Operationalizing strategy is one of the most critical responsibilities of business leaders. Mapping out the direction for the organization and making choices that move the organization closer to its long-term goals is the essence of leadership. But, of course, it is more complicated than it sounds. Daily emergencies compete for attention and resources with top-level, so it is easy to lose focus on long-term goals.
Many organizations turn to a practice called Hoshin Kanri to overcome this challenge. Hoshin planning is a method for closing the gap between strategy and execution. By defining the organization's strategic goals and cascading objectives down to each person, leaders can align priorities and move everyone toward the same ends. Ideally, everyday process improvement is in lock-step with the strategy, and decision-making is constant.
Mounds of research make it clear that people understand visual information more readily than text. As a result, leaders invested in continuous improvement look for ways to implement visual management. When it comes to visualizing Hoshin Kanri, the go-to planning tool is the X-matrix.
What is an X-Matrix?
X-Matrices are charts made up of five sections. The design of the matrix helps define the relationships between each section. While the strategic initiatives of every organization are different, the structure of the X-matrix makes it worthwhile regardless of the size or industry of the organization.
Breakthrough Objectives (Bottom Quadrant)
The bottom quadrant forms the foundation of the strategy. It contains the critical strategic goals to be achieved in the next three to five years. There are only a handful of these objectives, but they are central to the organization's plans for the future.
Annual Objectives (Left Quadrant)
Annual objectives are the short-term goals that are required to reach the breakthrough objectives. The design of the X-matrix lets leaders connect each annual goal to the breakthrough objective that it furthers.
Annual Improvement Opportunities and Priorities (Top Quadrant)
The top quadrant of the matrix is where specific opportunities for improvement are documented. These opportunities connect to one of the annual objectives. Identifying improvement projects is one more step in bringing the breakthrough objectives down into immediately actionable plans.
Metrics to Measure (Right Quadrant)
After leaders have defined the goals and opportunities for improvement, they must decide how success will be measured. The key performance indicators (KPIs) that give everyone insight into progress toward annual goals are listed in the right quadrant. Measurement is one of the most often overlooked elements of strategy deployment, so using the X-matrix strategy method is critical.
Teams and Ownership (Far Right Side)
Accountability is an essential component of strategy deployment. Therefore, the far-right portion of the X-matrix is used to assign an owner to each measurement, improvement project, and annual objective. Giving ownership helps employees develop an emotional connection to the strategic plan.
The Benefits of Using the X-Matrix
Although the structure of an X-matrix is relatively simple, this visual approach to strategy deployment is practical. In addition, the X-matrix has several benefits that less structured methods to operationalizing the strategy lack.
Introspection and Alignment
The experience of creating the X-matrix can be used to develop the strategy itself. Most leaders understand the breakthrough goals, but completing the other sections of the matrix can be very enlightening. In addition, a completed X-matrix requires the involvement of all stakeholders, creating an opportunity for many voices to help decide how the organization will navigate toward True North.
It is difficult to develop an emotional connection with a seemingly impossible goal or objectives too far removed from daily activities. The Hoshin Kanri method, when supported by X-matrix strategic visualization, helps break down breakthrough objectives into manageable goals that people can take action on right away. In addition, the measurement quadrant gives teams a way to see how incremental improvements create value in both the short and long term.
Aligned Functional Areas
Cross-functional collaboration is a pain point for most organizations, but it is necessary to solve the most challenging problems and eliminate common barriers to success. By crafting the X-matrix collaboratively and giving all teams insight into success, leaders improve communication and get every person, team, and function working toward the same ends. It is helpful when workers have a clear view of how their work impacts other areas of the organization.
If progress isn't constant, the breakthrough goals soon become impossible to achieve. With an X-matrix that is closely tracked, leaders have the information necessary to recognize when forward progress has slowed. Then, they can act right away to remove roadblocks and get things moving in the right direction. Ideally, the X-matrix will be used with improvement management software with built-in alerts that notify managers when deadlines are missed.
One of the toughest decisions in business is how to use the available resources most efficiently. An X-matrix streamlines decision-making because activities that align with any section of the matrix become a higher priority than those that don't. When questions arise about how to allocate resources, the X-matrix has the answers.
Just as it does for many other strategy deployment techniques, improvement software makes setting up your X-matrix easy. If you select a solution with an X-matrix module, you can leverage this visual management tool alongside your other continuous improvement techniques. Thus, strategy deployment and daily incremental improvement come together in a single platform.
With the ideal solution, you'll be able to:
- Control who can create and maintain X-matrices.
- Configure and manage the attribute types used to denote relationships on your X-matrices.
- Setup custom configurations and add X-matrices to your visual management dashboards.
When deployed in improvement software, your X-matrices are available to everyone who needs them, keeping the strategic vision alive. Each user can quickly drill down into the details of any improvement project or goal right from the matrix. The results of improvement projects can be calculated, making measuring the metrics painless.
The X-matrix is the ideal tool for organizational strategic alignment. It helps everyone understand how their goals are related to the long-term breakthrough goals and objectives. Everyday improvement activities are aligned because each project and annual objective are connected to one breakthrough goal. Strategy deployment is critical. The X-matrix makes it manageable.