The Hoshin Planning system provides a systematic method for strategic planning and managing the organization’s key goals and strategic initiatives. Hoshin Planning originates from Japanese tradition and it is believed that is was developed in the ‘60s and ‘70s. Hoshin Planning is becoming incredibly popular in the business world nowadays as more and more organizations are looking for a holistic framework for managing and executing their strategy. 

Understanding the Hoshin Kanri Process

When establishing Hoshin Kanri within your organization, it is important to keep in mind the following:

1. Create a Strategic Plan: First and foremost, you need to begin with a strategic plan (e.g. annual plan) devised by the top-level management. The plan should be carefully crafted so that it resolves critical issues faced by the organization. Some key areas to note are:

  • Focus on five goals. Putting down a small number of goals allows you to focus better.
  • Effectiveness first. Doing the right things.
  • Evolution vs Revolution. Goals might be evolutionary or revolutionary.
  • Top-down Consensus.
  • Careful selection of KPIs (Key Performance Indicators)
  • Own the goal. Every goal should have a facilitator (smooth the progress) and a coach (track progress).

2. Develop Tactics. At this stage, middle management should develop the tactics required to achieve the goals that were previously laid out by the top management. Tactics should be flexible in nature since it might be required that they dynamically adapt to new situations along with the progress. Communication is key here.

A critical aspect of the process here is “Catchball” – a back and forth refinement system in which the whole organization becomes involved. It aims to ensure that the goals are comprehended and that tactics are strongly aligned with the strategy.

3. Take Action. This is the stage at which goals are translated into tangible results. Here, operational details are worked out to implement the tactics.

A relevant element here is Gemba – tracking the execution of your goals by checking out the place where the real outcome is produced, the factory.  The idea behind this is that managers should be closely monitoring how the ideas are being embraced in the factory floor in order to collect feedback and insights on the Hoshin process.

4. Review and Adjust.  An equally important step is the step in which all work is reviewed and adjusted accordingly. The progress should be frequently monitored on a weekly, monthly and annual basis. By regularly reviewing how you are progressing you can easily identify any problem areas and make the necessary adjustments needed to keep you right on track.

What are the benefits of the Hoshin Planning System?

  • Easy to use strategic tool that will help you manage and execute your strategy better.
  • Provides focus by creating a purpose and setting out specific goals and objectives
  • Fits into the lean philosophy and the culture of continuous improvement.
  • Applicable to any type of industry
  • Creates a shared vision among the team
  • Boosts employee motivation to work
  • Aligns the company’s broad vision to specific and measurable goals and objectives.