We get a lot of questions from leaders about which continuous improvement tools and techniques they should use. Is DMAIC better than PDSA? Should I do Gemba walks or daily huddles? When do I use incremental improvement vs. a Kaizen event? These are all reasonable questions, but the great news is that most continuous improvement tools, including those popular with organizations that use the Lean or Six Sigma methodology, work very well together. In fact, in many cases, they were developed jointly.

Today, we will discuss how Hoshin Planning and PDSA are two peas in a pod. If you are unfamiliar with Hoshin planning (AKA strategy deployment), this post will provide an introduction. This one will do the same for PDSA if it is new to you.

The Hoshin planning process aims to align the entire organization around several breakthrough goals. The Hoshin process gives leaders the ability to steer the organization toward “true north” while still implementing incremental improvements. The PDSA improvement cycle is often associated with daily improvements, but it also guides the steps of Hoshin planning. If you think of PDSA as a scientific way to structure improvement, Hoshin planning applies that same scientific thinking to the broader, long-term strategy.

Phase I: (Plan) Define True North and the Essential Breakthrough Goals

Whether you are solving a particular problem with a process or setting the direction for the entire organization over the next three to five years, the first step is to define what success means. For leaders, this often means asking some soul searching questions, like, “Why do we exist as an organization?” Once the mission, vision, and values are clear, you can begin to identify the key goals that will lead to success over the next several years. As with any improvement cycle, clarity and focus are essential. Most organizations select only a handful of goals.

Phase II: (Plan) Break the Goals Down

After the objectives have been established, it is necessary to break them down into the achievements that will be required by each department and team. This is also the time to develop the checkpoints that will be put in place to ensure forward progress, along with the metrics that will be used to measure progress. This is a great time to break out an X-matrix (even better if you have an electronic one). The X-matrix will help you visualize your main and sub-goals and how they relate. It will also help establish ownership for each objective and capture the required measurements.

Phase III: (Do) Socialize the Plan

While the overall objectives and some sub-goals are defined by leadership, Hoshin planning requires that people at every level get involved in strategy execution. At this point, the plan should be communicated and discussed so that each department and team can break the objectives down even further and add their own goals that align with the strategy. It is essential that every person understand how their work will help propel the organization toward True North. When there is a consensus about what needs to be achieved, people are more likely to take ownership and expend effort that goes above and beyond what is required.

Phase IV: (Check) Implement Your Management Metrics

Once people start working toward their goals, it is time to begin the measurement phase. Be sure that there is a plan for tracking the key performance indicators that you defined in Phase II and that it is implemented. There should be clarity on targets vs. actual results. Again, improvement management software is helpful here as it can capture the impact of improvements and serve as a repository for reports, charts, and other data related to success metrics. A well-executed plan for checking progress is the difference between goals that are achieved and an “annual plan” that sits undisturbed until next year.

Phase V: (Adjust) Analyze Results and Adjust

Once your measurement data starts to come in, you will be in the position to analyze the results and take corrective action if there is a difference between the goals and the results. It may be necessary to execute a PDSA cycle within the Hoshin plan for a particular process that is under-performing. In some cases, it may be prudent to reevaluate targets or realign time frames.

Hoshin planning is not a cure-all for organizations that aren’t arriving at the desired destination, but it can help significantly. When everyone is rowing the same direction, working toward the same ends, and using consistent measurements of progress, amazing things can be achieved. Structured improvement like Hoshin and PDSA are perfect for improvements both big and small.