Information about A3 approach

Introduction

The A3 approach is a form of an one paper strategy. The A3 approach is specifically aimed at the joint creation, execution and monitoring of the annual plan. It helps transforming abstract ideas into concrete measures. Furthermore, it depicts the whole trajectory from ‘from vision to action’ on one A3 sheet. Representing this process in such a concise manner is achieved with the help of the EFQM Excellence Model, a powerful tool for making condensed accounts. The A3 approach is based on three pillars: the A3 annual plan, the A3 management dialogue and A3 digital. A3 digital facilitates the dialogue.

The three pillars of the A3 approach:

• A3 annual plan,
• A3 management dialogue
• and A3 digitaal.

A3 Approach is integrated in a management control system and has an interactive character. Interaction is a key success factor in effective performance management. The A3 annual plan is produced by an entire team, which generates a sense of ‘our’ plan. In A3 both the staff and the managers participate in the formulation and realization of the objectives. In this respect, participation is a key element. Another focal point is simplicity, which is achieved by the restriction of the information to one A3 sheet. This restriction enables the users of A3 to obtain an adequate overview of the business trajectory described.

The conclusion is that a ‘one paper strategy’ such as the A3 approach, is not so much focused on the writing capabilities of the people in the organisation, but more on the power of thinking and on dialogue.

The guiding principles of the annual plan of the organization or organisational unit are the mission, the vision and the key success factors. In the schematic representation of A3 the relationships between the key success factors, the performance indicators of the key results criteria and the accompanying actions are all indicated by the use of colours.

Discussing the progress of the A3 annual plan during regular A3 management dialogues provides valuable information on various issues, such as the organisation’s status quo, whether the results are likely to be achieved and if any adjustments to the agreements in the A3 annual plan are necessary.

A3 annual plan The A3 annual plan is in fact a strategic map which shows the relationships between the key success factors, the performance indicators and the actions. The development of such a map, first by the organisational units separately and then collectively by the managers of these units, will help the organisation in defining a single set of standardised performance indicators. This approach is much more functional than having each unit use its own set of performance indicators. The aim of the annual plan is first and foremost to establish one standardised framework used by all levels of the organisation. This will help create consistency and coherence among the annual plans of all segments of the organisation. The A3 annual plan: focus and overview Most organisations measure their performance using extensive and complicated evaluation systems. All that is really needed is, however, focus. Focus can be achieved by simplicity and conciseness.

More focus, better control and less paperwork...

In this respect the following rules apply:

• The smaller the number of strategies, the more likely they will be implemented.
• The smaller the number of key success factors, the more likely they will be successful.
• The smaller the number of performance indicators, the more likely they will be monitored.
• The smaller the number of actions laid down, the more likely they will be carried out.

A3 management dialogue

The A3 management dialogue is essential in making the A3 annual plan a ‘living’ document. This means that via the regular discussions both among the various management levels and among the staff members the A3 annual plan can be adjusted if so required.

Goal
The A3 management dialogue is centred around several concepts, such as result orientation, constructive feedback, mutual trust, and appraisal based on performance. Another element of the A3 management dialogue is determining the management agenda, which is based on the A3 annual plan. During the management dialogue all nine areas of attention included in the A3 annual plan are discussed on a regular basis. Looking back is less important than looking ahead. Looking back is done to learn from the consequences of actions and to accept responsibility for the results. Looking ahead is directed at sharing the organisation’s expectations of and visions regarding the future. In this way, the A3 annual plan is brought to life. It becomes a relevant topic to everyone in the organisation and is no longer the uninspiring result of a tedious exercise on paper. The A3 management dialogue is a platform where the characteristics of effective leadership can take their effect on the MCS to create an open learning climate within the organisation.

Content
The A3 management dialogue is generally a discussion between the managers of two consecutive management levels. In this dialogue, the most important themes from the A3 annual plan are central. The participants review which (external) developments are currently influencing the execution of the annual plan in terms of the successes achieved, the question whether the organisation is still on course and the possible need for adjustments. Furthermore, the contributions of the organisational units are tested against the execution of the strategy. Here the focus is particularly on the effectiveness of the actions taken in this context. During the A3 management dialogue the managers are forced to reflect upon the direction chosen and its meaning and consequences. In sum: the ‘what’ and the ‘how’.

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The A3 management dialogue is an event which demarcates a particular period. There are two central discussion themes: the collaboration between the managers of the two different management levels and the development of the organisation. These issues have to be addressed periodically, approximately six to twelve times a year. There are four general agenda topics:

• New developments (or policy, with consequences for the A3 annual plan)
• Successes achieved (attained objectives of the organisational units)
• Matters of concern (objectives which have not been achieved yet or other bottlenecks)
• Follow-up (agreements concerning the solution of bottlenecks)

A3 Digitaal

Information about progress for everyone, everywhere...

A3 digitaal is a user-friendly and functional software system for working with the A3 approach.

The A3 digitaal software is designed to be “Keep-IT-Simple”. On first use you can focus on easilycreate annual plans according the A3 digitaal (=EFQM) method, combine plans togehther and share results.

Further on in the process A3 digitaal helps you setting the right focus for periodically reviewing your plans and monitoring the actual progress in aquiring your business goals.

