Hoshin Planning

Hoshin Planning, also known as Hoshin Kanri or policy deployment, is a systematic process for tackling long-term strategic goals through day-to-day operations, built-in review processes, and training activities that support continuous improvement.

Hoshin is a cornerstone of any Lean transformation that focuses primarily on establishing a culture around open communication, where conversations around goal-setting and process improvement drive organizational alignment and accountability.

What Is Hoshin Planning and Policy Deployment?

The official phrase used to describe this methodology is Hoshin Kanri, which comes from the Japanese words for policy/direction (hoshin) and management (kanri) and is often interpreted as “how do we manage our direction?” or “the management of objectives.”

Hoshin Kanri Meaning

When implemented correctly, the Hoshin Kanri planning process ensures that an organization’s strategic goals drive progress and action at all levels within the company.

The leadership team is responsible for establishing a vision and a set of high-level (breakthrough) goals, which are communicated through a cascading series of two-way feedback loops, which may look something like this:

  • Upper management communicates the strategy to middle management, who weighs in with their own perspective, along with insights gleaned from direct reports.
  • Middle managers then determine which tactics to use to reach those goals and communicate that information to their teams.
  • Frontline employees share operational insights with middle managers, which can then be used to further refine processes.

The purpose of this open communication system (known as “catchball”) is to eliminate the waste caused by poor communication by establishing consensus around how to achieve strategic goals.

Hoshin Kanri Matrix

The Hoshin Kanri Matrix, or X matrix, is a spreadsheet template that lays out the cascading goals, priorities, and projects that keep the entire organization focused on achieving breakthrough objectives.

In Lean management, the template is used to identify the activities with the biggest impact on strategic initiatives and identify new metrics and corrective actions that help you improve.

At the center of the matrix, you’ll find the four quadrants that represent your business strategy:

  • Top-level priorities (North)
  • Metrics to improve (East)
  • Breakthrough goals (South)
  • Annual objectives (West)

At the corners of the spreadsheet, you’ll see a series of boxes you can check to indicate dependencies between the activities linked to each of the main sections.

Another section allows you to define who is responsible for executing key tasks. While the Hoshin Kanri Matrix isn’t the only spreadsheet used in this methodology, it’s an effective tool for monitoring big-picture progress toward annual goals.

7 Steps of Hoshin Planning

The Hoshin methodology follows a seven-step process for bridging the gap between strategy and execution. Here’s a quick overview of what’s involved at each stage:

  1. Define Mission, Vision, and Key Metrics. Hoshin Planning starts by defining your big-picture vision and purpose.
    • Why does your company exist?
    • Who do you help?
    • What do you hope to achieve?
    • How will you measure success?
    • How will you know when you’ve reached your goal?

    Here, your goal is to make sure that you have a clear direction for your strategy so that you focus on the right objectives.

  2. Identify Breakthrough Objectives. Breakthrough objectives refer to a set of vital, significant changes needed for the organization to realize its vision. These are big-picture goals with many moving pieces, so you’ll want to keep this list short. While the general rule of thumb is under five, we recommend sticking to a tight two or three.
  3. Set Annual Objectives. After you’ve identified your breakthrough objectives, you’ll want to set annual objectives for achieving those goals. Note that “annual” objectives don’t always operate on a one-year timeline. In some cases, a three-month or even 30-day turnaround is more appropriate.
  4. Here, you can use a template (known as the A3 document) to provide some background information about the problem you’re trying to solve and what you hope to achieve. From there, you’ll apply the Plan, Do, Check, Act (PDCA) wheel to identify root causes, then use that data to develop an improvement plan.

  5. Deploy via Catchball. The next step is to deploy your annual objectives using a technique called Hoshin Kanri Catchball, which is designed to create consensus about how objectives will be met through a top-down system of two-way feedback loops between managers and their direct reports.
  6. Review Results on a Weekly, Monthly, and Annual Basis. You’ll want to review the process at regular intervals to measure your progress toward achieving key breakthrough goals. Here, the goal is to identify gaps between the actual and desired conditions, identify and address problems, and set new measurable targets to help you get back on track.
  7. Problem Solving. In this step, you’ll focus on problem-solving. Inevitably, you’ll find some missed objectives or areas that require a correction to be implemented in step five. Here, you’ll follow the PDCA model for continuous quality improvement.
  8. Reflect and Learn. The final step in the Hoshin Planning process is all about reflecting on lessons learned so that we can understand and grow from our daily work. Here, you’ll also standardize successful strategies and share key insights across your organization.

How to Practice Hoshin Planning

While Hoshin is a natural fit with other Lean tools and methodologies, any company can apply its core principles toward improving internal processes.

It’s important to understand that while the 7-step process may seem simple, creating a sustainable strategy is harder than it seems. Here are a few things to consider before implementing Hoshin in your organization:

  • Hoshin Kanri requires a sustained focus on long-term goals and daily monitoring of the KPIs that measure improvement. Track goals with frequent progress reports and make adjustments as needed.
  • Commit to the catchball technique. Whether you’re failing to engage frontline employees or there’s a disconnect between the C-suite and middle management, poor alignment makes it harder to achieve desired outcomes.
  • While Hoshin Planning is built around high-level, long-term goals, you’ll need to make room for uncertainty, adjusting your strategy to adapt to changing circumstances while staying focused on core objectives.

For more resources on implementing a Hoshin Kanri initiative in your organization, check out our Hoshin Planning course. We’ll cover everything from defining your mission statement to creating breakthrough goals, measuring progress, and more.


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