Hoshin system of strategy implementation

The challenge faced by many people in the organizations of today is that there is a strategic destination they're all supposed to reach but they don't always have a convenient device to help them reach their objective. Sometimes individuals, teams, and even whole departments can get so far off course that they seem not even to remember what the final destination was supposed to be! This is where it's useful to have a system to co-ordinate different parts of your organization and keep them on course. The proposed system aligns all parts of an organization to accomplish an important objective.

The Process

1. Select a key objective.
2. Aligns implementation plans at all levels.
3. Implements, reviews, and improves the plan on an ongoing basis.

The process follows Deming's "Plan-Do-Check-Act" cycle which is well known as a method of continuous improvement.

Step 1: 
(Plan) Define What You Want to Improve

This is most often a key strategic objective that needs a significant change in how things are done. 

Step 2: 
(Plan) Establish Sub-Goals to Achieve Your Objective

• What organizational (or team/functional/departmental) goals for the year are need to achieve this objective?
• What checkpoints are necessary to keep the goals on track?
• What controls can you put in place to ensure that the goals are successfully reached?
• How will you measure progress and evaluate success?

Record these, and use them as the basis for your review process.

Step 3: 
(Do) Communicate the Plan

• Communicate your plan throughout the organization.
• Ensure that all levels of the company understand your vision and goals.
• Have each department and team set its own goals to link directly to the objective and the sub-goals you've established.
• Make sure that managers in these departments and teams "ripple goals down" so that everybody knows their part in the plan, and is using the Hoshin process to manage the people who report to them.
• Assign clear responsibility for each item in the implementation plan.
• Make sure that you have agreement on all items within the plan with all of your reports, and make sure that this agreement has rippled down as well.

Step 4: 
(Check) Develop a System to Collect Information on Your Control Parameters, and Then use it to Manage Change

Are your key metrics being met? If not, why?

Create a review table that shows the:

• Goal.
• Goal owner(s).
• Time frame.
• Performance metrics.
• Targets.
• Actual results.

Then use this table to manage movement towards these goals on an ongoing basis.

This "check" step ensures that your plan is a living document. It doesn't just sit on a shelf to collect dust once it's finished. Hoshin planning is based on the idea that to reach your strategic goals, the company needs to be in a constant state of reflection and evaluation.

On your review table, note any differences between the target and actual performance. This information will be used for subsequent plans, because Hoshin planning builds in levels over time. The plan you create this year will be used as the basis for next year's plan.

Step 5: 
(Act) Analyze Results, and Take Corrective Action Where Needed

If there are any differences between expected and actual results, identify the sources of those differences. Discuss these, organize corrective action, and implement this action.

• What is going right?
• What is going wrong?
• Do the plans meet the realities of your business and the problems you face?
• Are measures appropriate?
• What can be done better, or differently, to reach your destination?

This stage of the process ensures a system of continuous improvement. To keep moving the company toward its vision, review the plans not just once a year, but on an ongoing basis to determine how daily work should be done. With this review (or act) step, you can ensure that plans continually evolve to take into account a changing environment.

Step 6: 
Repeat the Process as Needed

This process can be cycled over and over to maximize the quality of your efforts. It can also be used within your various business units, functions, and teams to ensure that their specific strategies have the same goal alignment and commitment to continuous improvement.

Tip 1:

A tightly controlled approach like this only suits certain situations and certain industries. Use your best judgment when applying this tool to your own situation.

Tip 2:

Peter Drucker's Management by Objectives (MBO) was very influential in developing this method. The idea of various levels of organizational objectives, from management down to the workers, is a fundamental part of such planning.