hoshin kanriHoshin Business Plan for Startups Part 2

Essential Business Execution Plans For Start-Ups – Individual Hoshin Plan Part 2

In this series of two articles and in continuation to Part 1, I have described the key aspects for starting or expanding the business.

Section 3

In this section, I have introduced two levels of plan.

1. Readiness Plan

If you have decided the launch date of your business, then there will be a set of things that is to be accomplished before that date. For example, identifying a brand name, registering your company, enabling necessary technology, renting an office, etc. A readiness list can contain the silliest of things that one feels is needed before the implementation date.

Readiness Plan is drawn by brainstorming and is kept updated from time-to-time. It acts as a scheduler of tasks that lead up to the launch.

Most start-ups and business expansion teams have this list.

2. Tactical Plan

A tactical plan of Hoshin contains Business Tactics. After launching the business, one would need to know how to accomplish the vision, mission and strategies. Each of the strategies mentioned may be very broad & high level.

And here is where even big corporations fail. They might have an excellent strategy document with well researched information of competition, customer and market, but when it comes to executing the strategy, even the Business Head can’t correlate actions to strategy. Mostly it happens by trial & error and more so by impulse rather than by planning.

In order to draw a robust tactical plan, assess how much are you away from the target for each of the strategies. This is usually done by looking at past performance for existing or expanding businesses.

But for start-ups, it can be done by an idea generation session or by finding out what competition is doing. For example, if the strategy is to target Small & Medium Enterprises and sell products to them, then the tactics can be any of the following:

So these are just few tactical items that one could target and most of these are done from time-to-time after business activity is initiated.

Hence tactical plan is a live document and kept updated regularly. Very few organizations and start-ups have such a plan.

Section 4 – Metrics Scorecard

Once you have vision, mission, strategies & tactics in place through Hoshin Plan it’s all left to execution. In order to gage execution, there should be a measurement mechanism in place that captures the performance and gaps against vision.

Here are key elements of a metrics scorecard of a Hoshin Plan are :

1. Only measures and not tick-points are to be included in the scorecard 2. All measures included in ‘Annual Objectives’ of Section 1 should be included 2. Additionally defined measures that measure efforts are to be included. 3. Monthly targets are to be assigned based on annual targets, seasonal trends and other business priorities 4. Tracking and reporting mechanism should be able to trigger alarms when things are not in shape.

And finally, try to keep it simple in MS-Excel rather than complicating it with automation.

If you are business owner, take personal interest to fill this up, as in the process of doing so, you will be able to find several live issues which otherwise don’t surface to your level.

Section 5 (Recommended for Start-ups)

I have found that in the case of start-ups, the founders may have the excellent product knowledge but lack several related skills such as marketing, presentation, team management skills, etc., which are essential in business. Hiring an expert is certainly a solution, only when you know how to use him.

So, I recommend that each of the founders draw-up a personal development plan and help each other to track progress.

Finally, it is important to have a business plan that passes the filters of investors and bankers. But that doesn’t warrant this important activity to be outsourced! Writing a business execution plan should be one of the skills of every entrepreneur and business leader should master.

Before I start telling you what an X-Matrix is, let me give you some context. X-Matrix is a very popular visual tool traditionally used by Japanese companies, and now by many world-wide for planning their organization’s strategy. It is part of the approach called Hoshin Kanri (Policy Deployment)

X-Matrix is a one page document that links an organization’s strategies, metrics, tactics, results and responsible people.

Once the 3-5 year strategic objectives of an organization are decided, then the X-Matrix can be used break them down to tactics, metrics, assign responsibilities and track them.

It starts at an organization level where a primary X-matrix is created and for each of the key strategies, if needed, secondary X- matrices are drilled-down.

In my experience X-matrix has been very beneficial for enterprises of all sizes. For large corporations with multiple business lines and products, then I have found there may be multiple X-matrices and that leads to lot of confusion.

One of the biggest benefits of X-matrix is that it acts as a document that forges agreement among all stakeholders on the strategies, tactics and metrics. Hence the ‘catch-ball’ happens when this document is completed. Usually this format is printed in A0 size and used for filling up the different sections.

The second benefit is that it acts as a good communication tool for management to share their plans with rest of the organization. It can be displayed in a common place for employees to see and understand the organization’s priorities

How to fill the X-Matrix?

