Strategic Planning With Hoshin Kanri
Today’s business world is constantly evolving and changing. To be successful, one must work towards exceeding a customer’s expectations, rather than just meet them. To do so, you need a strategic plan of action that allows everyone in the organization to conceptualize a clear vision. A plan that is forward-thinking and allows for continuous improvement at all levels, especially the organization’s vital business processes. This is no easy challenge. However, with the help of the Hoshin Kanri system (also known as Hoshin planning), more and more organizations everywhere are finding success with their strategic planning process.
Hoshin = Shining needle pointing direction, as in compass. Or the setting of a direction or setting of an objective in this case.
Kanri = Control or management
Together the Japanese terms can be translated as “the management of objectives.”
Developed by the Japanese in the 1960’s, Hoshin Kanri is a strategic planning methodology for identifying and obtaining long-term objectives through a seven-step process. The process is designed to give a specific direction that is clear to the entire organization, keeping everyone on the same path towards success. Objectives developed within the Hoshin process can range from one to five years and are continuously kept in focus without loosing sight of the day-to-day businesses practices. This allows long-term breakthroughs to continuously be in reach, while keeping day-to-day improvement at the forefront.
The key to the Hoshin process is keeping everyone in the organization working towards the same end result. This requires the trust of upper and middle management to be confident enough to delegate as much authority as possible.
Initially, the Hoshin process looks very similar to any strategic planning process. Teams of executives gather information on current performance and work to identify current and future needs of potential customers. Strengths, weaknesses, opportunities, and threats (SWOT) are all analyzed and critiqued. A review of the organization’s mission and vision is conducted and evaluated to ensure they are still relevant.
At this point the Hoshin planning process begins to form and deviate from the traditional standard planning process in four key ways.
- Degree of Focus
- Involvement of all levels of the organization
- Tools used to plan and process improvement
- How reviews are conducted
Focus – One Hoshin At A Time
In this context, a Hoshin refers to one specific breakthrough objective that is obtainable by the organization in a specific time period. A Hoshin has three specific characteristics.
- Requires a fundamental change in the systems of the organization
- The involvement of the entire organization is needed to accomplish it
- When accomplished will bring organization to a higher level of performance
Management decides which Hoshin has priority and should organize the rest into a Gantt chart. This will assure everyone that other Hoshins are still in focus and what the future expectations are.
Involvement Through ‘Catchball’
At this point, you need to consider what it’s going to take to get the job done correctly. To close the gap between the selection and deployment of a Hoshin, organizations use the activity known as catchball.
Catchball brings together managers and front line workers to develop strategies, tasks, and metrics to support the objectives of the Hoshin. To measure the output of the catchball process, a set of planning tables and diagrams are used within the different stages. The Affinity Diagram is a popular Hoshin planning tool that allows groups to develop the information needed to support a plan of action. This information is then used to develop an Annual Plan Table, which forms the specific strategies needed to accomplish the Hoshin.
Involving several layers of the organization during the planning stages makes it clear as to the volume of work that will be required to complete the Hoshin. As plans are developed, they can then be processed through a higher level of the process, allowing for adjustments in the upper-level strategies. In many cases, executives are surprised at the resources required when they review a planning table –collaboration is important.
This back and forth exchange of information is where we get the term ‘catchball.’ The catchball process of planning development typically takes anywhere from two to three months depending on the focus of the leadership in place at the time.
Using the planning tools and tables as a resource to document the planning process is extremely vital to the Hoshin Process. By documenting everything in real-time, planning meetings are able to use the group processing tools and tables instead of traditional meeting minutes. This allows the results of the group’s work in the meeting to become a part of the plan, as it happens.
Hoshin tools rely heavily on the dialogue created through the interactions and meetings of team members. When you involve a high degree of interaction and members feel as if their opinion is of value to the process, people begin to take ownership in the objective. Creating an environment where employees are invested in the process will more often than not, result in a completed Hoshin.
While not the most exciting part of the process. the review component of the Hoshin process is definitely one of the most valued. Typical periodic reviews involve a progress report presentation that are more of an update and do little to address failure. The Hoshin process calls for a much more stringent review. Planning strategy owners must provide regular reports on previously laid out metrics. If metrics are missed they must determine the root cause that led to the result with the expectation that they will also provide the data and corrective measures needed to fix the result.
The details of the meetings are not meant to be a negative experience. Experimentation is encouraged throughout the Hoshin process. Risk-takers should be rewarded and mistakes should be used as a learning opportunity, not a form of punishment.
The Hoshin designed and facilitated review meeting should entail the following:
- A clear focus that is open to some flexibility without changing the defined objective
- Concentrates on outcomes and deliverables instead of activities
- Time for reflection
- Standard reporting tool
Hoshin review meetings are meant to be efficient and effective. They should be conducted regular schedule to keep the organization focused on the specifics of the plan and to put aside parts of the plan that have been completed.
Stay tuned for future posts that break down the seven-step Hoshin planning process.
- Hoshin Planning: Seven Step Process
- Value Stream Mapping 101
- The Improvement Kata: Part 3
- Lean Six Sigma Checklist for Success
- Five Steps to Lean Improvement
- The Improvement Kata: Part 2