Hoshin Kanri, also known as "strategy deployment," is a formal Lean technique used to identify an organization’s breakthrough objectives and create a defined three to five-year plan for achieving them. The process is associated with identifying the organization’s true north and aligning the goals and objectives of each employee with the strategic plan.
The typical process involves 6 steps:
- Define "true north" that will stay fairly consistent over time
- Identify significant business issues that need to be solved over a 3 to 5-year timeline
- Establish specific measurable objectives to resolve these issues
- Define key performance indicators (KPIs) for every level of the organization
- Develop strategies, projects, and tactics to support the achievement of these goals
- Review progress on a monthly and annual basis
Unlike other approaches to planning, Hoshin Kanri is not done from the top-down. People at every level of the organization are involved in setting the priorities and laying out the plan for success. A technique called Catchball, where ideas are passed from one level of the hierarchy to another is commonly used during Hoshin planning.
Hoshin Kanri has a number of advantages over other strategic planning methodologies. Here are the chief reasons it is so popular.
Action, Not Just Numbers
Far too often, strategic planning revolves around numbers on a spreadsheet, with no clear path to making them a reality. Hoshin Kanri involves measurable objectives, to be sure, but it is also designed to lay out the path to success. It recognizes that long-term results depend on the tactics that are deployed today at every level. It asks the questions, “Where do we want to be and how are we going to get there?”
Improved Organizational Alignment
Without a clear understanding of what the organization needs to achieve to reach its most important goals, departments and teams will set their own set of priorities that may not be related to the overall strategy. The Hoshin process eliminates this problem by making sure that everyone is rowing in the same direction.
Increased Ownership and Engagement
Strategic plans that are handed down from the boardroom without input from the people who will be tasked with executing them rarely produce much good will. But when people are actively involved in determining the strategy and creating the action plan that goes along with it, they develop a sense of ownership and become far more likely to invest discretionary effort in improving processes.
Easier Decision Making and More Consensus
Conflict and indecision in organizations are often the results of unclear or competing priorities. People generally want to do what’s best for the company, but without insight into what matters most, reasonable people can disagree about almost every decision at hand. Hoshin Kanri helps take the guesswork out of decision-making and gives team members a standard upon which to base daily choices.
It is very easy to get caught up in the firefight of the day and lose sight of goals that may not be achieved for years. When Hoshin Kanri is properly executed, it becomes part of the fabric of the organization, not just some document gathering dust in a drawer somewhere. The performance of every person and department is regularly measured against the KPIs associated with the strategic plan. Managers and leaders can assess progress at any time, and the Hoshin plan is a frequent point of discussion.
The Hoshin planning process isn’t just about envisioning the desired future state of the organization. To get there, you first have to understand the current conditions and the obstacles that need to be overcome. This means digging into the root causes of the problems that are faced by the organization today. The 5 Whys and the A3 technique are helpful tools that can be leveraged during Hoshin planning.
More Effective Employee Development and Hiring
Too often we see organizations either neglecting employee development or doing it without regard to the long-term needs of the company. Hoshin Kanri creates the opportunity to connect the development of employee skills to the company’s strategic priorities. If you know what capabilities you will need as you reach each step in the plan, you can offer relevant development opportunities to current employees and look for those abilities in the people you bring on board.
Strategic planning isn’t easy, but it is arguably the most important responsibility of leaders. The Hoshin Kanri framework is an effective tool for crafting the strategy, defining success, and executing the plan.