Better Project Selection using Hoshin Planning and Balanced Scorecards
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The document discusses the importance of effective project selection for achieving operational excellence, emphasizing the need for a strategic approach using tools like hoshin planning and balanced scorecards. It outlines common pitfalls in project identification and selection, as well as methodologies to improve engagement and execution of projects. The content also highlights how organizations can better align project initiatives with strategic goals to enhance overall results.
Better Project Selection using Hoshin Planning and Balanced Scorecards
- 1. © i- n e x u s 2 0 1 0 Just Do Projects or Achieve Real Results? Better Project Selection Using Hoshin Planning and Balanced Scorecards
- 2. © i- n e x u s 2 0 1 3 Slide 2 Six questions we want to answer... 1. Why is project selection so important? 2. How are projects typically identified / selected and why are the results not as good as they could be? 3. How can you improve the identification and selection of projects and the commitment to executing those projects? 4. What results can you see when a more strategic approach to project selection is taken? 5. How can we help you improve project selection in your organisation? 6. What is the next step for you? Alignment Filter Feasibility Filter Financial Filter Project Scoping Project Allocation Project Ideas from Operational Priorities Project Ideas from Customers, Partners and Suppliers Project Ideas from Employees Capture Opportunity Qualify Opportunities Select Project Start Project Project scoped Project staffed Project Ideas from Strategic Goals Execute Project
- 3. © i- n e x u s 2 0 1 3 Slide 3 1. Why is project identification and selection so important? ROI %Successful Programme Cost Project Cycle Time Net Savings/Project Number of Projects ROI Results Business Outcomes
- 4. © i- n e x u s 2 0 1 3 Slide 4 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
- 5. © i- n e x u s 2 0 1 3 Slide 5 Ultimately poor project selection will lead to the death of an operational excellence initiative... © i-solutions Global Ltd. 2007 Cause Problem Pain Root Cause Cause Problem Symptom Pain Consequence 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 Project Selection is Not Systematically Driven by Performance- Expectation 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 Managers Don’t Address Project Road-blocks Managers Don’t Make Time For Project Reviews Managers Don’t Provide Enough (or the Right) Resources to Projects Managers See the PI Initiative as the Deployment Leaders Program Managers Behaviour Does Not Reinforce PI Principles Managers Short- circuit Formal PI Approach With Unsustainable Actions Managers Don’t Ultimately Take Actions Needs to Liberate Tangible Benefits Projects Take Longer to Do Than They Should Less Projects Are Successful Than They Should Be Tangible Project Benefits Are Lower Than They Should Be Deployment Leaders Spend Time and Energy Compensating for Unsupportive Management Behaviour Deployment Leaders Spend Time and Energy Pushing PI Up the Management Agenda Tangible Program Results are Substantially Lower Than They Could Be Rate of Program Expansion is Eroded As Deployment Leader’s Time and Energy is Sapped Keeping PI on Agenda PI Program Stalls and Ultimately Fails Lack of Management Buy- in to the Performance Improvement Program
- 6. © i- n e x u s 2 0 1 3 Slide 6 3. How can you improve the selection of projects and the commitment to executing those projects? 1. Use Strategy Maps to Capture Strategic Goals/Assumptions and Engage Leaders Financial Customer Internal Learning Increase Profit Maximise Utilisation Retain Customers Low Cost Offer Fast Turnaround Motivated Crew Strategy Map 2. Use X-matrices to translate Goals to Actionable Priorities and Clarify Ownership 3. Use Bowling Charts and A3s to Keep Leaders Engaged
