Hoshin Planning: Vision-driven Leadership for Breakthrough Improvement


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  • VOC- Voice of the Customer.The Voice of the Customer drives the Strategic Plan. The Strategic Plan drives your Policy Deployment breakthroughs. The Policy Deployment breakthroughs drive World Class Performance in Q,D,C, and I. End of the Strategic Plan - At the conclusion of the Strategic Plan, a series of objectives targeted to meet the ultimate vision of the company has been developed and prioritized. Beginning of Policy Deployment - Policy Deployment begins with identifying the company’s vision, which has been done in the strategic plan. The next phase is to identify the 3-5 year breakthrough objectives for the company. These breakthrough objectives should “fall out” of the strategic plan. However, the strategic plan may include objectives that are not breakthrough objectives, or may include too many breakthrough objectives. For Policy Deployment, the top 3 or 4 breakthrough objectives should be chosen from the Strategic Plan’s list of objectives.”
  • Policy Deployment is a good tool for communication. It gets everyone on the same page for what is or is not important.” PD provides focus (what to do, what not to do). PD communicates the importance; what PD means for each person. Policy Deployment is used to align targets and resources throughout the organization. Everyone knows their place and how they fit into the “big picture” from the Strategic Plan to the Point of Impact. If anyone of these four elements is out of balance with the other, then the organize will lose velocity in its transformation
  • Policy Deployment creates laser focus on the work that we do today, without sacrificing the future. In other words, short term gains are not acceptable if they are not part of an overall strategy to achieve sustainable breakthrough performance.
  • Effective Daily Management Systems are a prerequisite for Policy Deployment.
  • The Planning Process Establishing Organizational Vision The first phase in the planning process is establishing organization vision. During this phase, the strategic business unit will develop a vision statement, mission statement, and values statement for the company. Strategic Planning/ Develop 3-5 Year Breakthrough Objectives The second phase in the planning process is known as strategic planning. Strategic planning involves analyzing the gap of where the company should be functioning and where it is currently functioning. If necessary, root causes are determined from the gaps that are discovered and breakthrough objectives are developed in order to target the root causes. The breakthrough objectives are worked towards over a period of 3-5 years. Develop Annual Breakthrough Objectives & Improvement Priorities The third phase in the planning process is determining what is breakthrough for the first year of your policy deployment, and developing improvement priorities that are process-oriented, focused, clear, measurable, and designed to meet the annual breakthrough objectives. Consideration should be paid to developing the underlying business processes necessary to achieving the result. Deploy Improvement Priorities The fourth phase in the Policy Deployment planning process is to deploy the improvement priorities. At this step, the multi-functional areas of the company are identified and the improvement priorities are aligned to the multi-functional areas. The Implementation Process Implement Improvement Priorities At this point the planning development is now put to action. Value Stream Mapping is performed to identify opportunities. The Lean Tools are selected and utilized in order to maximize opportunity and meet objectives. The Review Process Monthly Review Each level of deployed policies is reviewed on a monthly basis. Bowling charts and control charts, both measurement tools, are used to track monthly progress. At this review period, the focus is on the exceptions; where are you off target? When you determine the exceptions, countermeasures are developed and acted upon. Annual Review Process The annual review is a self diagnosis step that examines the results of the policy deployment and focuses upon the processes you did or did not set in place.
  • Step 1: Is to establish the organizational vision. This is typically done by the more senior management of the company. The organization must have a widely known vision and mission. This must be followed by some understanding of what the company values. From this, the bold statement of organizational strategy is next.
  • The organization must always strive towards world class benchmarks. Even if it does not get to world class, the journey will get the organization much farther than competition alone. Breakthrough Thinking requires examining world-class standards and comparing it to the current situation. This also requires narrowing focus down to the critical few.
  • No 3-5 year Breakthrough can be achieved in 1 year. The Annual BT Objectives tell you how far you need to improve in the first year to meet your 3-5 year BT Objective. If not at 50% the first year, air is very thin at the peak. Different piece of the puzzle at different times. No hockey sticks for amount to goal. Emphasize that you want to do a big chunk in the first year. Want to front-load the objective...put the “tension” in the system early. Get the learning early. Make sure the annual breakthrough objectives exceed budget targets if applicable.
  • What are the different possible causes of the gap between the breakthrough and the current situation. The “5 Whys” represent identifying true problems or root causes, and not just the symptoms of the problem. We will attack these hurdles with Improvement Priorities.
