CHAPTER 5
Strategic Focus for Performance Excellence 2
CHAPTER 4Strategic Focus for Performance ExcellenceTeaching
NotesThis chapter centers on strategic management as the basis of
all managerial activities relating to total quality management.
While leadership is acknowledged as the "driver" for an effective
TQ focus, this chapter focuses on the planning process, while
leaving the details of leadership theory to be addressed in Chapter
9. Strategic planning and management have become more important in
organizations that aspire to high quality levels, so leaders must
understand how to "deploy" plans and quality efforts throughout the
organization.
One of the key functions of strategic focus is to provide
alignment of quality goals and plans with the overall strategy of
the firm. Poor deployment of quality can generally be traced back
to poor strategy development and alignment. The internal
environment of the organization must also develop and encourage
alignment, as well as the focus on doing quality at the grassroots
level.
Students should be encouraged to focus on what to do, how to do
it, when to do it, and how strategic leadership must actively be
involved in doing it as they look at strategic quality planning and
management. The Baldrige Criteria provide a frame of reference for
assessing organizational effectiveness and for benchmarking
strategic planning. Key objectives for this chapter should
include:
To define strategy as the pattern of decisions that determines
and reveals a companys goals, policies, and plans to meet the needs
of its stakeholders. Strategic planning is the process of
envisioning the organizations future and developing the necessary
goals, objectives, and action plans to achieve that future.
To develop the process and content of planning for quality in
organizations. Steps in strategy formulation begin with determining
the organization's mission, vision, and guiding principles. These
lead to strategies, strategic objectives, and action plans that set
the direction for achieving the mission.
To emphasize the critical role of strategic leadership in
strategic management.
To become aware that key practices for effective strategic
planning include active participation by both top management and
lower-level employees, a strong customer focus, supplier
involvement, and well-established measurement and feedback
systems.
To learn that deploying strategy effectively is often done
through a process called hoshin kanri, or policy deployment, that
emphasizes organization-wide planning and setting of priorities,
providing resources to meet objectives, and measuring performance
as a basis for improving it and is essentially a total quality
approach to executing strategy.
To understand how the seven management and planning tools can
help managers to implement policy deployment and are useful in
other areas of quality planning.
To learn that the strategic planning process is fundamental to
the Baldrige criteria, ISO 9000:2000, and Six Sigma. Although the
relative emphasis varies, each of these frameworks views strategic
planning and deployment as a critical means of focusing the
organization, successfully implementing an effective quality
management system, and ensuring that longer-term directions are
achieved.
The Instructors Resource materials found on the website, have a
number of Baldrige video clips which give an inside view of
organizations that have received the Baldrige award. One of those,
featuring Baldrige award recipient, Texas Nameplate Corporation,
has a number of scenes that show how a small business can exemplify
world-class strategic planning and leadership principles. These can
be used to supplement the numerous examples of many of the Baldrige
winners that we provide in the text. It can also put faces to some
of the names that are mentioned, such as Dale Crownover, CEO of
Texas Nameplate.ANSWERS TO QUALITY IN PRACTICE KEY
ISSUESIntegrating Six Sigma with Strategic Planning at Cigna1.
Cigna has five strategic imperatives:
a. Establish a meaningful cost advantage relative to the
competition.
b. Help improve the health and well-being of members and the
people Cigna insures.
c. Bring innovative products and services to market.
d. Become the partner of choice to its customers.
e. Create a winning environment in the organization.
Six Sigma can and does help meet these strategic imperatives.
Cignas Holistic Six Sigma Model shows how Six Sigma is being used
to help it address its five strategic imperatives. Their approach
appears to be consistent with the discussion of Six Sigma and
competitive strategy at the end of this chapter. Six Sigma is a way
to turn performance improvement needs into reality. To be
effective, it must be integrated into strategic planning processes.
In Cigna, their Holistic Six Sigma Model corresponds to the three
levels of strategy: corporate, strategic business unit (SBU), and
competitive (tactical). At the corporate strategy level, the
question of How do we, as an organization, grow? is partially
answered by using Six Sigma methodology to define which areas of
improvement to pursue. At the SBU or divisional level, the
strategic question of: Where does the organization focus its
resources to enhance its value offering? is addressed by metrics
for QA, standard operating procedures, and change management.
Finally, at the tactical level, where competitive strategy focuses
on value enhancement the questions of: Where are the organizations
best opportunities for widening a value advantage or closing a
disadvantage? On what basis does the organization widen or close
the value gap? How does the organization get its best return on
investment for these efforts? are answered by carrying out specific
projects or events using DMAIC, DFSS, and Kaizen and other Six
Sigma tools. These tools of are particularly effective for
improving business processes. The challenge lies in directing those
tools toward improvements that will have a direct impact on value
gaps. That requires aligning Six Sigma with the organizations
competitive strategy. 2. Some Six Sigma projects that might support
the objectives could include: 1) cost reduction projects in areas
such as underwriting or claims handling, in order to establish a
meaningful cost advantage relative to the competition.; 2) health
improvement projects to improve the health and well-being of
members and the people Cigna insures; 3) product development in
order to bring innovative products and services to market; 4)
improve P.R. in order to become the partner of choice to its
customers; 5) communication, training, and celebration of successes
within Cigna to help develop a winning environment.Strategic
Planning at Branch Smith Printing Division
1. Branch-Smiths strategic planning process (SPP) is unique in
several ways. First, it is unusual to find such a comprehensive
planning process in a small business. Second, they have been
especially careful to include monthly tracking and updates to
permit them to proactively respond to opportunities and risks.
Although the company covers the key stages of the strategic
planning process presented in the chapter environmental assessment,
strategies, strategic objectives, and action plans they have
tailored the process to their organization. Note that they have
three steps in their model before doing their business analysis,
which is equivalent to environmental assessment. These three steps
in Branch-Smiths process focus on the prior years performance and
lessons learned, before moving on to new and revised plans. They
also take partner capabilities into account in their business
analysis. In steps 5-8 the plan is updated and action plans in the
form of cascaded deployment and budget are incorporated. Step 8 is
ongoing review on a monthly basis, mentioned above.
2. Branch-Smiths strategic challenges revolve around the
competitiveness of the industry. The company competes on its
ability to service customers needing high quality, short run, quick
turnaround orders. To cost-effectively serve their niche, they use
appropriate technology and management of customer and partner
relationships. Objective 1 points at the need for effective process
improvement and healthy supplier relationships in order to enhance
financial performance. Objective 2 reinforces their customer focus
and their goal to become the partner of choice to their customers.
Objective 3 points to the key role of employees as internal
partners and the goal to become the employer of choice in their
region by providing the same quality environment to coworkers as we
extend to our customers. To achieve these goals, Branch-Smith
should (and generally does) provide for deployment through
specific, cascaded activities such as continuous process
improvement, customer relationship planning, employee involvement
and empowerment, customer and employee surveys, etc.
ANSWERS TO REVIEW QUESTIONS1.Strategy is the pattern of
decisions that determines and reveals a companys goals, policies,
and plans to meet the needs of its stakeholders. Strategic planning
is the process of envisioning the organizations future and
developing the necessary goals, objectives, and action plans to
achieve that future.
Thus, a strategy provides a roadmap to achieve a vision of what
the organization should and could be three, five, or more years in
the future. A good strategy should build a competitive posture that
is so strong in selective ways that the organization can achieve
its goals despite unforeseeable external forces.
Making it happen is the essence of strategic planning, which
generally requires strong, participative strategic leadership.
Formal strategies contain three elements:
a. Goals to be achieved.
b. Policies that guide or limit action.
c. Action sequences, or programs, that accomplish the goals.
2. The key practices for a strategic focus on performance
excellence include:
Understand the organizations operating environment and its key
relationships with customers, suppliers, partners, and
stakeholders.
