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Flevy Management Insights Case Study
Revitalization of Hoshin Planning for an International Technology Firm


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Hoshin Planning to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

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Consider this scenario: An international technology firm is struggling with its Hoshin Planning to effectively communicate and execute their strategic plan.

Despite the global reach and sizable market share, disjointed implementation of the strategic plan has led to subpar performance, reduced employee engagement, and weakening competitive position in rapidly evolving markets.



The misalignment between the company's strategic vision and operational activities indicates a potential flaw in their Hoshin Planning process. Hypotheses may include inadequate communication of the strategic vision, ineffective implementation strategies, or disjointed alignment across different business units. It could also be weak periodic reviews leading to gaps between the original strategic plan and the actual performance.

Methodology

A 6-phase approach to Hoshin Planning could potentially realign the firm's strategic vision with its execution. The phases include:

  1. Develop Vision: Understand what the firm is trying to achieve on a broader level.
  2. Develop Strategies: Create distinct, measurable strategies to support the vision.
  3. Develop Goals: Establish specific, quantitative targets.
  4. Develop Initiatives: Define concrete actions to accomplish the goals.
  5. Implement: Launch initiatives and measure progress.
  6. Review: Regularly revisit the plan, addressing performance gaps and making necessary adjustments.

Learn more about Hoshin Planning

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

Strategic Planning: Hoshin Kanri (Hoshin Planning) (153-slide PowerPoint deck and supporting ZIP)
Strategic Planning: A3 Hoshin Planning Process (113-slide PowerPoint deck and supporting Excel workbook)
Strategic Planning - Hoshin Policy Deployment (138-slide PowerPoint deck and supporting Excel workbook)
Strategic Planning: Hoshin Kanri (Hoshin Planning Process) (167-slide PowerPoint deck and supporting Excel workbook)
Templates for Hoshin Kanri Strategy Deployment (Excel workbook)
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Potential Challenges

In the course of implementing this plan, it is probable that the firm's leadership may question the practicality of aligning multinational business units under a unified vision. An emphasis should be placed on creating a shared understanding of the company's vision across all levels and regions, backing it up with localized strategies that reflect specific market needs.

CEOs may also be concerned about the feasibility and time-frame of implementing a comprehensive Hoshin Plan. To mitigate this concern, it is important to highlight the step-by-step nature of the plan, acknowledging that change takes time, and emphasizing the importance of regular assessment and adjustments.

Lastly, keeping the entire organization informed and engaged during the transformation process can be challenging. A suggested resolution is to approach this challenge through robust communication strategies, aligning everyone to the overall vision and creating widespread ownership of the plan.

Learn more about Leadership

Case Studies

  • The approach adopted by a Fortune 500 technology company proved effective in revamping their Hoshin planning. They shifted from a top-down to a two-way dialogue model to create their strategic plan, which ensured alignment across the organization and led to an increase in their net profits by 7% within two years.

Explore additional related case studies

Sample Deliverables

  • Strategy Review Report (Word)
  • Hoshin Planning Map (PowerPoint)
  • Hoshin Scorecard (Excel)
  • Quarterly Review Protocol (Word)
  • Implementation Roadmap (PowerPoint)

Explore more Hoshin Planning deliverables

Embedding Hoshin Culture

Successfully implementing the Hoshin Plan is just the beginning. The organization should aim to embed Hoshin culture across all levels to ensure continuous alignment and long-term success. This includes training leaders on Hoshin planning and promoting transparency through routine communication.

Hoshin Planning Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Hoshin Planning. These resources below were developed by management consulting firms and Hoshin Planning subject matter experts.

Technology Integration

The use of disruptive technology tools (like Business Intelligence and Advanced Analytics) can streamline the Hoshin Planning process. These tools offer real-time insights, enhance decision-making, and promote an agile, responsive organization.

Learn more about Agile Business Intelligence

Operationalizing the Hoshin Planning Process

To operationalize the Hoshin Planning process, the organization must overcome the disconnection between strategy and execution. This is achieved through detailed action planning and clear accountability structures. Create a cascading process where Hoshin goals are broken down at each organizational level, ensuring that every unit understands how their activities contribute to strategic objectives. Furthermore, it’s imperative to assign clear owners for each initiative who will be responsible for delivering results and to establish metrics that accurately measure progress against goals.

One practical application of operationalizing Hoshin Planning can be found in the approach used by a leading semiconductor company where cross-functional teams were established to focus on key initiatives. By applying advanced project management techniques and holding regular accountability meetings, the company was able to increase its on-time delivery from 70% to 94% in one year (McKinsey Quarterly).

Effective communication is also a crucial element in operationalizing Hoshin Plans. It’s not just about informing the staff; it's about creating avenues for upward feedback, which can provide insights into the challenges faced by teams and offer opportunities to recalibrate strategies as necessary.

