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Flevy Management Insights Q&A
How are companies integrating Hoshin Kanri with sustainable innovation to meet future challenges?


This article provides a detailed response to: How are companies integrating Hoshin Kanri with sustainable innovation to meet future challenges? For a comprehensive understanding of Hoshin, we also include relevant case studies for further reading and links to Hoshin best practice resources.

TLDR Integrating Hoshin Kanri with sustainable innovation aligns strategic objectives with sustainability goals, driving Operational Efficiency, continuous improvement, and long-term value creation.

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Integrating Hoshin Kanri with sustainable innovation is a strategic approach that forward-thinking organizations are adopting to meet the challenges of the future. This integration facilitates a systematic process for ensuring that the strategic goals of an organization are effectively communicated throughout the organization and then translated into actionable objectives. This approach not only enhances operational efficiency but also fosters a culture of continuous improvement and innovation, crucial for long-term sustainability.

Understanding Hoshin Kanri

Hoshin Kanri, also known as Policy Deployment, is a methodical approach to strategic planning and management. It ensures that an organization's strategic goals are aligned with its daily operations, with a strong emphasis on continuous improvement. The process involves setting strategic objectives, developing tactical plans to achieve them, and then implementing these plans across the organization. A key element of Hoshin Kanri is the "catchball" process, which encourages feedback and communication between different levels of the organization to refine goals and strategies continuously.

For organizations aiming to integrate sustainable innovation into their strategic framework, Hoshin Kanri provides a robust methodology. It allows for the alignment of sustainability goals with business objectives, ensuring that every department and employee is working towards a common vision. This alignment is critical in today's business environment, where sustainability has become a key driver of consumer preferences and regulatory requirements.

The integration of Hoshin Kanri with sustainable innovation requires organizations to identify and prioritize sustainability goals that are in line with their strategic vision. These goals then become part of the organization's strategic objectives, with specific, measurable targets set for different teams and departments. The catchball process ensures that these sustainability goals are realistic, achievable, and aligned with the organization's overall strategy.

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Sustainable Innovation as a Strategic Objective

Sustainable innovation involves developing new products, processes, and business models that reduce environmental impact and drive economic growth. It is becoming increasingly important as organizations face pressure from consumers, regulators, and investors to demonstrate their commitment to sustainability. By integrating sustainable innovation into their Hoshin Kanri process, organizations can ensure that their sustainability efforts are strategic, focused, and capable of delivering real impact.

Organizations must identify areas where innovation can drive sustainability and create value. This might involve investing in renewable energy, developing eco-friendly products, or redesigning manufacturing processes to reduce waste. By making sustainable innovation a strategic objective, organizations can focus their resources and creativity on areas with the highest potential for impact.

Implementing sustainable innovation requires a culture that supports experimentation, learning, and risk-taking. Organizations must be willing to invest in new technologies and business models, even if the returns are not immediate. The Hoshin Kanri process supports this by providing a framework for setting ambitious yet achievable goals, tracking progress, and adjusting strategies based on feedback and learning.

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Real-World Examples and Best Practices

Leading organizations across industries are demonstrating how Hoshin Kanri can be effectively integrated with sustainable innovation. For example, Toyota, the company from which Hoshin Kanri originated, has long used this approach to drive both operational excellence and sustainability. Toyota's commitment to continuous improvement and respect for people has enabled it to become a leader in developing hybrid and fuel cell vehicles, significantly reducing the environmental impact of transportation.

Another example is Siemens, which has integrated sustainability into its strategic planning process. Siemens uses Hoshin Kanri to align its business units around the goal of becoming a carbon-neutral company. This has led to innovations in energy-efficient technologies and services, helping Siemens and its customers reduce their carbon footprints.

To successfully integrate Hoshin Kanri with sustainable innovation, organizations should follow several best practices. First, leadership commitment is essential. Leaders must demonstrate a genuine commitment to sustainability and innovation, setting clear goals and providing the resources needed to achieve them. Second, organizations should foster a culture of collaboration and continuous improvement, where employees at all levels are encouraged to contribute ideas and feedback. Finally, organizations must be willing to invest in the capabilities needed to drive sustainable innovation, including technology, talent, and partnerships.

