Strategy Development

An excerpt from The Handbook for Quality Management (2013, McGraw-Hill) by Paul Keller and Thomas Pyzdek

Continued from: Organizational Vision

After specifying the objectives of the business via the vision and mission statements, the next activity in strategic planning is to develop the strategies (i.e., the plan) to achieve these objectives. Yet planning must go beyond simply coming up with new things the business can do in the future. We must also ask of each present activity, product, process, or market, “If we weren’t already doing this, would we start?” If the answer is “No,” then the organization should develop plans to stop doing it, ASAP.

The planning aims to make organizational changes: changes in the way people work, changes in the systems to meet customers’ future needs. The plan shows how to allocate scarce resources and builds accountability into the plan. Deadlines are necessary, as is feedback on progress and measurement of the final result.

A traditional basis of strategy formation is the comparison of internal Strengths and Weaknesses to external Opportunities and Threats (SWOT). As shown in Fig. 5.1, strategy is created at the intersection of an external appraisal of the threats and opportunities facing an organization in its environment, considered in terms of key factors for success, and an internal appraisal of the strengths and weaknesses of the organization itself, distilled into a set of distinctive competencies. Outside opportunities are exploited by inside strengths, while threats are avoided (or addressed) and weaknesses circumvented (or addressed). Opportunities and threats are identified by understanding customers and their markets. Internal strengths and weaknesses are evaluated through rigorous organizational assessments. (Each of these is discussed in detail in the chapters that follow). Taken into consideration, both in the creation of the strategies and in their subsequent evaluation, are the values of the leadership as well as its social responsibility.

Once a strategy has been chosen, it is implemented as a cross-functional improvement project using the improvement methods described in Part IV. The structured DMAIC improvement model, an improvement to Shewhart’s Plan-Do-Study-Act, effectively builds buy-in among the stakeholder groups as well as the key middle management.

Projects are defined to achieve the vision established by the leadership team, with understanding of the customer needs and expectations (see Chap. 6). Organizational assessments, as well as customer data, provide the basis for the Measure stage of DMAIC. Key drivers of the outcomes are established in the Analyze stage. An improvement strategy is implemented in the Improve stage and continually verified in the Control stage.

Larger strategies are executed primarily at the executive level. The implementation of organization-wide initiatives in the Improve stage may be best broken into smaller projects aligned with a specific substrategy and executed at lower levels of the organization.

Editor's note: The chapter goes on to describe various styles of strategic development, with particular elaboration of Possibilities-Based Strategic Decisions and Strategic Development Using Constraint Theory.

Learn more about the Quality Management tools for process excellence in The Handbook for Quality Management (2013, McGraw-Hill) by Paul Keller and Thomas Pyzdek or their online Quality Management Study Guide.