Deploy Focal and Check Points

Deploy Focal and Check Points

Now that we have the Business Plan built, we need to translate that plan into something that the business’ managers can deploy their resources against while organizing it in a way that prevents suboptimization. Suboptimization is when what looks like a benefit for a particular area in the company actually hurts the company as a whole.

Example Suboptimization: Department A of a company meets and exceeds its monthly production quota, and so is given extra performance pay. However, to make the quota at the end of the month they made a lot of product that is easy to manufacture, but that was not actually needed by the downstream processes in Department B. Thus, while Department A gets a bonus, Department B has no incoming material to run. Department B misses their quota and the customers don’t get what they ordered on time. The company is paying Department A to lose the company money and customers.

Suboptimization is prevented by good organization and communication during this deployment stage, and by Cross-Functional Management on an ongoing basis.

Tactical Objectives in the Business Plan are achieved by maintaining or improving a number of “Check Points,” or highly specific, usually numeric, targets with achievement dates. These are handled via Daily Management at different levels of the organization. It is usually straightforward to identify these targets (in fact, they have probably already been identified in the KPI matrix cascade, but the linkage to the Strategic Intents may change their relative importance).

Similar to Tactical Objectives, achieving a Strategic Objective in the Business Plan, is accomplished by completing a number of “Focal Points.” Focal Points are projects with highly specific objectives and milestone dates. The executive-level manager identified as the point person for that objective brings together all those managers at the next level that will be involved in achieving the objective. The manager explains the business case for the improvement and his or her vision of how the company can achieve it. The next level managers then come back with a proposal for what the area they are responsible for is going to achieve to support the Strategic Objective. These are proposed Focal Points. The executive manager then negotiates with each manager until they are sure that 1) accomplishing all the proposed Focal Points will together accomplish the Strategic Objective, 2) the proposed Focal Points do not conflict with others in other areas, and 3) all areas that need to support or work with efforts in other areas have identified resources to do so. This negotiation is sometimes referred to as “catchball.” The final Focal Points are documented, along with project sponsors. If an organization is large enough, this process may repeat down for each level of management.

Now, each manager has a list of projects and activities that their area is responsible for doing that will work towards achieving the Strategic Objectives. It is their task to identify people that will sponsor each focal point, and in turn the sponsor is responsible for securing resources and training for the effort, and for following the team’s progress. Frequently, these Focal Points are good targets for deploying your cadre of employees trained in advanced problem-solving (also known as Black Belts).

Example Final Deployed Strategic Plan:

·         Strategic Intent 1 – Significantly increase profitability

o    Strategic Objective 1.1 – Obtain breakthrough reduction in manufacturing costs of $2 million by year end 2014

§  Focal Point 1.1.1 – Reduce scrap rate by 25% by year end 2013

§  Focal Point 1.1.2 – Reduce labor $/revenue $ by 12% by year end 2013

§  Focal Point 1.1.3 – Reduce indirect manufacturing costs by 25% by year end 2015

o    Strategic Objective 1.2 – Significantly increase profit margin by implementing a Customer/Product Rationalization model

§  Focal Point 1.2.1 – Develop TAU model for all locations by year end 2013

§  Focal Point 1.2.2 – Develop CPR model to customer/product level for all locations by year end 2014

§  Focal Point 1.2.3 – Develop Sales and Marketing plan based on CPR by end of second quarter 2015

o    Tactical Objective 1.1 – Maintain or improve sales and distribution costs at 6% of sales

§  Check Point 1.1.1 – All sales and distribution locations will monitor S&D costs/$ Sales

o    Tactical Objective 1.2 – Maintain or improve General and Administrative costs at 5% of sales

§  Check Point 1.2.1 – Corporate will monitor G&A costs/$ Sales

o    Tactical Objective 1.3 – Maintain or improve revenue at $40 million/year

§  Check Point 1.3.1 – All sales departments will monitor revenue/month

·         Strategic Intent 2 – Grow market share in profitable markets

o    Strategic Objective 2.1 – Obtain breakthrough improvements in market share in Asia

§  Focal Point 2.1.1 – Increase market share in Singapore to 25%

§  Focal Point 2.1.2 – Increase market share in Japan to 15%

§  Focal Point 2.1.3 – Increase market share in China to 30%

§  Focal Point 2.1.4 – Increase market share in Australia to 10%

o    Tactical Objective 2.1 – Maintain or improve market share in the domestic Northern Division at 15%

o    Tactical Objective 2.2 – Maintain or improve market share in the domestic Southern Division at 20%

o    Tactical Objective 2.3 – Maintain or improve market share in the domestic Eastern Division at 10%

o    Tactical Objective 2.4 – Maintain or improve market share in the domestic Western Division at 30%

·         Enabler – Develop system to track market share worldwide on at least a quarterly basis

In this example, many of the focal points would need to be deployed down another level, following the same “catchball” negotiation.

Each item on the plan would have a sponsor (for the Strategic Objectives and Focal Points) or Owner (for the Tactical and Check Points) – a person identified as the one to go to with questions and the one responsible for achieving that task. All the activities are linked back to the input from the market, customers, suppliers, and current business performance, and these in turn are linked with our vision, mission, value proposition, and strategic model for differentiation. We now have a fully-integrated plan to achieve our company’s objectives. But even with all the organization we have at this point, when it comes to the end of the year, we may find that some or all of our objectives were not met. We have only completed the “Plan” phase of Deming’s Plan-Do-Check-Act discipline.

Now that everyone in the organization knows what they need to do to advance the company, they go forth and do it (the “Do” phase of Deming’s Plan-Do-Check-Act discipline). However, it is still incumbent upon the highest levels of management to monitor the progress of the efforts across the company. To this end, we recommend Quarterly Reviews (QRs) to perform the “Check” function of the Plan-Do-Check-Act discipline.

This is a periodic (usually quarterly) meeting between the executive leadership of a company and those on the front line of the improvement efforts. QRs provide an opportunity for:

• Upper management
  • to see the progress being made across the company
  • to show their commitment and engagement with the efforts
  • to assess the rate of progress compared to plan
  • to identify opportunities for improvement in the BPE implementation
  • to verify that the appropriate process is being followed by project leaders (in the initial phases of BPE, management frequently needs to emphasize process over results)
• Project leaders to identify barriers to success that they and the project sponsors have not been able to overcome
• Employees making great contributions to have those contributions recognized by the highest level of management
• Giving a strong incentive to project leaders and members to make progress on their project

Using QRs prevents any surprises from showing up at the end of the planning cycle and increases the likelihood of successful completion of projects. However, there is one final step needed.