Abstract

​After reading this article, you’ll learn how to put in place a strategic growth plan. You’ll understand how this process helps manufacturers achieve sustainable and profitable growth. I’ll share manufacturing leaders’ everyday challenges. Things like a lack of formal growth strategies and misaligned goals. I’ll walk you step-by-step through the strategy deployment process. The structured approach based on Lean principles. This process helps align organizational goals, engage employees, and promote continuous improvement. I’ll cover the benefits of this approach, including enhanced agility and risk management. I’ll also share common implementation challenges. Lastly, I’ll provide a step-by-step guide to implement this process in your business.

Did you know?

• Studies reveal that only a small fraction, about 10% of companies, manage to drive consistent and profitable growth over time.
• Slightly more than a quarter (26.9%) of U.S. manufacturing plants say strategy deployment occurs in their facilities. According to the 2007 IW/MPI Census of Manufacturers.
• However, that percentage increases dramatically (to 53%) when looking only at plants with 500 or more employees.
• Studies show that strategy execution failure rates range from 7% to 90%, with an average of about 50%.

Key Takeaways

DIMENSION	TAKEAWAY
Internal and External Challenges	Manufacturers face obstacles such as customer price pressures, inflation, and shifting industry trends, making a strategic growth plan essential for overcoming these barriers.
Definition	Strategy deployment provides a structured approach to setting business outcomes and aligning resources and efforts to achieve them, based on Lean principles.
Benefits	Key benefits include goal alignment, employee engagement, increased agility, continuous improvement, sustainable growth, risk management, and cross-functional collaboration.
Internal Challenges	Common challenges include gaining leadership buy-in, ensuring accountability, aligning departments with strategic goals, and overcoming the complexity of breaking down long-term visions into actionable steps.
Common Mistakes	Common pitfalls include poor goal setting, failing to track progress, lack of budget planning synchronization, and having too many strategic initiatives.
Employee Engagement	Engaging employees through structured processes like the catchball ensures their involvement and commitment to achieving strategic goals.
Sustainable Growth	Mastering strategy deployment typically takes time, but with consistent effort, manufacturers can guide their businesses to new levels of performance and profitability.

1. Why Manufacturers Need Strategy Deployment.

Whenever I ask middle-market manufacturing executives (CEOs, Presidents, Owners, etc.) what their long-term goals are, I hear a consistent answer: Profitable growth.

Watch this video to learn the five scenarios you’ll find in a manufacturing business.

Which makes complete sense. However, when I ask them: What are your targets? Or how do you plan on reaching them? The answers are less consistent; here is what I hear:

• We don’t have a growth plan
• We have a growth plan, but it’s in my head
• We have a plan, but we’re not executing it very well

Seeing these answers and reading the statistics above, the low success rates for manufacturers in achieving this goal are not surprising.

The problem is that most manufacturers cannot afford to grow without a plan. Here are some of the reasons why:

• Customer price pressures
• Inflation
• Shifting industry trends
• Increased customer requirements

Watch this webinar to learn more about implementing the strategy deployment process in a manufacturing business.

When you try to grow your business without considering the internal and external factors affecting your industry, economy, and business, it’s going to be an uphill battle. These are among the reasons why manufacturers need a strategic plan to grow their business successfully.

In this article, I will share a process that will help you:

• Gain control over the growth of your business
• Engage your entire team
• Remove the burden of coming up with growth strategies by yourself

2. What is Strategy Deployment?

Strategy deployment is a methodology that provides a structured approach for identifying your desired business outcomes and developing a plan to make them a reality. The methodology I’m about to share is based on Lean principles.

In a conversation with a manufacturing business owner, I recall him saying, “I just want an X$ (annual sales) size business.” If you think this way, I’d say that growing a business is like swimming upstream. There are always internal and external factors that push you forward and back.

Manufacturing business leaders must constantly improve and innovate to keep business growth trending because the downturns almost always come on their own. This is what strategy deployment allows you to do. Whether it is recognizing:

• A new market you haven’t exploited
• An underperforming sales force
• Lower margins due to inefficiencies in operations
• Long lead times to roll out new products
• Most leaders recognize their limitations. The challenge is to overcome them effectively. Strategy deployment helps you engage your entire team to overcome these gaps and reach your vision.

