Better Project Selection using Hoshin Planning and Balanced Scorecards

© i-nexus 2010

Just Do Projects or Achieve Real Results?Better Project Selection Using Hoshin Planning and Balanced Scorecards

© i-nexus 2013 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 FilterFinancial Filter

ProjectScoping

Pro

ject

Allo

cati

on

Project Ideas from

OperationalPriorities Project Ideas from

Customers, Partners and Suppliers

Project Ideas fromEmployee

s

Capture Opportunity

QualifyOpportunities

Select Project

StartProject

Projectscoped

Projectstaffed

Project Ideas from

StrategicGoals

ExecuteProject


1. Why is project identification and selection so important?

ROIROI %Successful %Successful

Programme Cost Programme Cost

Project Cycle Time Project Cycle Time

Net Savings/Project Net Savings/Project

Number of Projects Number of Projects

ROI Results Business Outcomes


2. How are projects typically identified andselected?

• 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


Ultimately poor project selection will lead to the death of an operational excellence initiative...

© i-solutions Global Ltd. 2007

Cause Problem PainRoot Cause Cause Problem Symptom Pain Consequence

Not InterestedManagers

Cannot See the Direct Linkage

Between Projects and

Their Personal Objectives

Not ConvincedManagers Do Not Believe PI

Will Deliver the Result They

Need in the Time They Have

Not MotivatedManagers 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


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

2. Use X-matrices to translate Goals to Actionable Priorities and Clarify Ownership

3. Use Bowling Charts and A3s to Keep Leaders Engaged


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

Financial

Customer

Internal

Learning

Increase Profit

Maximise

Utilisation

RetainCustomer

s

LowCost Offer

FastTurnaround

MotivatedCrew

Strategy MapBalanced Scorecard


Hoshin Planning – The Concept

方Ho

管KanShin Ri

針理Direction Needle

ControlChanneling

ReasonLogic

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’


How Hoshin Works – The X Matrix (Basic Concept)

RESOURCES

AnnualBreakthrough

Objectives

Targetsto Improve

3-5 Year Breakthrough

Objectives

Top LevelImprovement

Priorities

= Primary Responsibility

= Secondary Responsibility

5- WHO

Use dots to show relationship of Targets and Resources to

the Improvement PriorityUse 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


Balanced Scorecard Strategy Map to X-Matrix Example


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


Show review process happens at multiple levels

Frequently translation from goals into actions requires multiple levels of cascade... and review


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


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

Prove

Level 1Scale andReplicate

Level 2

Internalize

Level 3Align andIntegrate

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


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

*data from 2011 i-nexus survey of 41 organizations


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

• Challenges

MotivationLeadership

KnowledgeSkills

Opportunity

Personal Dimension Organisational Dimension

Willingness to Change status quo

CompetenceSupport

Roles

22 BB

AA

CC

11

33


We support you all the way from the idea up toyour 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)


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

PlanAction

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


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.


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