Key Points

• Hoshin Kanri is used by some giant brands, especially in Japan.
• This methodology is a great system to help filter the right message down to hundreds or thousands of employees.
• The hope is that this system can keep you on track for five years or more with objectives.

While the term “Hoshin Kanri” might not be well-known outside of corporate planning circles, it’s a very important idea nonetheless. Designed to get all employees in an organization moving in the right direction, Hoshin Kanri is a Japanese management methodology that has been around since the early 1960s. Some indicators place it origin closer to WWII, but either way, it’s been around for some time.

Today, Hoshin Kanri has spread worldwide, including to many well-known brands such as Toyota, Procter & Gamble, Nissan, Xerox, Bridgestone, Komatsu, and many more. These are some of the world’s best-known names, which only serves to amplify why Hoshin Kanri isn’t a strategic planning system that is a fly-by-night process but one that is deeply ingrained in giant companies. 

What Is Hoshin Kanri? 

Also known as “Policy Deployment,” Hoshin Kanri is essentially a strategic planning process that gives organizations a basic methodology for communicating their goals properly from the leadership level on down. The hope is that once these goals are disseminated among the daily workers, they can be translated into actionable objectives that an organization can actually accomplish. 

The goal of the Hoshin Kanri system is essentially to have everyone in a company rowing in the same direction at the same time. If people are moving in different directions or metaphorically rowing in different directions, it creates roadblocks all over, and everything slows down work-wise, which can bring productivity to a halt. 

Said differently, Hoshin Kanri planning aims to eliminate any efficiencies inside an organization that would derive from a lack of communication between departments that should be actively talking. 

The Seven Steps of Hoshin Kanri

1. Establish the Vision 

At the very top of the order for Hoshin Kanri is to establish the vision an organization wishes to achieve and then assess the current state the organization is in. In most cases, this is generally done through something like a vision statement, which should be written in such a way as to support the long-term goals of team’s that can then be connected back to a company mission statement. This is exactly what you are trying to get back by incorporating Hoshin Kanri into the bones of a business. 

2. Develop Strategic Objectives

Sometimes known as breakthrough objectives, developing strategic objectives is the second step in the Hoshin Kanri methodology. In this step, these objectives need to properly outline how a company will achieve the vision outlined in the first step. 

You might hear someone calling a breakthrough objective a stretch target, as the objectives outlined in step two should be fairly ambitious and require significant work on behalf of an organization and its staff to achieve. A balance needs to be found between goals that are too difficult to achieve and goals that would be underwhelming and not have the desired effect of long-term improvement. 

However, you must also consider that these objectives are now the company’s north star for the next 3-5 years, so they must be achievable in that timeframe. 

3. Develop Annual Objectives

The third step in the strategy is to develop annual objectives that are essentially a breakdown of the 3-5 year goals that were made in step 2. These goals are designed to provide teams with a clear focus on what is immediately ahead, which could be something like rolling out a chatbot platform for a website instead of a full platform. 

In order to achieve the breakthrough goals, annual objectives have to be detailed enough to accomplish but not so pie-in-the-sky that the team can’t finish in 12 months. 

4. Cascading Goals Down Through An Organization 

As these goals are determined by organizational leaders, it’s now time for them to start filtering down to the workers who will actually be charged with achieving them. Once they reach this step, goals should be specific to departments so the team knows what they are charged with, but they should also have an understanding of the big-picture organizational goals.

You could also consider this step a deployment step, as it will be one of the more crucial stages that directly connects to the idea of how Hoshin Kanri aligns strategy and execution. 

5. Implement Annual Objectives

Congratulations to your teams if they have made it this far as part of a Hoshin Kanri rollout. You are now entering the execution stages. At this point, every team and team member should have clear objectives and KPIs they need to meet as they start implementing the objectives they have been assigned. 