“Breakthrough improvement implies that you don’t have the answer and have no idea how to reach it.”

3. Breakthrough vs Incremental Improvement.

Incremental improvements in manufacturing are small, step-by-step changes that make existing processes a little better, like fixing small problems or saving time. These changes are usually easy to do and help things run smoother. This is the focus of Lean Daily Management.

Read this article to learn about the five disciplines of strong manufacturing management.

These initiatives are often led by shopfloor, front-line, and mid-level managers.

“You won’t save your way to world-class performance or profitability. You’ll do it by investing in your business (team, expertise, technology, systems, etc.). Remember that.”

Breakthrough improvements are big, bold changes that can completely transform how you do things. They might involve new technology, big investments, or new ways of working. These changes need a lot of teamwork and support from leaders. While harder to achieve, they can bring huge benefits and help the business stay ahead of the competition. These changes are the focus of strategy deployment. These initiatives are led by the executive leaders team and cascade down through all management levels reaching all employees.

4. The Benefits of a Strategic Growth Plan.

Here are the benefits of implementing strategy deployment into your manufacturing business in no particular order:

• Alignment of goals – Ensures that every level of the organization understands the goals and priorities for the business. This leads to more productive efforts.
• Employee Engagement – Involves employees in the planning and execution of the process. This creates ownership of their work and results.
• Increased Agility – Provides a structured but also flexible approach, enabling you to respond to market changes, customer demands, and other unexpected market dynamics.
• Continuous Improvement – Embeds a continuous improvement culture by periodically reviewing performance, developing countermeasures to missed targets, and being proactive about managing the performance of the business.
• Sustainable Growth – Aligns short-term actions with long-term goals. This ensures that day-to-day activities contribute to the growth of the business.
• Risk Management – Identifies potential obstacles to growth plans and helps you stay proactive by mitigating them and maintaining the growth plans.
• Cross-Functional Collaboration – Requires collaboration between departments. This leads to the breaking down of silos and more effective solutions.

5. Challenges with Strategy Deployment.

When implementing strategy deployment, here are some of the challenges you may encounter:

• Buy-In – Often, leaders resist change. This process is about driving continuous change to your business to achieve sustainable growth.

Watch this video to learn how to get buy-in from your teams.

• Accountability – When deploying this process, employees may resist the structured approach with metrics, owners, meetings, and reviews.
• Ownership – Team members may struggle with taking ownership of initiatives and developing countermeasures when they miss targets.

Read this Infographic to learn about KPIs for manufacturing businesses.

• Lack of alignment – Aligning all functions to the business’s strategic goals can present a challenge.
• Complexity – Businesses sometimes struggle to effectively break down the long-term vision into incremental steps. Especially large organizations.
• Resources – When leaders don’t assign enough resources to support the effort.
• Short-Term Focus – Pressures to deliver on short-term commitments leads
• Leadership Engagement – When the senior is disengaged from this process, it leads to low accountability and ownership and the failure of strategic initiatives.

6. How Strategy Deployment Works.

Here is a step-by-step breakdown of how to implement this process:

6.1 Develop your Strategic Intent.

The senior leadership team must develop/revise/reassure the following elements of strategic intent. These items should be more static than the rest as they represent long-term elements of the business growth strategy:

6.1.1 Mission/Purpose Statement.

This statement captures the reason for the business. Explain what problems you solve, for whom, and what outcomes you create that contribute to a better society.

6.1.2 Vision Statement.

This statement captures the ideal picture of what the business hopes to become at its peak. The vision will help you expose gaps in your business.

6.1.3 Long-term Strategy.

The strategy will explain how the business will fulfill its mission and achieve its vision. In other words, strategy will show how you’ll compete in the market through features, segments, prices, and when, how, and why. The strategy explains what it will take in terms of resources and capabilities to achieve the vision.

6.2 Deploy your Growth Strategy.

6.2.1 Mid-term Strategy.

This section should answer: What goals do you want to accomplish in the next 3-5 years?

“Implementing a process is not a strategic initiative; business outcomes are.”

6.2.2 Annual Targets.

These are targets you plan on achieving within the next fiscal year.

6.2.3 Strategies.

These are the focus areas and approaches you will deploy to hit your annual targets.

