Hoshin Kanri is a strategic planning and management system that emphasizes alignment, continuous improvement, and collective involvement. It aims to address shortcomings of conventional annual strategic planning approaches. A survey of over 100 organizations found that most conduct annual strategic planning but managers are often dissatisfied. Hoshin Kanri ties annual strategy to daily management through vertical and horizontal alignment of goals and periodic review. It focuses on developing means to achieve objectives rather than just ends. When implemented correctly with leadership commitment and employee engagement, Hoshin Kanri can help organizations better execute strategies and drive continuous improvement.

1. Hoshin Kanri:Survey Results – A Strategic
Planning System Through Creation,
Dialogue, Review, Manager
Development, Alignment &
Collective Involvement.
November 8, 2017
Dennis M. Gawlik
Faculty – The Presidio Graduate School
San Francisco / Seattle USA

2. “The single biggest problem in
communication is the illusion
that it has taken place.”
George Bernard Shaw

3. B
A
C
D

4. Why Hoshin Kanri Matters
Conventional
Strategic Planning
and Tool-Based
Initiatives Fall Short
Hoshin Kanri as a System Adds Value
(see also Mr. I. Yoshino’s Plenary):
Alignment (horizontal & vertical)
Manager Development/Commitment
Adaptive / Reviewed Regularly
Management Accountability
Focus on Few, Vital Priorities

Employee Engagement
Execution
Simply  PDSA
Learning Org / Employee Creativity

5. Survey Background:
Examined:
Strategic Planning Approaches
Hoshin Kanri Use
Mid-Size/Large Organizations
Middle & Upper-Management
5 Yrs. / 431 Surveys Sent
112 Surveys Received Back /
26% Return Rate

6. When is Strategic Planning Conducted?
Annually
Other
Quarterly
Semi-Annual
74%
15%
2%
I don’t know 5%
4%
Note: 93% of
Organizations Conduct
Formal Strategic Plans

7. Conventional Planning Approaches:

8.  “Annual Based” Strategic Approaches:
 Too many KPIs (5 – 15), not critical few
 Too many Non-Complementary Tools
 Fewer strategic problems solved
 Fewer strategic targets/goals met
 Less flexible to changing environment
 “Metric” focused Strategies:
 Key primarily on results/metrics,
less on purpose, means or customer
 Top-down approach
Sample Size: Annual Survey, 5 Years of Data 431
Surveys / 112 Returned

9. Conventional Planning Satisfaction
54%
Not Satisfied with
Process
46%
Satisfied with
Process
5%
6%
14%
29%
8%
24%
14%
0% 5% 10% 15% 20% 25% 30%
Extremely Dissatisfied
Quite Dissatisfied
Somewhat Dissatisfied
Neither
Extremely Satisfied
Somewhat Satisfied
Quite Satisfied

10. No Steady
Progress, 15%,
No Process
& Missed
Targets 12%
More than 5 Strategic
Objectives, 22%
Had Process, Was
Not Effective 27%
Did not Change with
Market, 24%
Issues

11.  Ends (results) vs.
Means (how)
 Reactive Metrics
vs. Proactive / Lead
 Top-Down Driven
 Annual
Drawbacks

12. 0%
5%
10%
15%
20%
25%
30%
29%
25%
16% 14%
8% 8%
Common Concerns

13. Key Findings:
 Leaders focus on “Directing”, not Coaching
 Little Manager Development
 “Annual” format:
 Leaders have too many indicators (5 – 15),
not important few
 Identifies fewer overall problem / fewer
solved or escalation
 Tied to one way of planning rather than
flexible approach
 “Metric Focused”:
 Leaders lead by metrics, less true knowledge
of business
 Approach focuses more on department
results, less on customer value

14. Processes & Tools

15. A Typical Process
Customer
Perspective
Learning &
Growth
Perspective
Business
Processes
Perspective
Financial
Perspective
Targets Set
for Key
Performance
Indicators
Process
Execution &
Improvement
Project
Plans &
Resource
Allocation
Leads to
Nego-
tiation
Inputs
Results – Reflection to Identify Continuous
Improvement Opportunities
1
2
3
4
5
6
7
Operational Excellence Consultancy: Hoshin Kanri Strategy Deployment

16. The X- Matrix & Planning

17. Hoshin Kanri

18. Hoshin Kanri -
The Toyota Way
In Japanese, (方針管理)
Hoshin means "compass needle" or "direction"
Kanri means “control” or “management”.

