1. Strategic Planning Process
Hoshin Kanri
Strategic Planning Process

2. Agenda Hoshin Kanri Defined A Brief History
Benefits and Key Elements of Hoshin Planning
Hoshin Planning Process
Hoshin X “Matrix”
X “Matrix” Example
Summary and Question

3. Hoshin Kanri Defined
Hoshin Kanri is a step-by-step planning, implementation and review process.
It is a systems approach to the management of change in critical business processes.
A proven technique that helps organizations focus efforts and achieve results.

4. A Brief History
Hoshin process developed in Japan during the 1960s from Quality Management practices in Bridgestone Tire company, Toyota, Nippon, Denso, Komatsu and Matsushita. It was strongly influenced by the Plan-Do-Check-Act (PDCA) of Deming and Management by Objectives of Peter Drucker.
The Japanese words hoshin kanri can be generally interpreted as direction (setting).
The words nichijo kanri can be interpreted as daily (fundamental) management.
The blending of these two methods is key to the success of the hoshin process.
Other names associated with HoshinKanri include:
Management by Policy
Hoshin Planning
Policy Deployment

5. Why use Hoshin Kanri?
To ensure that insight and vision are not forgotten and ignored as soon as planning activities are over.
To guarantee planning documents, once finalized, are kept alive and acted on daily.
To prevent the daily quota of fire-fighting, unplanned ‘strategic’ meetings, and quarterly bottom-line pressures taking precedence over the really strategic plans
To have short-term activities determined and managed by the plans themselves.
To ensure a continual process of checking to make sure what is done each day reflects the intentions, the targets and the vision of the company has agreed to pursue.
To have both a planning and deployment process to guide and focus the organization.

6. Four Key elements of Hoshin Kanri
Focus
Alignment
Structure
Rigor
Focus on the vital few
(Pareto Principle)
Catch ball – validates understanding
Shows relationship of actions to big picture
Focus -- Organizations need to focus on those processes that are most important in the context of the business's strategic intent. Hoshin uses the Pareto principle to narrow the focus (e.g., only 20% of the processes are responsible for 80% of what matters.)
Alignment -- Hoshin uses a process called "catchball" to ensure that all efforts across a system are aligned. First the catchball process translates strategies into increasingly lower level objectives in a cause-and-effect way. Then catchball is employed to make sure all the objectives at every level are well coordinated across process and functional lines.
Structure -- Hoshin deploys a strategy-objective-tactic hierarchy in from the top to the bottom, ensuring a company has its template for performance improvement firmly in place. With this structure defined, it is much easier to understand the purpose for which processes exist, and to focus process improvement efforts.
Rigor -- The Hoshin system performance-to-plan is reviewed regularly at all levels. Small tactical reviews on the shop floor may take place weekly. Higher-level operational reviews might take place once per month, and more strategic reviews at the top might happen quarterly. With this strong review system in place, Hoshin brings more rigor and accountability to the entire management function, including the process management aspect.
Review Cycles – Monthly and Annual Review

7. Hoshin Planning Process
Establish Organizational Vision
Develop Strategic Objectives
Develop Annual Objectives
Deploy Annual Objectives
Implement Annual Objectives
Monthly Review
Annual Review
CATCHBALL
Lean & Other Tools P D C A
3-5 Year Strategic Breakthrough objectives –
Represent significant change and improvement
Require the organization to stretch itself
Can be characterized as Home Runs and Grand Slams
Usually require multi-functional efforts and team work
Usually not standard or system exists for this level of breakthrough
Annual Objectives are those objectives that need to achieve this year which will enable us to reach our overall 3-5 year Breakthrough Objectives
Self Diagnosis

8. Develop Strategic Objectives
SWOT Analysis
Strategic Planning is determining those 3-5 years breakthrough objectives that will move the organization towards world class.
Balanced Score Card
Strategy Maps
- Financial – revenue and cost optimization; the ability to deliver maximum value to the customer
- Customer satisfaction – ability of our organization to provide quality service, effective delivery of those services, and the customers’ satisfaction
in getting what they came for
- Process – the key activities of our organization that lead to financial success and customer satisfaction
- Learning and growth (internal health) – quality, ability and satisfaction of associates, and quality of information systems

9. Develop Annual Objectives
Strategic Themes from Strategy maps, Balanced Score cards become the 3-5 year Breakthrough Objectives in the Hoshin Matrix. Use of the Hoshin Matrix for tracking & Management of these objectives is an effective approach.
Strategy Maps
3-5 Year
Breakthrough Objectives

10. The Hoshin Planning X Matrix
Hoshin X Matrix
3-5 Year Breakthrough
Objectives
2). Annual Breakthrough
3) Supporting Action/Project
Priorities
4) Action Measures of Success
Step 5: Who?
Resource Deployment
Step 1: What? Breakthrough Thinking
Step 2: How Far? This year?
Step 3: How? Which Key Supporting Action/Project?
Step 4: How Much and When? Measures
The Hoshin Planning X Matrix
X Matrix Labels 1 2 3 4
Strategic Plan Owner:
Date:

11. X “Matrix” Example

12. Summary
The Hoshin Kanri process has been validated over the last 40 years.
This process is applicable to small and large organizations alike.
It is an effective alignment tool to translate strategies into actions.
QUESTIONS ?