6.2.4 Success Metrics.

These are metrics you’ll use to monitor progress. These should be leading indicators of your annual targets.

Watch this webinar to learn how manufacturers use KPIs.

6.2.5 Owners and Teams.

In this section, you’ll identify the individuals leading each project/strategic initiative and the teams working with them.

6.2.6 Catchball.

This is a step in which strategic plans are cascaded down to various departments. This process ensures that targets are realistic and that all departments are aligned and committed to achieving them.

6.2.7 Implementation Plans.

Now that we have clarity and buy-in. Each team leader then works with their teams to develop implementation plans. These plans outline the specific tasks, timelines, and resources required to meet the annual objectives.

6.3 Implement the Strategy.

6.3.1 Strategy Deployment Execution.

This is the most important phase, where the plans are implemented. Here, teams work to complete their assigned tasks and meet to brainstorm solutions and develop countermeasures.

6.3.2 Reviews.

One critical aspect of implementation is the periodic review. These should be held monthly at a minimum. Here, the leadership team evaluates performance against targets, strategic initiative progress, and status and develops countermeasures for missed targets and delays in strategic initiatives. The central element of these reviews is key performance indicators for the business and each strategic initiative.

Grab a copy of all the strategy deployment templates.

6.4 Evaluation and Reflection on your Strategy.

6.4.1 Quarterly Review & Evaluation

In this review, the leadership team completes the monthly evaluation. In addition, they assess performance, identify any deviations from the plan, and make necessary adjustments.

6.4.2 Annual Reflection.

At the end of each year, manufacturers conduct a comprehensive review of their performance against the annual objectives. This review process, often called the “PDCA cycle” (Plan-Do-Check-Act), involves evaluating what worked well, identifying areas for improvement, and adjusting the strategies for the following year. This iterative approach fosters a culture of continuous improvement and ensures that the organization remains agile and responsive to changing market conditions.

7. Common Mistakes When Implementing Strategy Deployment.

• Poor goal setting – Manufacturers often establish either too conservative or aggressive goals. Overly conservative goals will fail to challenge your team, and overly aggressive goals will make them feel set up for failure. In both cases, the team becomes disengaged. Engage them in this, and don’t be afraid to challenge them.

 “Make your targets challenging enough, forcing your team to make significant changes instead of small tweaks.”

• Failing to track progress and follow through – Successful strategic initiatives require work, oversight, and support. When leaders leave teams to their own recourse and do not provide the appropriate governance, they often fail.
• No synchronization with budgetary planning – This can lead to a disconnect between financial resources and the strategic plan. Budget allocations may not support strategic initiatives which leads to wasted resources and missed opportunities.
• Too many strategic initiatives – An overly ambitious leadership team may ask too much of their teams. Recognize the amount of work and change your teams can handle.
• Failing to engage the entire team – When leaders fail to use the power of the catchball process, they unknowingly create disengagement. Think about your feelings if given a task without input or influence.

• KPI Management – Regarding KPIs, manufacturing leaders often establish too many, not enough, or irrelevant metrics. This leads to confusion, overexertion, and frustration.

“No measurement, no improvement. Period.”

• Overcomplicating the process – Keep communications simple; don’t overwhelm people with excessive data, complicated processes, or complex plans. These may lead to confusion, mistakes, and delays in your plans.
• Underestimating resources needed – Once again, engaging your teams helps you understand the amount of work strategic initiatives will take to implement. Use the catchball process to adjust your plans, prioritize, and allocate appropriate resources to each initiative.
• Failure to define success in quantifiable terms – I recommend you use the SMART approach (Specific, measurable, attainable, relevant, and time-bound). This will help you make things objective, transparent, engaging, and empowering for everyone. Not to mention, it will increase accountability.

8. Conclusion.

Most manufacturing leaders I speak with are seeking one thing: sustainable, profitable growth. This process will help you accomplish that goal. You will uncover the gaps that keep you from reaching your goals. The best thing is that you’ll engage your team. You’ll enjoy the relief of not feeling like you must come up with all the answers. The average business takes at least two annual cycles to master this process. Stay patient and committed.  If you do, you’ll reap the benefits of unprecedented performance, growth, and profitability levels.

 

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