This presentation evaluates the Hoshin Kanri concept, what it is, how it works, what can go wrong and how to make Hoshin really work.
Slide 3: Most people familiar with Hoshin Kanri will know that it translates from Japanese into a "Vision Compass". More importantly, Hoshin is gaining traction due to its recognition of the need to link direction (strategy formulation) with management (implementation).
Slide 4: A key feature of Hoshin Kanri is the concept of Breakthrough Objectives. The concept encourages aggressive objectives together with a structured method for cascading these and breaking them down into manageable pieces.
Slides 5 and 6 address common responses from executives one might encounter when trying to introduce Hoshin Kanri together with the symptoms suggesting that Hoshin Planning is required. The symptoms listed will strike a chord with many readers and represent the product of poor strategy execution.
Slide 8 identifies some of the many leading organizations using Hoshin as their strategy execution methodology. The majority of organizations that we at i-nexus are talking to (particularly in the USA) are either considering implementing Hoshin Kanri or have already made a start.
Slide 9 identifies the value of having a strong strategy execution system by tracking share price performance.
Slides 11 and 12 introduce the link between Hoshin Kanri, and in particular the X matrix concept, and Balanced Scorecards. The traditional Balanced Scorecard clearly introduced value by looking at business metrics from more than purely a financial perspective. In contrast however, the X matrix is a far more robust tool for supporting strategy implementation. The various faces of the X matrix (South, West, North and East) detail the WHAT, HOW FAR, HOW and HOW MUCH of the strategy. Having said that, the X matrix is by no means universally popular as a Hoshin tool and is regarded by some CEO's as too complex. It is clearly a tool more likely to provide value in organizations that are more mature in their strategy execution journey.
Slide 13 shows an example of how the i-nexus software supports both the Hoshin X matrix and Scorecards.
Slide 15 identifies the critical role of the bowling chart in linking between the X matrix and action plans and its use a key management tool to track achievement and lack thereof against goals.
Slide 17 identifies "culture change" as a key barrier to effective Hoshin. Many of our customers do find that the greater transparency achieved with i-nexus can be seen as a threat. This needs to be managed carefully with problems (red traffic lights) seen as discussion points rather than failure.
Slide 22 provides an example of an A3 report. Many i-nexus customers find visual management of progress to be key to obtaining commitment to Hoshin.
Finally slide 24 looks at the value of Hoshin countermeasures in enabling early identification and resolution of barriers to progress.
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Deploying Hoshin Kanri as a Competitive Weapon
1. All information provided in this document is proprietary and confidential information from i-nexus and must be treated in a confidential manner.
Deploying
Hoshin Kanri
as a Competitive
Weapon!
2. Slide 2Copyright i-nexus 2012. All rights reserved.
What are we going to cover?
• What is Hoshin Kanri and what does it
promise?
• How does it work (in theory)?
• What can go wrong (in practice)?
• What’s behind this?
• 4 key challenges to overcome
• Proven strategies to make Hoshin really
work
• Key takeaways
3. Slide 3Copyright i-nexus 2012. All rights reserved.
Hoshin Planning – The Concept
方
Ho
管
KanShin Ri
針 理Direction Needle
Control
Channeling
Reason
Logic
Direction Needle, or Compass Management
Hoshin Planning is a systematic and disciplined process to align, communicate and
execute strategy by focusing on those few breakthrough objectives that give you
competitive advantage.
A ‘Vision Compass’
4. Slide 4Copyright i-nexus 2012. All rights reserved.
Hoshin Planning – The Process
Hoshin Process
in Concept
5. Slide 5Copyright i-nexus 2012. All rights reserved.
Reasons Not to Do This....
And the leaders will say....
• We already do this.
• We do not have enough time to do this.
• We can not possibly plan that far into the future.
• We have tried this before.
• Our corporate leadership (insert board if appropriate) will
never give up control.
• The way we do it today is just fine.
• We will not maintain this process.
• Etc, Etc, Etc...
