Hoshin Kanri, also known as Policy Deployment, is a strategic planning and management system that originated from Japan in the 1960s. It is a methodology that helps organisations align their daily activities with their strategic goals, ensuring that everyone in the company understands and works towards the achievement of those objectives. Hoshin Kanri is a data-driven approach which focuses on continuous improvement, problem-solving, and the involvement of all employees in the strategic planning process.
The term "Hoshin Kanri" is composed of two Japanese words: "Hoshin," which means "compass" or "direction," and "Kanri," which means "control" or "management." Together, they represent a systematic and integrated method for managing an organisation's strategic planning, implementation, and review processes.
Hoshin Kanri has been successfully implemented in various industries, including manufacturing, healthcare, construction, and information technology. Its adaptability and effectiveness have made it a popular choice for businesses seeking to improve their overall performance, competitiveness, and sustainability.
How to Use Hoshin Kanri
Step 1: Establish the Company's Vision, Mission, and Long-Term Goals
The first step in implementing Hoshin Kanri is to establish a clear vision, mission, and long-term goals for the organisation. These elements should be communicated and understood by all employees, as they will serve as the foundation for the strategic planning process.
Step 2: Identify Breakthrough Objectives
Breakthrough objectives are significant, ambitious goals that require substantial effort and resources to achieve. These objectives should be aligned with the company's long-term goals and contribute to its overall success. Examples of breakthrough objectives could be:
- Increasing market share by 50% within the next three years
- Reducing product development time by 30% in two years
- Achieving a 25% reduction in operational costs over the next five years
Step 3: Develop Annual Objectives
Annual objectives are specific, measurable, achievable, relevant, and time-bound (SMART) goals that support the breakthrough objectives. These objectives should be established for each department or functional area within the organisation and should be aligned with the breakthrough objectives.
Step 4: Create Catchball Sessions
Catchball sessions are cross-functional meetings where the annual objectives are reviewed, discussed, and refined. During these sessions, department leaders and employees provide feedback, identify potential challenges, and propose solutions. Catchball sessions promote collaboration, communication, and the involvement of all employees in the strategic planning process.
Step 5: Develop Action Plans
Action plans are detailed, step-by-step guides which outline the specific tasks, responsibilities, deadlines, and resources required to achieve the annual objectives. These plans should be developed collaboratively by the employees responsible for their execution and should be regularly reviewed and updated as needed.
Step 6: Implement Action Plans
Once the action plans are developed, they should be executed according to the established timelines and resources. Regular progress reviews should be conducted to ensure that the objectives are being met and that any necessary adjustments are made.
Step 7: Conduct Regular Reviews and Evaluations
Hoshin Kanri emphasises the importance of continuous improvement and learning. Regular reviews and evaluations should be conducted to assess the effectiveness of the strategic planning process, identify areas for improvement, and adjust the objectives and action plans as needed.
Strategic Usage of Hoshin Kanri
Hoshin Kanri is a top-down management approach which ensures every employee understands the organisation's strategic objectives and their role in achieving them.
The process begins with the formulation of long-term business objectives, which are then broken down into annual goals. These goals are communicated throughout the organisation, and cross-functional teams are established to develop detailed action plans for achieving these goals. The tool output that helps achieve the goal includes:
- A clear vision and strategic objectives that are communicated and understood at all levels of the organisation.
- A systematic process for breaking down strategic objectives into annual goals and action plans.
- A framework for tracking progress towards goals and making adjustments as necessary.
- A culture of continuous improvement and alignment between daily activities and strategic objectives.
Best Practices
- Involve all levels of the organisation in the Hoshin Kanri process to ensure buy-in and alignment.
- Use data and metrics to track progress towards goals and make informed decisions.
- Regularly review and update the Hoshin plan to ensure it remains relevant and aligned with the organisation's strategic objectives.
- Establish clear roles and responsibilities for cross-functional teams and hold them accountable for achieving their goals.
Common Pitfalls
- Failing to involve all levels of the organisation in the Hoshin Kanri process, leading to a lack of buy-in and alignment.
- Not using data and metrics to track progress towards goals, making it difficult to make informed decisions.
- Not regularly reviewing and updating the Hoshin plan, leading to it becoming outdated and irrelevant.
- Failing to establish clear roles and responsibilities for cross-functional teams, leading to a lack of accountability and poor execution.
Hoshin Kanri is a powerful strategic planning and execution framework that can help businesses align their daily activities with their strategic objectives. By following best practices and avoiding common pitfalls, organisations can maximise the impact of using Hoshin Kanri and achieve their long-term goals.