- 7. © i- n e x u s 2 0 1 3 Slide 7 The Balanced Scorecard ( and strategy maps) helps us to visualise goals and assumptions Financial Customer Internal Learning Increase Profit Maximise Utilisation Retain Customers Low Cost Offer Fast Turnaround Motivated Crew Strategy Map Balanced Scorecard
- 8. © i- n e x u s 2 0 1 3 Slide 8 Hoshin Planning – The Concept 方 Ho 管 KanShin Ri 針 理Direction Needle Control Channeling Reason Logic Direction Needle, or 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. A ‘Vision Compass’
- 9. © i- n e x u s 2 0 1 3 Slide 9 How Hoshin Works – The X Matrix (Basic Concept) RESOURCES Annual Breakthrough Objectives Targets to Improve 3-5 Year Breakthrough Objectives Top Level Improvement Priorities = Primary Responsibility = Secondary Responsibility 5- WHO Use dots to show relationship of Targets and Resources to the Improvement Priority Use dots to show relationship of Improvement Priorities to Annual Objectives 2- HOW FAR NOTE: Only Solid dots on a resource deploy to the next level OWNER 4- HOW MUCH1- WHAT 3- HOW
- 10. © i- n e x u s 2 0 1 3 Slide 10 Balanced Scorecard Strategy Map to X- Matrix Example
- 11. © i- n e x u s 2 0 1 3 Slide 11 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
- 12. © i- n e x u s 2 0 1 3 Slide 12 Show review process happens at multiple levels Frequently translation from goals into actions requires multiple levels of cascade... and review
- 13. © i- n e x u s 2 0 1 3 Slide 13 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
- 14. © i- n e x u s 2 0 1 3 Slide 14 4. What results can you see when a more strategic approach to project selection is taken? Prove Level 1 Scale and Replicate Level 2 Internalize Level 3 Align and Integrate Level 4 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 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 Push Pull
- 15. © i- n e x u s 2 0 1 3 Slide 15 The impact of this higher level of ownership and focus is dramatic… *data from 2011 i-nexus survey of 41 organizations
- 16. © i- n e x u s 2 0 1 3 Slide 16 5. How can we help you improve project selection in your organisation? • Challenges Motivation Leadership Knowledge Skills Opportunity Personal Dimension Organisational Dimension Willingness to Change status quo Competence Support Roles 22 BB AA CC 11 33
- 17. © i- n e x u s 2 0 1 3 Slide 17 We support you all the way from the idea up to your successful implementation • Training and Coaching • Efficiently supported by i-nexus Personal Dimension Organisational Dimension 22 BB AA CC 11 33 Personal Excellence (e.g. talent discovery) Hard and soft skills (e.g. scientific thinking and facilitation) Personal Leadership (e.g. visioning, communication) Learning Organization (e.g. change and program management) Organizational Structure (e.g. roles and responsibilities ) Operational Excellence (e.g. X-Matrix and i-nexus) Motivation Leadership Knowledge Skills Opportunity 2 1 3 Willingness to Change status quo Competence Support Roles B A C
- 18. © i- n e x u s 2 0 1 3 Slide 18 Deploying Hoshin Kanri with Spread sheets Quickly Becomes Unsustainable... X Matrix X Matrix X Matrix X Matrix Action Plan Action Plan Action Plan Action PlanAction PlanAction Plan Action Plan Action PlanAction Plan Action PlanAction Plan X Matrix X Matrix X Matrix X Matrix Bowling Chart Bowling Chart Bowling Chart Bowling Chart Bowling Chart Bowling Chart Bowling Chart Bowling Chart Counter Measure Counter Measure Counter MeasureCounter Measure Counter Measure Counter Measure
- 19. © i- n e x u s 2 0 1 3 Slide 19 Let i-nexus take the strain.... X-matrices Action Plans/A3sBowling Charts 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. • Hassle Free – Available 24x7, scaleable, installation free.
- 20. © i- n e x u s 2 0 1 3 Slide 20 For a copy of the presentation and more information on i-nexus contact: [email protected] or visit www.i-nexus.com For more information on training and coaching in Hoshin Kanri contact: [email protected] or visit www.six-winners.com 6. What is the next step for you? “There is great power in knowing where you are going and passion in knowing how as an individual you fit in!” Anonymous