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How to align strategy and operation with Hoshin Kanri

What is the Hoshin Kanri tool ?
Hoshin Kanri Method: Objectives
How to set up Hoshin Kanri in 5 steps

Do you want to turn your vision into concrete action for your teams? This is the tool for you: Hoshin Kanri.
Born in Japan in the 60s, Hoshin Kanri is a strategic management method to align the efforts of an entire organization according to the strategic needs that will be defined during the first steps of the method.
The idea is to clearly define the objectives in order to have fluid communication and good coordination of the different teams. Each member knows his or her purpose and the tasks he or she must perform or are responsible for. In this article, we will detail how to implement this method in 5 steps.

What is the Hoshin Kanri tool?

As mentioned in the Introduction, this method was developed in Japan in the 60s. The “Hoshin Kanri” can be translated as “strategic direction”. It aims to deploy the strategy at all levels of the company. The company’s goals are then converted into annual goals that are then cascaded back to the entire organization and its employees. It can then be ensured that actions are coordinated and aligned with the company’s challenges in a coherent way. This method is particularly effective in complex environments where the objectives can be many and varied.

Hoshin Kanri Method: Objectives

The main goal of Hoshin Kanri is to ensure that the company’s vision and strategic goals are shared by all. This involves several key elements:

Sharing the Vision: It’s important that the company’s vision is clear and transparent to all employees. It’s necessary to create a sense of belonging so that everyone feels involved in the common project of the company.
Translation of the Goals: After the vision has been shared, the “Hoshin Kanri” allows these “general goals” to be translated into concrete actions on site. We will see how in the next part. We will then break down the organization’s grand ambitions into specific tasks that each team can accomplish.
Synergy of resources: By organizing and planning these actions, we ensure that the efforts of each department are well aligned towards the common objectives and that they are coordinated.
Measuring Progress: This last point is just as important, we want to measure progress and correct any abuses. To do this, we will define performance indicators that will make it possible to monitor progress against the objectives set and adjust if necessary.

How to set up Hoshin Kanri in 5 steps

Step 1: Establish an organizational vision

The first step in Hoshin Kanri is to establish a clear and shared organizational vision. This must be aligned with the values, policy, ambitions and challenges of the market. Here are some questions to ask yourself to help you in this first step:

What processes are currently in place to establish and achieve objectives?
Has a long-term strategy been put in place?
Is there a mission and vision statement?

Here’s an example of a furniture manufacturing company’s vision: “To become the first choice for sustainable and eco-friendly furniture, while ensuring exceptional quality and unparalleled customer service.”
The objective is to create a vision that inspires all the players in the company. To do this, it will have to be known and understood. It is up to the strategic team (Executive Committee, Executive Committee, etc.) to draw up a clear statement of this vision, which can be consulted by all employees.

Step 2: Define strategic objectives (3 to 5 years)

In this second stage, strategic objectives will be set over three to five years that will be linked to the defined visions in step 1. To do this, it is advisable to use the SMART method, i.e. create “specific, measurable, achievable, realistic and time-bound objectives.
An example of a so-called SMART goal following the vision example in Step 1: “Reduce the carbon footprint of production by 50% by 2027.”
It’s important to find a balance between goals that are ambitious enough to inspire the organization to innovate and push itself, while remaining realistic enough to be achievable.
To develop these objectives, do not hesitate to divide into components according to the structure of your company (Functional Departments, Countries, etc.).

Step 3: Develop annual goals

We will now go into more detail in order to transform our “big objectives” into annual objectives. The goal is to plan your next 12 months to make sure you reach your goals over 3 to 5 years.
For our example, one of the annual goals could be: “By the end of the year, the company will introduce a new line of furniture made from recycled materials, with a sales target of 1,000 units within three months of launch.”
As a reminder, the goal should always be SMART. Don’t hesitate to use Hoshin Kanri catchball, a real tool for consultation and internal consensus.

Step 4: Push Cascading Goals Across the Organization

As stated, it is important to disseminate the cascading goals to ensure that each level of the organization understands and contributes to the annual goals.
Then assign goals to the department, team, and individual once you’ve determined what you need to accomplish during the year. Every hierarchical level must be involved.
It is important to create synergy and coherence in the monitoring of projects to ensure good coordination of the different parties.

Step 5: Implement annual targets

The implementation of the annual objectives will not be a long quiet river, it will require a regular review to identify obstacles and adjust strategies.
To do this, it is important to carry out monthly and annual check-ups. The monthly review ensures that the project is progressing as planned and allows you to quickly adjust to the stated objectives.
The annual review provides an overview of the progress made and the adjustments needed. After the annual cycle, I recommend that you conduct a comprehensive review of the year’s goals (see if the company is ahead or behind). It will then be necessary to take a step back and reflect on what worked and what didn’t during the process.

To conclude, Hoshin Kanri is a powerful managerial method for aligning a company’s strategy with its day-to-day operations. By following these five steps, you will be able to draw a clear path for all stakeholders from a vision.
By integrating this method, you will not only be able to improve their performance, but also create a work environment where each employee feels committed to collective success.

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