Aligning Strategies with Operations

by Norma Simonspresented at

The AEC Luncheon The Ohio State University

© 2015 Performance Innovation LLC

Outline

• Food for Thought

• The Path to Alignment• Step 1: Develop a Strategy Map

• Step 2: Identify Key Performance Indicators

• Step 3: Establish a Standard Documentation System

• Step 4: Deploy Measures in all areas

• Step 5: Establish a Review System

• Step 6: Institute a Visual Management

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Food for Thought• Can you execute your strategic plan?

• Is your organization aligned?

• Are you able to hold people accountable for performance?

• Do you struggle to meet financial performance at the end of the month, quarter, or year?

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Quotes

• “The most critical element in any strategy is its translation into reality. The only true measure of success is in its execution. And one of the key determinants of successful strategy implementation is organisational alignment.”

• “Alignment the glue to organizational performance”

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An Organization with Vision but Poor Alignment

Gallop Poll of 1.7 million workers found that 67% could not answer “Strongly agree” with the statement “I know what is expected of me at work”

“Great Performance is 1% vision and 99% Alignment”

Jim Collins, author of Good to Great

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An Organization with Vision & Alignment

There is nothing so useless as doing efficiently that which should not be done at all” —Peter Drucker

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Importance of Alignment• Waste Reduction

• Ease of Communication

• Ability to Respond Quickly to Changes

• Improve Efficiency & Effectiveness

Remember that alignment is not static

Alignment is continuous

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Senior Management

Senior Management

Middle Management

Middle Management

WorkforceWorkforce

Closed-Loop SystemHorizontal & Vertical Alignment

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The Path to Alignment

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Step 1: Develop a Strategy Map

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Step 2: Create Key Performance Measures

• Relate to the strategy

• Communicate the strategy

• Financial/non-financial measures

• Establish a Feedback mechanism.

BOS

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Step 3: Standardize Documentation

• Structured and consistent

• Use of key tools:-Trend chart-Pareto chart-8D Summary-Paynter chart

BOS

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Primary Tools Used

PaynterChart

ParetoChart

ProblemSolving Process

Trend &

Goal Chart

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Step 4: Deploy Measures

• Start at the top by defining goals & strategies

• Translate to key measures at each level

• Means of linking strategy to tactics

• Organizational alignment.

BOS

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Linking Measurements

M

A

R

K

E

T

Process/DepartmentalMeasures

OrganizationalMeasures

Individual Measures

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Step 5: Establish a Review System

• Structured and consistent

• Review of actions impacting key measures

• Evaluate system effectiveness

• Modify and close gaps.

BOS

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Step 6: Develop a Visual Management System

• Common method of communication

• Problems more visible

• Cycle time to correct problems reduced

• Facilitates daily work

• Promote total employee involvement

• Ties to the Review System.

BOS

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Components of a Typical

Business Operating

System

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A Structured Business Operating System

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A disciplined system used to promote and

manage continuous improvement.

It focuses on the assembly and analysis of data

for key measures that are quickly reviewed

and acted upon by a team.

The Business Operating System

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Some Results• Plant Turnaround - stop loosing money in six months

• Improve cash flow by 200%

• Enhance overall company performance within one year

• Reduce percentage defects by 50%

• Improve On Time Delivery performance from 60% to 100%

• Improve inventory turns

• Develop teams across functional units

• Improve productivity by 40%

PresenterNorma Simons

Lean Six Sigma Master Black BeltPresident

Performance Innovation LLCNovi Michigan

www.performance-innovation.comnorma@performance-innovation.com

© 2015 Performance Innovation LLC