Key Points

• Hoshin Kanri offers a fantastic way to get retail businesses moving in the right direction.
• The hope is that through this business process, everyone from the CEO on down understands short-term action and long-term strategy.
• When used appropriately, Hoshin Kanri can help turn struggling retail businesses around.

The world of Hoshin planning, also known as Hoshin Kanri or more simply as policy deployment, is often considered one of the world’s foremost frameworks for tying together the short-term actions of an organization and its long-term goals. If this sounds pretty simple, it’s because it’s all pretty clear how it should work, but making it work is another story.

This is especially true in retail, where strategic priorities, goals, activities, and even communication tactics such as marketing change frequently. As a result, Hoshin Kanri is a fluid system that helps companies regularly review their progress toward hitting their targets. This then allows a retail brand to better understand how to best direct funds as well as the work of teams inside its organization.

What Is Hoshin Kanri?

To dive a little deeper into the definition of Hoshin Kanri, it’s basically best known as a Japanese planning method that helps companies look at big-picture strategies and convert them into everyday action. One of the most important facets of Hoshin Kanri is that everyone plays a role, from the CEO on down to the store clerks inside a retail location.

Hoshin Kanri has long shown itself to be a smart business methodology that works in all kinds of businesses, such as manufacturing, where teams can use tools to break down long-term goals into yearly targets that their teams can actually start working on.

In other words, you might want to look at Hoshin Kanri as something of a roadmap that is going to connect a retail “store” growth opportunity to the daily tasks that can actually make this growth happen.

The core idea behind Hoshin Kanri is “catchball,” which is a system that allows leaders to give goals to their teams for feedback, and then use this feedback to make these goals attainable enough that all departments and their teams buy into the goal. It’s important not to think of this as top-down dictating in a Hoshin Kanri world, but collaborating in a way that allows things to stay on track without micromanaging. The hope is that Hoshin Kanri can and will cut through confusion and lead to strong and measurable growth.

Hoshin Kanri and Retail Are a Perfect Match

It won’t come as any surprise to learn that the retail sector is all about balancing the fast-changing needs of consumers alongside efficient operations. The other hope is that Hoshin Kanri is something of a glove that can take your growth plans, like opening up a new store location or giving a boost to online sales, and provide clear and actionable steps that work for both the stores themselves and the teams that run them.

This is how companies like Walmart have efficiently adapted to handle seasonal rushes or inventory shifts. Hoshin Kanri is so flexible that it pairs incredibly well with the fast pace of retail, and allows for regular check-ins to make sure that stores and teams can pivot quickly depending on different circumstances, like a new product or product category launches.

The joy of Hoshin Kanri and retail coming together is that it can connect the insights gleaned from the front-line, as to what customers want to see in stores, along with top-level strategy. The hope is that silos don’t form that can slow growth, and instead, Hoshin Kanri allows for the formation of a culture that will enable everyone to take ownership of their work and the targets that follow that work.

Understanding the Challenges that Come Along with Retail Growth

As exciting as it might sound to grow a retail business, it often means that you have scattered priorities, and what was successful in one store doesn’t necessarily translate to success across an entire chain of stores. Separately, you have to navigate the real-world possibility that inventory challenges are going to arise, often at the most painful times, like the holidays or during other seasonal events.

The reason why something like Hoshin Kanri exists is that it makes sure that teams are aligned on goals. The reality is that teams that are chasing different goals, like getting sales up in one side of the business while inventory lags in another, can lead to frustration among all teams and missed sales and business opportunities, as well as a dropping reputation with customers.

The reality in retail is that leaders often set big visions, but the daily work getting done doesn’t always connect to this vision, so delays happen. This leads directly to frustrated staff in stores and worsening customer experiences across the board. As soon as staff in a store get overwhelmed, the bottom just falls out, and it’s bad news all around.

In better news, Hoshin Kanri can come to the rescue and introduce clarity that links strategy to action, so pitfalls stop and turn into progress.

How Hoshin Kanri Drives Retail Success

Aligning Goals Across Stores and Teams

In the grand scheme of things, the best aspect of Hoshin Kanri is that it’s going to take something like a growth vision you have to boost retail store sales by 20% and turn it into a yearly goal. This means that everyone in the organization, from the C-Suite on down, will know exactly how this goal is going to be achieved and what role they will play.

