Friday, January 26, 2018

Create Clear Company Visions through Cascading Policy Deployment

By: Chuck Werner

“Lost but making good time” is never a positive situation for an organization, despite its comedic origins. Unfortunately, companies of all sizes suffer the impacts of this condition. The team might be working hard on activities that will not drive the bottom line. Or, worse yet, working on the most important initiative within the company and not know it. Studies indicate that somewhere between 85 and 95% of employees have goals they are not aware of, do not understand or that are not aligned with the goals of their organization. These poorly identified goals can have negative impacts on performance at all levels of the business.

Foggy Visions: Disjointed Policy Deployment
At the individual level, workers might have expectations that conflict with the overall strategy of the organization, leading to dissatisfaction and turnover. A lack of goal alignment throughout the business can cause employees to perceive priorities from above as intruding upon their individual goals. These seemingly impeding priorities may be completely in line with the overall direction of the business, but individuals are unaware of this due to poor communication and skewed priorities.

Among departments, misaligned goals create divisiveness and resistance to working as a team. This occurs when each team or department comes up with their own definition of success, which might not all connect to the overall strategy of the company. This makes it difficult for team members to recognize the priority of an objective not set by their own group. Additionally, the teams move at a much slower pace as all decisions become centralized, deferring them to a supervisor or departmental manager for prioritization and authorization.

What happens at the company level? Simply put, the business does not execute its strategy, missing out on opportunities for profit, growth and success. There is a direct correlation between a company’s performance and an effective business policy deployment. Sometimes it really is about the destination. If you doubt that, try jumping in a taxi and giving the order to “just drive.” You either won’t get anywhere, or if you do, it won’t be where you wanted to go, and it will cost you a lot of money. The same holds true for a company. If an organization’s leaders are not clear about their vision, departmental managers will not understand their tasks and employees will have misplaced focus, so the company will not get where it wants to go.

Policy Must Cascade
For an individual to be effective, it is important that they understand their goals and objectives and know how their success will be measured. For an organization to be effective, it must establish a line of sight, where each team member is able to explain how their work is contributing to the vision and mission of the organization. When a line of sight exists, the organization can achieve a level of synchronicity, which allows each of the parts to operate in a more autonomous manner, assured that they are in line with the direction of the whole company.

The best way to achieve this synchronous operation is by using a cascading policy deployment. As the term “cascading” implies, each successive level of the policy deployment plan is created by better defining the level above it. This entire process involves a number of steps, including the creation of a vision, mission, strategy, objectives, goals and managing performance.

The deployment begins with creating a vision statement. There is some conjecture on whether vision or mission comes first, but think of it like this: the vision statement is what the organization desires as an end-state, while the mission statement addresses the question of how to get there. For example, if you were planning to go on a trip, you could not select the mode of travel until you have first chosen a destination.

Typically, the vision, mission and strategy are all determined by top management, or ownership, of the company. As the deployment progresses from strategy to objectives, other employees will need to be included in the process. Department managers or subject matter experts should be brought in as they can provide important details, such as specific activities to be involved and required levels of performance, as well as costs associated with achieving both.

Achieving Synchronicity: A Case Study
To better understand how this policy deployment is carried out, consider the following case: The new owner of a hotel determines their target market is tourists visiting the local area. With that in mind, her vision is for her business to be the pleasure traveler’s first choice in local hotels. The owner then meets with her leadership team to share her vision. At the meeting, the team creates their mission statement, which is to provide a drama-free experience so guests can enjoy a stress-free stay.

During business planning sessions, the managers work to define and measure “drama-free.” Drama, to them, translates to complaints. To analyze this, they have two sources of data available: internet commentaries on their website, and surveys collected from customers. They find that their historic rating average is 3.5 out of a possible score of 5. While this is better than the average, it is not sufficient to be the first choice of hotels. To be preferred, they need to be at least higher than the scores of their competitors. Benchmarking data shows a few of their competitors routinely score around a 4.0 rating. This shapes the hotel’s strategy.

In analyzing the customer satisfaction surveys to see what impacts responses, they discover a main contributor is rooms not being ready at check-in time. Meeting with the front desk, housekeeping and maintenance departments, the cross-functional group determines why rooms are not ready at check-in time. Based on data collected and knowledge of the team members, most occurrences of rooms not being ready occur at peak volume transitions going into the weekend. Although it is now up to the housekeeping department to improve this situation and achieve the objective, all departments are aware of its importance and understand they may need to subordinate their own goals or supply resources to ensure it is ultimately achieved.

The housekeeping manager now has responsibility for several activities. First, he needs to determine an acceptable amount of time in which to successfully prepare a room during peak transition times. In this case, the desired time is 20 minutes. A resource and budget plan must be established to ensure the objective can be met. Finally, a method of tracking the goal (metric) of time taken to clean a room must be implemented. Once these are all in place, the time to clean each room can be tracked, and barriers to meeting the goal can be identified and eliminated.

With cascading business policy deployment, the members of the housekeeping team now all understand that a room must be cleaned within 20 minutes. This ensures that all rooms are ready by check-in times. Customer satisfaction can then be maximized, ensuring a customer satisfaction score of above 4.0 and keeping the customer’s experience drama-free. This success will contribute to making their hotel the pleasure traveler’s first choice in local hotels, achieving their ultimate vision.

When mapped out, the entire process looks a little like this:

There are various methods of policy deployment used by companies today, with Hoshin-Kanri and True North probably being the two most famous examples. Whether you use these approaches, or simply follow a line-of-sight methodology, the benefits of using cascading policy deployment can be seen in all levels of a company. Whichever method you choose, alignment of purpose throughout the entire organization is key to making your vision a reality.


MEET OUR EXPERT
Chuck Werner
Lean Program Manager

Chuck has been a Lean Program Manager at The Center since 2016. His areas of expertise are in Lean, Six Sigma and Quality. Chuck has devoted many years to practicing Six Sigma methods, ultimately earning a Six Sigma Master Black Belt in 2011. He is passionate about helping small and medium-sized manufacturers become more prosperous using a variety of tools and methods gathered from over 27 years of experience. Additionally, Chuck is a certified ISO/QS9000 Lead Assessor, Training Within Industry (TWI) Master Trainer and is certified in OSHA Compliance and Accident Reduction.



Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.

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