Hoshin Kanri or Hoshin planning, strategic planning or policy deployment is a method designed to focus and align all contributions of the organization’s staff on required breakthroughs in order to achieve the top strategic objectives.
Lack of focus
It is very common in all kind of organizations that people work a lot, spend energy and consume resources on projects and performance improvement without the organization noticing significant progress.
Some may say things are done in inefficient way, let’s hunt waste. But that haste is waste too if not given a prior bit of thinking.
Improvement opportunities are infinite in any organization. Think about a factory, a hospital or an office building. What comes limited are resources: money, people, equipment, material, floor space… and time.
If too many projects are launched, too many improvements strived for or too many goals targeted, chances are that despite great efforts and spending, the dilution of limited resources will not earn noticeable / satisfactory progress.
Some of the planned projects or initiatives may simply be left aside because it is too much to handle, and chance are that priorities are not shared, bring a lot of frustration: top management does not get what it expected, bottom worked hard on topics which are not valued by the top.
The top management is often guilty too, failing to communicate strategic goals and/or sharing written priorities, keep teams focused on a limited number of projects or setting local target that will make divisions compete internally.
Focus and align
To prevent resource dilution, it is necessary to define what are the few things that are really required to achieve the long-term goal and is not yet available or not under control. This things are referred to as breakthroughs, which means we’re not after trivialities but important, critical things: new technology, specific know-how, methods, etc.
All efforts, contributions and resources will be focused on acquiring, building, installing the few breakthroughs. Furthermore, all efforts, contributions and resources must be aligned so that local initiatives do not negatively interfere with each other, but help the whole organization to achieve the goal.
The focus is now on what is referred as ‘true North’, a metaphor used to indicate where all units should head for, regardless the routes they individually have to take.
Hoshin Kanri starts with the definition of the few critical breakthroughs the organization must achieve so that its goal or purpose can be achieved. This is considered on long or mid-term, typically three to five years ahead.
The next step of planning is to breakdown the long or mid-term objectives into shorter term objectives, usually for the coming year or next twelve months.
While strategic objective setting is done at the top of the organization, the underlying objectives and tasks are handed top-down. Each head of division has to propose his plan to support and achieve short-term objectives. Proposals are submitted to the top and a consensus searching process known as ‘catchball’ will make top and next level discuss the proposal until agreement is found.
The process repeats itself level after level, cascading down the objectives and cascading up the proposals.
Once everything is settled, the cascade is built so that achievement of lowest objectives automatically achieve higher objectives.
Strategic planning and deployment can lead to fairly big collections of objectives, hence actions. In order not to recreate the loss of focus it is supposed to avoid, planning overview is done with the help of a X-Matrix.
Such a matrix usually reads clockwise starting with long-term objectives, the related short-term objectives, the actions to achieve short-term objectives and KPIs to monitor progress. At each intersection of the X, a symbol shows the contribution level. For example if an action contributes strongly to achieve an objective, the square at their intersection will show a dark disc. If the contribution is weak, the square will display a circle and if the action does not contribute to the objective, their connecting square will be left empty.
This matrix allows a synthetic overview as well as a way to check if planned actions will effectively help achieving objectives.
An additional table on one side of the matrix shows who takes over actions (what resources, who’s in charge…).
The X-Matrix is a summary and a high level planning tool. For the cascade to lower levels and a more operational use, A3 reports are great tools. The cascading is done with a set of A3 reports, the higher level A3 report being father or mother of the subordinate A3 reports, the sons or daughters.
To learn more about A3 reports, read my related posts.
Hoshin Kanri reviews
Hoshin kanri or policy deployment is reviewed periodically. The A3 reports are used for operational daily, weekly and monthly reviews while more formal strategic level reviews are done every quarter or twice a year and a final review closes the short-term plan the end of the period and fuels the next one.