  1. Start with the ‘Strategies’ – Fill in the 3 or 4 broad strategies for the organization for the next 3-5 years.
  2. Move to Annual Objectives – List down those objectives which will be accomplish by the team
  3. Establish correction between Strategies and Objectives. Link up each of the ‘strategies’ to the ‘objectives’ in the intersection place with cross signs. Some recommend high(H), medium(M) and low(L) to denote the strength of correlation. This exercise can be done by the team through brainstorming or by data collection, if relevant.
  4. If there are orphan strategies or objectives, then go back to second 1 and 2 and review them.

Repeat steps 1 to 4 by populating the following one after the other:

If you like to know what goes into tactical plans, how metrics are decided and how accountability and targets of metrics and goals are assigned, I’d recommend that you read my articles in ‘Strategy & Hoshin’ section

Accountability is nothing but the correlation of Tactics to Team members This entire exercise involves a lot of concentration and team effort and hence is unlikely to be completed in a single sitting. Many times, the functional heads may require inputs from their team members and hence may need more time.

For best results and especially if you are doing it the first time, I recommend you have an expert run this for you. He can educate the leadership team and at the same time get this important annual goal setting accomplished.

Hoshin Planning process, derived from Japanese policy deployment approach of Hoshin Kanri (Policy Deployment) has several salient features over conventional strategic planning process.

If you are accountable for organizing annual goal setting for your organization, it would be a good idea to learn about Hoshin Planning process.

Following are the top 7 salient features of Hoshin planning process:

Prioritization : Every organization, however big it is, works with limited resources – time, people and $$. One of the key reasons for derailment of business strategy execution is lack of prioritization at the time of creation of annual strategic plan. This is one such area where all organizations fail, immaterial of their size. Between the eagerness to achieve stretch goals and fear of not achieving them, most leaders compromise on the prioritization and end up doing everything. One of the fundamental principles of Hoshin Kanri (Policy Deployment) is prioritization. Some goals are more important than others, some strategies are more fruitful than others and some strategic projects create more impact as compared to others than created only trivial impact. So it is not possible to give equal priority to all goals, strategies and strategic initiatives. Thus Hoshin planning process forces the leadership team to prioritize organizational goals, strategies and strategic projects based on the parameters like organizational vision, internal and external environments and voice of customers.

‘De-selection’ : At the first sight, ‘Deselection’ might sound like the corollary of Prioritization. “Deselection” actually precedes prioritization. Hoshin Planning process encourages the leaders to deselect goals, strategies and strategic projects that aren’t important rather than selecting important ones. Thus ‘De-selection’ is the process of systematically eliminating or parking, goals, strategies and strategic projects that aren’t most important. In my experience most large organizations fail when it comes to deselection. They run too many strategic projects concurrently with gross overlap in scope by resources who are spread thin on various projects. These are clear indications that ‘deselection’ isn’t effective. The criteria for de-selection can vary. Usually following criteria work –

‘Must-do, can’t fail’ Attitude : Hoshin Kanri (Policy Deployment) approach emphasizes the organizational leaders to imbibe a ‘Must do, Can’t fail’ attitude when it comes to prioritized strategic projects. In spirit, it means that the organization believes that a ‘must do, can’t fail’ initiatve is critical for the success of the organization and hence the leaders need to do all it takes to make it successful because it failure directly impacts the organizational goals.

Joint Accountability : Hoshin process encourages sole ownership and joint accountability of the leadership team in deciding and achieving the goals. While individual leaders hold sole ownership of an organizational goal, the leadership team of the organization too holds joint accountability. ‘Catch-ball’ mechanism is a method adapted in Hoshin Kanri (Policy Deployment) approach to drive this joint accountability for goals. Again, this is one of the biggest areas where large enterprises fail.

Constructive Negotiation : Hoshin doesn’t encourage strong top-down approach. Instead it encourages leaders to negotiate goals, resources and ownership, both vertically and horizontally using ‘Catch-Ball’ mechanism. By doing so, leaders participate in their own goal setting rather than accepting goals given to them. Cross functional ownership of goals are also agreed in the similar manner. While this process does consume some extra time in finalizing the strategic plan, it brings in lot of clarity and acceptance among leaders.

