Our ultimate guide to Hoshin Kanri

What does Hoshin Kanri do?

At its core, Hoshin Kanri is a Lean method to driving organizational alignment and successful execution of a strategy.

Given the growing complexities of modern work, a strategy can rarely be achieved without combining top-down and bottom-up goal setting and delivery.

That’s why Hoshin Kanri promotes conversations and negotiations around goals, making their definition and management easier, aligning three organizational levels:

– Corporate / Strategic: Whereby the strategic direction is set for the organization, covering vision, mission, breakthrough, and annual goals. This often sits with the CEO, CSO, and Cx.

– Tactical: Set at the director or middle management level, these are core elements needed to deliver the strategy. Where improvement priorities and tactics are set by middle management, with initiatives and projects associated.

– Front-line: At the operational level, the work is being conducted for the projects and initiatives. Action plans, KPIs, journals, regular reviews, and an annual review are crucial to ensure all work aligns with the company’s goals.

Why practice Hoshin Kanri?

Investing in a strategy execution framework such as Hoshin allows your business to:

– Drive rigor into the way top-level strategic goals are cascaded throughout the organization from top-level, middle management to operations.

– Ensure that these goals, and the strategic initiatives and tactics that relate to them, are aligned and understood across the organization.

– Ensure that progress and results can be regularly reviewed.

How to implement Hoshin Planning

Implementing Hoshin Kanri begins with downloading the x-matrix, bowling chart, and other educational resources. Click the links below to get yours: 

• Strategic planning template pack 
• X-matrix, bowling chart, and root cause template 
• “W” process planning process 
• Hoshin 101 webinar boxset 
• Hoshin Kanri for beginners eBook
• How to lead Hoshin Kanri eBook

The Hoshin Kanri planning process is one of the most rigorous methods of goal-setting and tracking and can yield considerable benefits to your organization. 

But what does the Hoshin planning process entail? Is Hoshin-Kanri different from policy deployment, goal deployment, problem-solving, and strategy deployment? What principles do you need to know, and how can your organization replicate the success of strategy execution masters such as Danaher and Ingersoll Rand? 

This is your guide to Hoshin Kanri and how it can help your organization turn strategy into operational reality. 

The catchball process

Define, cascade, communicate, negotiate and set goals that align with your true north.

The catchball process is a negotiation between organizational layers and across functions as to what each area will contribute to the higher-level goals based on the current state of performance and the change / improvement support on offer.

Simply put, it’s the most effective way to make effective goals.

Catchball comes down to collective agreement, but this must first be established by a process design, which can be created through a Ringi system, social judgment, or Delphi.

Unlike in other strategy cascades, all accountable owners at every level must be part of the process at the earliest stage to understand their role, consult with their teams, calculate resource requirements, recommend changes, and then commit to its delivery.

Creating alignment and commitment across all involved in delivering the plan means that when the time for execution comes, it can be swift, efficient, and well-coordinated.

Why is Hoshin Kanri different from other methodologies?

Hoshin is the evolution of MBO

Hoshin Kanri is one of many methodologies from Peter Drucker’s Management by Objectives (MBO).

These varying methodologies include:

• OKRs (Objectives and Key Results) is popular in technology companies
• OGSM (Objectives, Goals, Strategies, and Metrics) is popular in retail, leisure, and entertainment, and
• Hoshin planning is widespread in manufacturing and in large conglomerates, where both central coordination and unit autonomy are prized.

What makes Hoshin Kanri different?

Hoshin Kanri is recognized as the most structured of the MBO methodologies and has several characteristics which make it unique:

• It requires planning in multiple timeframes, from long-term to immediate actions, with direct links between each timeframe
• It enables coordinated planning across organizational boundaries
• Hoshin Kanri is both top-down and bottom-up, building both company-wide and individual commitment to the plans
• It requires measurement of success using both lagging and leading metrics
• Where difficulties arise in meeting targets, it provides a framework for solving them.

Typical challenges of implementing Hoshin Kanri

Navigate these Hoshin Kanri challenges

Common challenges with Hoshin Kanri include:

1. Resistance to accountability
   At any level of an organization you might find a senior executive, middle management or team member who is resistant to hard and fast targets. Senior sponsorship is vital to overcoming opposition.
   
2. Process and commitment conflicts
   Budgeting, senior leadership meetings and company-wide conferences are all interfaces with the Hoshin planning process and execution cycle. Taking the time to ‘make it fit’ will alleviate unnecessary conflicts.
   
3. Fear of failure In many companies, failure to meet target is career limiting
   In the Hoshin planning template, it is considered a learning opportunity – unmet targets need countermeasures, not criticism.
   It takes considerable senior leadership to build a culture of trust in an organization that is rife with fear of failure.
   
4. Inconsistent, incorrect data
   The Hoshin planning process targets need to be measured against clean, real-time data in your organization sourced from multiple systems, and progress needs to be measured in a clear, consistent way.
   
   Organizations with Programme / Project Management Offices or Continuous Improvement Centres of Excellence may already have clean data sources and standards in place, but for those that do not, building this capability is paramount.