Better Project Selection using Hoshin Planning and Balanced Scorecards by Tim Bell

Just Do Projects or Achieve Real Results?

Better Project Selection Using Hoshin Planning and Balanced Scorecards

Six questions we want to answer...

Why is project selection so important? How are projects typically identified / selected and why are the results not as good as they could be? How can you improve the identification and selection of projects and the commitment to executing those projects? What results can you see when a more strategic approach to project selection is taken? How can we help you improve project selection in your organisation? What is the next step for you?

Project Ideas from Employees

Project Ideas from Strategic Goals

Project Ideas from Operational Priorities Project Ideas from Customers, Partners and Suppliers

Capture Opportunity Alignment Filter Qualify Opportunities

Feasibility Filter Financial Filter Project Scoping Project Allocation

Select Project Project scoped Project staffed

Start Project Execute Project

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1. Why is project identification and selection so important? ROI Results

Business Outcomes

Project Cycle Time 

Net Savings/Project 

ROI

%Successful 

Number of Projects 

Programme Cost  © inexus 2013

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2. How are projects typically identified and selected? • In early stages of maturity ... project selection largely is driven by local agendas … • Organisations with focus on Six Sigma typically use weighted evaluation matrices • Organisations with focus on Lean often start with VSM and choose areas of improvements • Focus is usually... Tactical

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Ultimately poor project selection will lead to the death of an operational excellence initiative... Root Cause Project Selection is Not Systematically Driven by PerformanceExpectation Gaps in the Outcomes Managers Are Responsible For

Managers Have Not Personally Experienced ‘Proof’ of the Power of Formal PI Tools on a Problem They See As Similar The Consequences For Not Delivering Against Business As Usual Targets Are Greater Than The Consequences on Not Delivering Improvement Projects

Pain

Problem

Cause Cause

Problem

Managers Don’t Make Time For Project Reviews

Not Interested Managers Cannot See the Direct Linkage Between Projects and Their Personal Objectives

Not Convinced Managers Do Not Believe PI Will Deliver the Result They Need in the Time They Have

Not Motivated Managers Choose to Prioritise Business as Usual Delivery Over Driving Improvement Projects

Symptom

Managers Don’t Address Project Road-blocks

Lack of Management Buyin to the Performance Improvement Program

Pain Projects Take Longer to Do Than They Should

Managers Don’t Provide Enough (or the Right) Resources to Projects

Less Projects Are Successful Than They Should Be

Managers Don’t Ultimately Take Actions Needs to Liberate Tangible Benefits

Tangible Project Benefits Are Lower Than They Should Be

Managers Behaviour Does Not Reinforce PI Principles Managers Shortcircuit Formal PI Approach With Unsustainable Actions Managers See the PI Initiative as the Deployment Leaders Program

Slide 5Global Ltd. 2007 © i-solutions

Deployment Leaders Spend Time and Energy Compensating for Unsupportive Management Behaviour

Deployment Leaders Spend Time and Energy Pushing PI Up the Management Agenda

Consequence

Tangible Program Results are Substantially Lower Than They Could Be

PI Program Stalls and Ultimately Fails

Rate of Program Expansion is Eroded As Deployment Leader’s Time and Energy is Sapped Keeping PI on Agenda

3. How can you improve the selection of projects and the commitment to executing those projects? St r at egy Map

Financial Increase Profit

Maximise Utilisation

1. Use Strategy Maps to Capture Strategic Goals/Assumptions and Engage Leaders

Customer Retain Customers Low Cost Offer

Internal Fast Turnaround

Learning Motivated Crew

2. Use X-matrices to translate Goals to Actionable Priorities and Clarify Ownership 3. Use Bowling Charts and A3s to Keep Leaders Engaged © inexus 2013

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The Balanced Scorecard ( and strategy maps) helps us to visualise goals and assumptions Strategy Map

Financial

Balanced Scorecard

Increase Profit Maximise Utilisation

Customer Retain Customers Low Cost Offer

Internal Fast Turnaround

Learning Motivated Crew

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Hoshin Planning – The Concept

Shin

Kan

方針管理  Direction

 Needle

Direction Needle, or Compass

 Control  Channeling

 Reason  Logic

A ‘Vision Compass’

Management

Hoshin Planning is a systematic and disciplined process to align, communicate and execute strategy by focusing on those few breakthrough objectives that give you competitive advantage. © inexus 2013