  • Pick a metric that will tell you if the process is improving. Identifying Targets to Improve for the Annual Objectives. How is a target different than an objective. (an objective is what we measure, a target is how we measure it). Targets to Improve, if effective, are like “canaries in the cage” were used in coal mines to detect gas before its effect to coal miners. We want to know how the process is performing before you are too far one way or another. We do not want the canary to die!
  • The last step is to identify the key resources to impact the Improvement Priorities. Who is going to get this job done? Identify the roles and responsibilities of the multi-functional areas and their impact on the objectives so we can deploy the objectives to them. .
  • As soon as a solid dot is placed above a resource, that resource will get a lower level matrix or an action plan. Clear circles indicate support resources. They do NOT get a lower level matrix or action plan unless they get a solid dot on another matrix. The dots are to be used as a sanity check. The Improvement Priority is deployed to the lower level matrix or an action plan.
  • Once the number of levels of matrices have been determined, then tracking documentation must be created for the monthly and annual reviews. Each matrix gets what is know as a “Bowling Chart.” This chart tracks the monthly performance of all of the targets. If the matrix is at a sufficiently low enough level in the process, then an “Action Plan” is created for each improvement priority to establish course of action to successfully implement the breakthrough. We call this the point of impact!
  • Hoshin Planning: Vision-driven Leadership for Breakthrough Improvement

    1. 1. Hoshin Planning: Vision-driven Leadership for Breakthrough Improvement
    2. 2. Our Agenda for Today <ul><li>What Exactly is ‘Hoshin Planning’ ? </li></ul><ul><li>Why use It. </li></ul><ul><li>Metaphors and Key themes: Hoshin made Simple… hopefully! </li></ul><ul><li>The 7 step Hoshin Planning Process </li></ul><ul><li>How Hoshin Planning relates to Performance Excellence </li></ul><ul><li>Benefits </li></ul><ul><li>Questions and Closing </li></ul>
    3. 3. What Exactly is ‘Hoshin Planning’? <ul><li>With Hoshin Planning, there are many practitioners, and many different definitions. Here are a few: </li></ul><ul><li>‘ We define Hoshin Planning as …. an approach to planning for breakthrough improvements towards an organization’s vision. Hoshin Planning draws on systems thinking, teamwork, the PDCA cycle, and a series of creative and logical tools designed to accelerate the achievement of the ‘Hoshin’ objectives.’ </li></ul>
    4. 4. What Exactly is ‘Hoshin Planning’? <ul><li>‘ Strategic planning that selects a breakthrough objective annually, aligns the plans at all levels, and implements, reviews, and improves the plan on a regular and annual basis.’ </li></ul><ul><li> </li></ul>
    5. 5. What Exactly is ‘Hoshin Planning’? <ul><li>‘ Hoshin Planning is the tool used to facilitate the creation of business processes that result in a sustained competitive advantage in Innovation, Quality, Delivery, and Cost.’ </li></ul><ul><li> </li></ul>
    6. 6. What Exactly is ‘Hoshin Planning’? <ul><li>‘ Hoshin’ = the most important annual objective towards the breakthrough. </li></ul>Before we get ahead of ourselves, a few key terms and definitions: ‘ Vision’ = whatever you do, done to perfection. ‘ Breakthrough’ = a radical and dramatic improvement in one or more organizational competency. Probably a long-term effort, and will require a fundamental re-thinking of the affected processes and systems.