Resource Optimization : Resources are very critical for the success of strategic plans. They can either be people, equipments, funds or other resources. But, in most organizations, its people who drive strategic plans. But when they are over utilized, it directly impacts the success rate of strategic initiatives and achievement of organizational goals. Embedded in Hoshin planning process is the resource allocation and optimal utilization to avoid failure due to skill mismatch or non-availability. There are inbuilt mechanisms that prevents a resource from being over utilized.

Integration of budgetary planning and performance management process : Hoshin planning process isn’t a stand-alone annual planning process. Organizations that have been successful with Hoshin Kanri (Policy Deployment) have integrated the budgetary planning and associate performance management process. The ensures that financial planning and associate incentives are aligned to organizational goals, strategies and strategic projects.

While there are few more features of Hoshin Planning process, the above 7 are compelling enough to pursue this approach if the organization wants to succeed in achieving its critical goals.

About the Author:

Nilakantasrinivasan aka Neil helps a range of large enterprises in services and manufacturing, with particular emphasis on execution of business & functional strategies using Hoshin Kanri(Policy Deployment). He can be contacted at neil@collaborat.com.

Kanri is the strategy execution process in the Japanese approach of Hoshin Kanri. To my knowledge, it is the only approach that seamlessly integrates strategy creation to its execution. Considering that this Japanese method has been in existence for 60~70 years now, it is interesting to know that originators of Hoshin Kanri have given equal (or even more) emphasis on strategy execution way back then. When you learn about the salient features of Kanri Strategy Execution Process, you will be able to appreciate this.

About the Author:

Nilakantasrinivasan aka Neil helps a range of large enterprises in services and manufacturing, with particular emphasis on execution of business & functional strategies using Hoshin Kanri. He can be contacted at neil@collaborat.com.

A Hoshin Kanri (Policy Deployment) X-matrix is a one page document strategic plan of any organization that includes goals, strategies, strategic projects (initiatives) and owners. It is also known as Policy Deployment (PD) document.

It is a X-shaped matrix diagram linking the aspects mentioned above. One wouldn’t miss the big X at the middle of this document.

The organizational X-matrix is owned by the CEO/President but it is jointly constructed by the leadership team of an organization and with the guidance of a Hoshin Kanri (Policy Deployment) expert. It is one of the key deliverable of the Hoshin planning session. Many organizations are used to voluminous strategic plan, but in Hoshin Kanri (Policy Deployment) approach, even for large conglomerate, strategic plan is a single page document. A X-matrix is a very good example of how Hoshin Kanri (Policy Deployment) uses visual management style. Being simple one page document, a X-matrix doesn’t go into a filing cabinet but instead, it is prominently (yet confidentially) displayed in the board room. Many Japanese organizations have the culture of conducting their monthly strategic review meetings around the displayed X-matrix.

X-matrix is created in the beginning of the financial year and updated every month. Once in a year, the X-matrix and its contents are revisited by the leadership team.

Any strategic plan has to be cascaded to the entire organization. In Hoshin Kanri (Policy Deployment), the X-matrix created at organizational level is cascaded to various functions or business units as child X-matrices. There are clear linkages that are established between the parent and child X-matrices.

There are several variations of X-matrix. Some organizations focus on strategy deployment while others focus on metrics deployment. When an organization over emphasizes on metrics deployment, Hoshin Kanri (Policy Deployment) approach tends to replace balance score card approach.

The success of any strategy and its execution is a dependent on the how leaders within the organization demonstrate ownership and participate in its execution.

Most conventional strategic management approaches don’t have well defined roles that leaders need to play, when it comes to strategy creation and execution. In many cases, the roles are un-articulated and considered to be inherent to the leader’s position. As a result, things start off very well with the strategic plan formulation, but things fad when it comes to strategy execution. By the end of year, there are arguments, disagreements and displeasure in owning failures and success.

Hoshin Kanri(Policy Deployment) Japanese strategy and execution approach is a well designed approach that clearly defines the various roles involved in the strategy formulation and its execution. While it is still the leaders of the organization who plays these roles, because the roles are articulated, a level playing ground is established. This acts as an enabler for successful execution of strategic plans.

