Tuesday, February 23, 2010

Strategy Deployment

To be successful in a highly competitive, global business environment, companies must have a sound strategy that provides a clear direction, along with the ability to execute the strategy with focused alignment of efforts by all employees. Where most companies fail to be successful isn’t in the choice of their strategy. Failure comes from the inability to execute the strategy. Most companies, at all levels of the organization, lack a defined, standardized process that allows the strategic plan to become reality. There is a gap that exists between the strategy and the actions that people take every day to try to improve the business. The lack of a good execution process creates inefficiencies, confusion, low morale, and no competitive advantage.

The Strategy Deployment (SD) process is the missing link that companies need to be more successful. When used rigorously, the SD process will provide a structured process, with clear focus and alignment of efforts, and proper commitment at each level. The SD process ensures that the most critical processes get addressed, business improvement decisions are fact-based, everyone knows what needs to be done, and people are accountable for supporting their piece of the strategy.

A rigorous SD process will give your company the following benefits:

1. Clear communication of the strategy to all employees

2. Alignment of everyone's effort

3. Accountability, not only for meeting targets, but also for process discipline

4. A timely and accurate measurement system, allowing for fact-based decision-making

5. Agreement and commitment at every level of the company

6. A common language

7. The use of logic, not opinion or intuition, to develop objectives.

Once understood, SD is a very logical process. Logic, however, isn't always prevalent in a company's culture, leading to one of the pitfalls in implementing SD. Company leaders are used to doing things their way. In introducing a new process, just like for anyone in any organization, there is typically resistance found in at least some of the group. Some leaders feel constrained by facts and logic. They are more comfortable using intuition, experience and other inputs to determine objectives and action plans.

Other pitfalls include:

- Not involving the right people, preventing consensus

- Not taking the time to do necessary research

- Setting targets as too high or too low

- Not performing regular, structured reviews of progress

- Not requiring countermeasures when a periodic target is missed

- Not reviewing progress often enough

- Not taking the time to train people on the SD philosophy and process

- Not making the process visual

When people ask me where they should start their lean transformation, and I tell them they need to start with SD, they are disappointed and confused. They want to start taking real action, jump in and start making changes. The changes, however, must be derived from the right strategy, and we have to know if the changes lead to the expected outcome. Sun Tzu said, "Tactics without strategy is the noise before defeat." It is critical that your company take the time to ensure that the objectives you communicate, the people you engage, the tactics that you use and the changes that you implement will lead to the efficient and effective realization of your strategic plans.

Friday, February 5, 2010

Trade Reform - A Macro-transformation

Most of us in the Lean Transformation world are focused on "micro" transformation issues, making individual companies more competitive, more sustainable, more profitable. We are making gains throughout various industries, in companies small and large. This is good stuff. There is, however, another issue that requires as much, if not more, effort from US manufacturing companies. It has to do with global trade policies and practices. Unfortunately, in trying to compete with China, companies making products in the US have barriers to deal with other than higher wages, greedy CEOs, restrictive unions and an apathetic society.

Did you know that much of the glass for the New World Trade Center in New York will be produced in China? It shouldn't surprise you that the Chinese glass was chosen by the Port Authority of New York. They wouldn't want to be viewed as wasting money on a more expensive product, or practicing protectionism. But, you gotta wonder how a low-labor-content product like glass from a Chinese manufacturer can be the lowest bid? Shipping costs alone should negate most of the gain from low labor costs. Unfortunately, the ugly little secret that's been ignored for years is that the Chinese government provides huge subsidies to certain industries in China. Many of these subsidies are illegal, in violation of trade laws.

Part of the problem is that we have no national manufacturing strategy. President Obama promised that his manufacturing czar (did you know we have one?), Ron Bloom, will develop a strategy, with emphasis on "21st century technologies". That's good, unless you're one of the millions of US workers in a 20th century industry. Who is going to help them?

We can't continue to allow jobs to be lost in this country by rolling over and allowing other countries to continue to violate trade policies and laws. Obama recently told the Senate, "If we are able to compete on a level playing field, nobody can beat us". Great statement; I just hope we have the guts to do something about it.