The paper explains what is meant by Strategy Deployment, distinguishing between the aspects of alignment and engagement. It anchors the theory and practice in both Strategic Thinking and Lean Thinking

1. Strategy Deployment
Introduction Contents
This document is one of a collection that sets out what our business
is and how we go about our work, which can be found in the The Acid Test................................................................................... 2
Learning Resources on www.sapartners.com. It builds on The Lean
Business Model and explains what we mean by Strategy Alignment and Engagement ............................................................. 2
Deployment and how it how it is implemented.
Lean Business Model....................................................................... 4
The particular approach that we adopt draws on three sources:
Articulating Strategy......................................................................... 4
The best of Lean, with its origins in Policy Deployment and Hoshin
Kanri Deployment Process ........................................................................ 5
Good practice in Strategic Management, in particular the “Design
School” of Strategic Management The Business Cockpit ...................................................................... 7
Selected parts of the Leadership and Change Management
domains. Deploying to the Next Level ............................................................. 8
Implementation of Strategy Deployment can be further enhanced by The Link to Continuous Improvement............................................... 9
use of best of breed software, developed by S A Partners and our
Allies, known as The Business Hub. Software for the Business Cockpit.................................................. 10
Next Steps ..................................................................................... 10
© S A Partners 1993-2009

2. The Acid Test cover at the times when there is most demand. We measure the
percentage of enquiries closed on first response and response
time to closure”
The starting point for developing understanding of strategy
deployment is to consider in any organisation what would happen if
you went to speak to someone in any function, at the lowest level
and asked the following questions:
Alignment and Engagement
So this idea of Strategy Deployment is about alignment and
What is the plan for this business over the next few years? engagement –
What are you doing to contribute to this plan that will make a alignment so that the focus is only on the right things that support
difference? the strategic direction
Would they be able to answer the first question? If so, would they be engagement so that personal energy and initiative are brought to
able to answer the second question? If they cannot answer both the day to day tasks and their improvement or indeed to new
how do we expect to implement the strategy effectively? things.
Clearly the answers will be in terms that are relevant to the people The diagram shows the frame in which deployment takes place.
being asked, not in management speak. So if an important element It is not unusual to find organisations that are quite well aligned but
of the strategy is about customer service, it might go something like: very passive (not engaged). In this case the challenge is to secure
that engagement so that the organisation moves from focused to
The person in the despatch bay will say something like “I get the
idea of customer service to make the business successful. We Alignment &
know turn round time is important and we make sure we complete Engagement Aligned
Focused Performing
Constrained Rewarding
the despatch list before we finish. Come and look at our
performance charts. You can see the levels of performance, our For the organisation ?
new targets and the problems that we are currently working on.” For the people
The operator in customer support might say “We have a central Alignment
role in the success of the business here in Customer Support. We
? ?
understand that the customers who contact us want a complete
What is Current
response quickly. So we aim to deal with as many of the queries Reality? ?
as we can ourselves and when we have to involve others we make Latent Chaotic
What should be
sure we monitor progress and chase it to a conclusion. We are our intentions? Scattered
Confusing Liberating
working on some improvement activities to make sure everyone is
Passive Engaged
trained in more topics and to work out a better way of providing Engagement
Page 2 of 10 © S A Partners 1993-2009

3. truly performing at its potential. As this change occurs, the people in face into the challenge of both aligning and engaging people at
the organisation become more energised, moving from a feeling of the same time.
being constrained to being rewarded (in an intrinsic sense) for their
contribution.
Example
We have found numbers of businesses in which there are high levels
of engagement but weak alignment. In one large international group, Insights is a global learning and development company working in
this engagement emanated from the brand and the very cohesive partnership with leading organisations across the world. It delivers
corporate culture. The business was absolutely buzzing. People transformational learning solutions that help its clients improve their
found it liberating because they were following their interests but the effectiveness in five key areas: individuals, teams, organisations,
business was suffering because there was insufficient focus on the sales and leadership.
strategic priorities. The organisation was full of talented people not
working together effectively and resources were dissipated. As part “We have a very people-focused culture both because of our values
of a wider strategic change programme, the Deployment task in this and because of the industry in which we work. We strive to balance
case was to channel the energy and secure performance against the our purpose - Igniting Corporate Spirit - with the growth of a well-
specific strategic performance indicators and outcomes. In doing managed, effective business. We adopted all the principles of
this teams at various levels developed a much deeper understanding strategy deployment for our businesses after adapting the language
of what value they should be adding and reduced the amount of and detailed methods to suit us - in fact we decided to call it
interventions that they made at lower levels, giving people more Strategy Engagement, rather than Deployment.quot;
space to fulfil their role.
These principles are powerful and simple. They require diligence
Toughest of all starting points is the enterprise which is both and commitment to apply them, but we found that the flexibility of
scattered and passive. So alignment is weak and there is little application and robustness of processes makes them highly
energy. Not only does the enterprise fail to realise its latent potential effective.
but people are confused. In this example careful thought is required
about whether to design deployment interventions that: This approach has helped us significantly in growing our business
rapidly. They have helped us triple our revenues and quadruple our
are primarily aimed at alignment, for example to achieve some profits in four years, as well as helping us become a serious player
much needed performance in selected dimensions on the global stage.”
or
are primarily designed to engage so that energy is liberated and Andy Lothian, CEO
the organisation becomes more innovative, in a sense preparing it
for alignment that is effective
or
Page 3 of 10 © S A Partners 1993-2009