Hoshin Kanri (Policy Deployment) approach advocates Individual Ownership and Joint Accountability(IOJA). Hence roles are defined for individual and for groups. Here are the key individual and group roles in Hoshin Kanri (Policy Deployment) :

Hoshin Leadership Team

Hoshin Leadership Team is nothing but a steering committee that is responsible for creating and executing strategic plans within the organization. Usually it has representatives from the senior management team. The Chief Executive or President is the chairperson of this team. However, the criteria is not necessarily hierarchy driven. It depends on many other factors. I’ve discussed the functioning of Hoshin Leadership Team in a separate article.

Functional Hoshin Leadership Team

Functional Hoshin Leadership Teams can be formed depending on the how the organization chooses to cascade their strategic plans to downstream organization. The role of functional hoshin leadership team will be similar to that of organizational hoshin leadership team, but restricted to respective functions.

Hoshin Teams

These are teams formed to driven strategic projects. Strategic projects are also called as hoshins or strategic initiatives. The composition of the team is usually cross-functional in nature. This team is led by a Hoshin Leader who is responsible to deliver the objectives of the project, formation of the team and reporting of progress to Hoshin Leadership Team. The team members will be assigned specific tasks. Team members have joint accountability to fulfill the objectives of strategic project. These teams are dissolved once the project meets its objectives.

Hoshin Planning Core Committee

This core committee consists of key sponsors of the Hoshin Kanri (Policy Deployment) deployment program in the organization. The role of this committee is to plan, review and implement necessary course correction in its implementation through hoshin policies, change management, corporate communication, etc. Usually this committee is spearheaded by the hoshin kanri (Policy Deployment) facilitator, who is usually an expert in Hoshin Kanri (Policy Deployment) and may be external to the organization. He/she seamlessly works across various levels of the organization throughout the year for strategy formulation and its execution.

Outcomes of Policy Deployment

Hoshin Kanri (Policy Deployment), a Japanese strategy and execution approach has been used by many organizations as a framework for their strategic planning. Hoshin Planning can be considered as a the process of setting annual goals for an organization or function and deploying them down the line.

In general, Hoshin Planning covers defining 3 year organizational goals, their quantification and ownership, organizational strategies to accomplish them, strategic projects (aka Hoshins) at organizational level that are helpful to accomplish goals. Many organizations also want to cascade their organizational hoshin plan to functional level.

If you are considering a Hoshin Planning session, following are the tangible deliverable that you can expect out of this exercise:

There is a lot of rigor that goes into creating these documents. Leadership involvement, ownership and detailing play a critical role in the effectiveness of these outcomes of annual hoshin planning process. Thus I should warn that just completing this documents for the sake of doing so isn’t Hoshin Kanri (Policy Deployment)!

X-Matrix

If you are new to Hoshin Kanri (Policy Deployment), I’m sure your curiosity to learn about Hoshin Kanri (Policy Deployment) would have left you more confused about X-matrix.

This article attempts to clarify the construct of a Hoshin Kanri (Policy Deployment) X-matrix. If you haven’t already read my article, ‘What is Hoshin Kanri (Policy Deployment) X-matrix?‘ I recommend you to do so before proceeding to understand the purpose of Hoshin Kanri (Policy Deployment) X-matrix.

To briefly summarize, X-Matrix is a one page document that links an organization’s goals, strategies, metrics, strategic projects and responsible people.

First of all, there are several variations of Hoshin Kanri (Policy Deployment) X-matrix and there are no standards. Here I’m going to explain to you, a variation that most of my clients find useful.

Business/Organization Goals

At the 9 clock position of the X-matrix, the organizational goals are entered. Usually not more than 5, but preferably just 3. It is a general practice to include the targets for next 3 years for all the goals. In Hoshin Kanri(Policy Deployment), prioritization plays a critical role. So the goals are prioritized based on their importance to the organization. The most important goals are placed closer to the X. The goal on the extreme left would be least important while one on the extreme right would be more important.

Many organizations don’t prioritize goals as they feel all the goals are equally important.

Organizational Strategies

Organizational Strategies are placed in the 12 clock position. Usually not more than 7, but preferably just 5 strategies. I’m not covering the details of the how organizational strategies are arrived here, but you will find information regarding this in resources page. Strategies are also prioritized. The most important strategies are placed closer to the X. So the strategy on extreme top is least important and the one at the bottom (closer to X) is the most important one. There needs to be consensus among the organizational leaders on these strategies and their priorities.

