Hoshin Kanri briefly
Hoshin Kanri is an effective strategy execution management method that combines long-term strategic objectives with actions to be taken in order to achieve them (development projects), and metrics that ensures transparent follow up of strategy implementation. This strategy execution method is powerful in aligning actions across the organization towards common objectives. Hoshin Kanri was developed in Japan and the words mean “direction” and ”management”.
A growing number of organizations have recognized the benefits of the method in implementing the strategy and therefore the use of Hoshin Kanri is increasing at an accelerating rate.
4 reasons why Hoshin Kanri enhances organization’s competitiveness
Helps to build a link between objectives, actions and KPIs
Hoshin Kanri often utilizes an X matrix that visually connects long-term objectives, activities and metrics. Organizations where staffs’ work can be directly linked to strategy are more successful and witness higher commitment of all organizational members.
Ensures the focus of operations
Hoshin Kanri is a layered management model where a each team prepares own objectives and in particular chooses small amount of activities that help them to reach objectives. Focusing on only a few breakthrough objectives at a time and ensuring that actions related to the objectives get a sharpened focus on action.
Increases organizational collaboration and transparency
In Hoshin Kanri, dialogue, or “catchball” within an organization, helps to align goals and actions in a common direction. Thru this process, potentially conflicting goals are easy to spot. Moreover, each team starts owning clear goals that are linked to the corporate strategy; everyone becomes aware of colleagues’ efforts. Such transparent management model engages and motivates staff and helps to maintain self-direction.
Lay the foundation for effective leadership
With Hoshin Kanri, effective day-to-day management principles can be easily extended to the entire organization. The method does not force a particular way of leading, but nevertheless provides a good basis for effective leadership.
What gets measured, gets done.
3 principles of the introduction of the Hoshin Kanri method:
Every organization can benefit from HK even if organization has pre-existing management structures, or strong organizational culture. Adopting company can choose between entirely embracing detailed HK management principles, or adopting only several main principles. Whichever approach is chosen, the following 3 principles should be in place:
1. Strategy documentation
The X matrix is a powerful document, which in one page describes the strategy and strategic actions. The X matrix helps in finding the focus. In the X matrix, the progress of KPIs and strategic projects are updated regularly.
Brief video introduces the X matrix:
2. Dialogue to align objectives
The dialogue or “catchball” is a stage in which objectives, plans and KPIs needs are recorded in an inclusive way. The role of middle management is significant, making their involvement important. In the dialogue, the organizational unit or team has received higher-level objectives, and on that basis, the teams are asked to develop their own objectives and plans that support the higher-level objectives. If the objectives cannot be committed to, a discussion will take place and the necessary changes will be agreed. The dialogue is efficient way to strengthen commitment and ownership.
3. Management process
The management process is an important part of a successful Hoshin Kanri implementation. The goal of management processes is to ensure that everyone knows what is being done, when, and why. Furthermore, a robust management process enables transparency and timely corrective actions, if needed.
Basic elements of the management system:
- Annual schedule for management process
- Progress reviews and corrective measures
- Standard documentation
- Transparency to the employees
Implementing Hoshin Kanri doesn’t require much from the organization, but the results can be observed quickly after its adoption. HK method supports development of the leadership and therefore the results tend to improve every year.
Who is benefiting from Hoshin Kanri
Hoshin Kanri is well known worldwide and is used by many successful companies: Tesla, Toyota, Caterpillar, HP and Bank of America. In addition, many hospitals, municipalities, and other public organizations are already utilizing this effective method of strategy management.
Hoshin Kanri helps large organizations reach a common line and increase cooperation, however, even smaller organizations benefit from an easy way to visualize strategy and ensure prioritization of actions. The management system, transparency and enhanced cooperation of the organization support the commitment of the staff.
Read a blog how does Hoshin Kanri compare with other leading strategy execution methods (OKR and Balanced Scorecard).