4. Generating a sense of the starting point through diagnosis and Our Lean Business Model, based on original research into Toyota
enquiry and being clear about the route to an aligned and engaged and its supply chain, recognises the essential nature of this and the
organisation is vital before leaping into the process and tasks. other four elements of Lean implementation. This is because well
conceived and well executed deployment not only aligns the
As the Insights example shows, there can be real hard benefits in organisation with strategy, it also allows the Lean Implementation to
strong engagement. be integrated into the management process and integrated into all
business activities. In other words it enables you to make Lean the
way you run the business, not be a project on the side of the
Lean Business Model business that grows and fades without becoming self sustaining.
It is clear that Strategy Deployment is of relevance to all More detail of The Lean Business Model can be found in the
organisations with whatever system of management they adopt. For Learning Resources section of www.sapartners.com.
those that embark on a journey of Lean Implementation it is one of
the fundamental elements that ensure Lean thinking is applied in
appropriate, rather than arbitrary, ways. Articulating Strategy
Deployment is more than a challenge if the strategy cannot be
Strategy Deployment in clearly articulated, perhaps because it is deep inside the mind of the
The Lean Business Model entrepreneurial leader or because it lies inaccessible in complex
planning documents.
There are many ways of crafting strategy and each leads to
differences in the way in which the strategic choices are structured
and described. The need is for the strategy to be clear, coherent
and compelling. So our initial premise is that the client has a
strategy and we work with the leadership team to make these tests
for clarity and coherence.
If this reveals more than just a clarity problem then we help the client
actually form their strategy using a strategic architecture based on
the diagram with Vision and Values at the top closely underpinned by
strategic Goals (both financial and market). These top level
constructs should set the ambition and whet the appetite for the
important stakeholders as well as provide just enough focus to give
direction.
Page 4 of 10 © S A Partners 1993-2009

5. The next level in the hierarchy provides the real strategic focus Deployment Process
where much more specific choices are made about markets,
products, resource and people. Together these should be a As with formation of strategy, so in deployment there are many
complete and coherent set that underpin the Vision and Values. methods that can be used. Ours is depicted in the diagram. It is has
been created to achieve several important outcomes, namely:
Strategic Direction
Making sure teams fulfil the role they should wherever they are in
the organisation
Producing deliverables that enable both effective management of
A clear articulation of Vision
Values today’s business and creation of tomorrow’s business – the result
a coherent strategy
of implementing the strategy
Goals Establishing a joined up management process that is driven by
Financial / Market the strategy
Finding the chosen balance between alignment of the
Strategic Focus organisation and engagement of its people
Markets / Products
Resources / People There are essentially four phases in the deployment process, starting
from ensuring that there is a clear understanding of the givens as
inputs. There are always givens; even at the top of a company
Critical Success Factors
there are givens that arrive from the external world whether from
shareholders, credit rating agencies, legislators or, in the public
sector, charter and government set targets.
In the lowest level in the hierarchy sit the Critical Success Factors.
They are the things at which we must excel that are important across The first phase comprises judicious selection of factor analysis tools
the organisation; together they will deliver the Vision, Values, Goals to do two things:
and Strategic Focus.
Establish current reality – what really is the situation now
Each of the strategic items may generate measures and targets for Test the strategy for clarity and coherence - are we clear about
achievement, often called KPI’s. The starting point in our what the strategy is and does it make sense.
methodology is to align these measures round the CSF’s which
therefore act as a fulcrum point between formation (or the If the strategy has already set the CSF’s, then the task is to ensure
articulation) of a clear strategy and deployment. they are understood before proceeding further. If this has not been
done, the CSF’s are created at this point.
Page 5 of 10 © S A Partners 1993-2009

