Strategy Deployment as a Series of Hypotheses or Predictions (Part 2)

file2871273526205Here is the EXTREMELY belated Part 2 of my post, started in January 2015 with Part 1, on Strategy Deployment (SD) and hypotheses.

A few of you actually emailed me to ask where Part 2 is, so thank you :-)

The first two hypotheses from Part 1 were:

Hypothesis #1: “If we focus our improvement efforts and close performance gaps in these four areas, we will therefore perform well as an organization, this year and over the long-term.”

and

Hypothesis #2: “If we can improve and close our performance gaps in these key performance indicators, we will satisfy our need for improvement in our key focus areas, and therefore we will be successful as an organization, overall.” 

So we’ve made predictions about what performance gaps need to be closed… now what are the next two hypotheses?

We need to decide what actions to take.

Dr. John Toussaint often tells a story about visiting organizations that have hundreds of “top priority” projects and initiatives. Karen Martin writes about the need for “focus” in her book The Outstanding Organization and we worked together to try to introduce SD to a health system that had that same problem… hundreds of planned events and initiatives, none of which really ever got done There were too many distractions and each project became part of the excuse for why a different one didn’t get done.

In Part 1, I wrote about ThedaCare and their SD walls in their senior leadership team room. ThedaCare has another wall in their SLT room (their “visual room,” as they call it), where they display their “breakthrough A3s” – there is an A3 that represents that work that’s being done that year to improve each focus metric. Toussaint and Dr. Dean Gruner (the current CEO) call this limited number of A3s the “must do, can’t fail” key initiatives.

Karen and I led a team of executives in culling through and really prioritizing their “top initiatives.” The “focus initiatives” really have to have focus, just as “focus metrics” need to have focus. We got organization down to the 30 top initiatives… after trying to get them to 20. It was really difficult for everybody because people really resisted de-prioritizing things.

People sort of cling to their top initiatives like Steve Martin in “The Jerk” clinging to his stuff:

I mean this in good fun… I don’t need any of these projects… well except these… and that paddle ball game…

Hypothesis #3: “If we actually execute and complete these top X initiatives, projects, events, and A3s, then we will make the greatest strides toward closing the key performance gaps (from Hypothesis #2) and therefore we’ll be more successful in our strategy (from Hypothesis #3).

Focus means not letting your top 300 projects distract you from getting those first 20 truly top priority projects done. That excuse of “We didn’t do X because we were doing Y” has to go away. Not everything gets to be a top priority. If everything is a top priority, then nothing is.

These top 20 (or so) initiatives are managed by A3s that are kept on the SD wall. Each one is managed using an A3 to make sure there is good process improvement discipline. If something is just a “pet project” (or jumping to a solution), the A3 process allows us to test to make sure we’re really solving a problem and that we’re proposing countermeasures that are expected to help solve a problem or bring an opportunity to fruition. That’s another lower-level hypothesis embedded in each A3…

These top initiatives are the ones reviewed by management on a regular basis (bi-weekly or monthly). They are the ones that the executives keep an eye on… asking how is the A3 coming? Do you need help? Are there barriers that need to be eliminated?

If these are truly the top priority initiatives, the executives (and the next layer of management) play “catch ball” to make sure things are moving along… de-prioritizing other work as needed and making sure individuals or departments aren’t penalized for helping the organization stick to its key priorities.

When one of those top initiatives actually gets completed (and it’s more likely that complete something when you focus), then you can start another. It’s sort of a corporate “Personal Kanban” approach where you limit the amount of WIP that you’re working on.

Now, it’s not that those 20 initiatives are the ONLY things people can be working on. Of course not. People can work on other lower-priority initiatives, as long as that work does not distract the organization or pull resources away from the top priority stuff. And, the executives won’t be reviewing the progress on that other work the way they will with the very top SD initiatives.

So, we have our direction (Hypothesis #1), our goals and measures (Hypothesis #2), and our selected initiatives (Hypothesis #3).

Our final hypothesis is about capacity. How do we know if we really need to limit our focus to 20 top initiatives? Why not 24? Or 30?

Hypothesis #4: We actually have the organizational capacity to complete these X top priorities in a year or a given timeframe (and with the right quality).

An organization might bite off more than it can chew. They might go from 250 “top” priorities to just 50… and still learn that they’re not focused enough. PDSA… Plan Do Study Adjust. The Adjust might be to go from 50 to 25 top initiatives.

Our organizational capacity might depend on what these top initiatives entail. Capacity here isn’t going to be as simple as a single number.

We might err on the side of caution. If we’re getting a bunch of top priorities done, maybe we can take on more. But it seems people usually err on the side of thinking they can take on too much.

We go through these cycles over time as executives and an organization. We learn and get better through these cycles. We set an example, through our practice of Strategy Deployment, for the rest of the organization about how to manage A3s and PDSA problem solving.

How does this line up with your practice of SD? Leave a comment below…

Also, see this webinar that I did in July 2016 (clicking the image below will bring you to a page with the recording).


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Now Available – The updated, expanded, and revised 3rd Edition of Mark Graban’s Shingo Research Award-Winning Book Lean Hospitals: Improving Quality, Patient Safety, and Employee Engagement. You can buy the book today, including signed copies from the author.

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

5 Comments on "Strategy Deployment as a Series of Hypotheses or Predictions (Part 2)"

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  1. Great post. “If everything is a top priority, then nothing is” should be posted in all manager offices. Also, in my experience, Value Stream Mapping is a very effective way to identify wastes in work processes and, from this discipline, to be able to make fact-based decisions about prioritizing their elimination.
    George Friesen recently posted..Doubt Really Messes Up PerformanceMy Profile

  2. Karl Scotland
    Twitter:
    says:

    Hi Mark

    This is great timing! I’ve been blogging a lot about Strategy Deployment recently, and your first three hypothesis match the strategy, outcomes and tactics I describe here:

    http://availagility.co.uk/2016/05/25/the-x-matrix-strategy-deployment-model/

    I like your additional 4th hypothesis about capacity. And I might add a hypothesis #0 that the desired results for organisational success are achievable.

    Karl
    Karl Scotland recently posted..Strategy Deployment and AgendashiftMy Profile

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