Problem-solving techniques like PDSA cycles, Kaizen events, and A3 thinking are often associated with this step in the process. This is essentially going to be the phase where the newly formed strategy meets daily management expectations. So, if an organization has made it this far, the things being rolled out are expected to be completed on time, on budget, and should surpass expectations. 

6. Monthly Reviews

As would typically be the case with a less focused methodology across an organization, the idea here is that adding monthly reviews will help ensure that everyone responsible for meeting new organizational goals is on track. 

Regular process checks might be frustrating to those doing the work, but they are a necessary evil to ensure that everyone is held accountable for the work they are responsible for. If there is one kink in the process, it can mess up everything, so it’s in these monthly reviews that those kinks need to be caught, addressed, and or fixed. 

7. Annual Reviews

The last step is finally here, and it’s unsurprisingly a review of everything that has taken place over the last year. This review should be comprehensive, detailed, and focused heavily on ensuring there has been enough progress toward breakthrough objectives. 

This is where documentation should be kept about what went right, what went wrong, and what can be done better for the next year as part of the longer 3-5 year annual review rollout. If there is any concern that KPIs were not met overall, this is the time to address them before the next year’s work begins. 

How Strategy and Execution Align

If you’re wondering how Hoshin Kanri can align strategy and execution, the answer won’t be all that surprising. 

Strategic Vision

We’re right back where we started in the paragraphs above, with a focus on the strategic vision. However, if you focus on aligning strategy and execution, you’ll start with a “north star” vision, like a hospital saying it wants to deliver world-class patient care by 2030. 

This is an effort that everyone who works inside the hospital can get behind, and it serves as the basis for the hospital strategy. This can now be broken down into a five-year objective starting in 2025 and ending in 2030 as a world-class hospital. 

Cascading Goals

Sticking with the same example, the idea here could be that the hospital wants to reduce the number of triage delays in the emergency room by 10% in 2025 alone. This means that the five-year vision is now broken down into the 12-month sprint, making the broader goal easier to digest and also easier to attain. 

The hope is that everyone inside the organization, from the check-in staff to medical personnel, knows their role. Even shaving a few minutes off the check-in process can help, so it’s not just the medical staff taking ownership of the goals. 

Actionable Steps

In this third step, you’ll see how strategy and execution align when the hospital determines to hire two new emergency room nurses within the first quarter of the year. This shows how they will take the strategy and execute it by putting words into action and giving the hospital the best shot at achieving its goals. 

Someone will be responsible for creating the job role. Another group will be responsible for interviewing and selecting the right candidate, and another team will be responsible for getting the nurses up to speed with how the hospital handles everything. So again, there are multiple teams involved. 

Catchball

This might be your first time hearing about “catchball,” which involves a two-way communication process between managers and subordinates to ensure everyone is aligned on the goals. For example, the ER staff might come to hospital leadership and say that its current five-minute target for triage isn’t attainable, so they might come to an agreement of seven to eight minutes. 

Monitoring and Ongoing Improvement

With this fifth and final step of aligning strategy and execution, all levels of the hospital will be monitoring how far along they are to hitting their 2025 target goal. Have check-in times been reduced? Are the two new nurses in the process of being hired or already onboarded? 

Other Useful Tools and Concepts

While the Hoshin Kanri process might not be the only methodology for improving businesses, it’s certainly working for some of the most prominent companies, especially in Japan, where it was founded. The hope is that this process will allow companies to be forward-thinking, whether it includes things like implementing artificial intelligence or a complete digital transformation. 

While Six Sigma remains a dominant methodology, it stands to reason that Hoshin Kanri and methods like it will appeal to companies that are looking for a well-defined system that has been around for decades. Plenty of evidence is available to support the benefits of the Hoshin Kanri system.

Conclusion 

It’s okay if you don’t know Hoshin Kanri’s background or history, especially if you aren’t deeply involved in the organizations where it’s available. However, understanding how strategy and execution align is a good thing, no matter where you work or the kind of work you do. This understanding goes well beyond just one methodology and can be useful in various aspects of our lives. 

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