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Managing an organization often resembles steering a large ship—meticulous, uniform efforts must be directed towards a common, singular destination. As Jack Welch, former CEO of General Electric, once succinctly put it, "Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion." Leadership, Vision, Culture—these intangible concepts can prove challenging to quantify. Enter the Hoshin Kanri methodology, a Strategic Planning tool that helps leaders to translate their vision into actionable business goals.

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Flevy Management Insights: Hoshin Kanri


Managing an organization often resembles steering a large ship—meticulous, uniform efforts must be directed towards a common, singular destination. As Jack Welch, former CEO of General Electric, once succinctly put it, "Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion." Leadership, Vision, Culture—these intangible concepts can prove challenging to quantify. Enter the Hoshin Kanri methodology, a Strategic Planning tool that helps leaders to translate their vision into actionable business goals.

The Power of Hoshin Kanri

Hoshin Kanri, also known as Policy Deployment, is a Japanese management method used by companies to translate their strategic objectives into well-defined actions at all levels. This tool accelerates Organizational Alignment and ensures every staff member is focused on the same goal. According to a study by McKinsey, organizations that effectively align their operations with their strategy boast profit margins 5-6% higher than their competitors. Hoshin Kanri solidifies this alignment by converting high-level strategic objectives into tangible Operational Excellence.

The Hoshin Kanri Philosophy

Hoshin Kanri is underpinned by two key principles—strategic cascading and the catchball process. In strategic cascading, the plan is systematically broken down from the executive level to individual contributors. Each team or individual is assigned a subset of the strategy, translating the overarching goals into individual responsibilities. This ensures clear, measurable targets for every staff member, thereby establishing a sense of accountability. The catchball process involves iterative discussions between different hierarchical levels. Through this discourse, initial goals are refined, ensuring the strategy is both informed by and relevant to every area of the business. It also fosters the exchange of ideas, promoting Innovation and increasing the plan's robustness.
  1. Identify the broad, long-term objectives of the organization.
  2. Brainstorm specific, measurable annual objectives towards the overall goals.
  3. Identify the initiatives necessary to achieve these annual objectives.
  4. Assign responsibilities at all levels of the organization.
  5. Review, revise and adjust the objectives and initiatives regularly according to results and feedback.

The Pitfalls and Remedies

Despite its promise, Hoshin Kanri is not a one-size-fits-all solution. The method demands a significant initial investment in terms of planning, Change Management, and staff training. It also requires modification at each deployment to suit the unique culture and structure of each organization. Importantly, Hoshin Kanri should not be considered a substitute for regular business operations. Instead, it should supplement existing processes. In a study by Bain & Company, businesses that successfully implemented Hoshin Kanri utilized it as one aspect of a broad strategic tool kit and maintained focus on their standard operations. Finally, a novelty often encountered with Hoshin Kanri implementation is the possible occurrence of tunnel vision, whereby employees are so focused on their specific goals that they become oblivious to other related factors. To avoid this, leadership needs to permeate a culture of flexibility and holistic thinking.

Unlocking Success with Hoshin Kanri

Successful Hoshin Kanri deployment depends on a trifecta—Persistence, Patience, and Perseverance. It demands a consistent commitment from everyone involved. Reports suggest businesses often see positive results after the third year of consistent implementation. It also requires consistent and constructive feedback across all levels. Just as in Lean Management, mistakes should be viewed as opportunities for improvement and learning. Ultimately, true success with Hoshin Kanri comes when the method becomes ingrained in the DNA of the organization. When executed correctly, Hoshin Kanri can transform what might initially seem like an insurmountable mountain into achievable steps—bridging the gap between vision and action on the journey towards corporate excellence.

For effective implementation, take a look at these Hoshin Kanri best practices:


Explore related management topics: Operational Excellence Change Management Strategic Planning Lean Management Organizational Alignment Policy Deployment Strategy Deployment & Execution Strategy Development A3 Strategic Thinking Lean Six Sigma Black Belt




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