Understand the competitive environment, the principal factors
that determine success, the organizations core competencies, and
strategic challenges business, operational, and human
resource-related associated with organizational sustainability.
Gather and analyze relevant data and information pertaining to
such factors as the organizations strengths, weaknesses,
opportunities, and threats; emerging trends in technology, markets,
customer preferences, competitions, and the regulatory environment;
long-term organizational sustainability; and the ability to execute
strategic plans.
Develop and refine a systematic approach for conducting
strategic planning and setting strategic objectives, including
identifying blind spots, leveraging strengths, and addressing
challenges over appropriate time horizons.
Develop and align short-term action plans with long-term
strategic objectives, ensure adequate resources and the ability to
sustain outcomes, assess financial and other risks associated with
the plans, and communicate them throughout the organization.
Derive human resource plans required to accomplish longer-term
strategic objectives and shorter-term action plans that address the
potential impacts on the workforce and potential changes to
workforce capability and capacity needs.
Identify key measures or indicators for tracking progress on
action plans, ensure that the measurement system reinforces
organizational alignment, and project performance of these key
measures compared with competitors or comparable organizations to
identify gaps and opportunities.
Determine the organizations core competencies, and understand
how they relate to the mission, competitive environment, and
strategic objectives.
View the work performed within the organization as a system, and
make rational decisions about the mix of internal and external work
processes that can best achieve the organizations mission.
3. Strategic leadership can be defined as a person's ability to
anticipate, envision, maintain flexibility, think strategically,
and work with others to initiate changes that will create a viable
future for the organization, and its competitive advantage to the
organization in this way. Strategic leaders must be actively
involved in creating and communicating a vision of the future,
sustaining an effective organization culture, making strategic
decisions, developing key competencies and responsibilities,
managing multiple constituencies, selecting and developing the next
generation of leaders, and infusing ethical value systems into an
organizations culture. Effective strategic leaders also have the
capability to create and maintain absorptive capacity (the ability
for an organization to learn) and adaptive capacity (the ability of
an organization to change) in order to deal with increasingly
hyper-turbulent environments. They must also exhibit managerial
wisdom, with the ability to perceive variation in their environment
and understand the social actors and their relationship in the
system.
4.The Baldrige Organizational Profile provides a frame of
reference to help an organization better understand the internal
and external factors that shape its operating environment, the key
requirements for current and future business success and
organizational sustainability; and the needs, opportunities, and
constraints placed on the organizations performance management
system.
Information is sought and classified into two principle
categories, including: 1) organization description, with
sub-categories of organization environment and organization
relationships; and 2) organization situation with sub-categories of
competitive environment, strategic context, and performance
improvement system.
The value to the organization is that by understanding these
factors, it can better focus strategic thinking within the
organization. Thus, knowing an organizations strengths,
vulnerabilities, and opportunities for both improvement and growth
helps to identify those products, service and program offerings,
processes, competencies, and performance attributes that are
unique; and that set it apart from other organizations. Those
strengths can help to sustain a competitive advantage.5.The steps
in the strategic planning process are shown in such examples as
Eastman Chemical Company (Figure 4.1) and Park Place Lexus (Figure
4.2). Once the company's mission, vision, and guiding principles
have been determined, the organization must assess the gap as to
where it is now, and where it wants to be as described in its
vision. Using this assessment, it must then develop goals,
strategies, and objectives that will enable it to bridge this
gap.
Key business factors include:
the nature of a company's products and services, its principal
customers, major markets, and key customer quality requirements
position in market and competitive environment
facilities and technologies
suppliers
other factors, such as the regulatory environment, industry
changes, etc.
Strategic plans must be consistent with the important business
factors of the company. For example, plans for a company in a
highly competitive, fast-changing market might include fast cycle
time and more attention to understanding emerging customer needs
than plans for a company with a low-cost focus on a mature
market.
6.The purpose, or mission, of the organization is a statement of
"why the organization is in business." In the past, the purpose of
the organization was frequently stated in terms of products or
services produced or profitability to stockholders. TQ-focused
firms are now stating their purpose in terms of their customer
focus and their commitment to strive for higher levels of
quality.
The vision statement is a statement of guiding values,
principles, and direction of expected growth of an organization or
some segment of it, and is generally developed by key managers and
others who are responsible for planning and carrying out that
vision. Vision statements may be developed at any level within the
organizational hierarchy from top to bottom. This is a very
worthwhile activity, as long as the statements are coordinated so
as to fit with those of the next higher level and the overall
organization's vision.
Values, or guiding principles, guide the journey to that vision
by defining attitudes and policies for all employees, which are
reinforced through conscious and subconscious behavior at all
levels of the organization. The mission, vision, and guiding
principles serve as the foundation for strategic planning. Top
management and others who lead, especially the CEO, must articulate
them. They also have to be transmitted, practiced, and reinforced
through symbolic and real action before they become "real" to the
employees, and the people, groups, and organizations in the
external environment that do business with the firm.
7.Hoshin kanri, known as policy deployment or management by
planning in the U.S.A., is the Japanese process of deploying
management strategy. Various companies have various definitions for
policy deployment. In all cases, it emphasizes organization-wide
planning and setting of priorities, provides resources to meet
objectives, and measures performance as a basis for improving
performance. Essentially, it is a TQ-based approach to executing a
strategy. (See Figure 5.5 in the text).8.Catchball is the term for
the negotiating process used within an organization to determine
long- and short-term quality objectives. Leaders communicate
mid-term objectives and measures to middle managers who develop
short-term objectives and recommend necessary resources, targets,
and roles/responsibilities. Catchball is not an autocratic,
top-down management style. It marshals the collective expertise of
the whole organization and results in realistic and achievable
objectives that do not conflict.
Policy deployment is a planning and implementation method that
ties improvement activities to long-term strategies of the
organization. It is driven by data, supported by documentation,
emphasizes company-wide planning, and includes setting of
priorities for improvement. It is somewhat similar to MBO, but has
a different focus. First, MBO focuses on the performance of the
individual employee, while policy deployment focuses on the
organization as a whole. Objectives in MBO are tied to performance
evaluation and rewards. Second, MBO objectives do not support the
company's objectives, but are set independently. Third, the focus
of MBO is as a control mechanism between supervisors and
subordinates. Fourth, MBO objectives usually are not emphasized in
daily work, but are brought out only at performance review
time.
9.The seven management and planning tools described in this
chapter include:
1. Affinity diagrams--This is a tool for organizing a large
number of ideas, opinions, and facts relating to a broad problem or
subject area, i.e. a vision statement.
2. Interrelationship digraphs--Identifies and explores casual
relationships among related concepts or ideas. It shows that every
idea can be logically linked with more than one idea at a time, and
allows for "lateral thinking" rather than "linear thinking."
3. Tree diagram--Maps out the paths and tasks necessary to
complete a specific project or reach a specified goal.
4. Matrix diagrams--These are "spreadsheets" that graphically
display relationships between ideas, activities, or other
dimensions in such a way as to provide logical connecting points
between each item.
5. Matrix data analysis--Takes data and arranges it to display
quantitative relationships among variables to make them more easily
understood and analyzed.
6. Process decision program chart--A method for mapping out
every conceivable event and contingency that can occur when moving
from a problem statement to possible solutions.
7. Arrow diagrams-- Arrow diagrams are another name for PERT/CPM
project planning diagrams. Students who have had a basic operations
management course may be familiar with the term network diagrams
for project planning and scheduling.