6. Slide 6Copyright i-nexus 2012. All rights reserved.
Recognise these symptoms?
And the organisation will see...
• Too many bad projects in process.
• Very long lead-times for improvements.
• Constantly missed budgets and forecasts.
• Senior management vision does not match organizational
activities.
• Annual objectives rolled out in March instead of January.
• Way too many good projects in process.
• Year to year plans never seem to connect.
• Most employees never seem to feel a part of the team.
• Little connection between strategy and continuous
improvement.
7. Slide 7Copyright i-nexus 2012. All rights reserved.
The Basic Model....
A simple model.....
Performance Management Systems are really designed to help
organisations perform three basic tasks:
• Monitor… We have to examine our core activities on a regular basis.
Collecting data.
• Learn…From that examination we have to better understand what is
working and what is not. Turning data into information.
• Improve… Take the information and turn it into ACTION!
8. Slide 8Copyright i-nexus 2012. All rights reserved.
Hoshin is rapidly becoming the de facto strategy
deployment methodology in Corporate America
9. Slide 9Copyright i-nexus 2012. All rights reserved.
Hoshin can clearly be a Competitive Weapon...
11. Slide 11Copyright i-nexus 2012. All rights reserved.
Hoshin and the Balanced Scorecard...
Financial
Customer
Internal
Learning
Measure Target Initiative
Increase
Profit
Maximise
Utilisation
Retain
Customers
Low
Cost Offer
Fast
Turnaround
Motivated
Crew
Objective
Achieve Fast
Ground
Turnaround
On Ground
Time
On Time
Departure
25 Minutes
95% Flights
Reduce
Turnaround
Time
Strategy Map
Hoshin Plan
12. Slide 12Copyright i-nexus 2012. All rights reserved.
How Hoshin Works (In Theory) –
The X Matrix
RESOURCES
Annual
Breakthrough
Objectives
Targets
to Improve
3-5 Year
Breakthrough
Objectives
Top Level
Improvement
Priorities
= Primary Responsibility
= Secondary Responsibility
5- WHO
Use dots to show
relationship of Targets and
Resources to the
Improvement PriorityUse dots to show
relationship of Improvement
Priorities to Annual
Objectives
2- HOW FAR
NOTE: Only Solid dots on a
resource deploy to the next
level
OWNER
4- HOW MUCH
1- WHAT
3- HOW
13. Slide 13Copyright i-nexus 2012. All rights reserved.
Balanced Scorecard Strategy Map to X-Matrix
Example
14. Slide 14Copyright i-nexus 2012. All rights reserved.
How Hoshin Works (in Theory)
- Cascade and Action Planning
15. Slide 15Copyright i-nexus 2012. All rights reserved.
How Hoshin Works (in Theory) –
Strategy and Performance Review
16. Slide 16Copyright i-nexus 2012. All rights reserved.
How Hoshin Works (in Theory) -
Countermeasures
Action Plans are proactive
– they address how to
achieve a particular goal
from the jump off point
(JOP) to the stretch target
Countermeasures are
reactive – they address
how to get back to plan
when a goal is missed for a
period
Monthly
Miss
Jump Off Point (JOP)
to stretch target
18. Slide 18Copyright i-nexus 2012. All rights reserved.
Hoshin Planning in Practice –
4 Key Cultural Challenges to Overcome
#1 – The “Commitment” Challenge
#2 – The “Stretch Goal” Challenge
#3 – The “Shoot the Messenger” Challenge
#4 – The “Bureaucracy” Challenge
19. Slide 19Copyright i-nexus 2012. All rights reserved.
#1) The “Commitment” Challenge – How to
ensure leadership stay the course...
Typical Mistakes....
• Not starting with/agreeing breakthroughs
• Poor discipline in the cascade
• Constant jerking of the chain
• Lack of linkage to reward and recognition
• Misalignment with the budget
20. Slide 20Copyright i-nexus 2012. All rights reserved.
Proven Strategies for Building Commitment...
