Strategic
Planning
Evans Chapter 5
STRATEGIC PLANNING
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The Role of Quality in Strategic Planning
What are the two basic types of
competitive advantage?
1.
Low cost
2.
Differentiation.
According to Evans, what are 4
important tasks that can be accomplished through strategic planning?
1. Understand key customer and operational
requirements as input to setting strategic directions. This step aligns ongoing
process improvements with the company's strategic directions.
2. Optimize the use of resources and ensure
bridging between short-term and longer-term requirements, which may entail
capital expenditures, training, etc.
3. Ensure that quality initiatives are
understood at the three key levels of the organization: the
company/organization level, the process level, and the individual level.
4. Ensure that work organizations and
structures effectively facilitate the accomplishment of strategic plans and set
the stage for integrating breakthrough and incremental improvement.
Leading Practices
According to Evans, what are the 4
leading practices in strategic planning?
1. Top management and employees all actively participate
in the planning process.
2. They have systematic planning systems for strategy
development and deployment, including measurement, feedback, and review.
3. They gather and analyze a variety of data about external
and internal factors as part of the strategic planning process
4. They align short-term action plans with long term strategic
objectives and communicate them throughout the organization, using measurements
to track progress
5. They use customer wants and needs to drive the
strategy.
6. They involve suppliers in the strategic planning
process.
7.
Top management and employees all actively
participate in the planning process.
Strong leadership is necessary to establish
the credibility of a total quality focus and integrate quality into the
business planning process.
Employees represent an important resource in
strategic planning. Not only can the company capitalize an employee knowledge
of customers and processes, but employee involvement greatly enhances the
effectiveness of strategy implementation.
Such "bottom-up' planning facilitates
better understanding and assessment of customer needs.
They have systematic planning systems for
strategy development and deployment, including measurement, feedback, and
review
See Corning Telecommunications Products
Division Example Figure 5.5
They gather and analyze a variety of data
about external and internal factors as part of the strategic planning process
Effective strategic planning depends upon a clear
understanding of:
Customer needs and expectations
Market needs and expectations
Competitive environment and capabilities
Financial and societal risks
Human resource capabilities and needs
Operational capabilities and needs
Supplier and partner capabilities and needs
They align short-term action plans with long
term strategic objectives and communicate them throughout the organization, using
measurements to track progress
Ensures that strategies will be deployed effectively
at the “three levels of quality”: organizational level, process level, and
individual job level.
They use customer wants and needs to
drive the strategy (text version 4).
Strategic planning processes are aligned
with the organizations' primary focus on customer satisfaction.
They involve suppliers in the strategic
planning process (text version 4)..
Supplier partnerships are viewed as key
long-term strategies.
Strategy Development
What is a mission of a company?
The mission of a firm defines its reason for
existence; it asks the question "Why are we in business?"
It might include a definition of products
and services the organization provides, technologies used to provide these
products and services, types of markets, important customer needs, and
distinctive competencies-the expertise that sets the firm apart from others.
What 4 functions does the mission
perform in the strategic planning process?
1. A firm's mission guides the development of strategies
by different groups within the firm.
2. It establishes the context within which daily
operating decisions are made and sets limits on available strategic options.
3. In addition, it governs the trade-off among the
various performance measures and between short- and long-term goals
4. Finally, it can inspire employees to focus their
efforts toward the overall purpose 0 the organization.
What is a vision of a company?
The vision describes where the organization
is headed and what it intends to be it is a statement of the future that would
not happen by itself.
It articulates the basic characteristics
that shape the organization's strategy.
What are the 3 characteristics of
a vision?
A vision should be brief, focused, clear and
inspirational to an organization's employees.
It should be linked to customers' needs and
convey a general strategy for achieving the mission.
A vision must be consistent with the culture
and values of the organization.
What are the values of a company?
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.
Environmental assessments are often
accompanied by a SWOT (strengths, weaknesses, opportunities and threats)
analysis
Strategy Deployment
Top management requires a method to ensure
that its plans and strategies are executed successfully within the
organization.
What is policy deployment?
Regardless of the particular definition,
policy deployment emphasizes organization-wide planning and setting of
priorities, provides resources to meet objectives, and measures performance as
a basis for improving performance.
Policy deployment is essentially a TQ-based
approach to executing a strategy by ensuring that all employees understand the
business direction and are working according to a plan to make the vision a
reality.
An iterative process in which senior
management asks what lower levels of the organization can do, what they need,
and what conflicts may arise can avoid many of the implementation problems that
managers typically face.
With policy deployment, top management is
responsible for developing and communicating a vision, then building
organization-wide commitment to its achievement.'
Management reviews at specific checkpoints
ensure the effectiveness of individual elements of the strategy.
The implementation teams are empowered to
manage actions and schedule their activities. Periodic reviews (monthly or
quarterly) track progress and diagnose problems.
Management may modify objectives on the
basis of these reviews, as evidenced by the feedback loop in the figure.
Top management evaluates results as well as
the deployment process itself through annual reviews, which serve as a basis
for the next planning cycle.
Note, however, that top management does not
develop action plans, it sets over- all guidelines and strategies. Departments
and functional units develop specific implementation plans.
What is catchball?
The negotiation process is called catchball
(represented by the baseball symbol in Figure 6.8). Leaders communicate
mid-term objectives and measures to middle managers who develop short-term
objectives and recommend necessary resources, targets, and
roles/responsibilities.
These issues are discussed and debated until
agreement is reached. The objectives then cascade to lower levels of the
organization where short-term plans are developed.
Catchball is an up, down, and sideways
communication process as opposed to 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.
In the spirit of Deming, the process focuses
on optimizing the system rather than on individual goals and objectives.
Clearly, this process can only occur in a TQ culture that nourishes open
communication.
THE SEVEN MANAGEMENT AND PLANNING TOOLS
Affinity Diagrams
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Interrelationship Digraph
What is an interrelationship
digraph?
An interrelationship digraph identifies and
explores casual relationships among related concepts or ideas. It shows that
every idea can be logically linked with more than one other idea at a time, and
allows for 'lateral thinking" rather than "linear thinking."
Tree Diagrams
What is a tree diagram?
A tree diagram maps out the paths and tasks
necessary to complete a specific project or reach a specified goal.
The planner uses this technique to seek
answers to such questions as 'What sequence of tasks will address the
issue?"
Matrix Diagrams
Matrix diagrams 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.
Matrix diagrams provide a picture of how well
two sets of objects or issues are related, and can identify missing pieces in
the thought process.
Matrix Data Analysis
Matrix data analysis takes data and arranges
them to display quantitative relationships among variables to make them more
easily understood and analyzed.
Process Decision Program Charts
A process decision program chart (PDPC) is a
method for mapping out every conceivable event and contingency that can occur
when moving from a problem statement to possible solutions.
A PDPC takes each branch of a tree diagram,
anticipates possible problems, and provides countermeasures that will (1)
prevent the deviation from occurring, or (2) be in place if the deviation does
occur.
Arrow Diagrams
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LEADERSHIP AND STRATEGIC PLANNING IN THE
BALDRIGE AWARD CRITERIA*
Reviewing company performance is a crucial
aspect of leader ship, because reviews help to build consistency behind goals
and allocation of resources.
Example 1: Gateway Estate Equipment
Company - Leadership System Response to the criteria
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Quality in Practice: Teaching the Buffalo
to Fly: Johnsonville Foods
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Quality in Practice: Leadership at
Rubbermaid, Inc.
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Quality in Practice: Strategic Quality
Planning At The Stroh Brewery Company
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