Some organizations consider inorganic growth as a strategy by default and include it as the last strategy. But this isn’t mandatory.

Owners for Goals

Hoshin Kanri (Policy Deployment) approach prescribes individual ownership and joint accountability(IOJA). Hence each of the goals at the organizational level are owned by individual leaders. In achieving some of these goals, there will be inter dependencies. That’s where joint accountability comes into play. In the X-matrix, owners names are mentioned in the extreme right side after strategies. I’ll later mention how these are linked to the goals.

Strategic Projects

Strategic Projects (Initiatives) are be added in 6 clock position. Some organizations call strategic projects as ‘Hoshins’. Few other synonyms are Strategic Initiatives, Critical Strategic Projects, etc. These are strategic thrust areas where the leadership believes the organization has to do something different in order to achieve 1 or more goals using 1 or more strategies. There is no restriction on the number of strategic projects, but it is critical to limit the number to something that the organization can concurrently manage. Most organizations falter here. Similar to goals and strategies, strategic projects are also prioritized.

Establishing relationship between Goals, Strategies, Owners and Strategic Projects

The most common way to establish these relationship is using symbols in the intersection area of each of the above. Generally, two different symbols are used to represent strong and weak relationships. But I prefer to use numbers of a 3 point rating scale (9,3 & 1). 9 represents a strong relationship, 3 for moderate relationship and 1 for weak relationship.

So in the 10 clock position will be used to represent the relationship between goals and strategies and 2 clock position to represent the relationship between strategies and strategic initiatives.

For the relationship between goals and owners, the interaction matrix appearing next to 2 clock position will be used.

Once created, the X matrix will be a live document and needs to be reviewed and updated every month.

The strategic planning process can sometimes get really complicated. Especially when it comes to large enterprises with multiple lines of business, where each of the lines of business are unique and have nothing common between them.

The objective of this article is not to give prescriptive advise on what will work for particular situation, but restrict to introducing the various levels of strategic plans as one chooses to cascade them. Arriving at an apt solution for a particular situation would require me to know about your organization and its current practices.

Broadly the strategic plans are classified into 3 levels based Hoshin Kanri Policy Deployment Framework:

Enterprise Strategic Plan

A strategic plan drawn at this level will be owned by the group chief executive or president. Two scenarios are likely First, the enterprise operates in different geographies and so each geography is a separate legal entity and operates independently. Second, the enterprise could be a conglomerate having multiple lines of business such as retail, telecom, mining, hospitality, etc. In either of these cases, the divisional strategies would be vastly different from each other. These types of organizations are usually referred as M-form (Multi-divisional form). It is very difficult to have a holistic strategic plan at this level for whole enterprise. The strategic plan at this level is more about goals and broad overarching strategies of the enterprise. Overarching strategies are closely linked to the enterprise’s values and guiding principles such as agility, vibrancy, sporty, caring, economical, etc.,

Broadly, the enterprise level strategic plans includes 3-5 goals of the enterprise for next 3 years, 1 ~3 overarching strategies and owners for each goal.

However if the enterprise, isn’t that diverse, then its enterprise level strategic plan resembles divisional strategic plans in form, structure and construction.

Divisional Strategic Plan

Divisional strategic plans are owned by the divisional business heads. They include 3-5 goals, 5~6 strategies specific to the division, derived based on the division’s internal and external environment conditions (SWOT), ownership assigned for each goal and specific strategic projects (initiatives) that will help to achieve the goals. The entire leadership team of the division is involved in creating this strategic plan. If there is a enterprise level strategic plan, then the goals of the divisional plan align to the enterprise’s. With regard to the strategies, while divisional strategies would be more specific, there will be alignment to enterprise strategies.

There would be as many divisional strategic plans as the number of divisions in the enterprise.

Functional Strategic Plan

A functional strategic plan is created for each unique function of a division. It is owned by the respective functional heads. The main purpose of the functional strategic plan is to align the functional goals to the divisional (and enterprise) strategic plans. The goals are directly derived from the divisional plan. Usually there isn’t much emphasis on the functional strategies. Instead functional strategic plans are more tactical in nature. Functions will have to own and contribute to divisional strategic projects as well as drive function level strategic projects. For example, a HR department may own a divisional strategic project to bring employee attrition below certain level, but they also want to drive function level strategic project to improve HR staff efficiency. Thus functional strategic plans are more about resource ownership, alignment between divisional and functional strategic plans, managing the utilization of resources between divisional and functional priorities, etc.,

There are as many functional strategic plans as the number of functions in the division.