10.Key contextual factors that affect organizational structure
include:
Company organizational and organizational guidelines
Management style
Customer influences
Company size
Diversity and complexity of product line
Stability of product line
Financial stability
Availability of personnel
The implications for quality are that the quality philosophy,
systems, procedures, and people must be aligned with the
organization structure and vice-versa. It has been said that
structure follows strategy, so, the quality strategy will ideally
drive the development of a structure in order to carry it out. In
reality, structures that have been in place for a long time are
often difficult to change when the strategy changes, which creates
significant misalignment and organizational stress. For example,
when a highly regulated industry, such as telecommunications or
electric power is deregulated, then the need for customer focus,
increased service quality, and organizational structural change
becomes painfully apparent, but difficult to accomplish.
11.Many variations of organization structure exist, but they are
commonly based on one of the following three forms: 1) line
organization, 2) line and staff organization, or 3) matrix
organization forms. The line organization is a simple form that is
most successful in small firms. It is not generally used in large
organizations, where the line and staff structure is most
prevalent. Neither the pure line organization nor line and staff
organization works very well where the environment of the firm and
its industry is changing very rapidly. That is because these types
of organizations tend to be rigidly structured. The matrix
organizational form is better suited to rapidly changing
environments, but it is more difficult to develop effective control
of outcomes in order to meet goals using this form of
organization.
12.TQ focused organizations are often taking a process view of
organization. Therefore, they are increasingly structuring their
organization around functional or cross-functional teams. To carry
out the work, high performance teams that focus on core processes,
quality improvement or other targets are often formed. These are
frequently coordinated through cross-functional coordinating
committees, management (or quality management) councils, etc. to
overcome the problems of lack of control and accountability
inherent in such matrix-form organizations.
13. Core competencies are an organizations areas of greatest
expertise that provide a sustainable competitive advantage in the
marketplace or service environment. A core competency should meet
three conditions: a. contribute significantly to customer
benefits
b. provides access to many products and markets
c. be difficult for competitors to imitate
Core competencies may involve technology expertise, unique
service offerings, a marketplace niche, or a particular business
acumen (e.g., business acquisitions). Some examples of core
competencies might be quality and productivity practices (e.g.,
Toyota), superior customer relationship management (e.g.
Nordstroms), innovation in design and new product development
(e.g., Apple), supply chain management (e.g., Dell), or
marketing/branding expertise (e.g., Procter & Gamble). An
organization needs to understand its core competencies and how they
support the organizations mission, enable it to compete against its
competitors, and help drive strategic objectives and action
plans.
14. Work systems coordinate the internal work processes and the
external resources necessary to develop, produce, and deliver
products and services to customers and to succeed in marketplace.
Work systems involve the workforce, key suppliers and partners,
contractors, collaborators, and other components of the supply
chain needed to produce and deliver products, services, and
business and support processes. Decisions about work systems are
strategic. These decisions involve protecting and capitalizing on
core competencies and deciding what should be procured or produced
outside the organization in order to be efficient and sustainable
in the marketplace.
Outsourcing is the practice of transferring the operations of a
business function to an outside supplier and may be done through
offshoring, in which the outsourced function is relegated to
foreign shores. The opposite of outsourcing is vertical
integration, by which certain business functions are acquired and
consolidated within a firm. The decision to outsource or vertically
integrate should be examined relative to all factors that can
affect organizational performance. In many cases, the decision is
based solely on costs without considering the impact on other
business priorities such as quality and customer satisfaction or
risks associated with protecting intellectual property. Because
outsourcing can have significant impacts on an organizations work
system effectiveness, it must be dealt with
strategically.15.Category 2 of the Baldrige Criteria is Strategic
Planning. It focuses on drivers of customer satisfaction, customer
retention, and market share that lead to higher competitiveness,
profitability, and business success. The category is divided into
two sections, labeled as Strategy Development and Strategy
Deployment. Strategy Development requires applicants to outline how
they create a view of the future that takes into account the market
factors in which they compete and the process of how they compete.
Strategy Deployment seeks information about specific action plans
that a company develops, how they are deployed, and a projection of
performance. The Strategic Planning category requirements are
intended to encourage strategic thinking and action, but do not
imply that formalized plans or planning systems must be
developed.
Strategic planning is not addressed as broadly in ISO 9000 as it
is in the Baldrige criteria, but the standards do require that top
management ensure that quality objectives are established at
relevant functions and levels within the organization, that they be
measurable and consistent with the quality policy, that planning be
carried out in order to meet quality system requirements and the
quality objectives, and that the integrity of the quality
management system is maintained when changes are planned and
implemented.
Strategic leadership is one of the most fundamental values of
Six Sigma. Driving organizational change to create and sustain a
Six Sigma culture simply cannot be done without strong leadership.
In other words, Six Sigma cannot be an add-on or a flavor of the
month. It must become the way business is done in organizations
that adopt it. Leaders in Twenty-first Century organizations are
finding that not only must they move from hierarchically structured
organizations to learning organizations, but also they must then
take the next step of moving from learning organizations to
teaching organizations.
ANSWERS TO DISCUSSION QUESTIONS1. The Johnson and Johnson credo
serves as a reminder to every employee of their ultimate
responsibility to their direct customers (doctors and nurses, for
many products) and the ultimate consumer -- patients, mothers, and
fathers, for their product quality. In its leadership approaches,
J&J would have to ensure that managers (leaders) "walk the
talk" of the importance of quality. In addition, it would have to
set up a strategic planning process to perform the 5 steps in the
process developed in question 8, above, in order to be a world
class competitor in quality and product safety. Students should be
encouraged to research the actions that J&J took during the
Tylenol product tampering case of the 1980s, which has become a
classic case study on how to handle a product recall where the
integrity of the product has been compromised. This situation
showed that J&J did not just pay lip service to its credo.
2. The mission statement of an organization should define the
reason for its existence and answers the question "Why are we in
business?" The mission statement should address the anticipated
quality that the organization will strive to attain, how it plans
to reach it, and how it will behave toward its publics during the
journey.
It is difficult to see how any of the mission statements, except
possibly the last one, would inspire employees or customers to
loyalty or long-term commitments to the company or its products.
Most of the statements appear to be generic and might be applied to
all of the companies in an industry, or even to several
industries.
3. a) Caterpillar
b) DHL Worldwide Express
c) Volvo
d) AT&T
e) The International Red Cross (Note: Frances Hesselbein, one of
the most widely hailed leaders of the 1990s stated that she thought
that this mission statement was the best she had ever come across
for its clarity, brevity, and focus.)
4. As in 2, above, it is difficult to see how any of these
vision statements would inspire employees or customers to loyalty
or long-term commitments to the company or its products.
a. The first statement is a vague, general statement that will
be of little use to the organization. It would appeal primarily to
stockholders
b. The second statement is more specific than the first,
although it is also very general in tone, and would appeal to the
PR department of the company.
c. The third statement is the most specific and is a
customer-focused vision of the future state of the firm; it
specifies the customers, including employees, shareowners and
communities in which the organization does business. It promises
something for everyone, but makes no mention of what the company is
going to be the best at doing. It would need to be even more
specific in order to be operationalized.
5. This list may vary widely, depending on the imaginations of
the students. For example, an affinity diagram might be used to
brainstorm and classify ways to obtain ideas about planning for,
and funding the design of a new sorority or fraternity house. An
interrelationship digraph might be used to clarify issues and
problems for the same project. Arrow diagrams might be used to
develop planning and sequencing for a thesis or term project.
