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The 7 Steps of Hoshin Kanri Planning

The 7 Steps of Hoshin Kanri Planning
The process you use to develop your strategic plan is as important as the plan itself. That’s why many organizations turn to the Hoshin Kanri approach, which focuses on creating a plan that takes into account both the daily management of the organization and the tactics necessary to reach those goals that will have the most significant impact. The result is a set of specific action plans and resources necessary to achieve your business breakthrough.

Although some organizations tweak the approach to meet their specific needs, most often the Hoshin Kanri planning process consists of the following seven steps.

Step 1: Establish the Vision and Assess the Current State

During this phase, it is important to examine your current mission, vision, and values. Are they aligned with your desired state? It is also necessary to review existing processes and procedures that are designed to meet future objectives.
What is your current state with respect to your vision, business planning processes and execution engine?

- What policies and procedures are already in place to create and deploy objectives?
- What is the organizational structure and daily management system?
- What are the current long-term plans?
- What are your existing vision and mission statements?

Step 2: Develop Breakthrough Objectives

Breakthrough objectives are those that require the organization to stretch in new and challenging ways. They typically take three to five years to achieve. Breakthrough objectives often include entering new markets, introducing new products, or adopting a different service delivery mode,
To develop these, we apply a variety of tools to identify growth opportunities, including the four quadrants of growth, which is an adaptation of the Ansoff Matrix. Using this model, we consider consumers and non-consumers—those who are currently using your product or service and those who aren’t—against current jobs and new jobs in order to outline stretch objectives in each area.
The 7 Steps of Hoshin Kanri Planning2

Step 3: Define Annual Objectives

What needs to happen this year to ensure that the three to five year goals are met. For example, if the goal is to introduce a new product in three years, it may be necessary to complete a market research study and define the product requirements during this year.

Step 4: Cascade Goals Throughout the Organization

Once you know what you need to accomplish, you can begin to assign department, team, and individual objectives that align with the overall mission for the year. The goals should be measurable and specific with defined key performance indicators that can be monitored by leadership.
First, we develop top-level improvement priorities and then apply metrics to them. Next, we create business-specific second- and third-level targets to improve that tie directly to the top-level priorities. Basically, we’re cascading down to create complete alignment throughout the entire organization. Each level goes down into more and more detail to where you’re seeing the product or shipping it. This alignment keeps people focused and integrates different departments, making sure everything across the entire company aligns back up to the strategic objectives.
The Hoshin Planning Matrix, or X matrix, captures the objectives and cascading priorities. Other tools, such as detailed action plans, summary reports and value stream maps, also help in identifying improvement opportunities and managing progress toward achieving goals.
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Step 5: Execute Annual Objectives

During this step, action is taken to reach the goals for the year. A host of problem-solving techniques including Kaizen events, DMAIC, PDSA, and A3 can be applied to help ensure success.

Step 6: Monthly Reviews

How successful is the organization in meeting the action plan deliverables? What corrective actions are needed for those that are behind?
Too often organizations spend a bunch of time setting up a plan for the year, only to forget about it as the pressure of daily management mounts. The Hoshin Kanri process helps avoid this common problem with monthly reviews. Checking in on each person’s progress toward goals on a monthly basis ensures that forward progress is maintained.


Step 7: Annual Review

At the conclusion of twelve months, it is time to do a comprehensive assessment of the organization’s progress. It may be necessary to make adjustments to goals or time estimates. This is also a good time to ensure that resources are properly allocated for what needs to be accomplished in the next year.

Hoshin Kanri planning is not terribly complex, but each step is important to creating an action plan that can be effectively executed in the expected time frame. Aligned goals ensure that everyone is working toward the same ends, and frequent reviews help ensure that work stays on track. If you are looking for a planning method that will help your organization make the leap to the next level, Hoshin Kanri is a great option to consider.






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