ASIP 2006 Presentation

The Anaar Strategy Integration Process (ASIP)

J. Nirdosh Reddy Asha Reddy Anaar Company Bloomfield Hills, MI USA

Anaar Strategy Integration Process (ASIP) Creating Our Future Introduction Business scenario Business performance to date Constraint analysis on each goal Strategy trees - one for each goal Subapproaches matrices - one for each process on the global process chart Finalization of goals for next fiscal year

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Expected Outcome

A comprehensive, clearly defined one year goals with: time-bound action plan of projects sponsors and team leaders measurements

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Creating Our Future If we dont take the time to create our future, who will create our future?

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Creating Our Future If we dont take the time to create our future, who will create our future? Competition

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Creating Our Future If we dont take the time to create our future, who will create our future? Competition What will that future be like?

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Creating Our Future If we dont take the time to create our future, who will create our future? Competition What will that future be like? Chaotic Reacting to winds of change Fire-fighting

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Creating Our Future If we do this year what we did last year, we will get less this year than what we got last year

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Creating Our Future If we do this year what we did last year, we will get less this year than what we got last year We must improve our systems and processes The fundamental question is: what do we need to differently?

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Creating Our Future If we do this year what we did last year, we will get less this year than what we got last year We must improve our systems and processes The fundamental question is: what do we need to differently? Senior management needs to spend about 50% of their time in creating the future of the organization - identifying, sponsoring and ensuring completion of improvement projects

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Ground rules Think about the business as a whole (not in compartments, not in departments)

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Ground rules Think about the business as a whole (not in compartments, not in departments) One meeting at a time No side conversations Cell phones in OFF mode

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Ground rules Think about the business as a whole (not in compartments, not in departments) One meeting at a time No side conversations Cell phones in OFF mode Focus on solutions, not on excuses

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Ground rules Think about the business as a whole (not in compartments, not in departments) One meeting at a time No side conversations Cell phones in OFF mode Focus on solutions, not on excuses Let go of excess baggage Dont let the past come in the way of creating a better future

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Ground rules Think about the business as a whole (not in compartments, not in departments) One meeting at a time No side conversations Cell phones in OFF mode Focus on solutions, not on excuses Let go of excess baggage Dont let the past come in the way of creating a better future Leave negative thoughts outside the conference room Anaar, 2006

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Ground rules Think about the business as a whole (not in compartments, not in departments) One meeting at a time No side conversations Cell phones in OFF mode Focus on solutions, not on excuses Let go of excess baggage Dont let the past come in the way of creating a better future Leave negative thoughts outside the conference room Build on other peoples ideas Anaar, 2006

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RecapLets start with a recap of overview of TQM / Anaar Roadmap

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Total Quality Management1950s Japanese implement Total Quality Control (TQC) based on teachings of Dr. W. Edwards Deming Establish Deming Prize 1980 NBC White Paper If Japan Can, Why Cant We? Ford re-discovers Demings teachings as Total Quality Excellence (TQE) Present Widely implemented (in many western businesses) as Total Quality Management (TQM)

Shift from just working harder to working smarter Anaar, 2006

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Why TQM ? Whats the need? Profitability - is it acceptable? Is it at intrinsic capability? Customer satisfaction - is it what it should be? Quality - is it at world class levels? Employee motivation Is it consistently high? Is there pride in work for all employees? Is it an exciting place to work, not merely a place to earn a salary?

After hard work, are the results satisfactory? Is cooperation between departments high all the time? (Or only when there is a crisis?)

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Goals of a TQM Program Enhance customer focus Bring in long term perspective Encourage people to take pride in work Enable team work Foster a harmonious environment Achieve global competitiveness

TQM is a means of unleashing the potential of people Anaar, 2006

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The Anaar Roadmap Module 1: New Mindsets and New Practices Dr. Demings 14 points for management, Maslows hierarchy of human needs, Anaar model of an enterprise, transformation process

Module 2: Anaar Process Review System (APRS) From only managing people to managing people and processes Bringing in ownership of processes and pride in improvement

Module 3: Anaar Strategy Integration Process (ASIP) Breaking down barriers between departments Aligning the thinking of various departments

Module 4: Continuous Improvement Process Involving everyone to improve their processes

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Module on Anaar Process Review System (APRS) APRS helps define the entire enterprise as a network of processes, both primary and enabling Helps optimize the enterprise, not departments For each process, APRS helps Create ownership of processes and pride in their improvement Identify customers expectations; establish measurements Provides the foundation to prevent recurrence of problems Enables organizational learning and seamless functioning Since processes produce output, our job is to manage and improve processes Anaar, 2006

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Global Process Chart of an Enterprise

Primary processes:Sponsor

Customer

P1

P2Pr. Leader

P3 PnCustomer

Enabling processes:Sponsor

E1

E2Pr. Leader Anaar, 2006

E3

En

Revision: Effective Date: File: Prepared by: Approved by: Title:

