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This article explains the Hoshin Kanri in a practical way. After reading you will understand the basics of this powerful strategy tool.
What is Hoshin Kanri?
Many companies struggle with translating strategic plans into actionable items on a daily process.
Hoshin Kanri is a tool that can be helpful in:
- Creating Goals
- Determining Strategies
- Establishing Metrics
- Creating Action Plans
- Reviewing Progress
Hoshin Kanri has been known by several names: policy deployment, X-matrix. Hoshin Kanri has its roots in the Toyota Production System and is a very powerful tool.
Based on a concept popularized in Japan in the late 1950s by Professor Yoji Akao. “Each person is the expert in his or her job, and Japanese TQC [Total Quality Control] is designed to use the collective thinking power of all employees to make their organization the best in its field.”
The Hoshin Kanri Table
Properly used, Hoshin Kanri will help employees to focus on goal achievement. The process also fosters communication and participation in establishing the goals as well as serve as a tool to hold individuals accountable for achieving their assigned objectives. How does the process work? Let us assume that an organization desires to expand international sales.
Most likely, this goal was created at a strategic planning retreat; performed a SWOT analysis and through discussion arrives at an objective to expand sales over the next three years by 20%. The Hoshin Kanri Table would look like the following image:
The three year breakthrough objective would be to achieve 20% growth in international sales. Note how this is the starting point of the table. Recall Stephen Covey’s “start with the end in mind” and you can see how this is the beginning of the matrix. If the company desires to grow by 20% over the next three years, it will not achieve this growth in year 1. On the left hand side of the chart, note that the year one growth is expected to be 5%. If the organization desires to achieve the 20% by year 3, then achieving 5% in year one would put them on track to be successful. To achieve the first year growth, the company identifies the improvement priorities to make the sales goals achievable. They decide that they need to identify five potential representative agencies. Once identified, the company plans to contract with 2 of the sales agencies. Note that individuals are named and assigned to achieve the specific improvements. Each of the individuals would then have detailed action plans with time frames to achieve the goal of contracting with two sales representative agencies.
Remarks on using the Hoshin Kanri Table
This Hoshin Kanri Table has been for only one “three year objective.” Ideally a company would have 4-6 objectives. Too many objectives can dilute the focus of the employees. The value of this approach is that everyone is aware of the overall strategic objectives, goals, and assignments. This can be used to create alignment throughout the company. It also allows assignment and accountability for individual action steps. Any time an action step is behind schedule; the management can take corrective action to realign the organization and improve the chances of success.
It’s Your Turn
What do you think? Is the Hoshin Kanri Table applicable in today’s modern organizations? Do you recognize the practical explanation or do you have more suggestions? What are your success factors for the good Hoshin Kanri Table set up?
Share your experience and knowledge in the comments box below.
- Kesterson, R. K. (2014). The Basics of Hoshin Kanri. CRC Press.
- Hutchins, M. D. (2012). Hoshin Kanri: the strategic approach to continuous improvement. Gower Publishing, Ltd.
- Casey, D. (2011). X Matrix: Strategy Deployment And Execution Process For Breakthrough Business Performance. Lulu.com.
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