Vision Is Nothing Without Deployment

Dec. 21, 2004
Strategic action leads to results.
This column is based on results of the Second Annual IndustryWeek Census of Manufacturers, a massive editorial research project that was designed to collect information about U.S. manufacturing trends, best practices, and specific manufacturing performance metrics. To that end, two questionnaires were developed: a mail survey that targeted plant-level manufacturing executives and a telephone survey aimed at corporate-level manufacturing executives. The research was conducted in association with PricewaterhouseCoopers. More than 2,400 survey responses were collected. Michael E. Kane is a principal consultant with PricewaterhouseCoopers, Philadelphia. Executives have the responsibility for developing the strategic direction for their businesses. Equally important to strategy development is the deployment of business strategy through each level and business process in the company. Although strategy development is in the forefront in business thinking, it is the deployment of strategy that determines the degree of success in operating results. Strategy deployment is the development and communication of operating expectations and performance metrics that, when combined with all other business process areas of the company, meet the strategic vision of top management. The results of the Second Annual IW Census of Manufacturers illustrate the largely different views of manufacturing executives in setting strategy versus those of plant managers tasked with executing operations that meet the strategic direction of senior management. World-class manufacturing status was identified as an important evaluation of company performance in the Second Annual IW Census. Only 35% of plant managers evaluated their facilities as having made "significant progress" toward attaining world-class status, while almost 48% of manufacturing executives said they believed they had made "significant progress." On the surface, this could be simply a matter of definition. A closer look at the data reveals a more striking theme in the area of strategy deployment. Data illustrate the views held by manufacturing executives and plant managers on the characteristics of manufacturing companies and the processes and methods used to operate them. Many topics were evaluated similarly by both groups. For instance, just over 60% of both groups recognize continuous-improvement programs as "extremely critical" to their achievement of world-class manufacturing status. Planning and scheduling strategies were thought to be "extremely critical" by more than 51% of both survey respondent pools. Census data relating to operations implementation, however, revealed that manufacturing executives were consistently more optimistic in their views than plant managers (see chart). Implementation issues of whether supply-chain optimization, planning and scheduling strategies, and strategic outsourcing had been extensively implemented found senior managers with a more promising view of deployment. Even the question of whether new information technologies had been implemented found significant differences of opinion. About 34% of corporate manufacturing executives interviewed felt their organizations had "extensive implementation" of new technologies, while only 15.5% of plant managers reported that "extensive implementation" had occurred. Data regarding the voice of the customer also revealed differing views among manufacturing senior executives and plant managers: 32% of the corporate-level respondents reported that they had extensively implemented a customer-satisfaction survey process, while only 22% of plant managers viewed customer-survey processes as extensively implemented. Many reasons may exist for the gaps between the views of manufacturing executives versus those of plant managers. Plant managers simply may evaluate operating performance more rigidly than vice presidents. Vice presidents may have the big-picture view of company operations. However, the issue of strategy deployment has large implications for all businesses and should not be overlooked. The first and largest implication delivered by the IW Census is that there is a fundamental disagreement between the strategic level and the execution of the business. This issue may have far reaching effects for a company. In an extreme case, company management should be asking whether the day-to-day operations of the business are driving toward the same vision as top management. Another large issue, that of management capability, also should also be evaluated in the strategic-deployment process. Senior managers should be assessing whether plant managers have the ability to absorb the strategic direction of the business and turn the vision into operating reality. Manufacturing executives need to look at themselves in the deployment process as well. They must question whether their expectations have been communicated effectively to plant managers. Conversely, they also need to evaluate whether the degree of support they provide in terms of involvement could alter their perception of operational execution. The implications of strategy deployment are substantial. Strategy deployment is the key to operations execution and the management vision becoming one. However, it is important to remember that strategy development, although critical to company success, is only part of the business-improvement process.
World-Class Initiatives-Implementation
% of respondents reporting "extensive implementation"
Initiative plant survey corporate survey
Quality management programs 31.3% 47.8%
Formal continuous-improvement program 23.6% 41.1%
Cycle-time reductions 20.4% 35.8%
New information technologies 15.5% 34.2%
Planning and scheduling strategies or technologies 14.2% 31.0%
New process equipment or technologies 18.0% 30.4%
Flexible, cross-functional workforce 19.6% 29.1%
Reengineered production processes 12.2% 26.9%
Agile manufacturing strategies 8.5% 26.3%
Self-directed or empowered work teams 16.0% 21.8%
Supply-chain optimization 10.7% 18.4%
Multifacility optimization 9.2% 16.5%
Strategic outsourcing 9.7% 16.1%
Maintenance optimization 8.8% 13.6%

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