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First-Level Macro ProcessProcess Owners ResponsibilitySequential Processes: Independent Processes:

Suppliers Customers Revision: Effective Date: File: Prepared by: Approved by: Title:

Interfacing Processes:

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Customer-Related DataProcess: ___________ Subprocess: ________Process Internal Customers What is expected Expectations Parameter Expected Value Actuals Actual Value

Management

External Customers

Note: Collect similar data for suppliers and interfacing processes

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Business Planning Scenario Many business plans remain on paper Many top managers are not satisfied with the way their strategies are implemented by all employees the results being delivered Middle managers are not satisfied with the way the goals are established interdepartmental barriers the level of cooperation from employees

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Module on Anaar Strategy Integration Process (ASIP)

Since our salaries come from satisfied customers, our goal is to maximize customer satisfaction ASIP helps develop and integrate strategies to optimize the entire business unit (system) instead of the traditional sub-optimization align the thinking of various departments break down barriers between departments ASIP enables identification and removal of constraints existing in the current way of doing things to achieve superior results

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ASIP ASIP is a systematic team-oriented thought process Translates organizations vision and goals into process-oriented, manageable, actionable and monitorable approaches Is a process of ... Translating strategic issues into key processes Integrating and communicating goals throughout the enterprise

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Different ways of establishing direction for a company

Winds of Change Chaos

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Departmental focus

Establish departments Manage people Better profits However, barriers between departments are created Inhibiting teamwork Leading to sub-optimization Less than maximum profits

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Departmental focus

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Sub-optimization

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Departmental focus Sub-optimization

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Process Focus

Break down barriers between departments through - Systems thinking - Process-oriented practices

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System optimization

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Departmental focus Sub-optimization

Process focus System optimization

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Organizational Performance

Some progress No progressTIME

Some deterioration

Significant progress

TIME Anaar, 2006

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Strategic Issue: Cost CompetitivenessStyle of ManagementTraditional Approach Cut costs Everybody in the organization tries to reduce cost at their individual level (Cost reduction objective delegated down the chimney)

Organizations ResponseProduct or Service at what cost?

Emerging Approach

Reduce cost per unit Identify key processes Identify processes requiring improvement Quantify the level of improvement

Product or Service at lower cost

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Anaar Strategy Integration ProcessSTRATEGY TREESA-20 A-1 A-2

StrategyGoals Approaches Sponsors and Process leaders

GOALS G1 -

QNTY

G10 Quantification Is this process in place? Degree of improvement required By when? GOALS G1 QNTY

SUBAPPROACHESSA-10 SA-1 G10 Quantification Is this process in place? Degree of improvement required By when? SA-2

TacticsGoals Subapproaches Process leaders

ImplementationSubapproach leaders, project leaders, all levels

Pursue the seven stages of Continuous Improvement (Module 4)

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Module on Anaar Continuous Improvement Process

Everything we do at work is part of some process Processes left unattended tend to deteriorate over time How well we satisfy the customers depends on how well our processes are behaving Process capability depends on how well we are utilizing the creativity of our employees and suppliers to meet and exceed the customers expectations 7 questions and steps on the next slide become part of the management system Many projects can be completed in 2 to 3 months

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7 Questions and StagesQ1: Are the processes defined? - Micro-level detail & employee training Q2: Are customers expectations identified? Q3: Managing with facts: Are data collected? Q4: Are data analyzed? Problems identified? Q5: Are the root causes of problems identified? Q6: Are the root causes removed? - Processes modified? employees re-trained? Q7: Are the customers satisfied? Are capability indices CPK > 2? (Six sigma)

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Business Scenario What business are we in? What business do we want to be in? By business segments, and by worlds regions What is the size of the market and our market share in the business we want to be in? (by segment, and by region) Environmental scan and top 5 competitors

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Business Scenario

Presentation by ..

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Business Performance

Business performance parameters (Goals) for the organization Measurement methods for each goal Unambiguous Measurable

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Business PerformancePrior Year actual & Current Year estimate Goal G1 - Revenue G2 - Profits (PBT or any other accepted measure) G3 - Customer satisfaction G4 - Employee motivation G5 - Other 1 G6 - Other 2 Anaar, 2006

2004 - 05 (Actual)

2005 - 06 (Estimate)

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Business Performance

Presentation by ..