In large enterprises, the functional strategic plans also need to have alignment to enterprises like functional strategies. For example, the HR functional strategic plan needs to be aligned to respective divisional strategic plan as well as enterprise level HR Strategic plan.

In cascading functional strategic plans from enterprise and divisional strategic plans, the role played by the facilitator is very important. He/She should diligently map the enterprise and divisional priorities, interview all concerned, understand ground realities and above all, stay neutral.

About the Author:

Nilakantasrinivasan aka Neil helps a range of large enterprises in services and manufacturing, with particular emphasis on execution of business & functional strategies. He can be contacted at neil@collaborat.com.

Nilakantasrinivasan J

Management of Strategies is a vicious cycle. Most organizations aggressively start them and progress till they hit execution roadblocks, they stumble and quit. By then, its time for the year’s performance evaluation so they scramble and fire fight to achieve their goals.

12 Step Strategic Management Cycle is a comprehensive approach that leverages the principles of Hoshin Kanri Policy Deployment and Blue Ocean Strategy. 12 steps mentioned below are followed sequentially, but many of them can be initiated concurrently.

1) Current Performance Assessment

Strategic management process of the coming year commences with a stock-taking exercise of current year’s performance. Most of information relating to current performance will be readily available, but the purpose of this exercise isn’t mere stock-taking. It goes beyond that to understand the lessons learned from current year, variation in performance and reasons for it. Therefore this exercise is reflective in nature.

2) Internal Environment Scanning

Internal environment plays a very critical role in our success. Quite often, leaders take internal challenges for granted. They feel that they can push their way through. Internal scanning is aimed at understanding changes in competencies/skills, mindsets, business models, associate satisfaction, attrition reasons, technological/infrastructure barriers, etc. Best way to scan the internal environment is through information research, interviews and focus group discussions.

3) External Environment Scanning

External environment plays an equally critical role in our success. Scanning of external environment is an evolved task in many organizations. There are industry research bodies, market subject matter experts, analyst reports, secondary information research information, commissioned studies undertaken by the organizations, etc. The only point I wish to highlight is the the voice of customers and more importantly the voice of non-customers.

4) SWOT Creation/Updation

SWOT is probably one of the oldest management tools. It is simple yet powerful. But it’s also the most abused tool. When I ask leaders to update their SWOTs, they avoid and prefer to delegate. But when I insist, they reluctantly get involved. In reality, the quality of SWOTs are unbearable. Most SWOTs are nothing but a journal of accomplishments and perceptions. But a good SWOT should be factual, frequently updated (at least yearly) and should be prepared with involvement for all stakeholders.

5) Goals Pre-work

Organizational goals have to be comprehensive and quantitative in nature. A facilitator plays a critical role in conducting pre-work exercise. Potential candidates for goals are collated, grouped, prioritized and selected through consensus.

6) Goals & Strategies Formulation

The real truth about most strategic plans is that there are no real strategies. Goals and strategies are interchangeably used. A good strategic plan should have 3~5 unique strategies derived from SWOT. Strategies answer the ‘How’ part and not the ‘What’.

7) Ownership

When goals are finalized, unique owners for each goal are also to be assigned. What differentiates between organizations that are successful with execution and others is their ability to create Individual Ownership and Shared Accountability (IOSA) in delivering organizational goals. ‘Catch-ball’ mechanism is a method adapted in Hoshin Kanri approach to drive this joint accountability for goals.

8) Strategic Projects Identification

Strategic Initiatives aka Strategic Projects are nothing but the most important projects that are require sponsorship to achieve specific stretch goals. So it starts with identifying stretch goals that cannot be accomplished by business-as-usual(BAU) means. These are good candidates for strategic projects. It is critical to ascertain ownership, measures of success, duration and sufficient sponsorship for each strategic project. Thus organizations are recommended to choose and run only a limited number of strategic projects. Those which don’t qualify to become strategic projects go into parking lot and are pursued in FIFO (First In First Out) approach. Prioritized strategic projects are funded, sponsored and resourced the most.

