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Joseph A. DeFeo

Quality Insider

Ready, Aim, Goal

Strategic quality planning and deployment moves companies from good to great

Published: Wednesday, January 5, 2011 - 08:39

Strategic quality planning (SQP) is a systematic approach to defining long-term business goals, including goals to improve quality and the means (i.e., the plans) to achieve them. Many organizations have created a vision “to be the best,” toward a goal of outperforming competitors. Many of these organizations fall short in achieving this vision. Most do not align, or have difficulty aligning, their performance excellence initiatives like lean and Six Sigma to the annual business plan. This leads to lack of resources to complete projects, which in turn makes them hard to justify.

To achieve a vision it is necessary to align the annual goals to your major change initiatives or quality programs and integrate them into the strategic plan. This will ensure the new focus becomes part of the plan and sustainable.

Japanese quality leaders refer to this process as hoshin kanri or “policy deployment. Ho, shin, kan, and ri are actually four words that loosely translate to “focus, direction, alignment, and reason.” Focus by creating goals that provide direction and alignment of the resources needed from the organization to meet those goals and the reasons for selection them. The reasons force management to understand why it is selecting these goals.

The potential benefits of strategic quality planning and deployment include:

• Clarification of goals
• Achievability of goals
• Scheduled reduction of chronic wastes and improved quality of products and services
• Better or new focus on customers

 

Strategic quality planning is the systematic process by which an organization defines its long-term goals with respect to quality and customers, and integrates them into a cohesive business plan. It enables an organization to execute organizational breakthroughs to achieve a competitive advantage and quality leadership.

The approach to providing organizationwide financial goals has evolved into a more robust strategic plan, incorporating these goals into a hierarchy that includes the voice of the customer. A structured methodology must include a provision of rewards, universal participation, a common language, and training.

Launching a strategic plan

Creating a strategic plan requires that leaders be personally involved, eliminating the atmosphere of blame, and making decisions on the best available data. The strategic deployment process requires incorporating the customer focus. The elements needed are generally alike for all organizations. The ones in most widespread use tend to be:

• Mission
• Vision
• Values
• Policy

 

The mission is the reason for the organization’s existence. The vision is the desired future state of the organization. Values are what the organization stands for, and they tie into strategies, which are the means to achieve the vision. Policies represent a guide to managerial action, guiding day-to-day decision-making. And finally, the deployment plan is what turns vision into action.

Developing the plan

Strategic deployment begins with a customer-focused vision, which should define the benefits that can be expected. Good vision statements should be compelling and shared throughout the organization. But vision statements are only words—a reminder of what the organization is pursuing, which must be carried out through actions. When forming a vision, it’s important not to focus exclusively on shareholders, to properly explain the vision to everyone involved, and not to create a vision too easy or difficult to achieve.

A mission is often confused with a vision, but a mission statement should clarify an organization’s purpose. Together, a vision and mission provide an agreed-upon direction, which can be used as a basis for decision-making.

To convert the vision into an achievable plan, it must be broken into key strategies. Responsibility for them must be distributed to key executives. To determine what the strategies should be, five areas must be assessed:

• Customer loyalty and satisfaction
• Costs related to poor quality of products or processes
• Organization’s culture
• Business processes
• Competitive benchmarking

 

Each of these areas can form the basis for a balanced business scorecard. The key strategies can be modified to reflect long-term goals. An organization must set specific strategic goals that must be achieved for the broad strategy to be a success. Seven areas must be addressed to ensure that the proper goals are established:

• Product performance
• Competitive performance
• Business improvement
• Cost of poor quality
• Performance of business processes
• Customer satisfaction
• Customer loyalty and retention

 

Goals that affect product salability and revenue generation should be based primarily on meeting or exceeding marketplace quality. A widely used basis for setting goals has been historical performance.

Corporate values reflect an organization’s culture. Some organizations create value statements to further define themselves. Values are what an organization stands for, and must be supported with actions from management lest their publication create cynicism.

Policy declarations are a necessity during a period of major change. Most declare the intention to meet the needs of customers, and include language relative to competitiveness in quality. Some include specific reference to internal customers, or indicate that the improvement should extend to all phases of the business. Enforcement of new policies is a problem due to the relative newness of documented quality policies. Sometimes, an audit process is mandated to ensure the policy is carried out.

A fundamental step in establishing any strategic plan is the participation of upper management. The executives are responsible for ensuring all business units have a similar council at the subordinate levels of the organization. If a council is not in place, the organization should create one.

Once the strategic goals have been agreed upon, they must be subdivided and communicated to lower levels. Those who are assigned responsibility must determine the needed resources and communicate this to higher levels. The deployment process starts by identifying the needs of the organization.

Measuring progress

There are several reasons why an organized approach to measuring performance is necessary:

• Performance measures indicate the degree of accomplishment of objectives
• Performance measures are needed to monitor the improvement process
• Performance measures are required for periodic reviews by management

Once goals have been broken down into subgoals, key measures need to be established. The best measures of the strategic planning process are simple, quantitative, and graphic. As goals are set and deployed, the means to achieve them must be analyzed to ensure they satisfy the objective they support. Once the system is in place, it must be reviewed periodically to ensure that goals are being met.

A formal, efficient review process will increase the probability of reaching the goals. The review process looks at gaps between what has been achieved and the target. Frequent measurements of progress displayed in graphic form help identify the gaps in need of attention. Success in closing those gaps depends on a formal feedback loop with clear responsibility and authority for acting on those differences.

Pursuing too many objectives at the same time will dilute the results. Trying to plan without adequate data can create an unachievable plan. If leaders delegate too much, there will be a lack of direction. The biggest disruption caused by strategic planning is created by imposing a structured approach on those who prefer not to have it. Resistance will be evident at the outset. Therefore, the most important prerequisite is the creation of an environment conducive to change.

Discuss

About The Author

Joseph A. DeFeo’s picture

Joseph A. DeFeo

Joseph A. DeFeo is president and executive coach with Juran. He is recognized worldwide for his training and consulting expertise which enables organizations to achieve superior results. For additional information, visit www.juran.com.