Mid-year is approaching fast. You will soon meet your employees or managers to review your objectives and necessarily ask the following questions: what have you delivered since the beginning of the year? What should you prioritize by the end of the year? Your organization has its strategic plan with its ambitions and your goals are directly related (hopefully). But is this really the case? Is the strategy well suited to all strata of your company? And most importantly, is your organization able to adjust along the way? In this article, I will introduce Hoshin Kanri, which is in strategic planning what Agile is to the project.
Hoshin kanri, what is it, and what is it used for?
Like many notions from lean, it is a Japanese term totally untranslatable, because very poetic. This term could be translated as “strategy alignment”. Although the Hoshin Kanri covers much more than just alignment. Literally, this is a strategy alignment methodology for all levels of employees. Hoshin Kanri does not just present the strategy at each cascading level, it sets different types of strategy level, provides continuous feedback and builds on other lean concepts.
The strength of Hoshin Kanri is to be both top-down and bottom-up. More specifically, it is top-down when the highest level of management indicates the Vision and Mission, as well as the goals to be achieved. On the opposite the bottom-up approach is made by employees. At each hierarchical level, they prepare action plans to achieve the results set by leaders. They also challenge the objectives to make them evolve.
Starting from the Vision, we make sure that each of the intermediate objectives is aligned and that we work on the projects that will bring a tangible result to one or more of the strategic axes. The alignment of the strategy ensures that each activity brings a significant gain in one of the axes or objectives. Relevant projects or activities are assessed in light of the organization’s targets. The organization makes sure to keep the focus, on the right projects and maintain consistency for all teams.
Supported by different tools, the strategy alignment remains very agile. Indeed, we must consider that a project can be replaced by another during the year, especially if it contributes more to the objectives. This exercise requires rigor. In fact, it is easy to add lines in an Excel spreadsheet and therefore projects to work on.
Different levels of strategic alignment
Hoshin Kanri proposes levels, to separate the different elements. Indeed, time horizons are very different from vision to action. As a picture is worth a thousand words, here is a description of the Hoshin Kanri levels.
The strategy alignment is based on PDCA loops. This is how agility enters the process, as opposed to strategic planning, which tends to simply decline goals. With each action taken, the team questions the results achieved and compares to what was targeted. The team corrects its action plan as it progresses towards the intermediate objectives.
In order to stay on course and concentrate efforts, it is the Pareto principle that supports the Hoshin Kanri. Pareto helps separating the “many and insignificant” elements from those that are “rare and critical”. It is a question of identifying the few actions that will bring you the majority of the results. It is better to realize some promising projects than to botch up many projects that will not bring all the expected benefits.
Hoshin Kanri is a powerful methodology, which is accompanied by several tools. I will introduce them in a future article.
Define your long, medium and short-term goals, choose the most promising projects, get feedback and focus on the essentials, to have the maximum impact and achieve your ambitions.