What is an A3 Strategy?
Strategy deployment is a periodic planning technique that sets a company’s goals, performance indicators, targets, and helps the team develop a month-to-month deployment plan to get those achievements. The plan is laid out on one A3-size piece of paper (11” x 17”), which becomes the organization’s strategy execution plan. You can think of it as a map that shows where you are today (What’s actually happening), where you want to go (What should be happening), and ultimately, the planned road to get there. Modern companies use software rather than paper and pencil for A3 planning.
How Does A3 Strategic Planning Work?
This strategic purpose, or “true north,” is the business direction defined by senior leaders to achieve a competitive edge and create value for customers. This process helps guide the organization to:
Set Direction: Leaders determine the organization’s “true north,” or the primary direction the strategy demands. True north represents the very reasons the organization exists. Achieving these crucial business goals is the purpose of A3 strategic planning.
Determine the Gap: Organizations must know precisely where they are now if they’re going to plan a course to their destination. Teams should reflect on past success, as well as those initiatives that failed to produce positive results. They should ask themselves difficult questions, like “How close are we to achieving operational excellence?”
Set Milestones to Close the Gap: The organization’s goals must be aligned with true north. It is best to use a disciplined approach that will ensure SMARTER goals. SMART goals are specific, measurable, achievable, realistic, and timely.
Create Detailed Action Plans to Achieve the Goals: The plan includes all the individual steps that the organization will take to achieve the goals. Each element should have identified owners, teams, and associated dates.
What are the Benefits of A3 Planning?
The A3 method for Strategy Development and Deployment brings numerous benefits to leaders, including:
Building Consensus: The A3 thinking method and processes build consensus among the team and give individuals the authority to take action. This is a pull-based authority that moves more quickly than traditional top-down management.
Encouraging Scientific Problem Solving: A3 strategy deployment works hand in hand with the use of the iterative Plan-Do-Study-Act cycle and greatly formalizes problem definition and solution within the A3 action plans. PDSA is as follows:
PLAN: Establish objectives and processes to deliver results that meet targets and goals.
DO: Implement the plan, produce data for the following phases.
Study: Check data, compare it to expected results and identify gaps for further action.
ACT: Define and drive corrective actions to close gaps and enable the next iteration.
One Page Logical Thinking: By managing the A3 strategy on a single page, organizations can clarify the link among problems, root causes, and countermeasures. Doing so leads to practical solutions and countermeasures based on facts and data, improving accountability for plan results and the likelihood of successful strategy deployment.
How to Formulate an A3 Strategy
While every organization does not use A3 problem-solving in the same way, there are three best practices that successful organizations have in common.
Define True North: This is perhaps one of the most important responsibilities of leaders. Defining true north means aligning the mission, vision, and values of the organization. It outlines why you exist and what you want for the future. Once defined, every goal, incentive, and activity should be tied to True North.
Develop Breakthrough and Annual Objectives: The A3 strategy deployment process rests on the idea that you need to achieve short-term objectives and reach long-term goals. However, the short term and long term should always be in alignment. Therefore, the list of goals should include some that are incremental and others that represent significant, dramatic changes for the organization.
Cascade Goals: After True North and high-level objectives have been set, it is time to create alignment by breaking each one down into local and individual level goals.
Develop Strategies, Projects, and Activities: This is the cornerstone of A3 Strategy Deployment. In this phase, goals and milestones are broken down into realistic and measurable projects for every individual, team, and department. In addition, every strategy, project, and tactic should be aligned with the organization’s larger, more strategic annual and breakthrough objectives.
Standardize Your A3 Reports: One benefit of using the A3 method is that everyone learns what to expect from an A3 report. Whatever the goal or problem, the topics covered will be the same. The following items are typically included:
Header: Basic information about the goal and the team.
Background: An outline of the objective or problem and a description of why a change is called for.
Current State: The situation as it exists today, backed by data, including graphs and illustrations.
Goal or Problem: This is the analysis of the current state. The team discovers the root cause of the problem or a reason for a new objective so that improvements will result in positive change.
Future State: This area includes detailed information about the specific goals and any countermeasures planned.
Implementation Plan: This section gives you the Who, What, and When of the action plan and timing for the project. It should also include plans for reporting over time.
Results: Once the change is implemented, the results are compared to the plan, and analysis is included about the total impact of the improvement. Results include cost reduction, improved quality, increased revenue, reduced waste, increased customer satisfaction, or other objectives that drive the organization toward true north.
Monthly & Annual Reviews: Now it is time to create projects and assign KPIs. Progress reviews are necessary to maintain momentum and ensure any need to adjust goals, or tactics is uncovered quickly. The annual reviews allow leaders to assess the likelihood of achieving breakthrough objectives. If needed, leaders can make pivots and adjustments to the next cycle or reconsider resource deployment. Monthly reviews are essential to keep the organization engaged in the execution of the plan.
The A3 strategy deployment methodology is a simple yet powerful approach to organizational alignment.