9) Cascading of Strategies

Strategies needs to be cascaded to grass-root level and this happens through deployment of strategic plans. Enterprise Strategic Plan needs to be cascaded to Organizational Strategic Plan (Business Unit level) and further to Functional Strategic Plan. Usually, most organizations cascade goals and metrics using Balance Score Card approach, but goals are only one aspect of strategy deployment.

10) Weekly Progress Meeting

The leader of each strategic project has a project plan. He/She forms a cross functional team. Weekly progress meetings are chaired by the respective project leaders and are meant to take stock of task level progress, identification of bottlenecks, resource constraints and new ideas. The success of any organizational strategy execution resides in the diligence to these routines by the strategic teams.

11) Monthly Strategic Reviews

Monthly strategic reviews are conducted by the Senior Leadership Team that created the Strategic Plans where they review the progress of each strategic project as leader of each project makes a presentation. This forum addresses issues relating to conflict of interest, participation issues, priority setting, etc.

12) Quarterly Strategic Reviews

This is the time to reflect. A quarter is good enough a period to validate if the existing strategies and strategic projects are still relevant with respect to the dynamic internal and external environment. If some of them needs to be changed/dropped/added, then those decisions are taken in this meeting. Further formal closures of successfully completed strategic projects and kick-offs of new ones from the parking lot. Thus this meeting acts as the fountainhead of strategic direction for any organization. Unfortunately the agenda for quarterly strategic reviews of many organizations is grossly off these objectives.

Finally, there are no approaches that fits all organizations. Depending on organizational culture, existing practices, leadership bandwidth, etc., its best to align the 12 step approach to organizational practices to create maximum buy-in and minimum chaos.

Nilakantasrinivasan J

Nilakantasrinivasan J (Neil) (born 1974) is an Indian author, consultant and guide, focused on the subject of client centricity, B2B client centric business growth, business transformation & analytics. Nilakantasrinivasan J (Neil) is the author of 3 books, The Client Centric Protagonist, The Master Book for Lean Six Sigma & A Little Book for Customer Experience.

If you are new to Strategic Planning and want to familiarize yourself on what a strategic plan is and how to go about preparing one, then this article will be useful.

Strategic plans are prepared at different levels using different approaches, but the ones mentioned below are 5 important elements of a good strategic plan. The framework of Hoshin Kanri Policy Deployment aptly covers these 5 elements.

Traditionally strategic plans are considered to be complex and bulky reports that runs to pages. But that isn’t necessary true. However, it is true that there is lot of work that goes into creating an organization’s strategic plan. But a good strategic plan can just be a one-document containing the following elements :

Business Goals

Business goals are the organizational level goals that are closely tied to the organization’s vision and mission. It reflects the aspirations of the organization and their commitment to their customers, shareholders and employees. Usually the organizational goals are restricted to not more than 5 and preferably just 3. Each of these goals are quantifiable measures with agreed targets for next 3 years. Not all goals are equally important, so it would be a good idea to arrange them in the order of importance.

If your organization feels that all the goals are equally important, then there is no need to prioritize them.

Measures of Success

As mentioned earlier, it is important to quantify all goals. So there is a clear difference between vision and goals. ‘To be market leader in next 3 years’ isn’t a goal. For some goals, there may be more than one measure of success. It’s a good idea to include all of them, but they can be carefully screened before inclusion.

Organizational Strategies

Organizational Strategy is the most misused management term. Goals and strategies are interchangeability used and they are thoroughly confused. As Michel Porter puts it, strategies represent the ‘How’ part of achieving the goal, not the ‘What’. Strategies are arrived based on internal and external environments. Number of strategies to be no more than 7 but preferably just 5. I’m not covering the details of the how organizational strategies are arrived here, but you will find information regarding this in other articles. Most times, a given strategy can be helpful in achieving more than one goal.

Like goals, strategies have to be prioritized as well. Some organizations consider inorganic growth as a strategy and include it as the last strategy. But it isn’t mandatory to include acquisition as a strategy by default.

Ownership for Goals

Goals without individual ownership will never be accomplished. Hence each of the goals at the organizational level are owned by individual leaders. Just to reiterate, I used the word ‘Owned’ not ‘Assigned’. Hence the individual leaders of the organization engage in a discussion and agree to own goals rather than being assigned by the Chief Executive. In achieving some of these goals, there will be inter-dependencies. That’s where joint accountability comes into play.

