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As James McNerney, the former CEO of Boeing, once stated, "Execution – converting plans into action – can only occur when a company's resources are aligned with its strategic priorities." In this vein, Hoshin Planning is a proven methodology designed to ensure that all critical resources in an organization are laser-focused on accomplishing key strategic objectives. This management approach, rooted in the principles of Lean Management, involves establishing both long-term strategic goals and the tangible means to achieve them through a concerted organizational effort.

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Flevy Management Insights: Hoshin Planning


As James McNerney, the former CEO of Boeing, once stated, "Execution – converting plans into action – can only occur when a company's resources are aligned with its strategic priorities." In this vein, Hoshin Planning is a proven methodology designed to ensure that all critical resources in an organization are laser-focused on accomplishing key strategic objectives. This management approach, rooted in the principles of Lean Management, involves establishing both long-term strategic goals and the tangible means to achieve them through a concerted organizational effort.

Principles of Hoshin Planning

Hoshin Planning operates on a few fundamental principles:

Executing Hoshin Planning

Implementing Hoshin Planning involves a structured, step-by-step process:

  1. Identifying the "True North": Establish the overarching strategic vision or objective for the organization. This vision sets the direction for all subordinate goals.
  2. Setting Breakthrough Objectives: Define the key goals that are critical for reaching the "True North" over a three-to-five-year period. These goals represent significant changes or breakthroughs in the organization's performance.
  3. Developing Annual Objectives: Decide on the goals to be achieved in the coming year that will contribute to the breakthrough objectives. These short-term targets should align perfectly with longer-term goals.

Challenges in Hoshin Planning Implementation

While Hoshin Planning is a powerful tool, its execution can be challenging. C-suite leaders should champion the initiative and drive alignment across the organization. It is also vital to regularly review and adjust the implementation in response to variances between planned goals and actual results, as well as market changes and disruptions. In addition, incorporating a strong communication strategy is key to ensure all employees understand the organization's direction, their role in it, and progress towards the objectives.

Role of Technology in Hoshin Planning

The emergence of Digital Transformation in organizations offers a powerful means to operationalize Hoshin Planning. Platforms and tools that support data-driven decision-making, Performance Management, collaborative planning, and real-time monitoring, to name a few, can enhance the efficacy of Hoshin Planning, enable better alignment, and expedite goal accomplishment.

Final Thoughts

Hoshin Planning paves the path to Operational Excellence, aligning the organization, its strategy, and its resources towards a common vision. It fosters a culture of shared responsibility and continuous improvement, key tenets of effective Strategic Planning. This methodology is not a mere tool; it is a mindset, a way of running a business that demands commitment and discipline but promises significant enhancements in organizational performance and competitive standing.

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


Explore related management topics: Digital Transformation Operational Excellence Strategic Planning Performance Management Lean Management Continuous Improvement Hoshin Kanri Strategy Deployment & Execution Strategy Development A3 Strategic Thinking Lean Six Sigma Black Belt




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