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Constraint Analysis What is / are constraining our results, our performance? What are blocking us, not allowing us to proceed? such as competitors actions What are choking us, not allowing us to breathe? such as excessive regulation, taxes What are limiting us, putting chains on our actions? such as lack of technology such as managerial practices Lets introspect Anaar, 2006

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Individual Assignment

Connect the 9 dots with 4 straight lines without lifting your penTime limit: 2 minutes Anaar, 2006

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Constraint Analysis We are prisoners of our paradigms, our mindsets Many constraints are figments of our imaginations We imagine constraints that are not there, that are NOT REAL We have been conditioned by our past experiences In order to Create our future, we need to Open our minds, and Break away from these shackles

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Constraint AnalysisAs senior managers: No matter what the level of our performance is, we need to be dissatisfied with it While being proud of what we have achieved, we need to have the desire to do better in order to survive in this highly competitive environment Aim so high that we will never be bored We need to empower our people to challenge status quo and make a contribution to the organization

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Constraint AnalysisAs senior managers: No matter what the level of our performance is, we need to be dissatisfied with it While being proud of what we have achieved, we need to have the desire to do better in order to survive in this highly competitive environment Aim so high that we will never be bored We need to empower our people to challenge status quo and make a contribution to the organization

The future can be no better than what the senior management envisions Anaar, 2006

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Constraint AnalysisLet us examine what are constraining us in our: Ability to generate revenue, which comes from Ability to market Ability to produce Ability to procure Ability to make profits Ability to satisfy our customers Ability to motivate our people Ability to achieve other goals

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Constraint AnalysisFor each goal, we need to: Form a cross-functional team; select a coordinator Review the performance parameter, actual values achieved in 2004 - 05 and estimates for 2005 - 06 Establish a baseline performance - either full year or last quarter or best months performance - something you have already achieved. We need to improve beyond this level Brainstorm on potential causes for this low level of performance, no matter how good performance is Prepare a CED; identify likely causes; collect available data on likely causes and identify the root causes Anaar, 2006

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Constraint AnalysisFor each goal (continued): Fill in ONLY the left side of Constraint Analysis sheet List the constraints (the root causes are the constraints) Identify the processes in which these root causes are Identify what actions can be taken to remove these root causes - remember that actions may need to be taken in processes other than where the constraint is felt Identify gains that can be expected over a 12-month period after the constraint is removed (This is NOT same as for the next FY) Calculate cumulative performance that is possible Anaar, 2006

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Constraint AnalysisFor each goal (continued): Continue to identify constraints and actions to remove the constraints until you have reached over 50% of market share OR until you have exhausted the available space in your campus Dont let investment requirements hinder your vision Dont stop until you have reached world-class levels of performance in quality, productivity and competitiveness

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Constraint Analysis on Goal: _______________________Performance parameter:_______________________ 2004 - 05 actual:__________; 2005 - 06 estimate:___________ Baseline: _______________________ 2006 - 07 projection:_____________

What can be done to remove the constraint What is the constraint and in which process Actions

Cum = Potential Baseline + gain (1) potential gain In which process (2)

Gains in 2006 - 07 from Strategy Yr end TreeDo-able by

Q1 Q2 Q3 Q4

Tot (3)

run rate (4)

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Gain for the quarter Baseline for the quarter Projection for the quarter

1. Potential gain for a 12-month period after removing the constraint 2. Cumulative performance for a 12-month period after removing the constraint 3. If the performance parameter is an index or %, don't fill this column 4. With the improvements made by Q4 end, what would be achieved for the following year

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Q1 Q2 Q3 Q4

Tot (3)

run rate (4)

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Constraint AnalysisAssignmentPrepare to present Constraint Analysis for each goal (either via transparency or PC): Performance parameter, past data and baseline Cause and effect diagram and root causes Constraints Possible actions to remove the constraints Potential gains for a 12-month period Cumulative performance, after each constraint is removed Time: 1 hour - 30 minutes Anaar, 2006

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Strategy Tree The cumulative performance figures on CA indicate what is possible by doing things differently The things we need to do differently are of three types: IPO - Improve the Process Of .. (A process already exists but needs to be improved) CPO - Create a Process Of .. (A required process does not exist) Task - A one time task needs to be undertaken (Describe the task starting with a verb)

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Strategy Tree We need make the ideas identified on the CA sheets actionable Clarify what needs to be done This may require that some of the ideas be expanded and broken down Identify measurement parameters that are applicable to this action and specify values Identify which process on the global process chart needs to lead each identified effort Identify time-frames

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Strategy Tree For each goal: Continue with the same cross-functional team Prepare a Strategy Tree to achieve the maximum cumulative performance Approach is opposite of the Constraint listed on CA Subapproaches are actionable projects Expand the ideas from CA, as necessary Identify measurement parameters and values Identify which process on the global process chart needs to lead each identified effort Identify time-frames, as applicable

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Strategy Tree For each goal (continued): Fill in ONLY the left side One subapproach can have more than one measures; list the most important measures

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Strategy Tree for Goal:__________ Performance parameter Cumulative maximum Projection for 2006 - 07Things we need to do differently to achieve the goal (Approaches, subapproaches and processes)ApproachA1

