Stratex Fundamentals – Goal Setting

How do we set strategic targets? What does our trajectory typically look like? What drives it? Do the StratEx lessons I learned as a young Toyota engineer & manager still apply?

Aim for the fences, settle for a double off the wall...

I grew up in the ‘90’s on a steady diet of the Toyota Production System (TPS). Our compass through the churning waters of continuous expansion was a business system called ‘Hoshin Kanri’ or Strategy Deployment. I’ve experienced countless cycles now & have written about it extensively. The past decade my practice has evolved toward ‘ambidexterity’ and fields like financial services, consumer goods & Tech. My hypothesis: those will prosper who can both protect the core business with OpEx and ignite new growth with Digital methods. 

So, do the TPS methods & mindsets I learned as a young engineer & manager apply? Yes, provided you translate & adapt them for each industry.  A common failure mode: ‘Here’s how we did it at Toyota ABCD…’, to which the COO, CFO, CMO, CIO et al respond, quite reasonably, ‘Who cares…?’ With that prologue, let’s see if we can answer the questions posed above.

How Do We Set Strategic Targets?

Set targets just beyond what your team thinks they can achieve. How do you know what they think? By scheduling Daily/Weekly/Monthly management walks. Okay, maybe Daily is difficult for a senior executive to sustain, but you know what I mean. To set targets you must know your business & team, which means you have to be there. Thus, you can answer core leadership questions like:

·       What is the nature my team? What is the nature of our industry & competitive challenge?

·       What is the capability of each team member? What motivates (or demotivates) them? Under what conditions do they thrive (or struggle)?

·       How capability are our processes? What are common failure modes?

·       What robust is our hardware? (Machines, info systems, supply chain…)

·       What is the capability of our software – both information systems, and culture?

·       What are the strengths & weaknesses of our management system?

Setting targets this way often produces a trajectory like the one I’ve illustrated. We don’t quite achieve our targets, but year after year we get stronger & build our muscles. In a few years, we’re a tough, capable team.

Failure Modes

Setting modest, unimaginative targets is perhaps the most common failure mode. What can cause this? Poor incentive structures, a weak grasp of blockers, unclear & unreliable data because of cumbersome central systems and a lack of YODA (Your Own Data)

Setting outlandish targets absent any real understanding of the business, team & competitive challenge is also a common mistake.  This is akin to the general manager of a baseball team blithely ignoring the team’s weaknesses & competitive position, while demanding they win 150 games next season and sell out every game.

A third common error is not setting effective improvement process targets. Want people to get good at value-added problem-solving? Set explicit targets for each team & check on them regularly. Start with modest targets, e.g. ‘Each team will close one significant problem per quarter usually scientific problem solving. Recognize & reward high achieving teams, e.g. with a ‘Problem Solving Expo’ or ‘Fair’ wherein teams demonstrate what they’ve been working on & the value they’ve derived.

Next time, what drives Stratex achievement & how do we sustain it?

Best wishes & a splendid 2026,

Pascal Dennis         E: pascal.dennis@leansystems.org