Hoshin planning, also known as Hoshin Kanri or policy deployment, is a strategic planning framework that ensures an organization’s short-term actions align with long-term goals. Derived from Japanese total quality management principles, Hoshin planning helps companies coordinate objectives and measures across departments. The primary focus of Hoshin planning is alignment, providing a system for organizations to establish strategic priorities, break down goals into specific activities, communicate objectives at all levels, and regularly review progress toward breakthrough targets. By managing the deployment of annual goals throughout the company, Hoshin planning connects the work performed by individual contributors to overarching organizational strategy.
What is Hoshin Planning?
The term “Hoshin” translates to “compass” and “Kanri” translates to “management.” Together, Hoshin Kanri refers to setting the direction for an organization and managing the process of achieving strategic objectives. Hoshin planning originated from postwar Japanese manufacturers but has since spread to companies worldwide. The flexibility of the methodology allows both small teams and large corporations to drive accountability by answering critical questions like:
– Where do we want to go as a company?
– How will we get there?
– How do I contribute to strategic success?
The primary goal of Hoshin planning is consensus around annual goals and alignment to long-term strategy across all departments and team members. This eliminates inefficiencies from poor communication or inconsistent objectives that waste time and money.
Key Components of Hoshin Planning
There are several key components that enable Hoshin planning to be an effective strategy framework:
1. Catchball Process
The catchball process refers to cascading goals from the executive level down to frontline employees to achieve alignment and funnel progress reviews and suggestions back up from the frontlines to management to enable adaptation. It establishes critical communication loops across silos.
2. A3 Problem-Solving
Hoshin planning incorporates A3 problem-solving to identify gaps between current state conditions and target objectives. A3 reports concisely capture background, analysis, recommendations, and review steps on a single page to enable focused problem-solving.
3. Gemba Walks
“Gemba” refers to the place where value is created, where the actual work is being done. As part of Hoshin planning, managers conduct Gemba walks to engage with frontline employees, track progress on key goals, and identify obstacles. This fuels the catchball process.
4. PDCA Continuous Improvement
Hoshin planning embeds the Plan-Do-Check-Act cycle to enable iterative goal deployment and process refinement. PDCA powers both breakthrough improvements and daily kaizen.
5. Standardized Visual Management
Hoshin planning applies visual management through techniques like strategy boards, action plans, and policy deployment matrices to present objectives and track progress transparently across the company. This promotes communication and problem-solving.
Benefits of Hoshin Planning
There are several benefits that Hoshin planning offers, including:
1. Increased Organizational Alignment and Cross-Functional Collaboration
One of the key benefits of Hoshin planning is improved alignment across the organization. As objectives cascade down through the catchball process, they promote cross-functional collaboration. Different departments gain insight into each other’s goals and activities, enabling them to identify synergies. This collaboration continues throughout the strategy execution and review stages.
As a result, organizational silos break down. Everyone understands how their work contributes to shared objectives, fostering unity. With Hoshin planning, the organization functions as an integrated whole rather than a collection of isolated departments.
2. Breakthrough Improvements Balanced with Daily Kaizen
The multi-year strategic planning horizon of Hoshin facilitates big-picture thinking. The breakthrough objectives stretch the organization to significantly advance capabilities. At the same time, Hoshin also fuels continuous, incremental improvements. This dual focus on breakthrough improvements and daily kaizen provides essential balance, enabling companies to realize massive leaps in competitiveness over years while also iterating towards excellence week-to-week.
3. Clear Connection Between Long-Term Strategy and Daily Work
Hoshin planning bridges the gap between long-term strategic goals and daily work activities. By translating ambitious, future-focused goals into specific daily tasks, employees understand how their individual contributions move the organization closer to achieving its strategic objectives. This direct line-of-sight between overall vision and daily work fosters intrinsic motivation and inspires exceptional performance.
4. Rapid Adaptation to Changing Internal and External Conditions
In dynamic times, organizations must stay agile and responsive to changing internal and external conditions. Hoshin planning builds in agility through regular reviews and feedback loops, enabling teams to quickly adapt tactics and strategies without losing sight of long-term objectives. By keeping a pulse on external changes and internal capabilities, Hoshin planning drives nimble navigation and proactive response to emerging challenges.
5. Early Identification and Resolution of Performance Issues
Hoshin planning promotes organizational vigilance by catching performance issues early through routine progress reviews and data transparency. By identifying and addressing problems before they escalate, teams can prevent minor process defects from turning into major gaps. This proactive approach to problem-solving and continuous improvement cultivates excellence systematically and drives performance across the organization.
6. Systematic Review and Refinement of Objectives at All Levels
Hoshin planning instills a culture of continual improvement by regularly re-examining strategic objectives and refining plans based on performance data and feedback. By distributing authority and leveraging collective intelligence throughout the organization, Hoshin planning enables teams to optimize and evolve objectives at every level, driving continual optimization and strategic alignment.
7. Shared Ownership and Enterprise Thinking Across Departments
Hoshin planning promotes shared ownership and enterprise thinking by aligning all departments and team members around common objectives. By fostering collaboration, innovation, and accountability, Hoshin planning breaks down departmental silos and empowers teams to work together towards shared goals. This shared mission drives cross-functional breakthroughs and creates a culture of transparency, accountability, and performance across the organization.
How to Use the Hoshin Planning Model
Hoshin planning follows a seven-step annual cycle linked to the organization’s vision and three to five year breakthrough objectives:
1. Assess the Current State
2. Set Annual Goals
3. Deploy Goals Through the Catchball Process
4. Execute the Hoshin Plan
5. Review Results Regularly
6. Identify Gaps and Set New Targets
7. Standardize and Plan for Next Year
Steps for Getting Started with Hoshin Planning
To begin implementing the Hoshin planning methodology in your organization, follow these steps:
1. Create a Long-Term Vision Statement
2. Define Breakthrough Objectives and Metrics
3. Conduct Catchball Sessions
4. Deploy Goals and Review Progress
5. Standardize and Repeat
Conclusion
Implementing Hoshin planning requires dedication and persistence, but the long-term benefits of improved alignment, collaboration, and performance make it a valuable strategic planning framework for organizations. By establishing a clear vision, setting ambitious yet achievable goals, and fostering a culture of continuous improvement, organizations can achieve sustainable success and drive strategic alignment across all levels of the business.