19. Hoshin Kanri Model

20. Attributes of Hoshin Kanri
 Align shared improvement goals
both vertically and horizontally
 ‘Means’ Focused Resources
 Customer / Business Centric
 Builds Employee Ownership
 Leadership Development / Growth
 Visible / Proactive / Flexible
 Periodic Follow-Up & Review
 Reflection / Learning Organization
 Inclusive in Approach

21. PDCA - Typical Organization
Do
Plan
Check
Act
Operational Excellence Consultancy: Hoshin Kanri Strategy Deployment
DO
Plan
Check
Act

22. …or
Maybe
it’s Like
ThisDo
Plan
Check
DO

23. Lean
Approach
Do
Plan
Check
Act
PLAN

24. The Hoshin Kanri Approach
Do
Plan
Check
Act

25. Hoshin Kanri – Means Focus
Hoshin Kanri
Customer Value
ContinuousImprovement Management by Fact
Teamwork
Alignment Principle
Operating
Philosophy
Operational Excellence Consultancy: Hoshin Kanri Strategy Deployment
Means
vs. Ends
* Means Focus *

26. A Hoshin Kanri System –
Goal Alignment
•Alignment
through
entire
company
•Each
subsequent
goal
supports the
previous
level’s goals
Verticalalignment
Organization
Goals
Department
Objectives
Individual
Objectives
Department
Objectives
Individual
Objectives
Individual
Objectives
Individual
Objectives
Horizontal
Alignment
*Horizontal*

27. Top-down focus
on creating and
improving
systems
HOSHIN KANRI
INTEGRATED WITH
Bottom-up
focus on
total employee
involvement in
continuous improvement
TOTAL EMPLOYEE INVOLVEMENT
*Teamwork*
Hoshin Kanri
& Employee
Involvement

28. Hoshin Kanri – Principles First
• Vision
• Mission
• Shared Values
Management by
Principles
• Objectives Setting
• Target-means Deployment
• Management Development
Management by
Priorities
• Network of Inter-related
Projects
• Cross-functional Management
Management by
Projects
*Principles*
*Development*
*Cross-Function*

29. Hoshin Kanri - Aligned Service Excellence
• Leadership creates a
challenging vision of
service excellence the
entire organization
must strive towards
based on:
• Passionately pursuing
purpose based on
guiding values
(TWTSE Principle 1)
• Deeply understanding
customer needs
(TWTSE Principle 2)
Jeffrey Liker and Karyn Ross: The Toyota Way to Service Excellence: Lean
Transformation in Service Organizations, McGraw-Hill, NY, NY 2016.
* Top Down *
* Bottom Up*

30. Hoshin Kanri Process – Catch Ball
Direction of
information flow
Catchball:
Negotiation &
Alignment between
two levels
Owner
Manager
Coach
Captain
Front Line
Increase Fan
Satisfaction
Feedback
Feedback
Feedback
Feedback
Practice Team and
Individual Assignments
To improve
quality
Improve
overall goal yield
Increase
Passes
Reduce Missed
Assignments
Policy Owner Objective Means
To improve
quality
Increase
Passes
Operational Excellence Consultancy: Hoshin Kanri Strategy Deployment
= Catch Ball
* Catch Ball *

