What is Hoshin Kanri?

by Karen Roberts

Posted on 24 Dec 2018

Hoshin Kanri comes from Japan. It was created by Dr. Yogi Akao after Deming, Juran and others talked to the Japanese about leadership and control.  You'll also hear it called Policy Deployment, especially when Hoshin is used for individual departments.  The foundation for Hoshin is inclusion, creativity and communication.  Inclusion means that everyone in the organization is involved in either giving input into the company’s plan or executing action items related to critical strategies.  Communication is critical because it’s how we make sure that everyone knows what is going on and how well the organization is meeting goals and objectives.  In Hoshin, we call this “catch-ball.”  And finally, creativity is realized when new ideas are brought to the table as a result of having cross-functional teams of people discovering the best way to get things done.  

Hoshins are the breakthrough strategies that create needed change toward continuous improvement.  They can be stretch goals or whatever the organization must do to survive.  The fundamental premise of Hoshin is that the best way to obtain the desired result for an organization is for all employees to understand the long-range direction and participate in designing the practical steps to achieve the results.  This form of participative management evolved and was influenced by the Japanese refinement of Drucker’s Management by Objectives (MBO) and through the birth and growth of the quality circle movement.  
 

In order for workers to understand their workplace effectively, they must have performance measures of their processes and monitor these measures to assure that they are contributing to continuous improvement as well as closing the gap toward the strategic targets.  Policy deployment became the tool that Japanese business leaders used to align the work of their front-line employees to the strategic direction of their company.  
 
HOSHIN DEFINED

Hoshin is a comprehensive step-by-step planning process that takes a systems approach to change towards continuous improvement.  This unique methodology is founded on the guiding principle of inclusion.  Hoshin planning is the system that orchestrates continuous improvement and breakthroughs.  It picks the area that needs improvement, makes sure all the right people get involved, and that the improvement is implemented.  Hoshin is a data driven, participative methodology that relies heavily on understanding the root cause of a problem.

 

HOSHIN PRINCIPLES

  • Measuring the system as a whole gives management a clear understanding of how the organization is performing
  • Setting targets for the business and communicating, those targets to the entire organization gets everyone focused
  • Everyone, including workers, sets their own monthly and yearly goals
  • Understanding the operating environment allows for sound decision making and innovative future thinking
  • Prioritizing resources on key objectives make the organization more effective and efficient
  • Back and forth communication, “catch-ball”, is encouraged both vertically and horizontally within the organization
 

THE TERM “HOSHIN KANRI”

Hoshin is composed of two Chinese characters, "ho" and "shin."  "Ho" meaning method or form, and "shin" meaning shiny needle or compass.  Taken together, the word "Hoshin" means a methodology for strategic direction setting.  It is the guiding strategic process that aids an organization as they make their way through a foggy environment into a clear and shining future.


Ho = method or form
Shin = shiny needle or compass
Kanri = management or control

 

HISTORY OF HOSHIN

  • 1950 - Dr. Deming presents the “plan, do, study and act” model to Japanese.
  • 1954 - Dr. Juran conducts workshop for the Japanese on quality control.
  • 1954 - Peter Drucker’s book which proposes management by objectives (MBO) is published in Japanese.
  • 1962 - Toyota publicizes top-level cross functional management systems.
  • 1964 - Bridgestone Tire Japan introduces the term Hoshin Kanri.
  • 1965 - Dr. Akao defines “items of daily management” in relation to goals and policies in a cross functional management system.
  • 1968 - Bridgestone outlines Hoshin Kanri methodology.
  • 1970 to Present – An increasing number of companies adopt Hoshin Kanri.

 

MATRIX METHODOLOGY

Hoshin is a matrix methodology that provides a way to link an organization's top objectives with the goals in every department in the company.  There are numerous types of Hoshin matrices.  There are T Matrices, X Matrices, etc.  The type of matrix that this course focuses on is a linked L Matrix.  By linking Hoshin matrices, you can determine where to place resources.  Hoshin provides a clean and robust way to ensure that everyone in the company is working on action items that matter the most to the business and the customer.  Although the matrix is important in a Hoshin process, it is the intent of the process that is more important.

 

CONCLUSION

Hoshin Kanri is a step-by-step strategic planning process that gives participants a visual map of what is most critical to work on.  Hoshin gives management a tool to understand what should be top priority and where to place precious resources.  But by far the most important aspect of Hoshin Kanri is the team-building effect that is has on an entire organization.  Feeling part of something greater than themselves affords employees a chance to learn skills that can't be taught in a classroom.

Author

Karen Roberts

MBA, MA University of New Mexico