Hoshin Kanri

A company that doesn't audit's it's own process is a company that can not succeed with their process. I've seen countless companies that are spending all their time putting out fires instead of planning for the future. Outlined in this article, is something that I truly believe will dramatically make the changes necessary to succeed. We will be talking about Hoshin Kanri also known as Policy Deployment.

Use a Systematic Approach for Strategy Deployment

As a business process or an organization, you will reach a point when all your practices and improvement efforts are aligned towards your customers or individuals. But all it takes is the implementation of that plan to know that exclusive strategy is not going to make the cut. What you need is the participation of all the key stakeholders to drive company-wide or process-wide expansion. This objective can be achieved by employing Hoshin Kanri, a lean method designed to point everyone in the same direction.

Why is Hoshin Kanri Used?

Steering an organization towards effective management and long-term success requires strategic planning and effective implementation of that plan. However, before deploying a team to begin the planning phase, it is important to recognize what the problem is and how you can address that problem.

But it is not as simple as it seems. When the change and improvement need to be implemented at the organizational level, it often becomes a challenge to find a starting point. Moreover, it is hard for the management to step away from their daily duties and effectively act the critical vehicle for the top to bottom communication.

It is impossible to solve the problems you cannot see. However, the lean processes, such as Hoshin Kanri, allow you to get a bird's eye view of the missing links. Problems at process level can escalate at an alarming rate, but if you know what is causing the ripple effect, you can easily control it and fix it.

Here are some signs indicating that you need strategy deployment, aka Hoshin planning:

  • Your projects are either stalled or largely unsuccessful after implementation
  • Delays in progressive development
  • Overlooked budgets and forecasts
  • Lack of alignment between the senior management's vision and regular operation of the organization
  • More projects onboard than you can reasonably handle
  • Poor association between last year's progress, or lack of it, with current year objectives
  • Lack of engagement among employees who feel disconnected from the team
  • No link between strategic plan and front line continuous development objectives
  • Constantly putting out fires and being reactive instead of proactive

Strategy Deployment using PDCA Model

It is a well-known fact that people in a team perform best when they have a common goal. When your team is aligned to your company's goal, it becomes easier for the organization to make decisions and push forward in the same direction.

This is when Hoshin Kanri plays an important role. Kanri, literally meaning shining needle on a compass, is a Japanese technique channeled towards achieving full control over company's management and direction needle or focus. The idea is to escape the never ending loop of status quo and make improvements by analyzing the problems, taking existing environmental conditions into account. This ensures that all the improvement efforts are momentous at the company level.

Kanri is implemented at an organizational level as Deming's PDCA model, Plan-Do-Check-Act. PDCA cycle is the first basic approach that is taken towards problem solving and development of effective processes and activities.

- Step 1: Plan

A rudimentary plan of action is developed that addresses key concerns and problem areas. Simultaneously, control parameters are also created. This plan is reviewed by everyone involved, and agreement is reached.

- Step 2: Do

All that has been agreed in step 1 will be implemented in step 2.

- Step 3: Check

All the information corresponding to the control parameters is collected and compared against the results that were expected from the strategy.

- Step 4: Act

In this step, the results are evaluated, and the cause of the discrepancy is analyzed. The cause of the difference between actual and expected results are assessed and discussed. Based on this assessment, a corrective plan is identified.

Hoshin Kanri – Fundamental Principles

The most important objective of this popular practice made common in 1950s Japan is to get everybody in an organization or a process pointing at the same direction, also known as the "true north." Its five core tenets include:

  • A company or process-wide assessment helps the leaders get a clear picture of its stakeholders' performance.
  • Based on this assessment, it becomes easier for the management to define clear objectives and then communicate those to the people who are involved in the shared vision and goal.
  • Develop a firm understanding of the current situation, so that the future processes can be improved for a better future.
  • Channel all the resources in attaining key objectives that improve focus and efficiency of the organization.
  • Involve, all the employees in Hoshin process, to cultivate a creative and dynamic organization.