6. Core competencies of colleges and universities generally
revolve around the traditional areas of teaching, research, and
service. In order for a specific college, such as a college of
business or engineering, to develop a strategic niche, they must do
one or several things very well. For example if the focus is on
undergraduate teaching, the core competencies might include an
outstanding co-op or internship program, faculty-student
collaborative research, development of faculty mentoring skills,
and/or partnership development with business and industry to ensure
that students skill and knowledge bases meet the needs of the
target organizations and industries in which the graduates will
work. If the strategy is develop an outstanding
theoretically-focused graduate program, the core competencies would
require a cadre of outstanding researchers and support staff on the
cutting edge of their field, well-equipped laboratories and
computer support, and partnerships and research projects with
recognized leading firms and organizations that could assist in
advancing knowledge in the field. The leverage from a strategic
perspective is generated by a focused mission and vision, an
integrated strategic management system, and a focus on continuously
improving the organization and processes that lead to success.7.A
complete answer to this question would take up more space than is
feasible for this instructors manual. It is suggested that you use
the discussion in the text under Leadership and Strategic Planning
in the Baldrige Criteria and Part 2 of the detailed Baldrige
Criteria for Performance Excellence, as found in the Bonus
materials on the Premium website, as a basis for discussion.
SUGGESTIONS FOR PROJECTS, ETC.Projects, Etc.
1. This project is designed to familiarize students with the
Baldrige Organizational Profile questions and the process of using
them to prepare an organizational profile for your college or a
local company. Use the format of the Novel Connect case study
should provide them with ideas on how those questions might be
answered by the representatives of the target organization when
writing the profile.2.Strategic planning styles will vary widely,
depending on such factors as the type of organization, its size,
and the philosophy of the top management. Students will no doubt
find that some organizations will have well-developed mission and
vision statements, but few guiding principles. Strategic planning
may be a neglected task that only occurs when someone has time to
do it. In other organizations, an elaborate planning process may
exist, plans may be developed periodically, but plans are rarely
reviewed or acted on. Only the most sophisticated organizations are
likely to have the type of process that Solectron has that is fully
articulated, deployed, systematically evaluated, and used to inform
decision-making on a regular and timely basis.
5. As in discussion questions 2, 3, and 4, above, even Fortune
500 companies will often be found not taking the time, or having
the expertise, to develop mission and vision statements that are
useful, relevant, and inspire and motivate employees or
customers.
4. More and more colleges and universities are developing
well-defined mission and vision statements and strategic planning
processes to develop objectives and plans. See Northern Kentucky
Universitys website, for a comprehensive mission, vision, and
strategic planning outline at:
http://www.nku.edu/about/plan.php5.This project will provide an
opportunity for students to delve into the strategic planning
requirements of a high quality performance management system. See,
for example, the Strategy Development and Deployment (SDD) process
of 2008 Baldrige Award winner Poudre Valley Health Systems, in
their award application at:
http://www.quality.nist.gov/PDF_files/2008_Poudre_Valley_Application_Summary.pdf
The approaches of other Baldrige Award winners can be researched
on the Baldrige website at:
http://www.quality.nist.gov/Contacts_Profiles.htm6. Personal
mission, vision, and statements of guiding principles can be
extremely beneficial to college students. One of the most popular
guides for developing this is Stephen Coveys, et al.s book: First
Things First, New York: Simon and Schuster, 1994.
7. As pointed out in review question 10, above: the key
contextual factors that affect organizational structure
include:
Company organizational and organizational guidelines
Management style
Customer influences
Company size
Diversity and complexity of product line
Stability of product line
Financial stability
Availability of personnel
The implications for quality are that the quality philosophy,
systems, procedures, and people must be aligned with the
organization structure and vice-versa. Students may find that
structures that have been in place for a long time are often
difficult to change when the strategy changes, which creates
significant mis-alignment and organizational stress. Quality
approaches and results will also vary, depending on their
contextual factors.
8.Answers will vary, depending on the organizations compared.
For example, Dells strategy is to provide rapid turnaround with
high volume, essentially commodity type computers while still
providing for custom configurations for each customer. Apple has
the strategy of providing products with unique design
characteristics, fewer configurations, and more customer-centric
marketing through their stores and authorized dealers. Supply chain
is much more important than long-term strategic direction for Dell,
than Apple.ANSWERS TO CASE QUESTIONS
I. A Strategic Bottleneck
The company finally realized that by developing a cooperative
culture and creating common goals it could improve both quality and
morale, while contributing substantially to the bottom line. It
required a strategic approach with strong leadership support.
It began with the development of an order fulfillment process
psyche that transcended departmental thinking regarding purchasing,
forming, selection and shipping. Management and union leadership
were engaged to explain and communicate this new psyche throughout
the plants. The business then developed performance measures for
the forming department that focused improvement efforts on quality
yields. Self-managed work teams were formed and trained in process
improvement and measurement methodologies.
In the selection department, improvement efforts focused on
increasing the sensitivity of the devices that could detect product
variability, which would help send earlier warnings to the forming
department that bottles were about to be produced out of the range
of specification. The result was a customer and business focused
workforce whose measurement and compensation systems tied everyone
to the same overall performance objectives.
II. Clifton Metal Works
1.The current mission statement of Clifton Metal Works (CMW)
appears to lack focus. It doesn't tell why the company is in
business, other than to "improve return on investment." Therefore,
it is not adequate to provide the strategic direction necessary for
CMW to move forward. Using this mission statement CMW could be
making light bulbs or personal computers rather than castings.
2.The mission statement could be improved by including a
definition of products or services, types of markets, important
customer needs, or distinctive competencies. Their mission
statement might be:
CMW's mission is to produce superior customized cast metal
products for markets in the Midwestern United States using teamwork
and unique advanced technology in order to meet or exceed customer
requirements, while still providing an above average return to our
shareholders.
Their vision might be:
CMW's vision is to be an outstanding company that leads the
industry in quality, technological innovations, service, and
productivity. We will strive to accomplish our vision by embracing
superior customer focus, flexibility, adaptability, innovation,
employee involvement and teamwork, with a constant awareness that
productivity, cost effectiveness, and competitive pricing are vital
to business profitability and success.
Their values seem to be:
Quality and service using a Deming philosophy
Teamwork
Financial accountability
Competitiveness
Pride in workmanship
IV. Novel Connect Core Competencies and Work Systems Design
Although not explicitly required for this exercise, the feedback
report comments for this case, based on the Baldrige criteria, are
used below, since they are enlightening and serve the purpose of
responding to the issues of the Category 6 and the response of
Novel Connect to the key questions. The companys response in their
application will not be duplicated here. See the Novel Connect case
materials in the Bonus materials folder on the Premium website for
this chapter.
Answers to case questions
(1) The information provided in 6.1a(1) and 6.1a(2) relating to
how the organization determines its core competencies outlines how
Novel Connect defined its initial set of core competencies in 2000.
The core competencies have been reviewed and modified as needed
annually as part of the SPP. Figure 6.1-1 indicates that the
organizations core competencies are communications, agility and
rapid response, innovative niche product/feature design, and
technology development and sourcing. Their relationship to the
mission, competitive environment, and action plans is also shown in
Figure 6.1-1. Some strengths and OFIs for category 6.1 follow,
after discussion of question (2).(2) Section 6.1b(3) of Novel
Connects Baldrige application describes how they design and
innovate your overall work systems and how they decide which
processes within the overall work systems will be internal to the
organization (key work processes) and which will use external
resources. They use the PFPD process (Figure 6.1-4 on page 29 of
the application) to ensure that new products and services are
created to better satisfy the needs of its external customers and
to ensure that its existing work processes are executed in a daily
manner that meets the needs of its employees and the organization
as a whole. The company recognized early on that its ability to
provide innovative niche product and feature designs for cell
phones represented a competitive advantage. In turn, Novel Connect
chose to focus on identifying, designing, and producing proprietary
products and features that allow it to satisfy unique and
ever-changing market needs.In assessing the companys approaches and
effectiveness in addressing the questions of design and innovation
of work systems, and which are key work processes, it can be seen
that they have some obvious strengths. However, it is also possible
to identify opportunities for improvement (OFIs). See below.6.1
Work Systems Design
STRENGTHS
Novel Connects four core competencies (Figure 6.1-1) were
established during a two day workshop in 2000, and they have been
reviewed annually since 2002. Review inputs include data from
customer focus groups, surveys, sales trend analysis, and call
center data. The data are integrated and validated using a quality
function deployment (QFD) matrix. The reviews are conducted as part
of the SPP cycle, and the process aligns with the voice of the
customer, which helps ensure that the core competencies evolve with
changing customer needs. Further, the QFD matrix is used as part of
the analysis to determine if processes remain internal or use
external resources. The analysis determines correlations among
process performance, customer satisfaction, and a current
competency.
