Hoshin kanri (HK),1 or strategy deployment, has been an integral part of the company management practices of some of the most successful Lean-practicing organizations. Done well, it is an extraordinary tool to help a team develop, adjust and communicate strategy to meet robust, long-term goals. Hoshin (loosely translated as policy, plan, purpose or target) is meant to encompass strategic alignment across the organization. The organization can be as large as the entire company or a small as an individual value stream. Kanri (loosely translated as control or management) is meant to indicate that this management tool is a disciplined manner of continuous improvement execution. Hoshin can be thought of as the skeleton that holds the strategy together, while kanri can be thought of as the muscle that performs the task. Both must be exercised in order to have and maintain a strong body. Most importantly, HK must be grounded at gemba,2 intent on creating customer value, and built around continuous improvement. It should not take on a bureaucratic air of driving strategy.

One of the keys to HK’s success is its simple, easy-to-understand construct. Fundamentally, a few pages help develop and communicate what the long-term goals are and how the value stream plans on accomplishing them, as well as who the responsible leader is and how progress will be measured. Done well, this will end with more engagement, ownership and accountability from all levels of the organization.

The value of keeping it simple includes the ability to engage individuals at all levels of the organization. The simple fact that more people understand what the organization is trying to achieve, how individuals’ activities affect these actions and why their activities are important goes a long way toward creating constructive engagement in many more associates.

General Concepts

  • A common structure of an HK process includes a two-page document that effectively tells the story of a value stream’s strategic and tactical efforts to deliver continuously improving results. This format is a critical aspect of the concept. Its simplicity allows all levels of the organization to understand what the value-stream team is trying to accomplish and how each individual and project fits into the overall scheme of continuous improvement activities.
  • Longer-term goals are the skeleton that holds efforts together.
  • Continuous-improvement tactics are the muscles that are working to get stronger.
  • The basic form is a matrix that enables short-term actions to be directly traceable to long-term goals as well as who is responsible and how the team will measure progress.
  • HK is designed to scale vertically and horizontally. When the entire organization is participating, the corporate level may have long-term or annual goals that do or do not relate to all units — or relate to them differently. For example, corporate might have a five-year goal for improving operational effectiveness by 45 percent. Of this, manufacturing may be responsible for 20 percent, engineering for 15 percent and distribution for 10 percent. Obviously the annual goals and current projects would be different. However — as a reminder — the individual value stream can choose to develop good HK practices even if the other organizations do not take or follow the lead.
  • “Catchball” is a term used to describe how ideas are tossed down, up and sideways to encourage diverse input and ownership of improvement. This is critical when developing the HK strategy. A purely top-down strategy will have very little effect or success. However, long-term direction from above should be welcome input, and a lack thereof would not be an excuse for not building one within your value stream.
  • Breakthrough goals should be set to motivate the team toward innovative solutions. Experience has shown that results tend toward tremendous improvement when continuous improvement is new to an organization. Although the people most closely involved tend to think very conservatively when setting goals, 50 percent improvement is often achieved by the simple act of getting a small group of people to document and agree upon what current standard processes should be.
  • Developing an annual timeline and method of measuring success are critical to developing a realistic strategy based on available resources and other constraints.
  • The HK matrix should always be referred to when thinking of the random action item or firefighting activity that comes up over time. Decisions must be analyzed and prioritized. If the new activity does not supersede existing projects or help achieve long-term goals, saying no or putting it on the backburner should be considered.
    • However, the HK matrix should be considered flexible to new learning. As teams learn through their continuous-improvement activities, they should make adjustments as necessary and should communicate the reasons for the change to ensure continued engagement and understanding.
  • Leadership and accountability should be clearly agreed upon.
  • There should be a basic method of determining progress and success. While the detailed metrics of each project may create an overly complex HK, a general description such as increased throughput rate or even project completion should be noted.
  • The HK team must maintain KISS3 self-control. Create the document as clearly as possible while steering clear of corporate bureaucratic speak and appearances.
Hochin Kanri Chart
Hoshin Kanri Matrix Example

Basic Steps

  1. Determine three-to five-year-goals.
  2. Determine how to achieve goals in year-sized actions.
  3. Select upcoming year-sized goals.
  4. Determine kaizen (continuous process improvement) or problem-solving activities necessary to achieve annualized goal.
  5. Determine:
    a. Who is responsible for each action?
    b. When they are going to accomplish their challenge?
    c. How will we measure progress or success?
  6. Develop timeline
    a. Determine resource availability versus capacity.
    b. Adjust start and end dates to account for capacity and serial versus parallel requirements.
HK timeline
Hoshin Kanri Timeline

Implementation

After creating your value stream’s HK matrix and timeline, use it as a grounding point for all relevant conversations with all associates and leadership up and down the value stream chain of command. It is a living document. Debate, assimilate and adjust as necessary. The most successful value streams use this in their staff meetings and daily huddles to remind everyone of the continuous-improvement priorities. This is especially important as you test your resolve against the daily firefights and setbacks and the knee-jerk tendency to start a new project or abort one. As boxer Mike Tyson once said, “Everybody has a plan until they get punched in the mouth.”4 The work put into creating and maintaining a living hoshin kanri plan can keep reminding the whole team of the plan they know will ultimately win the fight.

The preceding is excerpted from the technical note A Brief Note on Hoshin Kanri: Strategy Deployment (Darden Business Publishing) by Darden Professor Elliott N. Weiss and Visiting Executive Lecturer Austin English.

  • 1. There are bookcases of material diving deeply into hoshin kanri. The purpose of this note is to give a very quick introduction to how it has been successfully used in small to medium-sized value streams to inject strategic meaning and tactical understanding to a value stream’s operational strategy and improvement plan.
  • 2. In Japanese, gemba is a term for “the real place” or “the actual place.” In Lean terms, the concept is related to process improvement and identifying waste at the location value is created.
  • 3. KISS = Keep It Simple, Stupid!
  • 4. Mike Berardino, “Mike Tyson Explains One of His Most Famous Quotes,” South Florida SunSentinel, 9 November 2012, https://www.sun-sentinel.com/sports/fl-xpm-2012-11-09-sfl-mike-tyson-explains-one-of-his-most-famous-quotes-20121109-story.html (accessed 11 November 2020).
Hoshin Kanri: Strategic Deployment
Learn more about the hoshin kanri process in the Darden Business Publishing technical note