    7. 7. What Exactly is ‘Hoshin Planning’? <ul><li>So, what’s this word ‘Hoshin’ all about? </li></ul><ul><li>First, it’s really Japanese. Origins at the Kobe shipyards and at Bridgestone in about 1965-67. </li></ul><ul><li>The Japanese is actually ‘Ho Shin Kan Ri’. </li></ul><ul><li>‘ Shining Metal Pointing Direction’. </li></ul><ul><li>A Compass! A VISION COMPASS! </li></ul>
    8. 8. Why Use Hoshin Planning? Policy Deployment Breakthroughs World Class Perf. To Align the Business Strategy and Execution to VOC Competitive Environment VOC Strategic Plan Innovation
    9. 9. Why Use Hoshin Planning? To Align Targets and Means throughout an Organization “ the way we operate” Strategy Systems People Performance Excellence “ the way we think and plan” “ the way we lead” “ the way we interconnect” Processes Outcomes: Performance Excellence Sustained Profitability Customer & Employee Satisfaction Growth & Innovation
    10. 10. Key Themes of Hoshin Planning <ul><li>Planning based on prediction is ‘iffy’ at best. </li></ul><ul><li>The only way to predict the future is to create it. </li></ul><ul><li>Prevention doesn’t equal creation. </li></ul><ul><li>‘ If everything is a priority, then nothing is.’ </li></ul><ul><li>Leverage. It’s all about leverage. </li></ul><ul><li>Planning vs. ‘The Plan’. </li></ul><ul><li>Make it visible what is your ‘moon’? </li></ul>
    11. 11. Basic Elements <ul><li>Hoshin Planning – Key Elements </li></ul><ul><li>Driven by the organization’s vision – not today’s problems. </li></ul><ul><li>A system to translate the vision into tangible and measurable objectives for achieving the breakthrough. </li></ul><ul><li>Alignment created by cross-functional planning to achieve short-term objectives each year. </li></ul><ul><li>‘ Smart wedges’ – fewer and fewer more focused efforts, versus more and more and more… </li></ul>
    12. 12. Basic Elements <ul><li>Hoshin Planning – Key Elements </li></ul><ul><li>Fosters learning through the review process… you become better planners every cycle. </li></ul><ul><li>At the heart of the Hoshin process is the Plan-Do-Check-Act cycle of continuous improvement. </li></ul><ul><li>‘ Catchball’ as the driving force of alignment, clarification, and employee involvement. </li></ul><ul><li>The thought process that drives the plan is called ‘Backwards from Perfect’, or ‘BFP’. </li></ul><ul><li>Use of the ‘MP’ tools to creatively and systematically probe and assess possible strategies. </li></ul>
    13. 13. <ul><li>Management by Objectives (MBO): </li></ul><ul><ul><li>Concerned only with results </li></ul></ul><ul><li>Hoshin Planning: </li></ul><ul><ul><li>Concerned with the establishment of results oriented processes </li></ul></ul>Hoshin Planning vs. MBO Systems
    14. 14. <ul><li>Once a Breakthrough Objective is achieved, the process for achieving the objective will become standardized. </li></ul><ul><li>Therefore, the processes that are established when achieving Breakthrough Objectives will eventually become part of the Daily Management systems of your organization </li></ul>Breakthrough to Daily Management Breakthrough Daily Management
    15. 15. 7 Step Hoshin Planning Process 1. Establish Organizational Vision 2. Strategic Planning: Develop 3-5 Year Breakthrough Objectives 3. Develop Annual Objectives 4. Deploy Annual Objectives 5. Implement Annual Objectives 6. Monthly Review 7. Annual Review Catchball Lean & Other Tools Self Diagnosis P D C A
    16. 16. Establish Organizational Vision Vision - Where are we going? Mission - What do we do? Values - What do we stand for?
    17. 17. Strategic Planning: The WHAT Strategic Planning Time Line 3-5 Years Performance Level Current Situation The Competition World Class What is the Gap?
    18. 18. Develop Annual Objectives Defined: Annual Objectives are those objectives that we need to achieve this year which will enable us to reach our overall 3-5 year Breakthrough Objectives
    19. 19. Develop Annual Objectives: HOW FAR Strategic Planning Time Line Performance Current Comp WC Gap Current Situation World Class Year 1 = 50% of Gap Year 2 = 30% of Gap Year 3 = 20% of Gap Annual Objectives
    20. 20. Deploy Annual Objectives: HOW <ul><li>Top Level Improvement Priorities </li></ul><ul><ul><li>Ask 5 Why’s and identify root causes </li></ul></ul><ul><ul><li>Use Problem Solving to find ways to bridge the gap </li></ul></ul><ul><ul><li>Identify Key Driver Processes with greatest impact. </li></ul></ul><ul><ul><li>Use the 7 MP tools to determine priority. </li></ul></ul>Current Situation World Class Year 1 = 50% of Gap Year 2 = 30% of Gap Year 3 = 20% of Gap Annual Objectives
    21. 21. Deploy: HOW MUCH/WHEN <ul><li>Determine Measures and Track </li></ul><ul><ul><li>Targets are measures of the effectiveness of a given process </li></ul></ul><ul><ul><li>Think in terms of process capability (statistics) </li></ul></ul><ul><ul><li>Improvement Priorities tell “how”, Targets tell “how much” & “by when </li></ul></ul><ul><ul><li>Targets should not be established based on “averages </li></ul></ul>Targets are a means to measure the effectiveness of a given process. Do not confuse targets with objectives!
