What is Hoshin Kanri?

Hoshin Kanri, also called “policy deployment process,” is a method of aligning individual goals with the organization’s strategic goals. These strategic goals (a.k.a. breakthrough objectives) are part of the strategic plan and are set by the senior leadership team. Once they have been identified and evaluated, they are  shared with everyone in the organization (i.e. they are cascaded). This process of communication is often called the “catchball process.”

Progress toward these goals is clearly measured through Key Performance Indicators (KPIs) to maintain the focus on the things that are most likely to help the organization reach its long-term goals and to provide continuous feedback.

How can Hoshin Kanri help your organization?

By using Hoshin Kanri and aligning all goals with the strategic goals, people in every department can more easily see how their goals and work fit with the strategic goals and contribute to the organization’s strategic plan. That one thing can bring about more productive problem solving, higher employee engagement, and better business acumen throughout the organization. This also assures the work being done on a daily basis is moving the organization toward those strategic goals. Because the progress is measured and communicated, people know where they stand in relation to their own goals, driving work performance and a culture of continuous improvement.

In order for Hoshin Kanri to achieve these positive outcomes, it’s important that leaders at every level understand the purpose of cascading the strategic goals, how they fit with their department’s goals, and the goals of Hoshin Kanri. It isn’t enough to simply communicate the goals through the organization. Like many other performance strategies, cascaded goals can become a box checking exercise that is detached from the real work and dreaded. This is where the implementation comes into play and makes a real difference.

How to implement Hoshin

1. Complete an environmental scan:This is a brainstorming session focused on thinking of all the possible changes in the market that could affect the organization. Some common categories to consider in this activity include the economy, politics, legislation, cultural, new technologies, the broader industry, raw materials and other resources needed, market developments, competitors and suppliers. Be thorough and encourage a very broad discussion that gives every point of view a chance to be heard.
2. Develop a strategic plan that moves the organization closer to its long-term goals: There are many ways to do this. The main thing is to choose a path that makes sense with the organization and how it already operates. Some key points to remember are:
   1. Use a planning structure that already exists and can be communicated clearly with he rest of the team, like the Ansoff Matrix or a SWOT analysis:  Choosing a structure will guide the conversations about the strategic plan and give the team resources to help them think through the different aspects of the organization that may be addressed in the plan.
   1. Limit the number of goals to a few top priorities (3 – 5 max):Splintering the focus into too many directions will diminish progress and make it more difficult to communicate a clear message to the organization.
   1. Remember the word “strategic:”Be careful not to get drawn into the weeds. It is important to understand how the plan will affect the day-to-day operations, but the goals themselves need to be focused at a higher level. This type of focus will lead to creating goals that are geared toward results and desired outcomes.
   1. Choose the KPIs wisely: In the process of choosing KPIs, always be aware of the question “Does this measurement drive the behaviors that will help the organization reach its goals?” Performance metrics need to be about aspects of performance. That means the people working toward the goals usually have control over things that are being measured. These are the most motivating types of goals.
   1. Use a few different tools to evaluate the strategic plan:Other tools, besides the SWOT matrix and Ansoff Matrix, are the X Matrix, and a gap analysis to identify drivers, means, and outcomes.
   1. Compare the strategic plan to the organization’s mission and values:Does it align and move things forward? Does it make sense with previous success?
3. Communicate the strategic plan through the organization. Each layer of the organization will relate to the plan in a different way. This is where it is critically important that the logic or “why” behind the goals and the Hoshin Kanri process itself are understood consistently. Take the time to make sure that leaders at every level know how to explain it to their teams. This process is often called the “catchball process.” That means that the strategic plan is communicated from the senior leaders through the layers of the organization and back up to get feedback and insights from every part of the business. Doing this well ensures that the plan is refined and understood by everyone. It also builds support for the plan.
4. Review progress regularly, note key lessons, and improve the strategic plan and future planning processes. Like the rest of Lean, Hoshin Kanri is best when continuously improved. There will be lessons along the way and the most successful organizations will take the time to learn from them.

If you are a member of the American Society of Quality, they have an excellent Hoshin Kanri resource that goes into great detail at http://asq.org/six-sigma/2010/08/six-sigma/hoshin-promotion.pdf.