Hoshin Kanri: A method for strategic planning and deployment

As a product manager, you’re always looking for ways to improve your efficiency and growth. Most people tend to approach this by creating a strategic plan based on accurate data. This can be an effective method, however, many people tend to overlook the value of employee buy-in.

Oftentimes, employees don’t understand how their work contributes to the company’s mission. As a result, motivation and productivity can begin to slip. This can then be compounded by the fact that upper management often makes decisions without any employee feedback.

To combat this, the Hoshin Kanri method aims to create an effective strategy that defines company objectives and a path to get there. In this article, you’ll learn what the Hoshin Kanri method is, its steps, and how to implement it within your product team.

What is Hoshin Kanri?

Hoshin Kanri is a strategic planning method for creating long-term goals that opens a path for continual improvement. It accomplishes this by involving employees in the strategic planning process. Hoshin Kanri also lets employees understand how their work connects with strategic objectives.

Is Hoshin Kanri a lean tool?

Hoshin Kanri is an essential tool for lean management. The idea behind it is that employees will feel greater ownership over their work if they understand how it affects company objectives.

To facilitate this, Hoshin Kanri creates open feedback loops between all levels of employees, allowing executives to receive feedback about their strategic plans.

What is the Hoshin Kanri matrix?

The Hoshin Kanri matrix, sometimes referred to as the X-Matric, helps you to implement Hoshin Kanri easily within your team. At first glance, the one-page visual looks complicated. However, once you learn how to read it, the matrix is a useful way to understand and communicate plans to employees.

An employee can look at the Hoshin Kanri matrix and understand how their individual work contributes to the bigger picture. The Hoshin Kanri matrix has 5 sections:

• Breakthrough objectives — Long-term goals
• Annual objectives — Goals for the year
• Improvement initiatives — Small goals to reach annual objectives
• Improvement targets — KPIs
• Resources — Employees or teams

The dots between the sections reveal what sections connect. This can help an employee identify how their daily work fits the annual objectives. The matrix also uses dots to show which resources are responsible for improvement targets.

Benefits of the Hoshin Kanri matrix

The Hoskin Kanti matrix provides a number of benefits for a product team as it:

• Makes it easy to communicate your strategic plan
• Helps align long-term objectives to the daily work of employees
• Reveals important tasks and aids in prioritization
• Provides a framework for how to track progress
• Encourages employee involvement in the strategic planning process

The primary use of the Hoshin Kanri matrix is to provide alignment between your strategy and execution, but it doesn’t help you implement the work. Management will need to use different implementation strategies for the execution plan.

What are the 7 steps of Hoshin Kanri?

Hoshin Kanri stands out from other strategic tools by transforming strategy into daily execution. The method also leaves space for you to combine other strategic tools to create a framework specific to your use case.

Let’s review a breakdown of the seven-step Hoshin Kanri process:

1. Establish the vision and assess the current state

The first step is to examine your organization’s mission statement, values, and vision. You should have a clear understanding of why your organization exists. Then your organization can assess policies and procedures to determine what may need improvement.

2. Develop breakthrough objectives

Breakthrough objectives are a crucial part of the Hoshin Kanri process. You can view them as ambitious goals you want to achieve in the next three to five years. The idea behind breakthrough objectives is to challenge your organization to grow in a new direction.

Some examples of breakthrough objectives might include launching new products or targeting a new market. Whatever the objectives are, you should feel like you’re branching out to obtain growth.

When creating breakthrough objectives, you should focus on what’s strategically important. It’s easy to make too many goals that aren’t achievable in the long term. Hone in on three to five breakthrough objectives that can help you reach your organization’s mission.

3. Develop annual objectives

The next step is to break down the breakthrough objectives into annual goals. This makes the big goal seem more manageable when divided into smaller goals.

You should consider what goals are vital for staying on track with your breakthrough objectives.

4. Deploy annual objectives

Creating organizational goals is one thing, but it’s another task altogether for departments and individual employees to act on them. They need more guidance and direction on what work they need to do to reach the breakthrough objectives.

The annual objectives need to be broken down into smaller daily goals for employees. Every employee should know exactly what they contribute to achieve the annual objectives.

This step is where the Hoshin Kanri matrix really shines. The matrix provides a visual aid for the deployment of annual objectives. It also shares detailed plans and prioritizes tasks for employees.

5. Implement annual objectives

At this point, it’s time to put your plan into action. Employees and departments should start working on their smaller goals and projects, but you’ll need to develop ways to track and measure progress. To do this, you may want to consider strategies like DMAIC or PDSA.

6. Monthly performance reviews

Hoshin Kanri involves active management. To run it well, you need to implement a way of receiving continuous feedback from employees. Monthly performance reviews ensure that employees are accountable for their work and gives individuals a space to express their opinions.

Without periodic performance reviews, Hoshin Kanri can’t adapt to changes and won’t rise to its full potential.

7. Annual reviews

Along with monthly reviews, Hoshin Kanri also expects annual reviews. While reviewing the events of the past year, evaluate if your organization is on schedule. You may also consider what adjustments may need to happen to reach its breakthrough goals.

How to implement Hoshin Kanri in your organization

The goal of Hoshin Kanri is to provide a path for continuous improvement. As your organization focuses on improving, it’ll find ways to grow and succeed.

However, implementing Hoshin Kanri is difficult if you don’t have all your employees on board with the idea. It’s crucial to ensure employees receive training on the Hoshin Kanri method and know how it can improve their workflows.

The foundation of Hoshin Kanri is the catchball communication tool. An open feedback loop needs to continually run if you want to succeed. You need to ensure that upper management receives feedback from employees.

There should also be frequent reviews to share progress and revisit any issues. Without this feedback loop, employees will become less engaged with the strategy..

Choose breakthrough objectives that are meaningful to your team. It will help them rally behind the company’s mission, especially if they have a say in creating it.

Key takeaways

Hoshin Kanri is a powerful method to engage an entire organization and align employees with the company mission. It bridges the gap between strategy and execution. It may seem like a goal-setting process, but Hoshin Kanri helps create a work environment that focuses on improvement and accountability.

Ensure employees understand how their work creates a lasting impact. By doing this, the Hoshin Kanri method can help a company reach its breakthrough objectives.

Featured image source: IconScout