    22. 22. <ul><li>Identify the resources with the greatest influence or opportunity to impact the Improvement Priority and Target to Improve </li></ul><ul><li>The largest or most available resources will not always have the greatest impact </li></ul>Deploy: Identify Resources 30% 30% 20% Relative Impact On Improvement Priority Monitor the Distribution Of Resources Team A Team B Resource C Resource D Team E 100% 0% 0% 100% 5% 15%
    23. 23. Deploy Annual Objectives HOW HOW FAR WHAT HOW MUCH Resources
    24. 24. Deploy Annual Objectives Top Level Bowling Chart Second Level Bowling Chart Action Plan POINT OF IMPACT
    25. 25. <ul><li>There is a monthly review process for each level of deployed objectives within the organization </li></ul><ul><li>Focus on exceptions only - Countermeasures </li></ul><ul><li>Use “Bowling Chart” to track monthly progress </li></ul><ul><li>One bowling chart per PD matrix </li></ul>Monthly Review Process
    26. 26. <ul><li>How effective is our Policy Deployment Process. </li></ul><ul><li>Do we move breakthroughs to daily management? </li></ul><ul><li>Did we apply resources effectively? </li></ul><ul><li>Were PD matrices and action plans deployed to proper level? </li></ul><ul><li>Did we appropriately use Process Excellence tools? </li></ul><ul><li>Did we put in sustainable processes or did we get short-term results? </li></ul><ul><li>Were our monthly PD reviews effective or do they need to be changed in structure? </li></ul><ul><li>Did we just dust the matrix off at the end of the year, or did we track it month to month? </li></ul>Annual Review Process
    27. 27. A little more . . . <ul><li>Challenges and Deficiencies Addressed by Hoshin: </li></ul><ul><li>Plans aren’t used – the ‘doing’ isn’t connected to the ‘thinking’. </li></ul><ul><li>Plans are not suited to the realities of the ‘shop floor’. </li></ul><ul><li>Plans aren’t aligned and connected across the system. </li></ul><ul><li>Measures may or may not exist, and may or may not be appropriate. </li></ul><ul><li>‘ By what method?’ </li></ul>
    28. 28. A little more . . . <ul><li>Challenges and Deficiencies Addressed by Hoshin: </li></ul><ul><li>Plans aren’t reviewed. Ever. </li></ul><ul><li>Plans don’t take into account a changing environment. </li></ul><ul><li>Plans never lead to the kind of change necessary to truly move ahead. </li></ul><ul><li>Next years’ plan may or may not have anything to do with this years’ plan. </li></ul><ul><li>The planning process itself never improves. </li></ul>
    29. 29. How does Hoshin relate to Performance Excellence? <ul><li>First, you need a solid foundation in Quality Improvement. </li></ul><ul><li>Hoshin is typically a ‘second generation’ application. </li></ul><ul><li>Builds upon early successes (‘low hanging fruit’). </li></ul><ul><li>Creates tighter alignment across work systems. </li></ul><ul><li>It’s a ‘tonic’, and will take you to the next level: from improvement to innovation, and from prevention to creation. </li></ul>
    30. 30. How does Hoshin relate to Performance Excellence? <ul><li>Performance Excellence is a continuous improvement initiative that, when implemented correctly, will accelerate an organization’s ability to achieve it’s strategic objectives. </li></ul><ul><li>Hoshin Planning is a disciplined approach to creative thinking that, when implemented correctly, will ensure the most bold and creative set of strategic objectives possible. </li></ul>Lean, Six Sigma, TRIZ, Change Management
    31. 31. The Benefits <ul><li>Focus. </li></ul><ul><li>Alignment and synergy of efforts </li></ul><ul><li>Enhanced creative problem solving everywhere. </li></ul><ul><li>A whole new set of decision making tools. </li></ul><ul><li>An objective approach to deal with subjective data. </li></ul><ul><li>Radical breakthrough improvement, the likes of which you’ve likely never seen before. </li></ul>
    32. 32. Remember: ‘F-A-D-I-R’ <ul><li>FIND your Hoshin. </li></ul><ul><li>ALIGN the organization and your objectives. </li></ul><ul><li>DEPLOY the plans. </li></ul><ul><li>IMPLEMENT the changes. </li></ul><ul><li>REVIEW and improve all along the way. </li></ul>
    33. 33. Time for Conversation <ul><li>QUESTIONS? </li></ul>