Key work process requirements are initially defined in
individual process flow diagrams by process owners using a standard
approach that includes collecting requirements from both internal
and external customers. These process requirements are maintained
by the respective process owners, who use an annual evaluation and
update process to assess how well the process is meeting the
requirements. For example, through this process, improvements were
made to the Internet order fulfillment process and the returns
process. Requirements for all value creation and value stream
support processes are identified in Figure 6.1-2.
Novel Connect uses the PFPD Process (Figure 6.1-4) to design new
products, features, and process options. The PFPD Process is used
to transform data and requirements into sample products and to test
production runs. The resulting challenge tests are performed by a
sample group of internal or external customers.
OPPORTUNITIES FOR IMPROVEMENT
The SLT uses performance information related to meeting customer
expectations, coupled with a process synergy map (Figure 6.1-3), to
design and innovate the overall work system. However, it is not
clear (1) whether the steps and methods used by the SLT are
systematic or (2) whether they are integrated with establishing the
roles of the workforce, suppliers, and partners in producing and
delivering products and services. The lack of a systematic approach
to designing the overall work system may limit Novel Connects
ability to realize its success factors of responding rapidly to
marketplace changes with new products and optimizing process
performance to maintain strong margins.
While Novel Connect uses input from customers to define and
maintain process requirements, it is not evident that input from
key suppliers and partners is sought and used in this process.
Without such input, Novel Connect may have difficulty ensuring that
its processes are responsive to all stakeholders, including
critical partners such as its cell carrier and retailers, and Novel
Connect may not be able to fully leverage its strategic advantage
of lowered costs from offshore suppliers.
It is not clear how the PFPD Process (Figure 6.1-4)
systematically incorporates all key requirements, agility, new
technology, and organizational knowledge, as well as cycle time,
productivity, cost control, and other efficiency/effectiveness
factors, into process design. Without a systematic approach for
consideration of these factors, Novel Connect may have difficulty
ensuring that its processes are optimized, which may in turn impact
its ability to address the strategic challenge of volatility in
niche markets.V. Novel Connect Strategic Planning
Although not explicitly required for this exercise, the feedback
report comments for this case, based on the Baldrige criteria, are
used below, since they are enlightening and serve the purpose of
responding to the issues of the Category 6 and the response of
Novel Connect to the key questions. The companys response in their
application will not be duplicated here. See the Novel Connect case
materials in the Bonus materials folder on the Premium website for
this chapter.
Answers to case questions
The following factors in the Organizational Profile appear to be
most important in evaluating their strategic planning and
deployment approaches. 4,188 employees make up a virtual,
distributed workforce: 1,200 in innovation (sales, R&D,
marketing, IT, and product engineering), 2,738 in operations, and
250 in administration and support. There is no employee union.
Key customer requirements: allease of use, reliability; personal
consumerstrendiness, convenience, secure/encrypted data and
transmission, personal/home safety and security, low cost,
ruggedness; business consumersruggedness, personal safety and
security, data and voice capability, sustained signal/strength
across distances, secure/encrypted data and transmission;
business/government consumerssecurity, data and voice capability,
secure/encrypted data and transmission, sustained signal/strength
across distances
Facilities: Headquarters in Rochester, NY (1,622 employees, or
about 39%) includes offices, the only company-owned manufacturing
plant, a research laboratory, and a distribution center. Also,
throughout the U.S., 11 podsleased office spaces that serve as hubs
for home-based employees, including a call center and a customer
briefing center (2,566 employees, or about 61%).
Key suppliers/partners: two offshore manufacturing suppliers (in
China and India), a cell carrier, retailers, transportation
companies, integrated component/software manufacturers,
universities, IT support, a security company, and a law firm
Key competitors: five of the largest cell phone manufacturers,
two other niche market competitors, several manufacturers of
integrated communication devices, and several dozen competitors in
the fragmented cell phone component and ringtone markets
Principal success factors: a strong relationship with carriers,
ability to respond to rapid changes in the marketplace with new
product design and/or superior hardware/software quality, and
collaborations with key suppliers/partners
Strategic advantages: product/feature design innovation,
business model innovation, lowered costs from offshore
supplier/partnership relationships
Strategic challenges: availability of a highly skilled
workforce, communication, logistics, rapidly changing
customer/market needs (volatility in niche markets), protection of
intellectual property, volatility of the overseas environment,
market forces driving the cost of cell phones and market
penetration
Based on Novel Connects response in Category 2 to the 2008
Baldrige criteria questions for this category, their strengths and
their weaknesses and opportunities for improvement are listed
below. In reference to strategy development, Novel Connects
management might be advised to develop systematic processes for
determining strategic challenges, strategic advantages, or time
horizons in order to fully align action plans with improving
overall organizational effectiveness and capability. Also, they
should address and include analysis of data specific to
opportunities, major shifts in technology or competition, and
long-term sustainability within the SPP, to meet its strategic
challenge of volatility in niche markets. Finally, Novel Connect
should be advised to use a fact-based approach to evaluate and
improve its SPP. Related to strategy deployment, Novel Connects
senior leadership teams should be advised to:
clarify the process and methods to be used by the SLT-led teams
to develop action plans for key strategic objectives. This may be
significant given the volatility of the environment and the
strategic challenge of rapidly changing customer/market needs.
ensure that adequate financial and other resources are available
and allocated to accomplish its plans and to develop an approach
that assesses and addresses financial and other risks associated
with Novel Connects plans, potential impacts on people, changes to
workforce capability and capacity needs, or changes to strategic
challenges.
Tools and techniques that Novel Directs managers and policy
analysts might find useful include the Seven Management and
Planning Tools and Six Sigma projects, to implement strategic
planning and deployment improvements.DETAILS OF STRENGTHS AND
OPPORTUNITIES FOR IMPROVEMENT
2.1 Strategy Development
STRENGTHS
An annual, systematic Strategic Planning Process (SPP, Figure
2.1-1) involves participation from the SLT, representatives from
higher education partners, the BOD, and members of local workforce
boards, as well as carrier representatives, key customers,
manufacturing and other key partners (including offshore
suppliers), and niche market subject-matter experts.
The process begins with a review and validation of the
organizations mission, vision, core values, core competencies,
Novel Path, and goals. After information is gathered from many
sources (e.g., from markets, customers, the carrier, the industry,
and manufacturing and higher education partners), the SLT analyzes
and aligns the data with the organizations mission, vision, core
competencies, and goals, and it delineates Novel Connects
objectives, goals, and risks. Following a review of internal
requirements, action plans are created and assigned to members of
the SLT. Balanced scorecard metrics are established, and MAP
database reports are reviewed at monthly Triple-M meetings by the
SLT.
Novel Connect has defined five key strategic objectives (profit;
customer satisfaction and market position; innovation, agility, and
rapid response; value creation; and workforce satisfaction) and
established related goals, implementation profiles, and measures,
as well as relationships to strategic advantages and challenges
(Figure 2.1-2). The implementation profiles are manufacturing; new
products; enhancements; value creation; customer satisfaction;
changing customer demands; rapid response to changes; technology
and resources; new customer requirements; relationships with the
carrier, suppliers, and partners; new pod locations; and
maintenance of virtual workforce guidelines. Collectively, these
planning elements provide a systematic approach to help ensure that
the identified needs of stakeholders are balanced.
