Strategic Planning and Policy Deployment

Strategic Planning: The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities. It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio, and coordinating functional strategies. (http://www.prenhall.com/divisions/bp/app/armstrong/cw/glossary.html#s)

Policy Deployment (a.k.a. Hoshin Planning or Hoshin Kanri): Integrating an organization's strategic and business plans with its vision, mission, value proposition, core competencies, and each individual's annual work plan. (Luftig, 1998)

A company's strategic plan and how it deploys its resources to achieve its strategic objectives are key components to its long term success. The first phase of implementing BPE consists of performing strategic planning and policy deployment. It is this crucial step that sets the stage for the success of the BPE implementation as well as the company's success.

ROI uses proprietary techniques created and perfected by Dr. Jeffrey Luftig over many years in many industries and at many Fortune 500 companies. How do you know if your company is in need of a better system for Strategic Planning and Policy Deployment? Review Dr. Luftig's humorous, and tragically all too common, list of symptoms.

Symptoms of Organizational Deficiencies

• The organization has a vision and mission which serve mostly as the basis for supposedly inspirational posters, slogans, wallet cards, pocket protectors, and ‘thought of the day’ quizzes; all of which constitute non-value-added expenditures and activities.
• There is little or no integration between the organization's vision and mission, and its strategic and business plans.
• There is little or no integration between the organization's vision and mission, and the KPIs and NFIs measured on a daily basis.
• There is little or no integration between the organization's strategic and business plans, and the KPIs and NFIs measured on a daily basis.
• The organization annually generates 100's of “number one priorities” (goals / objectives), while everyone recognizes it doesn't actually have the resources to achieve half that many.
• Many constructs or themes inherent within the organization's vision and mission are never measured.
• The organization's strategic and business plans are last viewed each year by managers when they place the 4" 3 ring binders on their shelves.
• The divisions or departments within the organization can all successfully “hit their numbers”, while the organization as a whole fails to make an acceptable profit.
• Projects are selected for their interest level and/or cannot be killed off.
• Individuals’ responsibilities are often only related to the vision, mission, and strategic plan of the organization by happenstance.
• The organization operates on a “feed the beast” mentality, assuming that any business is superior to no business (i.e. "revenue is king").
• The organization employs standard or average cost accounting procedures to ensure that no one understands what business is truly profitable.
• True versus apparent cost and profit cannot be broken down by flow path, customer, product(s) or any critical component; leading to . . .
  • Incentive systems that encourage the sale/production of ‘any’ units, versus the optimization of ‘richness of product mix’ sold/produced, leading to . . .
  • Working on just-in-time process improvement and lean manufacturing projects which ultimately reduce profit (asset) dollars generated.
• Using X% headcount reductions ‘across the board’ (in the name of fairness) to reduce costs. Using headcount reductions and capital equipment investments as a first rather than last choice to improve profitability.