In conclusion, integrating Hoshin Kanri with sustainable innovation offers organizations a powerful approach to meeting the challenges of the future. By aligning strategic objectives with sustainability goals, organizations can drive operational efficiency, foster a culture of continuous improvement, and create long-term value for stakeholders. With the right leadership, culture, and resources, organizations can turn the vision of sustainable innovation into reality.

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Best Practices in Hoshin

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Hoshin Case Studies

For a practical understanding of Hoshin, take a look at these case studies.

Global Expansion Strategy for Cosmetic Brand in Asian Markets

Scenario: A renowned cosmetic brand facing stagnation in its traditional markets is looking to implement a hoshin kanri approach to navigate the complexities of expanding into the burgeoning Asian beauty market.

Read Full Case Study

Operational Excellence Strategy for a Boutique Hotel Chain

Scenario: A boutique hotel chain is grappling with operational inefficiencies and a declining guest satisfaction score, utilizing Hoshin Planning to address these strategic challenges.

Read Full Case Study

Ecommerce Policy Deployment Optimization Initiative

Scenario: An ecommerce firm specializing in bespoke furniture has seen a rapid expansion in market demand, leading to a 200% increase in product range and a similarly scaled growth in workforce.

Read Full Case Study

Revitalizing Hoshin Kanri for Operational Efficiency

Scenario: A global manufacturing firm has been struggling with operational inefficiencies linked to its Hoshin Kanri strategic planning process.

Read Full Case Study

Policy Deployment Optimization for Growing Electronics Manufacturer

Scenario: A fast-growing electronics manufacturing company in Asia is struggling with effective policy deployment despite having robust policy guidelines.

Read Full Case Study

Policy Deployment Enhancement in Life Sciences

Scenario: The organization is a mid-sized biotechnology company specializing in the development of novel therapeutics.

Read Full Case Study

Explore all Flevy Management Case Studies

Related Questions

Here are our additional questions you may be interested in.

How is artificial intelligence (AI) influencing the execution and monitoring of Hoshin Planning?
AI is revolutionizing Hoshin Planning by leveraging predictive analytics for strategic execution, enhancing real-time monitoring and performance management, and facilitating adaptive learning for continuous improvement, making organizations more agile and effective in achieving strategic goals. [Read full explanation]
What role does organizational culture play in the successful adoption of Hoshin Kanri, and how can resistance to change be managed?
Organizational culture is crucial for the successful adoption of Hoshin Kanri, emphasizing the need for transparency, continuous improvement, and employee engagement, while managing resistance to change involves clear communication, involvement, and adequate support to align with strategic objectives. [Read full explanation]
How does Hoshin Kanri complement or conflict with other strategic planning methodologies like OKRs (Objectives and Key Results)?
Hoshin Kanri and OKRs complement each other in aligning long-term Strategic Planning with short-term goals through mutual focus on alignment, execution, and measurable outcomes, despite potential conflicts in cultural underpinnings and review cycles. [Read full explanation]
What metrics or KPIs are most effective in measuring the success of Hoshin Kanri implementation?
The success of Hoshin Kanri implementation is best measured through KPIs and metrics that track strategic alignment, employee engagement, and process efficiency, reflecting the achievement of strategic goals, workforce commitment, and operational improvements. [Read full explanation]
In the context of increasing emphasis on sustainability, how can Hoshin Kanri be used to align organizational goals with environmental and social governance (ESG) objectives?
Hoshin Kanri facilitates the integration of ESG objectives into organizational strategic goals through structured planning, leadership engagement, and operationalization, enhancing long-term business success and sustainability. [Read full explanation]
How is artificial intelligence being integrated into the Hoshin Kanri process to predict and align strategic objectives more accurately?
AI integration into the Hoshin Kanri process significantly evolves Strategic Planning by improving predictive capabilities, automating data analysis, and enabling dynamic strategic alignment, offering a competitive edge in modern business. [Read full explanation]

Source: Executive Q&A: Hoshin Questions, Flevy Management Insights, 2024


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