Hoshin Kanri (also called Policy Deployment, Management by Policy or Management by planning) is a method for bringing about progress at the strategical, tactial and operational level within a company by ensuring that every employee's activities are coordinated in synchrony according to the company's strategy. If you ever feel that the company's very strategy and goals are omitting your needs or are not meaningful to you, then chances are your company hasn't implemented Hoshin Kanri.
It is not as well-known as the other lean tools. It works best in a well-developed lean culture, where continuous improvement is firmly ingrained at all levels of a company, and any organization can benefit from its core principles:
- Visionary strategic planning (focusing on the things that really matter)
- Catchball (building workable plans through consensus)
- Measuring progress (carefully selecting KPIs that will drive the desired behavior)
- Closing the loop (using regular follow-up to keep progress on track)
Hoshin Kanri relies on a "flattened management framework" where the fewer levels of management the faster the decision making progress resulting from the information gatehred from the closed loop system.
In order to understand Hoshin Kanri, it's important to walk through the following steps:
Step One – Create a Strategic Plan
Hoshin Kanri starts with a strategic plan (e.g. an annual plan) developed by the top management to further the long range goals of the company. This plan should be carefully crafted to address a small number of critical issues. Key items to consider when developing the strategic plan are:
Focus on five goals (or fewer). Drawing up a list of goals may give a false sense of progress, with the more the better. In reality, a goal only expresses intent.
Taking action is what matters. Every company has finite resources and energy coupled with a limited attention span. Focusing on a small number of goals makes success far more likely than dissipating energy across dozens of goals. It's similar to the law of diminishing returns in which writing up more goals won't result in more progress as energy that could be channelled to one endeavour is scattered hastily trying to accomplish more than one can handle.
Effectiveness First: There is a well-known distinction between efficiency and effectiveness: efficiency is doing things right while effectiveness is doing the right things. Strategic goals need to be effective – doing the right things to take the company to the next level.
Evolution vs. Revolution Goals can be evolutionary (incremental goals usually achieved through continuous improvement) or revolutionary (breakthrough changes with dramatic scope). Both entail progress in the form of improvement. It's similar to Hamel's concept of innovation, which can incremental (by changing the way you peform a process) or radical (changing the process altogether).
Top Down Consensus. Top management is responsible for developing the strategic plan but consulting with middle management provides additional perspective and feedback that helps craft stronger, more informed strategies while fostering an atmosphere of shared responsibility and significantly acquire more buy-in from middle management. Careful KPIs. Key Performance Indicators (KPIs) provide the means for tracking progress towards goals. It's important to spare some care when choosing which KPIs will help produce the desirable behaviour without creating perverse incentives, like single-minded pursuit of efficiency at the cost of pushing minor drawbacks to be fixed later.
Own the Goal. a facilitator with the skills and authority to successfully see the goal through to conclusion by removing roadblocks that may be hindering progress and making sure the path to progress is always the one followed.
Step Two – Develop Tactics
Mid-level managers are often tasked with tactics that will best achieve the goals as laid out by top management. One of the most important aspects of this process is "catchball"…a back and forth interaction with top management to ensure understanding of the goals and strategy and tactics are well aligned. Tactics may change so flexibility and adaptability are mighty needs of this process. As a result it is helpful to have regular progress reviews (e.g. monthly), at which time results are evaluated and tactics are reviewed.
Step Three – Take Action
At the plant floor level, supervisors and team leaders work out the operational details to implement the tactics as laid out by mid-level managers. The catchball pattern makes another appearance here as the management levels engage in ongoing exchange with the to ensure alignemnt of the company's strategy. This is where goals and plans are converted into results. This is gemba (the place where real action occurs). Therefore, managers should stay closely connected to activity at this level, even if this means reenacting the notorious business practice of the hovering boss.
Step Four – Review and Adjust
So far the steps have focused on cascading strategic goals down through levels of the company; from top management all the way down to the plant floor. Just as important if the flow of information, which should follow a reverse pattern thus creating a closed loop.
Progress should be tracked continuously and reviewed formally on a regular basis (e.g. monthly). These progress checkpoints provide an opportunity for adjustment of tactics and their associated operational details.
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| Mmgt by Deployments basic chart |
Refereneces:
Hoshin Kanri. Lean Production Retrieved <http://www.leanproduction.com/hoshin-kanri.html>
Hoshin Management. Retrieved <https://de.wikipedia.org/wiki/Hoshin-Management>
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