Strategic Projects (Initiatives)

Strategic Initiatives are strategic thrust areas where the leadership believes the organization has to do something different in order to achieve 1 or more goals. Few synonyms for Strategic Projects are Strategic Initiatives, Critical Strategic Projects, etc. There is no restriction on the number of strategic projects, but should be limited based how much an organization can manage concurrently. Most organizations falter here. Similar to goals and strategies, strategic projects are also prioritized. In order to ensure a strategic project is successful, there needs to be a robust project plan, cross-functional teams and rigor.

Once created, a strategic plan is a live document and needs to be reviewed and updated every month.

Q – How to solve Ownership Issues; A – Catch Ball Technique

It is indeed this topic very close to heart for many of us, isn’t it?

Each of us will have stories of frustration to share on how we were appraised poorly, received low bonuses, promoted last, long arguments with boss & colleagues and in some cases even lost our jobs for no fault of ours!

When goals come from seniors, in good spirits, it is assumed as everyone’s responsibility to meet them. But when really things don’t go as they were planned, scapegoats are born.

I have seen lack of responsibility in the following situations:

a) Ownership issues for failures between departments. For example, if there’s staff attrition, is that HR or Line Manager who owns this failure b) Ownership issued within homogeneous teams. For example, lack of ownership on team sales target among sales staff of that team

While (a) has been difficult to resolve traditionally, (b) is not so much a problem when the Manager exercises good control (Top-down).

Catch-ball technique, a part of Hoshin kanri or Policy Deployment Planning is a very effective method to encourage employees to take ownership and empower them.

As the name suggests, the ‘ball’ of responsibility is thrown between team members till consensus is arrived. In essence, it is a series of constructive and dialogue-based process where team members discuss and agree on ownership of targets.

Unlike the traditional top-down approach, manager doesn’t thrust targets on his team. In this technique, she proposes a target and allows the team to debate on the capabilities, constraints, resources, etc., before they agree on a goal. If they disagree, the manager has an opportunity to review the target, as she too hasn’t agreed the target with her manager.

Thus the mechanism involves several rounds of discussion between team members before goals are agreed. From an organizational perspective, the CEO/business leader gets to know by the end of ‘catch-balls’ if the target set by him is achievable or not; and the constraints associated with it.

In my personal experience, as people get to discuss about the target in advance, several opportunities arise, such as:

Systematic: A lot of planning activity gets accomplished upfront, rather than putting it for later months Think-tank: There is thorough understanding about the target – what needs to be accomplished, when, how, challenges, levers, etc, among all the team members Team Work: Team members get opportunity to mingle and understand each other better. Especially in today’s environment where staffs rotate every 2 years and we end up dealing with new members every time, these catch-ball sessions help.

Shared responsibility: Many targets require participation from other functions, like the above example of staff attrition. So in this case, may be attrition due to ‘managerial’ issues can be owned by line management and those due to ‘compensation & retention’ by HR. Something like this cannot be agreed till such time discussions happen. In preparation to such achieving such a target, a robust data collection mechanism at the time of staff exit has to be implemented. Such aspects don’t get discussed in traditional goal setting.

Empowerment: When targets are not achievable, it encourages dialogues with Managers or Senior Managers on why it can’t be achieved. Such situations usually force managers to empower their teams. So, even when a manager is ‘control-freak’, he is forced to empower his team. Culture: Due to the nature of discussions, when catch-ball technique is used over 1 or 2 years for annual planning sessions, there is a big change in company’s culture. People are open and transparent. They see each other eye-to-eye and they learn to agree to disagree.

Accountability: Many times, when targets are unachievable, people accept such targets only to see how they can palm it off later when things don’t work. They probably know of other constraints that can be their ‘official’ reasons for failure – clearly cases of procrastination and finger pointing. Such situations don’t occur as ‘Catch-ball’ encourages discussion and subsequently ‘Kanri’ ensures rigorous monthly monitoring. Stretch Targets: As illustrated in the article of ‘bottom-up’ example, teams tend to achieve more than the target and that too willingly. In order to learn more about how catch-ball technique is executed, refer to my article titled ‘How to implement Catch-ball Technique’

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