Catchball will surface as an opportunity to bounce ideas back and forth between teams, so targets like “boost in-store traffic by 10%” can be something multiple teams think through and all give input on. Think of this as something like a chain where every team and individual knows how each link fits into the whole, so everything is held together.

The reality is that having scattered goals is just going to waste energy, and more importantly, time and resources.

Enhancing Customer Experience Through Focused Initiatives

With Hoshin Kanri, in the world of retail, you are likely going to start with a focus on customer-facing projects, like making checkout even faster or personalizing in-store displays. You’ll do so by tying them to growth metrics so that you can pull the resources you need to achieve these goals.

Having regular reviews with key stakeholders is going to be critical to ensure these initiatives are not just moving forward, but adapting to the different feedback each team is bringing to the table. This might include tweaking the layout of the area around the checkout station in a retail store or reducing how long it takes to check out online based on customer feedback, e.g., shopper data. The goal here is to put the customer at the very front of any goals, as they should be the center of a strategy and not an afterthought.

The reason you focus here is that happy customers are, unsurprisingly, going to drive word of mouth, post online on social media, and repeat customers are the best kind of customer. You’ll be able to determine success when you see higher satisfaction scores and increased sign-ups through things like loyalty programs, which can be directly tied to increased revenue.

Optimizing Inventory and Supply Chains for Scalable Growth

Using Hoshin Kanri to set up inventory goals is one of the best ways to supply retail environments, keeping shelves stocked and customers happy. This could start by setting up a goal like reducing stockouts by 15% and then getting to work with cross-functional teams to bring this goal to life.

Assuming this is the goal, the reality here is that you’ll work toward keeping shelves stocked without overbuying, which is going to be great to support new store openings without pulling inventory from existing locations. This could be a goal that is something of a backbone that helps growth scale smoothly, without customers even noticing something is taking place behind the scenes.

Tracking Progress with Regular Reviews

One final thing to consider with Hoshin Kanri around driving retail success is that you must track progress with regular reviews. This isn’t just a recommendation. It’s a necessity to have things like monthly check-ins to track progress, see what is on track, measure sales per square foot, and make changes to any goal that requires countermeasures if something is slipping.

The hope is that these progress checks are going to keep the momentum going into the end of the year, a critical time for sales, without discovering any end-of-year surprises that can change everything, for the worse.

The good news is that holding these regular check-ins is going to allow teams to quickly spot big misses and instead allow you to hold firm to a 90% target rate for the timeline for any goal that is being worked on.

Benefits of Integrating Hoshin Kanri Into Retail

At the end of the day, integrating Hoshin kanri into retail is something that can help keep retail growth steady, with aligned teams focused on hitting their targets more frequently. Whether it’s looking at how to expand into new stores and lift sales, you’ll get an opportunity with Hoshin Kanri to clear up the priority list and waste less time on ideas that quickly go off-track.

This is the difference between growing scattered and growing smart. It’s with Hoshin Kanri that internal teams can feel more connected, which in turn increases morale and hopefully reduces turnover. As individuals and teams see how their input is critical to shaping the success and future of the business, it’s a massive lift in morale.

The same benefits extend to customers, too, who are going to see smoother experiences across the board, which leads to more loyalty, which in turn leads to repeat business. When inventory runs tight and there is no wash, there is also cash for reinvestment, whether it’s into marketing or expansion, it’s a path toward more profits.

Other Useful Tools and Concepts

In the grand scheme of things, Hoshin Kanri is something that is well worth learning more about, as it might be the right fit for your organization, no matter its size. For this reason, your next read should be on Metrics that Matter, so you know how to measure the success of any Hoshin Kanri execution.

Separately, if you are struggling to execute a strategy inside your organization, this article is all about integrating Hoshin Kanri into your world. Of course, suppose you want to move on to another topic. In that case, you can absolutely do that as well, like maybe you want to visualize your work for instant productivity gains using the increasingly popular Kanban method.

Conclusion

Ultimately, Hoshin Kanri isn’t all that complicated; in fact, it’s actually pretty straightforward on how to keep your retail growth on point, so big dreams can become reality. Think of Hoshin Kanri as a map, and you now have a plan in place to help steer the ship, which allows organizations to turn challenges into chances and drive more sales, create happier teams, and enjoy positive customer feedback.