G E T MO R E OU T OF Y OU R B U S IN ES S IM P R O V E ME N T IN ITIATIV E S

Management Brieng
Align Projects with Strategic Objectives
Achieve annual and longer-term objectives by maintaining strong connections
between LeanSigma improvement projects and business strategies.

Executive Summary

More and more companies are using policy deploymenta management

tactic thats also known as strategy deployment, hoshin kanri or hoshin
planningto keep change and process improvement activities aligned with
strategic objectives. Achieving business targets depends in large part on how
well policy deployment itself is executed across multiple businesses, sites and
teams. As this management brieng describes, companies that maintain a
strong linkage between projects and objectives are more likely to make
business changes that contribute to both cost savings and revenue growth
year after year. The extent of that contribution depends on how well
projects are executed at all levels.

By Anand Sharma Bill Remy Ken Koenemann

asharma@tbmcg.com bremy@tbmcg.com kkoenemann@tbmcg.com

Leadership, at its heart, is largely about recognizing
the need for change, determining what kind of change
is necessary, and pushing the organization in that
direction. Strategic planning processes determine the
direction. But as grueling as such planning sessions
can be, thats the easy part. Execution requires a day-
to-day and week-to-week focus that is difcult for any
organization to maintain, which only becomes more
difcult as business size and complexity increase.
Management Brieng
Effective execution boils down to
three primary management roles:
1. Make sure the organization is working on
projects and process improvements that
will have the greatest impact realizing the
strategic objectives.
1
2. Ensure that changes are implemented
and institutionalized, with minimal
backsliding.
3. Understand the leverage points and
effectively convert process changes into
nancial results, for example, by closing
facilities to reduce xed costs, or using
the newfound capacity to boost sales.
This management brieng describes how
to align business improvement projects with
strategic business objectives by using policy
deployment, a strategy execution tactic also
known as strategy deployment, hoshin kanri
or hoshin planning.
Align Projects with Strategic Objectives
Projects are the best reection of
managements true intent
Cathleen Benko and F. Warren McFarlan argue in their
book, Connecting the Dots1, that most companies fail to
capture the full value of their projects, and do a poor job
of connecting projects to the organizations top priorities.
Individually, each project may appear to be adding
value to the organization, they write, But when
projects are examined together, a different picture
emerges. Some may be working at cross-purposes,
others may be needlessly duplicating each other, still
other projects may be aiming to meet outmoded
objectivesbut all are competing for scarce resources.
This unintended disorder in a companys project
portfolio consumes valuable time and energy, leaves
good money on the table, and fails to provision the
organization for the future.2
The solution and path to greater investment returns,
Benko and McFarlan argue, is a stronger alignment
between a companys objectives and its project
portfolio. This portfolio is the truest measure of
organizational intent. Its where strategy and plans
become reality. It is the manifestation of what a
company is doing and where it is going. Its where
investments are made and resources are allocated.
As companies have struggled to keep pace with
globalization, non-stop market changes and new
technologyinformation technology especiallythe
project management profession has exploded. For proof
we need look no further than the number of project
management professionals (PMP) certied by the
Project Management Institute (PMI), which has grown
from less than 10,000 in 1998 to more than 400,000 today.
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Align Projects with Strategic Objectives

But even if a company hires experienced

project managers that doesnt mean that it
will capture the maximum returns from its
project-driven initiatives. Thats because
the connection between most projects and
strategic objectives is not well articulated.

According to a survey conducted by PMI,

while most project managers believe the
projects theyre working on have some kind

Management Brieng
of strategic intent, only one out of four has
seen or heard a clear strategic connection,
either in writing or verbally.3 Not only that,
half of project managers report that projects
are determined by individual stakeholders
or other informal methods, or that they
dont know exactly how their organization
prioritizes projects.

2
Maintaining a line-of-sight connection
between projects and objectives

This is where policy deployment comes in.

Policy deployment helps leadership team
members create a detailed action plan for
achieving the strategic objectives, agree on
the key performance indicators and assign
individual responsibility. It also establishes
a process and disciplined set of checks for
monitoring projects and progress.

Leadership teams can take a lot of time

discussing their ve-year strategic plans
and talking about the vision. But they
dont get into the details on how to execute
that vision, says Sheri Nemeth, a senior
management consultant for TBM. As the