Functionality

With A3 digitaal you can:

• design annual plans with mission, vision, key success factors, results and linked actions.
• use color mapping to identify linked content.
• link results to key sucees factors and link actions to results.
• link plans together.
• support reviews by setting as specific focus (person, important results, specified factors or unfinished actions).
• Monitor actions and results
• Authorisation for editting, add data or viewing.

How to create an A3 annual plan

Making an A3 annual plan is a dialogic process involving various participants. It is crucial that the knowledge yielded in this process is embedded into the annual plan. the following five items definitely have to be discussed:

1. Mission
2. Vision
3. Key Success Factors
4. Result areas
5. Enabler areas

1. Mission
   The mission is the organisation’s primary goal, which is not changed unless a reorganisation, a merger or another development of this nature takes place. The mission tells us something about the identity of the organisation and explains issues such as: Why does the organisation exist and what is its purpose? What needs do the organisation’s services or products fulfil? What makes the organisation unique and indispensable? As regards the mission the outcome rather than the output is central. Making profit or increasing the shareholder value are not considered as an organisation’s mission, but meeting the client’s demand or need for certain products or services is.

   In properly defining an organisation’s mission the following game rule questions have to be answered in one phrase:

   • Who are we? (your organisation or unit)
   • What do we do?
   • For whom do we do it?
   • Result areas
   • Why do we do it?
   
   

2. Vision
   While the mission embodies what the organisation stands for, its vision describes what the organisation aims to achieve. The vision represents a dynamic image of the future. It is meant to inspire and give direction to those working in the organisation. The vision in fact describes a future objective. In formulating this objective also the relevant stakeholders have to be taken into account. How this objective has to be attained is still unknown. This is the challenge of the vision. Organisations in the same branch have similar visions, and base their policies on similar key success factors and values. In other words, their challenges relate to similar matters of concern.

   In short, the vision has to provide answers to the following questions:

   • What do we want to achieve?
   • About which future goals is the organisation the most enthusiastic?
   • What are we passionate about?
   • Who do we want to be?
   • How do we want to achieve this?
   
   

   Formulating the vision of an organisation or a unit is not a task which can be accomplished in one day. It is usually a process involving a great deal of reflection. Below we present a short step-by-step plan which can help you in developing a vision for your organisation or unit:

   1. Put together a team of different stakeholders (internal and external) who you would like to be involved in the formulation of the vision. By involving these stakeholders you will make them the ‘fellow proprietors’ of this vision, while their input may improve the preciseness and quality of the definition. Be careful, however, not to involve too many parties as this could slow down the process.
   2. Map out the strengths and weaknesses of the organisation or unit. Also include developments and trends in the ‘market’ or in other external surroundings.
   3. Based on the information you have collected, answer the following questions: a. What are the consequences of developments in the organisation/unit/ market for our work? b. What are our employees passionate about? c. What values and standards do we share as an organisation/unit?

      When answering the questions above, consider which fundamental beliefs will make your organisation/unit successful and which of its characteristics above will contribute to the realisation of the vision. When formulating the vision imagine your organisation in five years’ time. Keep in mind that the vision has to connect with the questions posed above.

3. Key Success Factors (KSFs)
   Once the vision has been formulated, it is not difficult to add the key success factors. Key success factors can be derived from the vision and form a fundamental part of it. Both the vision and the key success factors should be reviewed on a yearly basis. In practice, key success factors have a ‘sell-by date’ of 1 to 3 years. Key success factors represent what makes the organisation successful, both from its own perspective and that of the various stakeholders, such as employees, customers, partners, boards, supporters and society in general. Key success factors can thus determine the continuity of the organisation.

   When formulating the key success factors try to focus on a desired future situation. Specify the KSFs as much as possible in terms of results, and limit their amount.

4. Results areas
   At the right hand side of the EFQM Excellence Model you find the results areas. Within these areas the relevant key success factors can be converted into the key performance indicators (KPIs). In this way the key success factors are made quantifiable.

   Key performance indicators
   A performance indicator defines how a key success factor can be realised in a quantifiable manner. It can measure four different aspects of performance:

   • Quality (characteristics)
   • Quantity (amount)
   • Time
   • Endeavours (efforts, costs)
   
   

   To be able to make comparisons it is important that performance indicators are realistic and unambiguous Bear in mind that they must be quantifiable. As regards aspect 4 (efforts, costs), ask yourself whether what is required of the employee lies within reasonable limits.

5. Enablers
   The enabler areas contain the actions required for achieving the desired results associated with the performance indicators. Key questions to define these actions are: What efforts are needed to achieve the desired results? By whom will the activities be carried out? Who is responsible for what? What are the deadlines? What is the size of the budget required to perform the actions? The actions should be defined on the basis of the five SMART characteristics (Specific, Measurable, Attainable, Relevant, Time-bound). The five action areas enable the formulation of a balanced set of activities which covers all focal points and provides an insight into the consequences of the actions. For example, certain actions may require an adjustment to the level of resources and/or the style of leadership. Make sure that there is a proper match between the actions you have defined and the desired results. They can be laid down in the second appendix (the action plan. This appendix can also be referred to as the underlying project action plan, which may serve as an additional tool for improving the strategic quality of the annual plan.

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