From SA matricesGlobal Pr # Leader Doable Resourc by es reqd

SA #1 2 3 4 5 6

IPO/CP O/Task

Subapproach (SA)

Desired result Parameter From

To

A2

1 2 3 4 5 6

A3

1 2 3 4 5

A4

1 2 3 4 5

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Note: One IPO / CPO / Task can have more than one measureable parameters. List the most importan

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SA #1 2 3 4 5 6

IPO/CP O/Task

Subapproach (SA)


To

A2

1 2 3 4 5 6

A3

1 2 3 4 5

A4

1 2 3 4 5

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Strategy TreeAssignmentPrepare to present a strategy tree for each goal (either via transparency or PC): Make sure Approaches are opposite of Constraints List the approaches in the same sequence as constraints Clarify whether a subapproach is an IPO / CPO / Task Include measurement parameters and values Identify applicable process on Global process chart

Time: 1 hour

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Subapproach Matrices How do we communicate and prioritize all these strategic initiatives By mapping all these actions into appropriate processes on the global process chart Subapproach matrices are intended to contain all the planned projects that apply to that process box There should be one subapproach matrix for each process box Projects come from two sources Strategy trees Improvement plans driven by gap between customers expectations and actual process performance (Tab 9 of process binders) Anaar, 2006

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Subapproach MatricesAssignment for each Process LeaderPrepare to present a Subapproach Matrix for each process box (either via transparency or PC): Review all strategy trees and pick out all subapproaches where your process is called out Fill in subapproaches in the top 1/4 of the sheet Enter measurement value across from Desired result Identify project leaders for each subapproach Fill in estimated dates for start and finish for each subapproach Indicate if cross-functional team is required Indicate if any resources are required Anaar, 2006

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Subapproach MatricesAssignment (continued): Add projects that are to be taken from customer related data from the process binders (Tab 8 and 9) Adjust priorities of projects if there are conflicts in scheduling Once completed, provide the following information to the appropriate strategy tree coordinators: Names of subapproach leaders Estimated project completion dates Estimate of resources required, if any

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Subapproaches Matrix FY xxxx :Process : Sponsor: Process Leader:

Goals G1 G2 G3 G4 G5 G6 G7 -

Projection

Subapproaches x-y-z

x-y-z

x-y-z

x-y-z

x-y-z

x-y-z

x-y-z

x-y-z

x-y-z

x-y-z

Priority Benchmark - Best in class value Breakthrough Required? Resources required? Crossfunctional team? Is there an M3? SA / Project leader

* Y Y

By w hen? Anaar Legend:

S = Start

Q4 Q1 Q2 Q3 Q4 Revision level: Date:

Desired result

Anaar, 2006= Breakthrough required F = Finish *

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Finalization of values for Goals Based on the actions planned on Subapproaches Matrices, we need to revisit the strategy trees and capture when the things we need to do differently can be done Then we need to revisit the constraint analysis to estimate the size of gains quarter-wise With this we will be ready to project what we can expect to achieve for the next FY, IF WE REMOVE THE IDENTIFIED CONSTRAINTS AS PLANNED.

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Strategy Tree RevisitedAssignment Prepare to present a strategy tree for each goal (either via transparency or PC): Update the right side of strategy tree with the information received from subapproaches matrices Names of leaders for each subapproach Doable dates (finish dates) Value of resources needed, if any Time: 30 minutes

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SA #1 2 3 4 5 6

IPO/CP O/Task

Subapproach (SA)


To

A2

1 2 3 4 5 6

A3

1 2 3 4 5

A4

1 2 3 4 5

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Constraint Analysis RevisitedAssignment Prepare to present Constraint Analysis for each goal (either via transparency or PC): Update right side for each constraint (from strategy tree) By when column - last date for the group of actions Based on this date, estimated benefits quarter-wise Year-end run rate Total gains by quarter Fill in baseline numbers by quarter Total projections by quarter, and for the year Time: 1 hour Anaar, 2006

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Q1 Q2 Q3 Q4

Tot (3)

run rate (4)

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Business Performance Projections

Summarize projected performance for all the goals

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Business Performance ProjectionsGoal 2004 - 05 2005 - 06 (Actual) (Estimate) 2006 - 07 (Projections) Q1 Q2 Q3 Q4 Total

G1 - Revenue G2 - Profits (PBT or any other accepted measure) G3 - Customer satisfaction G4 - Employee motivation G5 - Other 1 G6 - Other 282

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Creating Our Future If we do this year what we did last year, we will get less this year than what we got last year We must improve our systems and processes The fundamental question is: what do we need to differently? Senior management needs to spend about 50% of their time in creating the future of the organization - identifying, sponsoring and ensuring completion of improvement projects83

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Documents

ASIP 2006 Presentation