One of the challenges organizations must solve is finding a way to align the present activities of managers and employees with future long-term business goals.
Or, to flip that concept, when you have a long-term goal, finding a way to develop a step-by-step process to get you there.
Lean deployment and Hoshin Kanri planning can provide the methods for creating that process, aligning current actions with long-term goals. Both ensure that the entire organization is driven toward achieving those goals, with everyone pulling in the same direction.
It’s useful for organizations that have already instituted Lean processes designed to cut waste and better meet customer demands.
The Value of Lean Deployment
To understand Hoshin Kanri, it’s important to understand Lean deployment.
Lean deployment is a management strategy that focuses on how present-day actions impact future goals. Many organizations can identify what they want to accomplishment. Lean deployment helps them develop plans for how they will accomplish those goals.
The first step in Lean deployment is to develop strategic goals. A good strategy typically follows SMART goals (specific, measurable, attainable, relevant and time-bound). For the time-bound element, long-term strategies are typically multi-year, but usually no longer than three to five years.
What is Hoshin Kanri Planning?
Some use the phrase “true north” when speaking of Hoshin Kanri, referring to the process that gets everyone in an organization moving in the same direction.
Hoshin Kanri involves five steps. They are as follows.
Setting Breakthrough Objectives – These are the three- to five-year goals that meet the criteria mentioned above and positively impact an organization’s performance, efficiency, effectiveness and sustainability. Examples include increasing sales or cutting costs by a set percentage or entering a new market. Because time spent on achieving long-term goals is inherently limited, it’s smart to keep the number of breakthrough objectives to three.
Determine Annual Objectives – This involves breaking the long-term goals into annual objectives. For example, if an organization wants to increase sales by 20% over five years, then a 4% increase each year might be the annual goal. Some businesses might want to shoot for higher goals early or build up from smaller gains each year to larger ones in the last two years. There’s flexibility in setting annual objectives, but the important thing is creating them for every year of the plan.
Select Improvement Projects – Hoshin Kanri involves a feedback loop that starts with managers and employees providing feedback to executives on potential projects to accomplish objectives, executives using that feedback to create a plan, and then employees and managers providing more feedback. In Lean, this is known as “catch ball.” It accomplishes the important goal of getting everyone in an organization involved with the process.
Define Measures for Success – Essentially, this is deciding what success will look like. If these measures are met, then a project is successful. And successful projects lead to meeting annual objectives, which in turn lead to achieving breakthrough objectives.
Implement and Control – This phase is when improvements are put into play. This also is the point where Lean processes such as Kaizen and Value Stream Mapping are put to use.
Hoshin Kanri requires that the action plan is reviewed on a regular basis to ensure teams meet timelines and deliver the expected results. Reviews typically occur monthly or quarterly. In some cases, organizations with experience in Lean will have designated a Lean Sensei to teach Lean tools and techniques to people at all levels of an organization.
Examples of Hoshin Kanri in Use
Toyota has used Hoshin Kanri since the 1960s. In an interview, Pierre Masai, Vice President and Chief Information Officer for Toyota Motor Europe, said one of the major hurdles is encouraging the “catch ball” phase and getting employees involved in the process. “Participation of employees does not happen automatically, and it is culture dependent,” he said.
Toyota has created an online platform that make it easier for employees to suggest changes that will improve operations.
The Office of Science and Technology at the National Oceanic and Atmospheric Administration (NOAA) uses Hoshin Kanri to achieve the agency’s goals through the Quality Management Professional Specialty Group, which was formed in 2011 by leaders in the Fisheries Information Systems.
The Nissan legal team also credits much of its success to using Hoshin Kanri. The team, which is smaller than legal teams for competitors, has achieved remarkable milestones and also was named the Innovative In-House Team of the Year at the ALB Japan Law Awards in 2017.
With this type of success, Lean deployment and Hoshin Kanri will continue to be used by organizations big and small. Developing expertise on how they impact a business also can set individual workers apart and increase their career potential.