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corporate director for the Danaher Business System,
Nemeth led an internal consulting team focused on
rapid integration of new acquisitions.
People always walk away from those planning
sessions with different perceptions on what it will take
to achieve the vision. With everyone having their own
thoughts on how to accomplish the plans, you quickly
run into resource and timing issues. What one manager
thinks is important isnt important to someone else, and
Management Brieng
vice versa. So you have a lot of conict, she adds.
After the strategic plan is established, the policy
deployment process pulls all of the business leaders
together to discuss and agree on the three to ve key
breakthrough processes that theyre collectively going to
work on and support during the next year. These tend
to be cross-functional processes that require support
on multiple levels. This consensus-building exercise
3 makes the often difcult structural changes that will be
A case in point
Graphic Packaging International, a $4.1 billion
manufacturer of product packaging, started its
formal continuous improvement push in 2001 with
the adoption of Six Sigma. The expert-led, project-
based methodology supported the vertically integrated
companys efforts to continually reduce costs.
That cost reduction mindset remains thoroughly
embedded in the organization, according to Phil
Geminder, V.P. of Graphic Business Systems. His CI
team supports 58 company facilities. In 2006 they
added lean methodologies to their portfolio of tools,
primarily to engage more employees directly in the
effort to improve business performance.
Align Projects with Strategic Objectives
required to realize the strategic vision clear to everyone.
Everyone agrees that the breakthrough objectives
are important. And everyone agrees to provide
resources and make them a priority so theres no
misunderstanding in the organization on exactly how
to move forward. The power of policy deployment is
in that alignment, Nemeth said.
Policy deployment prioritizes projects and connects
them to the strategic plan. Absent such an alignment
process, projects tend to proliferate based on immediate
issues, often with tenuous links to longer-term
objectives. Embedded in the policy deployment process
are a number of elements that help maintain and
reinforce business alignment. These include an emphasis
on breakthrough objectives, killing pet projects that
divert resources away from more pressing priorities,
identication and tracking of a limited number of
key performance metrics, and monitoring progress so
countermeasures can be taken as quickly as possible.
We embraced LeanSigma after management
determined that there was a need for cultural change
and that we needed to get the entire organization aligned
instead of operating in silos, recalls Geminder. Two years
after introducing the lean tools, in conjunction with a
major acquisition, Graphic Packaging began using policy
deployment to more clearly articulate the company
vision and values, and develop a more sustainable CI
strategy. This includes an actively managed improvement
project pool that maintains the links between corporate
KPIs and plant level activity.
Policy deployment supports Graphics ability to
execute at the plant and business unit level, he
added. You can have a great strategy and plan, but
if you dont execute you havent gone anywhere.
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Align Projects with Strategic Objectives
Anand Sharma,
the President and Chief Executive
Ofcer at TBM Consulting Group
and the company co-founder, has
worked with hundreds of the leading
businesses around the globe for more
than 40 years to implement and
leverage a lean business system as
an effective strategy for achieving
and sustaining protable growth.
He worked with many of the clients
featured in Lean Thinking by James P.
Womack and Daniel T. Jones (Free
Press 1996) and is author of two
industry leading books. He is
regularly sought out by national
media for his opinions on business
and new economy and is a frequent
speaker at key conferences.
Sources
1 Benko, Cathleen and McFarlan, F. Warren, Connecting the Dots: Aligning Projects With Objectives in Unpredictable Times (Harvard Business School Press, 2003).
2 Ibid, Preface, ix.
3 Unleashing Organizational Potential through People and Projects, Insights Learning & Development and Project Management Institute (2009).
800.438.5535 | www.tbmcg.com
Bill Remy,
a Senior Vice President at TBM
Consulting Group, has over 25 years
of leadership experience in business
management and manufacturing
operations. He specializes in
operational performance
improvement through LeanSigma
deployment in manufacturing
operations, supply chain,
product development and project
management across various
industries. Today, he is responsible
for developing and growing TBMs
Asia-Pacic business and helps North
American companies expand and
build strong operations abroad.
Ken Koenemann,
a Vice President at TBM
Consulting Group, has over 20
years of leadership experience
in manufacturing and supply
chain operations. He specializes
in operational performance
improvement through LeanSigma
deployment in manufacturing, supply
chain and project management
across various industries. He also
specializes in rapid deployment of
Management Brieng
improvement initiatives in private
equity and public owned companies.
He is frequently published, quoted in
the national media and is a speaker
at key industry and supply chain
conferences.


Align Projects with Strategic Objectives

Dploy Solutions Accelerated Policy Deployment

Dploy Solutions by TBM Consulting Group is a web-based system for managing policy
deployment. It helps managers focus, monitor, measure and sustain improvement results
by providing a global, real-time view of progress across the entire organization. It drives
visibility and accountability by helping leaders prioritize objectives, focus on projects
that will make a meaningful impact, and quickly identify and initiate root-cause analysis
and countermeasure actions when progress isnt being made.
Management Brieng

Dploy Solutions includes modules for translating strategy into projects, Dploy Strategy,
managing metrics, Dploy KPI, and capturing and sharing best practices, Dploy
Knowledge. The newest release, Dploy Alignment, simplies the process of managing
continuous improvement activities and clearly links projects to strategic objectives
and KPIs. It helps standardize performance data across the organization; simplies
the management of daily, weekly or monthly results; and improves visibility and
accountability at all organizational levels.

For more information and a demonstration of Dploy, contact TBM at 800-438-5535

5

TBM Consulting Group

Headquartered in Durham, NC, TBM Consulting Group is the leading provider of

LeanSigma Consulting and Training Services in North and South America, Europe
and Asia. With more than 150 experienced consultants operating on ve continents in
seven languages across the globe, TBM has grown to be the worldwide leader in lean
innovation and business improvement in the manufacturing and service sectors. The
companys mission is to help manufacturers and service companies create a competitive
advantage to generate signicant growth in sales and earnings. The company provides
strategic direction and hands-on implementation to guide cultural and organizational
transformation. TBM Consulting Groups LeanSigma approach integrates lean
principles for market agility and responsiveness and Six Sigmas focus on quality. For
more information, visit www.tbmcg.com.

TBM Consulting Group, Inc.

4400 Ben Franklin Blvd.
Durham, NC 27704
800.438.5535
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800.438.5535 | www.tbmcg.com