7 Steps to Achieve Hoshin Kanri Planning

The one thing that is elemental in executing any strategy is its development process. This is the reason this strategy has emerged as a successful method. It takes the execution of the strategy very seriously and assesses its effectiveness at every step. As a result, the implementers of the strategy can reach their strategic goals.

Hoshin Kanri

Hoshin Kanri

To successfully achieve the solution of the problem, Hoshin Kanri must be implemented in seven stages. This allows you to align your business goals with available resources and necessary action plans that will be required to make it happen. Consequently, it is only a matter of time when the entire organization is involved in achieving company-wide goals and key performance indicators (KPI's), by combining stellar performance with daily management.

- Define organizational vision

Not much can be achieved if the company's main goal and vision are abstract. It is very crucial to define your core objective before you start anything else. You need to assess where your organization or business process stands with regards to your vision. You must also know the existing policies and procedures that are already in the implementation phase to reach the set objectives.

Unless you know your organizational hierarchy and the daily management system like the back of your hand, executing Kanri will not come easily to you. The current position of your on-going long term plans is also crucial to your future planning. As you collate this data, your company's goals and its existing state will start taking shape.

- Create advanced goals

Advanced objectives or breakthrough goals are those that forces your organization to stretch beyond its limits in a new and thought-provoking manner. These goals will take anywhere between 3 to 5 years to reach fruition. Breakthrough objectives are all about exploring new markets, launching new products, embracing different models, etc.

- Outline yearly Goals

Unless you have short-term goals clearly defined, your long term goals can never be achieved. You need to start planning the small objectives you need meet this year to ensure the success of goals that will reach realization stage in three to five years. You may be required to study the market, assess competition, develop product requirements, etc. in this year.

- Delegate goals to respective people throughout the organization

Once you have a clear understanding of your goals and what you need to accomplish, it is time to setup a team and assigns individual objectives to respective departments. These objectives should be aligned with the company's goal of the year. All the goals that you set for yourself and the organization should be measurable with key performance indicators. This will allow the leadership to monitor the progress of the plan.

- Take action to execute annual goals

In this step, you need to start implementing the yearly goals. You can use several problem-solving tools at this stage to ensure that you reach success.

- Performance reviews

Don't let daily management tasks stand in the way of monthly performance reviews. Now that you have a plan in place, its success depends on its real-time progress against expected results. This can only be identified if you undergo monthly reviews. Individual performance check will help you monitor your progress and ensure that you are moving forward as planned.

- Annual Review

After a period of 12 months has passed, it is time to sit with key players of the plan and assess the overall progress of the organization. You may be required to adjust the goals or timeframes for a more realistic approach. This will also help you in the proper allocation of resources so that the goals for next year are suitably accomplished.

Kanri is not as complex as it may appear. However, each step requires a solid action plan so that the strategy can be effectively executed at the organizational level and within the stipulated time frame. When the goals are aligned to a common objective, it ensures that everyone in the organization is geared towards the same vision. It is important to periodically review performance to guarantee results at the end of the period.

Key Takeaways

By now you would have understood that Kanri is to be implemented at the macro level so that all the elements of an organization can be geared towards a common goal. Here are the key takeaways of this strategy that will tell you about this business practice in a nutshell.

  • Start by defining the company's strategic goals and relay them clearly to all the departments so that they can contribute in an effective manner.
  • Make every single goal and contribution measurable by using data and figures. These numbers will reveal the existing trend, the current state of the organization and where you want to reach in the next six months, a year and then five years.
  • Identify the processes that are successfully moving towards the goal and the ones that are deflecting from the target. This will help the leaders intervene where it is required.
  • Use various problem-solving tools to keep quality, cost, and delivery in check.
  • Break down monthly and yearly goals into daily goals to stay accountable to your progress, or lack of it

Hoshin Kanri helps where complacency has set in. It allows the organization to have a comprehensive look at what works and what doesn't. Hoshin Kanri is systematic approach towards a common goal has been helping companies to achieve their target for decades and will continue to do so for years to come.

Author: Eric Raio

Eric Raio is one of the founders of Factory Solutions. When he isn't plotting new ways to create awesome software. He likes to geek out about flying drones and technology.

Why are we asking?