Loading...

Thursday, August 21, 2014

Checks and Balances A technique to sync organizational vision and strategy

BACK TO BASICS
BY Janet Bautista Smith

A common failure when deploying a strategic plan is its misalignment with the organization’s vision (Figure 1). There must be dynamic checks and balances to ensure critical milestones are pointed in the same direction as the business model to achieve shareholders’ expectations.




Figure 1

Figure 1 also depicts a business model wherein the vision is the nucleus of the strategic development and the catalyst for the creation of measurable operational initiatives. Misaligned strategies can result in waste, financial loss, suboptimized resources or lost opportunities. Early detection of these gaps can facilitate timely intervention and adjustments to strategies and initiatives to ensure alignment with the vision. Before any adjustments are made, you must define and understand the root causes of the deviation.

Possible root causes of misaligned strategies include:
Vision is not clearly stated.
Vision is clearly stated, but the workforce misinterprets the intent.
Vision is clearly understood by the workforce and strategies are initially aligned, but they have drifted away from the vision, unnoticed.
Vision is ignored by managers who create initiatives they believe are best for the organization.

Root causes can be remedied only if misalignment is detected early enough to be mitigated. Realignment efforts can be focused on the major discrepancies. A key process indicator (metric) for each core process will serve as the early detection mechanism to alert the system of a possible failure or deviation from target results. Without this early detection mechanism, the incremental deviation from the target may eventually become an irreversible, undesirable trend.
Recognizing process drift

Undesirable trends do not happen overnight. They are caused by incremental nonconformances accumulated over time. Why are these incremental deviations not detected and mitigated before reaching an out-of-control status? Commonly, there is a lack of checks and balances to gauge whether performance is drifting from the target. Meeting the specification is not enough to determine whether performance to plan is adequate, as shown in Online Figure 1 (found on this article’s webpage at www.qualityprogress.com).




Figure 1

Auditing beyond compliance is more likely to detect an incremental drift from the target that may otherwise be hidden under the conventional acceptance criteria of a traditional compliance audit. The repeating drift shown in Online Figure 1 may signal a potential irreversible failure silently gaining momentum, undetected by a traditional compliance audit. Process drift has the same analogy as the impact of strategy’s misalignment with the vision (target). But there are measures that can ensure consistent alignment of strategies and initiatives with the vision.

Strategic planning and auditing beyond compliance share the same path leading to the realization of the organizational vision. These two business elements are intertwined at all phases of operations. The concept seems abstract and difficult to translate into practical day-to-day systems.

Strategies’ alignment with the vision may be monitored through the creation of key performance indicators directly relevant to the supporting initiatives. Early detection of an incremental drift from the target can facilitate timely mitigation and realignment. A sample template to monitor alignment and effectiveness of the strategic plan is shown in Online Table 1.



Table 1

Process owners’ day-to-day interactions with operational variables may lessen the sensitivity of recognizing incremental changes. Implementing an auditing beyond compliance program will minimize bias or conflict of interest in the true measurement of operational performance. The added value of auditing can be leveraged further if the scope extends beyond compliance. Audits focused solely on strict compliance may miss opportunities to capture hidden variables that cause process drift, which can cause strategic plans to fail.
____________________
Bibliography
Bautista Smith, Janet, Auditing Beyond Compliance: Using the Portable Universal Quality Lean Audit Model, ASQ Quality Press, July 2012.

Janet Bautista Smith is the director of quality and continuous improvement at ProTrans International in Indianapolis. She holds a bachelor’s degree in chemical engineering from the University of Santo Tomas in Manila, Philippines. A senior member of ASQ, Bautista Smith is an ASQ-certified Six Sigma Black Belt, quality engineer, quality auditor and certified manager of quality/organizational excellence.

No comments:

Post a Comment