With so many resources to support your deployment of Hoshin Kanri in 2020, it’s hard to know which you truly need to consider. Here are our top 6 recommendations for all things Hoshin Kanri.
Written by: Tyler McBeth, Pre-Sales Consultant
Hoshin Kanri is a powerful way to ensure your strategy execution is on-track and performing well. When implemented properly, it bridges the gap between your developed strategy and its execution, resulting in organisation-wide alignment and focus.
But achieving that is easier said than done. Only 56% of strategies succeed and the majority fail because of poor implementation. Aligning your strategy deployment with your business model is critical. Organisations which report poor alignment additionally suffer from weaker financial results.
A planning and deployment method can be a key element in transforming your once struggling strategic performance. And, in many ways, Hoshin Kanri can resolve the underlying issues that cause yours, and countless others’ strategies to stutter in the first place.
To start, you must understand the basics of Hoshin Kanri methodology. Additionally, there are added benefits in understanding how Hoshin interacts with Plan Do Check Act (PDCA), Management by Objectives (MBO) and the Balanced Scorecard (BSC).
Here are the top resources to help you succeed with Hoshin Kanri.
Understanding the Hoshin Planning System
The most logical resource to begin with is one which answers the question “what is Hoshin Kanri?”.
Hoshin planning gives you a process for aligning goals at all levels of your company with your wider strategic vision.
It helps to communicate your strategy to everyone in your organisation, and demonstrate the connectivity of their work on the overall strategy.
This requires a few steps, including:
- Defining the objectives you want to achieve as an organisation.
- Breaking this down into sub-goals and cascading throughout the company
- Communicating these goals and driving engagement through a systematic approach such as catchball.
- Developing a governance system to track performance.
Unpicking the X-Matrix
The Hoshin Kanri X-Matrix (also known as the Hoshin Planning Matrix) helps organisations to capture strategic objectives, cascade priorities and assign ownership.
Its name comes from the X that divides the matrix into four key areas:
- Long-term goals (South)
- Annual objectives (West)
- Top-level priorities (North)
- Metrics to improve (East)
The X-Matrix and its use is best described visually.
This video resource gives an easy-to-understand introduction to the matrix and Hoshin Planning as a whole:
Knowing Hoshin’s roots: Management by Objectives
It pays to know some of the key influences on Hoshin Kanri’s development. One of which was Peter Drucker’s Management by Objectives (MBO).
The MBO approach seeks to align employees’ objectives with the organisation’s goals, involving every level of a company, from the Boardroom to entry-level.
The process is clearly laid out with this diagram from Expert Programme Management:
For an introduction to Management of Objectives, Investopedia offers a good introduction to the basics and principles of the methodology, and MBO in practice.
Another influence on Hoshin Kanri is Deming’s Plan-Do-Check-Act approach that continuously improves performance.
It involves systematically testing processes, assessing the results and then implementing the solutions with the best returns.
It’s also known as the Deming Cycle, and the Balanced Scorecard Institute provides a useful explainer article.
Speaking of which, the Balanced Scorecard (BSC) is often used alongside Hoshin Kanri to improve strategy execution and manage a long-term strategy.
The benefits of combining both approaches is discussed in several academic reports, including:
Witcher and Chau’s 2007 paper examines the combination of the BSC and Hoshin Kanri.
The first paper of its kind, it’s a seminal read into how the two methodologies can, in fact, complement each other in strategy execution.
A valuable Hoshin resource to consume, it reveals how the combination are a useful framework for managing sustained competitive advantage for organisations.
To understand more about the Balanced Scorecard, the Balanced Scorecard Institute is a one-stop resource.
Delving deeper with Hoshin Planning
Hoshin Kanri can be tough to get your head around when approaching it for the first time.
There are plenty of online resources available, as well as discussions and books.
Hoshin Kanri for the Lean Enterprise is a fantastic book for an overarching look at Hoshin Kanri and its applications.
Want to learn more about Hoshin Kanri, MBO and other strategy execution methodologies, tools and principles?
Take your pick from the resources below:
- What is continuous improvement?: Explore the principles of CI and how your organisation can achieve breakthrough performance via it.
- Hoshin Kanri – OGSM – OKR: A case of apples and oranges?: Uncover the differences, or lack thereof, between Hoshin, OGSM and OKR.
- Hoshin Kanri and the aircraft industry: Discover how Hoshin Kanri has been deployed in an industry-leading aircraft engine division.
About the author
Tyler McBeth is one of i-nexus’ Pre-sales Consultants. Amassing over 15 years of experience in strategy execution, Tyler is a Six Sigma Master Black Belt, with a career which has covered the automotive and heavy machinery manufacturing, healthcare, and financial services industries. He has a passion for operational excellence, advanced data and statistical analytics, as well as being highly-versed in Lean and DMAIC.