This blog summarizes the benefits of hoshin kanri software and what to consider in implementation.
What is Hoshin Kanri
Hoshin Kanri (HK) is an effective strategy execution management method that combines long-term strategic objectives with actions to be taken to achieve them (development projects), and metrics that ensure transparent follow-up of strategy implementation. This strategy execution method effectively aligns the organization toward common objectives. Hoshin Kanri was developed in Japan meaning ”direction” and ”management”.
Typical elements of the strategy are shown in the picture below. The areas that are covered with the hoshin kanri method are marked with green.
What is strategy and what hoshin kanri covers
Main phases of the hoshin kanri
- The concretization of the strategic plan. Basically, every organization should have a vision, mission and clear strategic choices. Often, however, the introduction of the hoshin kanri method reveals their shortcomings and weaknesses, so they need to be clarified.
- Definition of strategic goals, i.e. concretization of key objectives by the end of the strategy period. After that, short-term goals, i.e. more generally annual goals, are determined.
- Dialogue about objectives among the next layer of the organization. In this phase, a common understanding of the strategic objectives in the organization is built and at the same time, it is ensured that the next level of the organization is committed to the goals. This is repeated at each organizational level. The purpose of this step is to ensure that everyone is working towards the common objectives. This requires dividing the goals into precise, measurable and achievable goals and appointing responsible persons for each objective.
- Define key performance indicators (KPIs) that are used to track progress toward objectives. These KPIs should have an understandable connection to strategic objectives.
- Development of action plans: Based on the objectives and KPIs, action plans are developed, i.e. development projects, which define the tasks, schedules and resources needed to achieve the objectives.
- Continuous monitoring: A jointly implemented management system is agreed upon in the organization, i.e. a process and operating method for monitoring progress and addressing deviations.
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.
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.
Every organization can benefit from HK even if organization has pre-existing management structures, or strong organizational culture.
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.
Amplon is hoshin kanri software
Amplon uses the Hoshin Kanri principles to engage all employees and to visualize the strategy. Read more about 3 hoshin kanri basic elements here.
With Amplon companies can design a bottom-up strategy and can easily adapt this software to their culture and processes. Amplon makes it easy to share common development projects and activities ensuring focus in the organization. Instant monitoring of strategy through software dashboards allows immediate reaction to any deviation. Read here why you should implement hoshin kanri with software.
Amplon makes hoshin kanri implementation easy and execution efficient
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