review Strengths, Weaknesses, Opportunities, and Threats (SWOT)
The goal of the SWOT analysis is to identify those significant, vital few issues the organization must address. Strengths and weaknesses are assessed from an internal focus against customer expectations. Opportunities and threats are assessed from an external perspective.
Step 3 – Develop Directional Alignment
Leadership must align the strategic direction of the organization with the revelations that emerge from the SWOT analysis. The strategic directional matrix emerges from the consideration of two primary dimensions – technology/products and markets/channels – to expose new and related opportunities.
Step 4 – Outline the Strategic Plan
The strategic planning team then uses the SWOT analysis and strategic directional matrix to outline a three- to five-year strategic plan that identifies quantitative goals in four specific areas:
- Quality/customer satisfaction
- Productivity/cost reduction
- Delivery/responsiveness
- Morale/ergonomics/safety.
Step 5 – Create the Strategy Deployment Matrix
On a single page the policy deployment matrix captures business objectives, projects, goals, financial impact, and implementation responsibility for the organization and for individual business units. These will be reviewed monthly throughout the year to ensure that the strategic objectives are being met.
Step 6 – Choose the Vital Few and Deselect Aggressively
The purpose of this step is to select the vital few breakthrough initiatives that will have a major impact on the company and deselect those that won’t. Breakthrough initiatives will focus on growth in sales and market share, earnings and asset leverage, over and above maintaining the current business trajectory.
Step 7 – Track and Review Performance
As the name implies, the crux of strategy deployment is making sure projects are on track and that actions are taken in a timely manner to achieve the business objectives. This is done through weekly team progress meetings, and monthly project reviews by senior management. Each month the executive team reviews the projects that have failed to hit targeted milestones and devises and implements countermeasures.
Strategy deployment has been used successfully by high-performing organizations in a wide variety of industrial sectors to accelerate improvements and speed past the competition. This is the power of alignment when everyone in your company is working on activities that are central to the growth and success of your company.