Strategy is two parts:
planning and deployment.
Hoshin Kanri can help.
Hoshin Kanri
What is Hoshin Kanri?
When you first hear of Hoshin Kanri, you are probably thinking to yourself “Hoshin What-ari?”. That is okay. Many people are hearing this term for the first time. But I promise, rolling up your sleeves and learning more about the process and principles is will worth your time.
Hoshin Kanri, derived from the Japanese words for direction (Hoshin) and management (Kanri) is commonly interpreted as “how we manage our direction”. When effectively deployed Hoshin Kanri seeks to ensure that the organization’s strategic goals drive all activities within the enterprise.
The Hoshin Kanri process is used as part of the organization’s strategic planning process to help communicate and cascade the strategic goals throughout the company. Focusing on action, Hoshin Kanri is an important aspect of continuous improvement that is deployed to ensure that improvement efforts are aligned with the organization’s most important strategic objectives.
Hoshin What-ari?
The Strategic Planning Process
In many organizations, the strategic planning process considers current performance compared to a desired future state. Through this evaluation a plan emerges to help “close the gap” between where the organization is and where it wants to be. Then, based on these gaps the leadership team will create a business case for deploying tactics to close the gap either by improving existing processes, designing new services, or entering new markets.
In the graphic above, we provide a high-level overview of a common framework for developing an organization’s strategic plan. The challenge however is ensuring the plan is universally understood and acted out at all levels of the organization – bridging the gap between planning and doing.
Four Reasons Your Strategy Will Fail
Although the framework above seems simple, organizations often underestimate the complexity of developing and deploying an effective strategy. To help ensure your strategy is set up for success, be sure to avoid these four common pitfalls.
No outside eyes
Too many organizations elect to self-facilitate the develop of their strategic plan. This can work as long as you think outside of your business and across operations to prevent siloed thinking from dominating what goes into the plan.
no balance
Ensuring balance of the multiple stakeholders’ needs is critical to developing a plan that helps to unify operations. When goals are incompatible, competing, or blatantly overlook a stakeholder group, the plan will fail to inspire people to participate.
No calibration
Once the plan is developed, usually as part of a strategic retreat, it is considered “done”. This misstep prevents leaders from seeking feedback on the plan, potentially leading to blind spots, lack of buy-in, and ownership. An important step in getting others to help own the plan is to ask them to offer suggestions on how to make the plan more effective.
no execution
Just because a plan exists, don’t assume people know how to align to the plan or contribute to the success of the plan. Strategy includes two steps: 1). strategy development and 2). strategy deployment. As the saying goes, most organizations “would rather have a decent idea well executed, than a great idea poorly executed.” When it comes to creating strategic advantages, a lot of it comes down to your ability to execute.
Why Hoshin Kanri is Important to an Organizaton
The primary objective of Hoshin Planning is to create line of sight by sharing the strategic goals, established by the top-level leadership, while capturing feedback and results from frontline operations. As strategy flows from the top of the organization it is digested by middle management who convert strategy into tactics and tactics into projects or standards that are supported by operations. This flow of information is commonly referred to as “catchball”.
Through Hoshin Kanri, the leadership team is responsible for establishing the organization’s aspirational vision and the high-level, breakthrough goals that will serve as milestones along the way to achieving that vision. This vision is then communicated to middle management who develop department specific tactics to align to the vision. These tactics are then communicated to frontline employees who implement the tactics through projects or through changes to everyday work.
Catchball is core to Hoshin Kanri, but catchball alone will not ensure the organization’s strategy will successfully be implemented, or that the strategic plan will benefit from routine evaluation, learning, feedback, and calibration. As such, the Hoshin Kanri process follows a seven steps process to not only ensure the strategic plan is understood, but that the plan benefits from intentional cycles of learning.
The Seven Steps of Hoshin Kanri
Step 1: Establish vision
The Hoshin Planning process starts by creating an aspiration vision that communicates who the organization wants to become in the future. This big-picture vision gives the organization purpose and sets a target worth striving for.
Step 2: Develop 3-5 Year Breakthrough Objectives
With the vision in mind, top-level leadership team will identify longer term objectives and transformational changes that will need to occur as the organization embarks on its journey to realizing its vision. The breakthrough objectives are typically limited to 2-3 objectives that span a 3–5-year time horizon.
Step 3: Establish Annual Objectives
Once the longer-term objectives have been established, these objectives need to be decomposed into more near-term targets.
Step 4: Deploy Objectives
Using catchball, the long-term and annual objectives are deployed to all members of the organization who are invited to provide feedback on the strategic plan helping to refine the plan and address any potential blind spots.
Step 5: Implement Objectives
With the plan globally understood, the next step is to begin executing the plan through specific projects, changes to standards, updated best practices, or other problem-solving activities.
Step 6: Periodic Review of Objectives
As the plan is executed, it is essential that periodic reviews are performed to measure the organization’s progress toward achieving its stated objectives. Through these regular reviews, the organization can assess if its action plans are effectively closing the gaps between where the organization is and where it wants to be. When performance is not consistent with expectations, the organization can modify its plans to try to get back on track.
Step 7: Annual Review and Organization-Wide Assessment
The final step in the Hoshin Kanri process is to reflect on the effectiveness of the organization’s process for developing, deploying, and executing its strategic plan. This intentional cycle of learning provides the organization an opportunity to compile lessons learned and evaluate the various factors that contributed to the successful implementation or the shortcomings of the organization’s strategic plan.
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