Learn more about Project Management

Ensuring Cross-Cultural Alignment

In a multinational organization, aligning various cultural and business practices with the Hoshin Planning process presents a unique challenge. To address this, it’s important to incorporate cultural and regional perspectives into the planning discussions. This involves adapting communication strategies to resonate with each region’s cultural norms and business customs, thereby achieving buy-in across the company.

For instance, one approach could be to host regional strategy workshops that tailor the overarching strategic goals to local market conditions and opportunities. Engage local leaders as champions of the Hoshin Planning process within their respective markets to ensure the plan feels relevant and valuable at the local level. Through this regional engagement, the global strategy becomes more than just a directive from headquarters—it becomes a set of actions owned and embraced by each part of the global business.

Such alignment was demonstrated by a global consumer goods company that adopted local market customization in its Hoshin Plans. By balancing global efficiency with local effectiveness, the company saw an increase in market share across several key emerging markets, which had previously been stagnant (McKinsey Quarterly).

Measuring Success and Impact

To measure the success and impact of the Hoshin Planning process, a balance of leading and lagging indicators should be utilized. Leading indicators predict future success and should be measured throughout the year, whereas lagging indicators, such as financial performance, will validate the overall success of the strategic initiatives at the end of the year or strategic cycle. It's essential to establish a robust measurement system that tracks these indicators and provides actionable insights.

Using a Balanced Scorecard approach ensures that financial and non-financial metrics are considered, enabling a comprehensive view of the organization’s health and Hoshin Plan effectiveness. Additionally, this approach helps to align initiatives with the organization's key strategic objectives.

An example of successful measurement in action is an international IT services company that incorporated both customer satisfaction and employee engagement within its Hoshin metrics. By doing so, the company not only accelerated revenue growth but also reduced employee turnover by 15%, recognizing that engaged employees are critical to delivering customer value and achieving strategic goals (McKinsey Quarterly).

Learn more about Balanced Scorecard Employee Engagement Customer Satisfaction

Supporting a Continuous Planning Cycle

The Hoshin Planning process should not be viewed as a one-time event but as a continuous cycle of planning, execution, and review. It’s vital to foster an environment where strategic review is part of the organizational rhythm.

To support this, consider instituting a ‘Strategy War Room’ where live dashboards display real-time progress on critical initiatives. This approach was successful for a multinational telecommunications company which found that this level of transparency and immediate accessibility to performance data encouraged swift decision-making and adjustments to initiatives (McKinsey Quarterly).

Continuous planning requires a systematic approach that includes monthly reviews, quarterly strategic assessments, and annual planning sessions. Each review cycle should have predefined agendas and output expectations, focusing on what's been achieved, the barriers encountered, and the next steps for each aspect of the plan.

Regularly scheduled strategic review sessions contribute to a responsive and flexible approach where strategic priorities can be adjusted in line with shifting market demands and internal organizational changes. By institutionalizing these habits, the organization can maintain alignment, improve execution, and remain on track to realize its strategic vision.

Learn more about Organizational Change

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Increased on-time delivery from 70% to 94% within a year by applying advanced project management techniques and establishing cross-functional teams.
  • Enhanced market share in several key emerging markets through local market customization in Hoshin Plans.
  • Accelerated revenue growth and reduced employee turnover by 15% by incorporating customer satisfaction and employee engagement within Hoshin metrics.
  • Improved strategic decision-making and initiative adjustments with the introduction of a ‘Strategy War Room’ displaying real-time progress.
  • Successfully aligned multinational business units under a unified vision by hosting regional strategy workshops and engaging local leaders.
  • Streamlined the Hoshin Planning process with the integration of Business Intelligence and Advanced Analytics tools.

The initiative's overall success is evident in the significant improvements across key performance indicators, including on-time delivery, market share, revenue growth, and employee turnover. The strategic alignment achieved through regional workshops and the engagement of local leaders demonstrates the effectiveness of adapting global strategies to meet local market needs. The introduction of a ‘Strategy War Room’ and the use of technology tools have enhanced decision-making and responsiveness, further contributing to the initiative's success. However, the results could have been further enhanced by more aggressively addressing the initial communication challenges across the organization and by implementing more rigorous training programs to deepen the understanding of Hoshin Planning at all levels.

For next steps, it is recommended to focus on further embedding the Hoshin culture throughout the organization. This includes expanding the training programs on Hoshin Planning for all employees, enhancing the communication strategies to ensure every team member is aligned with the strategic vision, and continuously leveraging technology to refine and optimize the planning and execution processes. Additionally, exploring opportunities for further customization of strategies to meet local market nuances will ensure sustained success and competitiveness in the global market.

Source: Revitalization of Hoshin Planning for an International Technology Firm, Flevy Management Insights, 2024

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