Phase IV: Reflection

LIKE MODERN SOCIETY IN GENERAL, TRADITIONAL strategic planning

rarely stops to reflect upon results, even if they are measured in a
developmental framework such as the Nine Keys. In addition to an appropriate
framework, proper reflection requires a Delta Zero mindset, a willingness to
rethink the results desired as well as the factors required to achieve them.
Throughout the previous phases of the strategic improvement cycle, the
attitude of Delta Zero pervaded planning, policy deployment, and improvement
activities in daily work. At the end of the cycle, the company's top leadership
returns to Zero again, reviewing the overall results, problems, and surprises,
and informing itself for building next year's policy.
In companies that have progressed one year or more beyond the Business
Renewal Process, the focus team formally reviews the company's performance
figures from the previous year to discover any gaps between actual
performance and stated targets. The focus team also reviews assumptions
made in its business renewal strategy-such as the importance of a product line
to a particular customer-to see how they hold up against actual conditions and
emerging trends. The outcome of this analysis is a list of assumption gaps and
barriers to the company's continued progress towards its vision. Finally, the
focus teams offers an evaluation of the prior year's policy, with suggestions for
themes and keys to address in the coming strateegic improvement cycle.
STEP 1. COLLECT INFORMATION
To reflect on policy implementation, the focus team collects information,
developed during the previous Business Renewal Process or through regular
business reporting during the year:
the company vision and development plan financial reports for the
previous year the company's Product/Market Matrix, Key Factor Matrix, and
other strategic planning tools
The team also gathers documents generated during the Adherence phase:
updated Lean Radar Chart and Development Plan the Completed Plan
Summary for the prior year's activities a compilation of last year's Analysis
Sheets and Status Reports from the deployment teams, as well as the focus
team's notes from the latest Corporate Diagnosis
STEP 2. IDENTIFY CRITICAL PERFORMANCE GAPS
Next the focus team should identify the gaps between last year's improvement
targets and the company's actual performance, as evidenced on the company's
Plan Summary for the current improvement cycle. For example, Figure 7-8 (p.
134) showed Nonesuch Casting's Completed Plan Summary. This chart
indicates that Nonesuch reached its annual policy targets in the leadership key,
and in some (but not all) of the control points for the lean equipment
management key. In addition, the Lean Equipment Management Initiative

deployment team's Analysis Sheet suggested the following gaps in anticipated

performance:
STEP 3. IOENTIFY EMERGENT GAPS ANO BARRIERS
In this step, the focus team questions the assumptions that support the
company's business renewal strategy. The team begins by reviewing its market
position using traditional strategic planning tools such as updated
Product/Market Matrixes and Key Factor Matrixes (introduced in Chapter 4; see
pp. 52--55).
After reviewing the strategic market information, the team brainstorms a list of
emerging factors in the market that could keep the company from achieving
top competitiveness. The team then uses the affinity diagram technique to
group like factors together. If necessary, the team further subdivides these
problems into smaller groups sharing common characteristics.
STEP 4. ANALYZE GAPS AND BARRIERS
The next step of analysis uses a chart similar to the Target/Means Diagram
introduced previously. First, the management team combines the lists of
performance gaps and emergent barriers to its strategy, and analyzes the
causes of each gap or barrier. The team sets up a cause- and-effect diagram for
each gap or barrier, writing it on the effect side of the diagram. It then drafts a
gap statement, suggests a target, and creates a performance graph showing
industry, world class, and target levels.
STEP 5. SUMMARIZE
After the focus team has identified and analyzed critical performance and
environmental gaps, it fills in an Analysis Summary. Keyed to the Completed
Plan Summary, this document records the focus team's evaluation notes and
recommendations for the focus of next year's annual policy (see Figure 8-3).
This evaluation lays the groundwork for the focus team to begin a new round of
the Strategic Improvement Cycle. In many cases, the focus tea m can develop
the theme for the new policy cycle directly from the recommendations in the
Analysis Summary, without having to analyze and rank profit factors as it did in
the first round (see Chapter S). Top management will find that it is much more
aware of the daily operation of the company than it was before the
improvement cycle, and will understand better what it must do to continue its
progress toward excellence in its strategic keys.