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Run the year on two sheets
The two questions
The method is called policy deployment. It asks two questions: what are the vital few things the business must do to preserve and protect itself over the next 12 months, and what are the vital few it must do now to turbocharge itself for years to come. Nothing else gets worked on. It takes the complexity out of strategic thinking and embeds what has to happen this year to stay on the path of the longer-term plan.
Teaching acquisitions
Acquisitions at Danaher start with strategy and then need an integration process. Leaders go in and teach policy deployment right away, which helps the newly acquired team become familiar with the culture and lets Danaher learn what each business needs from the start.
In young companies
Mitch Rales brings the same toolkit to the young companies he invests in, along with funnel management and channel management. All of it comes from decades of learning how to scale a business.
How did policy deployment develop in Japan?
Policy deployment is the English name for hoshin kanri, a planning method that Japanese manufacturers developed in the 1960s. It grew out of the quality movement that followed W. Edwards Deming's visits and built on his plan-do-check-act cycle. Bridgestone Tire is often cited as one of the first companies to use it. Toyota later applied its own version, and the method spread to companies worldwide.
Why do managers talk about the vital few?
The phrase comes from Joseph Juran, a quality pioneer who popularized the Pareto principle in management. Vilfredo Pareto, an Italian economist, noted in 1896 that about 80 percent of the land in Italy was owned by about 20 percent of the people. Juran applied the pattern to quality problems and called the small share of causes responsible for most losses the vital few. The remainder he called the useful many.
How does catchball work in policy deployment?
Catchball is the back-and-forth in which goals are passed down from executives to managers and teams, then returned with feedback, like a ball being tossed. Each level discusses what is realistic and what resources it needs. The goals are revised before they are fixed for the year. The practice is a standard part of hoshin kanri.
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