OPPORTUNITIES FOR IMPROVEMENT
Although Novel Connect notes that it identifies key strategic
challenges as part of the SPP, a systematic process is not
described for determining strategic challenges, strategic
advantages, or time horizons. Without a systematic approach for
determining these planning elements,
Novel Connects action plans may not be fully aligned with
improving overall organizational effectiveness and capability in
the rapidly changing cell phone industry.
While the SPP includes a review of internal requirements to help
ensure Novel Connects ability to execute the strategic plan, it is
not apparent that the SPP addresses and includes the analysis of
data specific to opportunities, major shifts in technology or
competition, and long-term sustainability. Without a plan for
addressing these considerations, Novel Connect may find it
difficult to meet its strategic challenge of volatility in niche
markets.
There is little evidence that Novel Connect uses a fact-based
approach to evaluate and improve its SPP. Without such a mechanism,
Novel Connect may find it difficult to ensure that the process
remains current with market and business needs. This may be
especially important given Novel Connects strategic challenge of
market volatility and the rate of growth in its gross revenue, as
depicted in Figure 7.3-1.2.2 Strategy Deployment
STRENGTHS
Action plans are developed by a team that is assembled and led
by a member of the SLT who
has been assigned responsibility for a strategic objective. The
plans are then reviewed and
ratified by the full SLT. The responsible senior leader assigns
strategies for deploying the
plans to key partners and suppliers, as well as to appropriate
work groups, sites, or
individuals. The SLT conducts monthly virtual Triple-M meetings
to review MAP data and
modify action plans if necessary. Adjustments in action plans
and goals are communicated to
the work areas, project leaders, and other individuals by senior
leaders in weekly one-on-one
meetings and/or weekly work group meetings with pod leaders.
Novel Connect has developed ten short-term action plans with
deployment strategies,
measures, and goals (Figure 2.2-1a) and seven longer-term action
plans, also with
deployment strategies, measures, and goals (Figure 2.2-1b). The
action plans are aligned with
measures on the Novel Compass Scorecard (Figure 4.1-1) through
key strategic objectives:
profit; customer satisfaction and market position; innovation,
agility, and rapid response;
value creation; and workforce satisfaction.
Novel Connect has defined its performance projections and
comparisons for quantitative
measures (Figure 2.2-2) that are associated with its strategic
objectives and most of its
related short- and long-term action plans. Performance
projections are defined by measures
through 2011, and performance comparisons are identified for the
current year. Get-Better-
Quick (GBQ) plans are put in place when measures do not meet
benchmark or projected
performance.
OPPORTUNITIES FOR IMPROVEMENT
It is not clear what steps or methods are used by the SLT-led
teams to develop action
plans for key strategic objectives. Without a systematic process
to develop action plans,
Novel Connects ability to effectively use these plans to
accomplish its strategic
objectives and reach its goals may be impaired. This may be
significant given the
volatility of the environment and the strategic challenge of
rapidly changing
customer/market needs.
Novel Connect maintains a 70/30 resource split between short-
and long-term action plans to
increase the focus on short-term goals. It is not clear,
however, how this ensures that
adequate financial and other resources are available and
allocated to accomplish its plans. It
also is not apparent how this approach assesses and addresses
financial and other risks
associated with Novel Connects plans, potential impacts on
people, changes to workforce
capability and capacity needs, or changes to strategic
challenges. Without these linkages,
Novel Connect may find it difficult to ensure the desired
outcomes from its ActivitiesBonus MaterialsCase: The Creative
Design Group
1. See the Affinity Diagram for the Creative Design Group,
below. It is constructed similar to Figure 5.4 (looking forward to
the next chapter). The diagram for CDG shows categories that
include customer service, team environment, facilities/technology,
design goals, worker amenities, project/financial controls,
competitive personnel issues, and business/financial issues.
From this analysis, Trendy began to see that human resources and
technology had some issues that needed to be addressed in her
long-range plans. In addition, she suspected that the competitive
business/financial issues had impacts on, but were also impacted
by, the competitive personnel and technology issues.
AFFINITY DIAGRAM FOR CREATIVE DESIGN GROUPCustomer
ServiceSpeed
Quality
Creativity
Value
Design GoalsWow customer
Meet/exceed deadline
Superior quality
Reasonable price
Value over price
Team Environment Independent design
Creative direction
CSE project costing
Worker AmenitiesCasual dress code
Casual policies
Health insurance
Flextime
Vacation policy
Leave policy
401K retirement
Competitive wages
Competitive Personnel IssuesFewer design graduates
Difficulty in recruiting talent
Difficulty in retaining designers
Salaries being bid up
Technology trails state of the art
Facilities/TechnologyModern computers
Modern software
Excellent lighting
Modern communications
Project/Financial ControlCSE- project contact point
Project estimating
Project proposal
Project tracking
Client communications
Status updates and changes
Advertising and promotion
Regular financial reports
Competition (Business/Financial Issues)Decreasing % of bids
accepted
Declining ROI
2. See the tree diagram, below. It can be seen how plans are
cascaded going from left to right. They become more specific,
resulting in action plans to deal with competitive business issues
of advertising and estimating by taking action to improve
advertising and visibility. In order to deal with competitive
personnel issues, recruiting and retention of talented designers
are addressed.
3.a.Matrix Data Analysis
The Matrix Data Analysis chart shown below confirms that by
using the weighted ratings across all competitors, the correct
selection is CCG. CCG has a total of 7.0 points (out of a possible
10), while the next closest competitor is COG, with a total of
6.1.
PRIVATE Supplier CharacteristicsWeights Rating for
CCG Rating for
COG Rating for
COW Wtd. Value
CCG Wtd. Value
COGWtd. Value
COW
System design reliability0.38652.41.81.5
Delivery timeliness0.27491.40.81.8
Cost0.25761.01.41.2
System service0.29641.81.20.8
Experience0.14960.40.90.6
Totals1.03333317.06.15.9
Note: Independent ratings on a scale of 1-10 (where 10 is best)
were performed by the Small Business Council of Qualdale, where CDG
is located.
Suppliers: CCG = Creative Computer Group
COG = Computer Organizational Group
COW = Computer Operations Workgroup
3.b) Questions that CDGs management should ask Charlie
include:
1. Will we be able to continue working while youre installing
the new system?
2. If not, how long will we be down?
3. Can you provide us with a detailed project plan so that we
will know when various milestones have been reached?
4. What warranties will be provided for the hardware, software,
and CCGs installation?
5. How much training will be required for the new system?
6. How much training will you provide versus the total training
needed?
7. Will you work with us or a contractor that we select to
structure the proper training?
8. If unforeseen difficulties arise, what is the procedure for
initiating and approving changes?
9. How is the payment schedule structured, and is financing
available?Case The Graduation Party
1. In order to develop a PERT-type network diagram activities
must first be labeled, and precedence relationships must be
established.
Activity
Precedent(s)A. Pick date
-
B. Estimate costs
A
C. Determine budget
B
D. Locate and book a hall
C
E. Hire a DJ
C
F. Select music
E
G. Plan menu
C
H. Plan decorations
D
I. Set up mailing list
A
J. Plan ceremony for seniors
C
K. Design and print invitations
C, D, E
L. Mail invitations
I, K
M. Determine how much will be paid from treasury vs. special
assessment
C
N. Dress rehearsal (dummy) *
F, H, J, L
O. Rehearse ceremony
N
P. Setup, decorate hall
N
Q. Get food delivered
G, P
R. Have the party
Q
S. Cleanup and pay bills
R
See the interrelationship digraph below.
b) Activity C (Determine budget) is obviously a critical
activity on which a number of others depend. Designing and printing
(Activity K) and the Dress rehearsal (dummy activity N) are ones in
which the long-range results terminate.
