One of the business management techniques that we often recommend to clients is called Hoshin Kanri. When we mention it to people, especially Americans, who aren’t familiar with the practice, we get a lot of raised eyebrows and confused looks. Here are the questions that generally come next.

What is Hoshin Kanri?

Hoshin Kanri is a planning process that aligns strategic objectives with the specific resources and action plans needed to make them happen. It involves defining an organization’s “true north” and ensuring that everyone is aligned toward it.

What do the words “Hoshin Kanri” mean in English?

Hoshin is composed of two Chinese characters, “ho” and “shin.” “Ho” meaning method or form, and “shin” meaning shiny needle or compass. Taken together, the word “hoshin” means a methodology for strategic direction setting. Kanri translates roughly to “management.” A good working translation is “Direction Management.”

Are there other terms to describe the approach?

Yes. Hoshin Kanri is often also referred to as Policy Development, Hoshin Planning, or Hoshin Development.

What is the purpose of Hoshin Kanri?

The main goals of Hoshin are to:

• Ensure that the entire organization is working toward a few, well-defined and widely understood strategic goals
• Prioritize continuous improvement work that is aligned with those objectives
• Eliminate distractions that don’t further the strategy
• Ensure buy-in by getting all leaders involved in strategic planning
• Define metrics for accountability
• Track progress frequently and make adjustments as needed

How do companies get started?

The first step is to get a clear understanding of the current state of the organization as it relates to the mission, vision, and values. If those have not yet been defined, they must be formalized and communicated as they are the foundation upon which the strategy will be developed. Next, the objectives that will result in significant performance improvements, known as “breakthrough objectives” are identified and documented. Once these are defined, the specific tactics that will be necessary by each individual and department can be identified. Finally, success metrics and methods of measuring them are developed.

How do leaders track progress?

Monthly and annual reviews are essential to the success of Hoshin Kanri. Leaders meet to evaluate how well the organization is tracking toward the goals and to address any roadblocks or changes to the strategy.

What tools are useful?

Hoshin Kanri software helps organizations keep on track and aligned. It captures improvement work around each objective and helps measure results. Improvement broadcasting keeps everyone engaged and working toward the most important goals.

Like many other continuous improvement techniques, Hoshin Kanri is elegantly simple, but deeply meaningful. It requires thoughtful implementation, but the returns on the effort can be extraordinary.