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How Hoshin Works – The X Matrix (Basic Concept) 3- HOW

Use dots to show relationship of Targets and Resources to the Improvement Priority

Use dots to show relationship of Improvement Priorities to Annual Objectives

Top Level Improvement Priorities

2- HOW FAR

Annual Breakthrough Objectives

1- WHAT © inexus 2013

NOTE: Only Solid dots on a resource deploy to the next level

Targets to Improve

3-5 Year Breakthrough Objectives

5- WHO

4- HOW MUCH

RESOURCES = Primary Responsibility = Secondary Responsibility

OWNER

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Balanced Scorecard Strategy Map to XMatrix Example

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Weightings can be used in conjunction with X-matrix to quantify alignment/value

• Value scores derived from weightings on X-matrix • Risk scores based on appraisal of execution risk e.g. Novelty, timing, complexity, resource dependencies

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Frequently translation from goals into actions requires multiple levels of cascade... and review Show review process happens at multiple levels

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The X-matrix helps us pick the right projects, the bowling chart help to keep executives focused X-Matrix – Translate Breakthrough Goals to Improvement Priorities

Bowling Chart – Drive Relentless Focus on Execution/ Improvement © inexus 2013

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4. What results can you see when a more strategic approach to project selection is taken? Push Level 1

Prove

Pull Level 2

Scale and Replicate

Level 3

Internalize

Level 4

Align and Integrate

Primary Focus

Projects

Programs/Projects

Operational Indicators/ Projects

Business Objectives

Big Y

Time to First Results

Financial Return/ROI

Operational Performance

Business Results

Scope

Single SBU/Division

Multiple Divisions

Company Wide

Leadership Energy

Deployment Leader/ 1-2 Key Executives

Deployment Leader/ MBBs/ Coalition of Key Executives

Operational Leaders/Managers

Senior Executives/ Operational Leaders

Project Selection

Ad hoc/Tactical

Weighted Evaluation Criteria

Directly Linked to Operational Priorities

Directly Aligned With Goals

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The impact of this higher level of ownership and focus is dramatic…

*data from 2011 i-nexus survey of 41 organizations

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5. How can we help you improve project selection in your organisation?

• Challenges Personal Dimension

Organisational Dimension

Knowledge Skills

Competence Support

Roles

Opportunity 33

Willingness to Change status quo

Motivation Leadership

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We support you all the way from the idea up to your successful implementation • Training and Coaching 2

Knowledge Skills

Willingness to Change status quo A

Personal Dimension 11

Personal Excellence

Hard and soft skills

Organisational Dimension AA

(e.g. talent discovery)

(e.g. scientific thinking and facilitation)

Learning Organization (e.g. change and program management)

Organizational Structure (e.g. roles and responsibilities )

Personal Leadership

(e.g. visioning, communication)

Competence Support

Motivation Leadership

Roles

Opportunity

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Operational Excellence (e.g. X-Matrix and i-nexus)

Deploying Hoshin Kanri with Spread sheets Quickly Becomes Unsustainable... Bowling Chart

X Matrix

X Matrix Action Plan

Bowling Chart

X Matrix

Counter Measure

Bowling Chart

X Matrix

Measure

X Matrix Action Plan

Bowling Chart

X Matrix X Matrix

X Matrix

Counter Measure Counter

Bowling Chart

Action Plan

Action Action Plan Plan

Counter Measure

Action Plan Action Action Plan Plan

Bowling Chart Counter Measure Slide 18

Bowling Chart Action Action Plan Action Plan Plan

Counter Measure

Let i-nexus take the strain....

X-matrices Ideal Hoshin Platform Requirements • Integrated - Brings together all X-matrices, Action Plans/A3s and Bowling Charts in one system. • Simple - As easy to use as the spreadsheets it replaces. • Right Functions - Offers functions that underpin the culture needed to sustain the Hoshin process. Bowling Charts • Hassle Free – Available 24x7, scaleable, Action Plans/A3s installation free. © inexus 2013

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6. What is the next step for you?

For a copy of the presentation and more information on i-nexus contact:

paul.docherty@i-nexus.com or visit www.i-nexus.com For more information on training and coaching in Hoshin Kanri contact:

enzo.di.nunzio@six-winners.com or visit www.six-winners.com “There is great power in knowing where you are going and passion in knowing how as an individual you fit in!” Anonymous

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