What is the Hoshin Kanri principle?
The Hoshin Kanri principle is a method for holistically aligning a company with its strategic breakthrough goals. This succeeds in securing long-term success and competitive advantages. A control cycle (Plan-Do-Check-Act cycle) ensures that everyone works consistently to achieve the goals.
What are the EIGHT Steps of Hoshin Kanri?
The introduction of Hoshin Kanri consists of eight steps: 1. development of vision, mission and values. 2. formulation of strategy. 3. setting breakthrough targets. 4. annual target planning at top level. 5. company-wide coordination of goals. 6. agile implementation of goals. 7. short-cycle review of goal achievement. 8. learning from the process.
The Hoshin Kanri Matrix supports the entire Hoshin Kanri process and is a management tool. It maps on one sheet of paper all important information from the goal alignment between management levels: Breakthrough targets, annual targets, improvement priorities, key performance indicators (KPIs) and responsibilities.
Top management and the next management level are involved in the creation of a Hoshin Kanri matrix. In a two-day workshop, the breakthrough targets, annual targets, improvement priorities, key performance indicators and responsible persons are defined. The X-Matrix is in turn the basis for the development of an X-Matrix for business units or areas.
Hoshin-Kanri-Catchball is the process of agreeing on goals throughout the organisation. The basis is an intensive dialogue between hierarchical levels and between areas. Figuratively speaking, the goals are “thrown” back and forth and negotiated. In this way, people are brought on board from the beginning, as they define their own, influenceable goals.
With Hoshin Kanri, the emphasis is on focus. This includes, for example, setting few but important goals (breakthrough goals) and clearly prioritising projects. Furthermore, the Hoshin Kanri method is based on the Plan-Do-Check-Act (PDCA) cycle. This ensures short-cycle goal tracking and regular goal review.
Both Hoshin Kanri and Balanced Scorecard (BSC) are methods for implementing corporate strategy. Overall, Hoshin Kanri shows more advantages. These lie in the focus, the systematic approach to deriving company-wide goals and the underlying control process (Plan-Do-Check-Act cycle).
Hoshin Kanri, in contrast to Management by Objectives (MbO), is a method of goal setting in which all employees are actively involved in the goal setting process (“bottom-up”). This is followed by a regular review of the goals. With MbO, on the other hand, the goals are set in a strongly “top-down” manner and are usually only reviewed once a year to see if they have been achieved. You can read more about “The difference between Hoshin Karni and MbO” in my blog post.
In general, there are different ways to introduce Hoshin Kanri. These can be a holistic roll-out, the start with a pilot unit, a selected business objective or a selected value stream. The choice of implementation strategy depends on several factors, especially the maturity of the organisation.
If you do not know whether Hoshin Kanri or OKR is suitable for your company, you should in any case acquire knowledge in both methods. In the meantime, there are a number of books and specialist literature as well as training courses. In addition, an external maturity assessment should always be the basis for the final decision.
Hoshin Kanri is about aligning the whole company with the corporate strategy and then putting the strategy into action. This means that everyone in the company knows their contribution to the top goals and works continuously to implement them.
The biggest hurdles in the introduction of Hoshin Kanri lie in generating commitment for Hoshin Kanri in the entire management. Hoshin Kanri is a management tool that subsequently requires the highest discipline throughout the management team in order to establish the process sustainably.