* The dummy activity (N) was actually included as a milestone to
remind the project team that they needed to check final
arrangements at that point, in order to ensure that no major
problems still existed.
3. a) and b) Using data from the interrelationship digraph (see
problem 1), an arrow diagram can be established. The Arrow Diagram,
shown above, shows precedent relationships for each activity.
The technique has been extended a little further by the use of
the PERT/CPM technique in order to calculate the critical path and
the estimated project completion time, which are shown on the
diagram. The arrow diagram indicates that Joe and his team have a
minimum of 21 days to complete the project, if their single time
estimates for each activity are accurate.
If a PERT-type analysis were to be used, then the probability of
completion within a specified time frame could also be established.
However, this method requires that three time estimates be made for
each activity, which is a little more difficult and time
consuming.
Case - Baldrige Assessment of Strategic Planning Part 1Share
Foods, IncAlthough not explicitly required for this exercise, the
feedback report comments for this case, based on the Baldrige
criteria, are used below, since they are enlightening and serve the
purpose of responding to the issues of the Category 2 and the
response of Share Foods to the key questions. The companys response
in their application will not be duplicated here. See the Share
Foods case materials in the Bonus materials folder on the Premium
website for this chapter.
Assignment 1The most important business or organizational
factors relevant to this item in the Organizational Profile appear
to be:
Mission, Vision, Values (MVV). Mission: A community-based food
bank dedicated to feeding the hungry residents of its communities.
Vision: Iowas heartland is hunger-free. Values: We work together,
we do what we say, everyone deserves respect, and we follow
through.
10 full-time equivalent (FTE) employees (8 full-time and 5
part-time); 8 of 13 employees with bachelor-level or above degrees,
5 employees with high school diplomas or associate degrees
More than 500 volunteers, including a core team of 20
volunteers, contributed 28,600 hours in 2006. Volunteers include
university nutrition and management students, government and
foundation fellows, and court-ordered community-service placements.
Nearly half of volunteers are over age 55.
Competes with other social services for funds and volunteers;
collaborates with these organizations in emergency and disaster
relief
Key success factors (same as strategic advantages for this
organization): its ability to feed the food-insecure through member
agencies, network of food suppliers, tight management of overhead
costs (12.1% of operating expenses), and volunteer base. Other
success factors: food availability and quality; fiscal agility;
funding and food resources; organizational effectiveness;
optimization of human, financial, food, and other resources;
organizational learning, collaboration, and innovation; dedicated,
experienced employees and volunteers; and the satisfaction of
member agencies, donors/suppliers, and the community
Key changes: shifting groups of temporarily food-insecure
persons, seasonal needs (e.g., related to school vacation times and
migrant populations), and the doubling of Hispanic and Hmong
populations in the past year. The nutritional quality of food,
along with quantity, has become a key consideration in the past
decade.
Five strategic challenges: ensure food reaches those most in
need when they need it most; optimize human resources and
partnerships; respond to member agency needs; obtain and maintain
adequate financial resources; recruit volunteers from a broad range
of age segments
Assignment 2Baldrige examiners are taught to develop statements
of strengths and OFIs within the framework of the Baldrige criteria
and leading questions. They must also ensure that the strengths and
OFIs are congruent with the key business and organizational factors
laid out in the organizational profile, in order to ensure that
quality practices fit organizational functioning and key
objectives. Thus, in the context of the case study response and the
given Baldrige criteria questions, the examiner team identified the
strengths of Share Foods to fit the criteria questions very
well.2007 Baldrige Strategy Development (Item 2.1) Questions
a. Strategy Development ProcessCriteria questions of:
(1) How does your organization conduct its strategic planning?
What are the key process steps? Who are the key participants? How
does your process identify potential blind spots? How do you
determine your strategic challenges and advantages, as identified
in response to P.2 in your Organizational Profile? What are your
short- and longer-term planning time horizons? How are these time
horizons set? How does your strategic planning process address
these time horizons?appear to have been answered in the first
strength. The examiner team felt that Share Foods 12-step SPP and
the fact that the organization identifies strategic challenges in
the Current State step represented a well-developed approach and
deployment of leading-edge strategic planning practices. Also, the
fact that Share Foods includes inputs from the SWOT Analysis,
Environmental Scan, and Funding Mandate Review were very
well-defined practices that clearly answered the initial questions,
above.Other Criteria questions were:(2) How do you ensure that
strategic planning addresses the key factors listed below? How do
you collect and analyze relevant data and information pertaining to
these factors as part of your strategic planning process:
your organizations strengths, weaknesses, opportunities, and
threats
early indications of major shifts in technology, markets,
customer preferences, competition, or the regulatory
environment
long-term organizational sustainability your ability to execute
the strategic plan
The second strength refers to how the SPP uses SWOT Analysis, an
Environmental Scan, and performance analyses to identify potential
blind spots. It appears to answer the second set of questions from
the Criteria.Other Criteria questions were:(1) What are your key
strategic objectives and your timetable for accomplishing them?
What are your most important goals for these strategic
objectives?
(2) How do your strategic objectives address your strategic
challenges and strategic advantages? How do your strategic
objectives address your opportunities for innovation in products
and services, operations, and the business model? How do you ensure
that your strategic objectives balance short- and longer-term
challenges and opportunities? How do you ensure that your strategic
objectives balance the needs of all key stakeholders?These were
addressed by the third strength, which refers to the fact that the
organization has identified its strategic objectives, as well as
its short- and longer-term goals (for FY2007, FY2008, FY2009, and
FY2010), along with associated timetables for their accomplishment.
The organization aligns its strategic objectives with strategic
challenges, values, key success factors, and stakeholder
requirements.Alignment of OFIs with Criteria questionsAlthough
there were strengths present in the approaches and deployment of
the strategy development process, there were several obvious gaps
that the examiner team noted. In summary form, the following OFIs
were aligned with each set of questions, above, and identified the
gaps that were apparent.
It is unclear how the organization ensures that strategic
planning addresses key factors in some areas that have been
identified as important threats. It also is unclear how strategic
planning addresses the need to obtain and maintain adequate
financial resources, which may be of particular significance.
Although the organization notes innovations in specific areas, it
is not clear how its strategic objectives address larger
opportunities for innovation in products, services, operations, and
its business model. It is unclear how the organization ensures that
its strategic objectives balance short- and longer-term challenges
and opportunities.It can be seen that the strengths and OFIs align
well with the key factors identified in the question in Assignment
1. For example, the first OFI relates to maintaining adequate
financial resources, which correlates directly with the strategic
challenges of the last key issue in the list in Assignment 1. Most
observers would agree that these are key strengths and
opportunities for improvement for this organization. One
suggestions that the team did not identify relates to the fact that
the SPP is only updated biennially, raising the question of whether
the SPP adequately addresses the key issue of providing early
indications of major shifts in technology, markets, customer
preferences, competition, or the regulatory environment.Case -
Baldrige Assessment of Strategic Planning Part 2
1. The most relevant business and organization factors from the
Organizational Profile pertaining to Item 2.2 are similar to Item
2.1 and appear to be:
Paid employees and volunteers acquire, warehouse, transport, and
distribute food to the food-insecure through partnerships with 58
member agencies.
10 full-time equivalent (FTE) employees (8 full-time and 5
part-time)
More than 500 volunteers, including a core team of 20
volunteers, contributed 28,600 hours in 2006. Volunteers include
university nutrition and management students, government and
foundation fellows, and court-ordered community-service placements.