31. Kata for Aligned Organizational Learning & Creativity!
CK/IK
CK/IK
CK/IK
Creative
new
services!
Creative
new
services!
Creative
new
services!
Organization Flourishes and Thrives!
Customers Continuously Delighted!
* Alignment *
CK = Coaching Kata / IK Improvement Kata
* Creative*

32. Hoshin
Daily Mgmt. (DM) with Kaizen
DM with
no HK
Time
Performance(KPI)
HK with no DM
P
D
C
A
P
D
C
A
P
D
C
A
P
D
C
A
P
D
C
A
P
D
C
A
Relationship of Hoshin, Daily Mgmt.
& Leader Development
- Both are essential - Maintain good balance
Jeffrey Liker: Developing Lean Leaders At All Levels; A Practical Guide: 2015, Figure 7-5.
Hoshin Kanri and Daily Management work together for breakthroughs and sustainment
- Both are essential - Maintain good balance
* Hoshin,
Daily Mgmt. &
Development *

33. Hoshin Kanri Process
13%
9%
11%
3%
10%
13%
5%
5%
0% 2% 4% 6% 8% 10% 12% 14%
Accountability - Implementing
Accountability - Resourcing
Breakthrough Objectives
Other
Process Focus
Strategic Metrics
Results Focused
Understanding of Variables
Critical Success Factors

34. Hoshin Kanri Success
0%
5%
10%
15%
20%
25%
30%
35%
40%
36%
13%
7% 7% 6% 6% 5% 5% 5% 4% 3% 3%

35. Learnings

36. Survey Results –
Hoshin Kanri Key Considerations
 Linked to purpose/key strategies
 Vertically/Horizontally ‘Means’ Focus
 Measures tied to Objectives
Leadership Development
 Customer Focused
 Collective Involvement
 “Correct” Practice/PDCA/PDSA

 Alignment of Personal and Company Values
 Periodic Follow-up/Review
(daily/monthly/quarterly/yearly)
 Hoshin Challenges: From/To/By when
Grasp the Burden; mid-level mgmt.

37. Common Factors Identified In
Sub-Optimal Hoshin Kanri Efforts
 Wrapping today’s Strategic
management process in A3 Paper
 Not knowing ‘why’
 Setting broad & vague objectives

 Writing the Hoshin plan on a
computer & keeping it there
 Having a strategy that is “too good” to
be changed
 Poor Execution
Source: gemba panta rei and D. Gawlik Hoshin Kanri Survey 2017
Using the process for
negotiation, not consensus

38. Research
Summary
 Over 93% of Organizations conduct
Formal Annual Strategic Plans
 Managers Committed / Developed
 72% Not Satisfied with Current Process
 Hoshin Kanri Ties Annual Strategy
Development / Progress with Daily
Management
 Hoshin Kanri Aids in Engagement,
Alignment, Focus, Execution, Review &
Follow Through
 Long-Term Approach: Expect to Start
Seeing Returns Between 3 and 12 Months

39. Hoshin
Kanri
WHAT
QUESTIONS DO
YOU HAVE?

40. Comparison of Management By
Objective (MBO) and Hoshin KanriManagement by Objectives Hoshin Kanri
Short-Term, Weak Adherence
with Company Philosophy
Long-Term, Strong Guiding
Principles
Results / Budget Oriented &
Evaluation of Effort
Concerned with Results and
Process with Focus on People
Development
Top down
Communication / Large Number
of Objectives
Top down Direction Setting and
Bottom-up flow of Information,
PDCA - PDSA and Means
Directive Participative / Systematic
Management of Processes
Primarily Authority Oriented Primarily Responsibility Oriented
Jeffrey Liker: Developing Lean Leaders At All Levels; A Practical Guide: 2015, Figure 7-
7: Comparison between Management by Objectives and Hoshin Kanri

41. The Improvement
Prioritization Process
2013 – The Karen Martin Group, Inc.
Focus
Here

42. X Matrix – Example
Colors are used to differentiate various levels
of deployment
Operational Excellence Consultancy: Hoshin Kanri Strategy Deployment