HOSHIN KANRI AND STRATEGIC POLICY DEPLOYMENT:Senior Management

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Total Quality Management MGT510

Lesson # 34

HOSHIN KANRI AND STRATEGIC POLICY DEPLOYMENT

Strategy Implementation:

Top management requires a method to ensure that their plans and strategies are successfully executed

(the term "deployed" is frequently used) within the organization. The Japanese deploy strategy through

a process known as Hoshin Planning, or Policy Deployment. Hoshin means policy or policy

deployment. Policy deployment is a systems approach to managing change in critical business

processes. It emphasizes organization-wide planning and setting of priorities, providing resources to

meet objectives, and measuring performance as a basis for improving performance. Policy deployment

is essentially a TQ-based approach to executing a strategy. King describes it eloquently.5

Imagine an organization that knows what customers will want five to ten years from

now and exactly what they will do to meet and exceed all expectations. Imagine a

planning system tat has integrated [Plan, Do, Check, Act] language and activity based

on clear, long-term thinking, a realistic measurement system with a focus on process

and results, identification of what's important, alignment of groups, decisions by people

who have the necessary information, planning integrated with daily activity, good

vertical communication, cross-functional communication, and everyone planning for

himself or herself, and the buy-in that results. That is Hoshin Planning.

With policy deployment, top management is responsible for developing and communicating a vision,

then building organization-wide commitment to its achievement. This vision is deployed through the

development and execution of annual policy statements (plans). All levels of employees actively

participate in generating a strategy and action plans to attain the vision.

At each level, progressively more detailed and concrete means to accomplish the annual plans are

determined. The plans are hierarchical, cascading downward from top management's plans. There

should be a clear link to common goals and activities throughout the organizational hierarchy. Policy

deployment provides frequent evaluation and modification based on feedback from regularly scheduled

audits of the process. Plans and actions are developed based on analysis of the root causes of a problem,

rather than only on the symptoms. Planning has a high degree of detail, including the anticipation of

possible problems during implementation. The emphasis is on the improvement of the process, as

opposed to a results-only orientation.

An example of policy deployment is provided by very well known Japanese, Mr. Imai:

To illustrate the need for policy deployment, let us consider the following case: The

president of an airline company proclaims that he believes in safety and that his

corporate goals are to make sure that safety is maintained throughout the company. This

proclamation is prominently featured in the company's quarterly report and its

advertising. Let us further suppose that the department managers also swear a firm

belief in safety. The catering manager says he believes in safety. The pilots say they

believe in safety. The flight crews say they believe in safety. Everyone in the company

practices safety. True? Or might everyone simply be paying lip service to the idea of

safety?

On the other hand, if the president states that safety is company policy and works with

his division managers to develop a plan for safety that defines responsibilities, everyone

will have a very specific subject to discuss. Safety will become a real concern. For the

manager in charge of catering services, safety might mean maintaining the quality of

food to avoid customer dissatisfaction or illness.

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Total Quality Management MGT510

In that case, how does he ensure that the food is of top quality? What sorts of control

points and checkpoints does he establish? How does he ensure that there is no

deterioration of food quality in flight? Who checks the temperature of the refrigerators

or the condition of the oven while the plane is in the air?

Only when safety is translated into specific actions with specific control and

checkpoints established for each employee's jobs may safety be said to have been truly

deployed as a policy. Policy deployment calls for everyone to interpret policy in light of

their own responsibilities and for everyone to work out criteria to check their success in

carrying out the policy.

Policy deployment starts with the senior managers of the company. The senior managers establish the

vision and core objectives of the company. An example of an objective might be "to improve delivery,"

which supports the long-term vision of "to be the industry leader in customer satisfaction. "Middle

management negotiates with senior management regarding the goals that will achieve the objectives.

Goals specify numerically the degree of change that is expected.

Strategies specify the means to achieve the goals. They include more specific actions to be taken.

Middle managers are responsible for managing the resources to accomplish the goals. Middle

management then negotiates with the implementation teams regarding the performance measures that

are used to indicate progress toward accomplishing the strategies.

Measures are specific checkpoints to ensure the effectiveness of individual elements o the strategy. The

implementation teams are empowered to manage the actions and schedule their activities. Senior

management then uses a review process t understand both the progress of the implementation team sand

the success of their planning system.

Roles in Implementing a Quality Strategy

Senior management, middle management, and the workforce each have a critical role to play in the

implementation process. Senior managers must ensure that their plans and strategies are successfully

executed within the organization. Middle mangers provide the leadership by which the vision of senior

management is translated into the operation of the organization. In the end, it is the workforce that

delivers quality and must have not only empowerment, but also a true commitment to quality for TQ to

succeed.

Senior Management

Senior managers must ensure that the organization is focusing on the needs of the customer. They must

promote the mission, vision, and values of the company throughout the organization. Senior managers

must identify the critical processes that need attention and improvement and the resources and trade-offs

that must be made to fund the TQ activity. They must review progress and remove barriers to

implementation. Finally, they must improve the processes, in which they are involved (strategic

planning, for example), both to improve the performance of the process and to demonstrate their ability

to use quality tools for problem solving.

Middle Management

Transforming middle managers into change agents requires a systematic process that dissolves

traditional management boundaries and replaces them with an empowered and team-oriented state of

accountability for organizational performance. This process involves the following:

1. Empowerment. Middle managers must be accountable for the performance of the organization

in meeting objectives

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Total Quality Management MGT510

2. Creating a common vision of excellence. This vision is then transformed into critical success

factors that describe key areas of performance that relate to internal and external customer

satisfaction.

3. New rules for playing the organizational game. Territorial wall must be broken, yielding a spirit

of teamwork. One new approach is interlocking accountability, in which all managers are

account able to one another for their performance. The second is team representation, in which

each manager is responsible for accurately representation, in which each manager is responsible

for accurately representing the ideas and decisions of the team to others outside the team.

4. Implementing a continuous improvement process. These projects should improve operational

systems and process.

5. Developing and retaining peak performers. Middle managers must identify and develop future

leaders of the organization.

The Workforce

The workforce must develop ownership of the quality process. Ownership and empowerment gives

employees the right to have a voice in deciding what needs to be done and how to do it. It is based on a

belief that what is good for the organization is also good for the individual and vice versa.

Training, recognition, and better communication are key success factors for transferring ownership in

the workforce. With increased ownership, however, come a flatter organization and the elimination of

some middle managers. Increased ownership also requires increased sharing of information with the

workforce and a commitment to the workforce in good times and in bad. This might mean reducing

stock dividends and executive bonuses before lying of the workforce during economic downturns.

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