Nearly half of volunteers are over age 55.
Demand for organizations services has doubled in the last three
years
Competes with other social services for funds and volunteers;
collaborates with these organizations in emergency and disaster
relief
Key changes: shifting groups of temporarily food-insecure
persons, seasonal needs (e.g., related to school vacation times and
migrant populations), and the doubling of Hispanic and Hmong
populations in the past year. The nutritional quality of food,
along with quantity, has become a key consideration in the past
decade.
2. Strengths that the organization has relative to the criteria
questions (given below) are: The SPP (Figure 2.1-1) and the PDCA
Process (Figure 6.1-3) are used for the development of action
plans. Action plans are created to support the strategic objectives
during Step 9 of the SPP. Champions (chosen from senior leaders,
board members, volunteers, and LDP graduates) are assigned to each
action plan to lead development and deployment throughout the
organization and to perform quarterly reviews.
SF uses its SPP (Figure 2.1-1) to ensure that adequate financial
and other resources are available and allocated to support the
accomplishment of its action plans. For example, adequate financial
resources are addressed as part of Steps 8 and 10. In Step 8, the
Executive Director, with help from other senior leaders, develops
annual fiscal and capital budgets in order to support the
objectives and goals established in Step 7. The Finance/Audit
Committee reviews these budgets and an outline of resources needed
to support the Strategic Plan. The Finance/Audit Committee
recommends allocations of resources based partly on action plans,
and the budgets are presented for approval by the board in Step
10.
As circumstances warrant, SF uses the Emergent Strategy Alert
Process (Figure 2.2-1) to establish and deploy modified action
plans. For example, circumstances may arise as the result of the
Environmental Scan done on the years when there is no SPP or as the
result of the Community Needs Assessment. The four-step Emergent
Strategy Alert Process, which includes a rapid-cycle SWOT Analysis,
guides SF to develop and deploy new or modified strategies, goals,
and actions.
SF has identified key short- and longer-term action plans that
are mapped to strategic objectives and goals (Figure 2.2-2). For
example, achieving a rating of 10 on the American Association of
Food and Nutrition for a Healthier America (AAFNHA) Nutrition Scale
by FY2010 is a long-term action plan, and increasing the number of
pounds of food per person in poverty by 5% by FY2007 is a
short-term action plan. Both are linked to the strategic objective
to increase the amount and quality of food delivered. SF also has
identified key changes planned for products and services. For
example, in this fiscal year it will increase the variety of
nutritional food offered to member agencies to reflect the Dietary
Guidelines for Americans, 2005 and look for innovative ways to use
Internet communication.3. Opportunities for improvement relative to
the criteria questions include: While champions are responsible for
the deployment of action plans, a systematic approach is not
described for deploying the plans to achieve strategic objectives
or for ensuring that the key outcomes of action plans can be
sustained. For example, it is not clear how the boards oversight at
quarterly meetings ensures sustainability or what other actions are
taken to integrate action plans into processes and approaches to
ensure they are maintained. Without systematic approaches to deploy
action plans and sustain their outcomes, SF may find it difficult
to attain its strategic performance goals.
It is unclear how SF assesses financial and other risks
associated with its action plans (e.g., possible financial risks
associated with its long-term action plan to achieve a rating of 10
on the AAFNHA Nutrition Scale, which might result in increased
costs from purchasing food to supplement possibly less-nutritious,
donated food). The lack of an effective, systematic approach may
hamper SFs ability to evaluate the feasibility of each action plan
as it strives to consistently acquire, warehouse, transport, and
distribute food to the food-insecure through partnerships with its
58 member agencies.
It is not clear how the key human resource plans SF has noted
will accomplish its strategic objectives and action plans. More
specifically, because the human resource plans are nearly identical
to short- and longer-term action plans listed for the first
strategic objective in Figure 2.2-2, it is not evident how the
former will help accomplish the latter. In addition, while the
human resource/action plans include goals (e.g., increase
volunteers hours by 10% each year), they do not include specific
actions, including resource commitments, to accomplish those goals
and the related strategic objective. Further, it is unclear how the
human resource plans will address potential impacts on the
workforce and potential changes to workforce capability and
capacity. The lack of an effective, systematic approach and
specific plans may impede SFs ability to meet its annual strategic
goals as well as its ability to continue and expand its services
for the food-insecure.
While senior leaders and board committee chairs set performance
projections during Step 7 of the SPP (Figure 2.2-2), it is not
clear how these short- and longer-term performance projections are
determined. Additionally, it does not appear that projected
performance is compared with that of comparable organizations or
past performance. Also, while goals are presented for FY2008,
FY2009, and FY2010, it is not clear whether these differ from
performance projections and if so, how. The lack of a fact-based,
systematic approach may limit SFs ability to assess its relative
performance and prepare for projected changes, such as the growing
demand for its services, which has doubled in the last three
years.2007 Baldrige Strategy Deployment (Item 2.2) Questions
a. Action Plan Development and Deployment(1) How do you develop
and deploy action plans throughout the organization to achieve your
key strategic objectives? How do you ensure that the key outcomes
of your action plans can be sustained?
(2) How do you ensure that adequate financial and other
resources are available to support the accomplishment of your
action plans? How do you allocate these resources to support the
accomplishment of the plans? How do you assess the financial and
other risks associated with the plans? How do you balance resources
to ensure adequate resources to meet current obligations?
(3) How do you establish and deploy modified action plans if
circumstances require a shift in plans and rapid execution of new
plans?
(4) What are your key short- and longer-term action plans? What
are the key planned changes, if any, in your products and services,
your customers and markets, and how you will operate?
(5) What are your key human resource plans to accomplish your
short- and longer-term strategic objectives and action plans? How
do the plans address potential impacts on people in your workforce
and any potential changes to workforce capability and capacity
needs?
(6) What are your key performance measures or indicators for
tracking progress on your action plans? How do you ensure that your
overall action plan measurement system reinforces organizational
alignment? How do you ensure that the measurement system covers all
key deployment areas and stakeholders?
b. Performance Projection For the key performance measures or
indicators identified in 2.2a(6), what are your performance
projections for both your short- and longer-term planning time
horizons? How are these projections determined? How does your
projected performance compare with the projected performance of
your competitors or comparable organizations? How does it compare
with key benchmarks, goals, and past performance, as appropriate?
How do you ensure progress so that you will meet your projections?
If there are current or projected gaps in performance against your
competitors or comparable organizations, how will you address
them?
AnswerAs noted in the previous case analysis, Baldrige examiners
are taught to develop statements of strengths and OFIs within the
framework of the Baldrige criteria and leading questions. They must
also ensure that the strengths and OFIs are congruent with the key
business and organizational factors laid out in the organizational
profile, in order to ensure that quality practices fit
organizational functioning and key objectives. Thus, in the context
of the case study response and the given Baldrige criteria
questions, the examiner team identified the strengths of Share
Foods to fit the criteria questions very well.
It can be seen that the strengths and OFIs align well with the
key factors identified in the question in Question 1 of this case.
For example, the third OFI relates to volunteer resources, which
correlates directly with the third business and organization factor
from the Organizational Profile in the list in Question 1.
Most observers would agree that these are key strengths and
opportunities for improvement for this organization.Develop plan
to
attract/retain employees
Develop plan to
meet competition
Determine interest in job sharing
Pay a sign-on bonus
Develop co-op position
Improve
recruiting
Take course in
graphics estimating
Use QFD
approach
Keep and use job
cost/time data
Improve
estimating
Increase recognition/incentives
Add child care allowance
Develop stock
option plan
Improve
retention
Place ads in business newspapers
Redesign website
Place spot ads on
radio
Make advertising
more effective
Develop action
plans
TREE DIAGRAM FOR CDG ACTION PLANNING
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