CASE 1: Analysing Manufacturing Strategy at a Manufacturer of Automobile Components

Strategy phase: Analysis
Level: Business Unit
Primary content: Objectives, Plans, Actions
Thinking types: Mostly convergent
Main benefits of visualization: Cognitive (overview and sequence), social (communication and alignment)
Visual format used: Structuring (and sequencing) technique: strategy charting


Company Context and Strategic Situation

A company, a manufacturer of auto components that was part of an international group, had recently reorganised into business units. The director of one business unit required a review of the current manufacturing strategy and its alignment with business needs. He wished this review to also act as a team building exercise to consolidate a new team in a newly created, stand-alone business unit. The visual technique of strategy charting (Mills et al. 1998) was used for this review. A strategy chart was created over a couple of 2-hour lunchtime workshops. The chart was perceived to be such a useful way of introducing order into plans and activities that had occurred and were occurring, that it was decided to place a copy on the shop floor for communication purposes and to update the chart on a regular basis. This activity continued for three years before being discontinued.
In summary, the key benefit of the strategy charting activity was that it helped in jointly making sense of plans and activities, and relating them to objectives and this through an ordered hierarchy of events plotted on a timeline. The main implementation barrier was the at times selective memory (i.e., only recalling successful events, or events that fit a participant’s model of reality) and post rationalisation (introducing non-occurring linkages and planning activities to make the strategy appear rational) of executives engaged in the activity.

Method Description: Strategy Charting

A strategy chart is a simple to use technique that captures activities and events that illustrate planned and emergent strategy. It gives users a common understanding of past, present and future strategy within their organisation. The visualization uses colour, text and organised space to record and display information in a readily understandable form. For more detail see, for example, Mills et al. (1998). The basic chart is constructed on sheets of flipchart paper attached to the wall. Time is represented along the horizontal axis, and the various levels of strategic decisions and actions are represented on the vertical axis. (see figure below)


Time

Business Unit Objectives


Manufacturing Objectives


Manufacturing Strategy Formulation


Manufacturing Strategy Implementation


Figure 1: A blank strategy chart with vertical axis adequate for a manufacturing context

Typically a chart is constructed in two sessions of between two and three hours. Participants in the charting session write decisions and events on stick-on notes and position them on the chart. Different colours of note can be used. In manufacturing companies each colour of note represents a particular decision area, e.g. suppliers, processes, quality. Events to be placed on the chart should be brief, factual descriptions of verifiable objectives, decisions and actions. Each should include a date to the nearest quarter. Examples: "CEO went to a conference and heard about Lean Manufacturing, Q2 1996". "Corporate requirement to reduce overhead, Q3 1995". "Decision to replace machine tool X, Q1 1998". The diagram below shows such one resulting strategy chart from such sessions with the company.


Figure 2: Events on the Implementation part of the strategy chart of the auto components manufacturer

Events may also be connected if any events are thought to lead to other events they can be joined by arrows. Thus the chart can:
• contain business and manufacturing objectives;
• contain actions and decisions in manufacturing’s strategic decision areas;
• indicate interactions or linkages between decision areas;
• show perceived causal connections between events;
• contain any event perceived to be of strategic importance.

Evaluation

The main advantage of the strategy charting procedure is that it provides managers with an agreed understanding of the evolution and current status of their manufacturing strategy. It makes ‘strategy’ an understandable and communicable concept for manufacturing managers and workforce. By offering an insight into the longitudinal development of manufacturing strategy, Strategy Charts can also form a starting point for future strategising.

There are, however, difficulties to be overcome. There may be a tendency when charting to omit certain events, or to sanitise them, particularly in politically sensitive areas. There might also be attempts to post rationalise connections to make the strategic story look more logical. In order to minimise these effects careful facilitation is required. For example, gathering all the events onto the chart before looking for linkages, and allowing plenty of time to capture contributions before analysis, are helpful techniques. A further difficulty can arise if the strategy chart is created in a group where one individual is clearly dominant. This can lead to a type of group think where individuals’ opinions become suppressed. One way around this is to get individuals to present their contributions in an anonymised way before group discussion.

Case Learnings:

Charts show parts of the context and process of strategy but the act of charting provokes considerable discussion on how past strategies arose; how long they took to implement; and which strategies failed and why. Charting may therefore be very useful in forming a new strategy, especially if managers are prepared to learn from the past. Users need to be sensitive to the dangers of groupthink, selective memory, and post rationalisation and to encourage openness in the construction of the chart. Good facilitation in the use of the visualisation is crucial here.

Last modified: Tuesday, 13 February 2007, 10:41 AM