6. During this phase it is inevitable that some Issues arise that may and a strictly limited number chosen to work on so that focus can be
need attention and these are captured for later review. maintained, resources allocated and results achieved. There are
always more things that can be done than there is capacity to do and
The second phase involves choosing measures that align with these early steps in strategy deployment test management ability to
strategy and then setting targets for achievement over time. make discriminating choices, especially choices not to do
Measures must indicate that success is being achieved and at the something…
same time drive behaviours that will lead to success.
It is essential to choose carefully, establishing From this flows actions – one time things
- Factor Analysis
the right measures, not using the parameters Givens - Critical Success to do by individuals - and projects –
ISSUES
that are easy to measure. At the top of a Factors complex activities involving many steps
Problems,
business, there are typically a mixture of Opportunities, and several people. This brings
strategic measures and the most important Uncertainties,
Controversies
intentionality to the strategy as it is now
operational ones. Each measure must be - Measures both measurable and actionable.
- Targets
aligned to an element of the strategy. Together Contrast this with variations of strategy
the set should include indicators of what may that are:
happen in the future. The total number of Issue
- Actions
measures should be carefully limited so that - Projects
Management Cast as statements of intent without
Process
real focus can be brought to managing clear ways to make it happen
performance to a result against these Business plans that are “budgets with
measures– quite a different notion from - Business Cockpit words” but no underpinning strategic
monitoring huge numbers of parameters and - Deploy to next logic
doing little or nothing about it. level Apparently endless lists of things to do
without clear priorities
Once the measures are agreed then targets must be set at the very
least to correspond to the Vision outcomes and for the first year. The final phase of the deployment process does two things. Firstly,
Typically, targets are also set for one or two intermediate years but strengthening the management process using the Business Cockpit;
often leaving a gap in the later years before the Vision is reached in secondly, follow through into the organisation to decide how and
order to avoid a sense of artificial precision. when to deploy to the next level. So in fact this is when deployment
truly starts; everything up until now is preparation to ensure that the
Not to be forgotten is the job of stopping the measurement of KPI’s leadership team are themselves aligned round an agreed strategy
that actually drive the wrong behaviour and clearly have no that is structured in a way that can be deployed.
correlation to the CSF’s!
Seeing the gaps between current performance and targets generates
more Issues to add to the earlier list. The whole list is then assessed
Page 6 of 10 © S A Partners 1993-2009

7. The Business Cockpit Together, these last two quadrants are primarily about creating
tomorrow’s business.
This is a concept that goes beyond a mere dashboard displaying KPI
data. It is the very backbone of a good and Lean management Example
process. The diagram sets out the concept with its four quadrants,
which are: MCE is a first tier automotive supplier of door lock systems to
companies such as Toyota and Honda. Over a two month period
bottom right – the top level financial data the leadership team went through the four phase strategy
bottom left – the important measures that have been selected from deployment process and then received 3 months of coaching in the
deployment for managing to a result use of the cockpit to structure management meetings.
Together, these quadrants are primarily about running today’s
business The epiphany for the team occurred when they realised that they
were operating in a vicious circle in which strategy was ad-hoc, the
The Business Cockpit structure was fixed and functional, their was conflict between roles
leading to results that were unpredictable and unsatisfactory.
Issues Market
Action Plans
Existing New
A host of benefits were attributed to this work by the MCE
Jan Feb Mar April
Week Number
H3 - Breakout Action Plans Status
No. Issue Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Move Factory
leadership team, including:
1 Move Factory H2 - Develop the Business
New
2 Foam Systems Development
3 Cost Reduction
4 Process Improvement Foam Systems Development
5 Upskill Engineering
Clear accountabilities for delivering targets.
Product
6 Better understanding of Auto Markets Cost Reduction
7 Establish presence in USA 2
8 Develop Project Management Capability
9 Not clear about customer value for 1st Tier Process Improvement
Robust and standardised method of running the business
New Product Introduction Process not good H1 - Business as Usual
1
10 enough 3 7
Existing Upskill Engineering
Existing
12 9/11 setback in Aviation market 4
13 Opportunitysystems moving up market
Mechanical to secure cost reduction from 5 6 Better understanding of Auto Markets
ensures that it is not reliant on any one leader.
14 supply chain
15 Exchange rate fluctuation
8 Establish presence in USA
16 Opportunities in Furniture market Develop Project Management Capability
17 Vibration problems with product
Much less politics and negative conversations.
18 Quality returns
Measure & Targets Financials
P&L
Actual
This Month
Budget Variance Actual
YTD
Budget Variance
Mindset shift from “reporting data” to “using data to drive
improvement”
SALES
Auto UK 237 258 -21 800 805 -5
Auto Export 598 571 27 1879 1783 96
Other 142 170 -28 477 530 -53
Sales Share Pipeline Cust Perc.
Allowances
Net Sales
DIRECT COSTS
977
-13
985
13
-8
-9
3147
-40
3078
31
69
Much less fire fighting
Freeing up Management time to focus on Business Development
Materials 483 473 -10 1501 1479 -22
Sub contracts 31 44 13 118 137 19
Labour 101 101 0 323 317 -6
Direct Costs at Standard 615 618 3 1942 1933 -10
and on Continuous Improvement activity without prejudicing day
Variances 31 22 -9 97 69 -28
Gross Contribution 331 344 -13 34% 1108 1077 32 35%
OVERHEADS
Factory Overheads 83 91 8 263 284 21
O.E.E. Cost Emp Sat Lead Time
Gross Profit
General Overheads
One-off events
248
147
254
141
-6 25%
-6
0
845
432
37
792
441
53 27%
9
-37
to day operations
NET PROFIT 101 113 -12 10% 376 352 24 12%
“ It has taken time, however this approach has really worked and
top left – the key issues that the business faces, both those that has transformed the way we manage the business” – Simon Cox,
are being worked on and the emerging issues that await attention General Manager
top right – the action plans or projects and their status which will
address the activated issues
Page 7 of 10 © S A Partners 1993-2009