Degree
of
Effort
Improved
Performance
Value
of
Outcome
Perceived value
of the outcome
Perception that
the effort will deliver
improved
performance
Perception that
Improved performance
will lead to the
outcome
Three Pre-requisites for Sustained Commitment
• Clear line of sight to the breakthroughs
• Clear evidence that Hoshin approach delivers better
outcomes
• Reward and recognition is actually linked to
executing hoshin plan
21. Slide 21Copyright i-nexus 2012. All rights reserved.
CEO
Sales Lead
#2) The “Stretch Goal” Challenge – How to stretch
whilst keeping the plan realistic and achievable...
We need to double
sales by 2015
That’s a serious
stretch boss. I’m
not sure the team
will buy it...
We’ve got no
choice, the stock’s
taking a battering
and we need to
project growth fast,
plus the team can
always do more...
Ok, we’ll give it a
go, but don’t be
surprised by the
result...
The boss needs us
to double sales in
three years, I’d like
achieve that in 2.
How? Best we’ve
ever done in one
year was 20% and
that was with
double the
resources we have
now...
Look, if we shoot
for the stars, at
worst we’ll hit the
moon...
I’m not sure this
makes sense, but
ultimately it’s your
call...
XYZ Achieved
200% of quota last
year – it shows it
can be done – so
I’m setting quotas
on this basis this
year....
But nothing’s
fundamentally
different ... What
makes you think
we’ll get a different
result this year?
Look we need
sales people who
can deliver... If
that’s not you...
Time to dust off
the CV...
SVP
VP, Sales
A Parody...?
22. Slide 22Copyright i-nexus 2012. All rights reserved.
The objective A3 provides a basis for a constructive
dialogue on what can be achieved...
23. Slide 23Copyright i-nexus 2012. All rights reserved.
#3) The “Shoot the Messenger” Challenge – How
to ensure the process remains constructive...
Who Screwed Up? I hope he doesn’t
blame me...
Let me tell you
what happened...
These numbers
aren’t comparable
Better not raise
the XYZ issue...
All we’re doing is
alleviating the
symptom...
24. Slide 24Copyright i-nexus 2012. All rights reserved.
Bowling Chart
Focus on the ‘forecast’ reds
Proven strategies to ensure the dialogue stays
constructive and focused on the future...
Are we likely to hit
the future targets?
If not, why not?
What’s the root cause
and what can we do
about it – short and
long term?
Countermeasure Plan
Majority of time should
focus on reviewing the
countermeasure plan...
25. Slide 25Copyright i-nexus 2012. All rights reserved.
The “Bureaucracy” Challenge – Avoiding the
administration getting in the way of the process...
X Matrix
X Matrix
X Matrix
X Matrix
Action
Plan
Action
Plan
Action
Plan
Action
PlanAction
PlanAction
Plan
Action
Plan
Action
PlanAction
Plan
Action
PlanAction
Plan
X Matrix
X Matrix
X Matrix
X Matrix
Bowling
Chart
Bowling
Chart
Bowling
Chart
Bowling
Chart
Bowling
Chart
Bowling
Chart
Bowling
Chart
Bowling
Chart
Counter
Measure
Counter
Measure
Counter
MeasureCounter
Measure
Counter
Measure
Counter
Measure
26. Slide 26Copyright i-nexus 2012. All rights reserved.
Let the right software take the strain....
X-matrices
Action Plans/A3sBowling Charts
Ideal Hoshin Platform Requirements
• Integrated - Brings together all X-matrices,
Action Plans/A3s and Bowling Charts in one
system.
• Simple - As easy to use as the spreadsheets
it replaces.
• Right Functions - Offers functions that
underpin the culture needed to sustain the
Hoshin process.
• Hassle Free – Available 24x7, scaleable,
installation free.
27. Slide 27Copyright i-nexus 2012. All rights reserved.
Key takeaways...
• Hoshin is rapidly becoming the de facto Strategy
Deployment approach.
• Executed well, Hoshin can be a real competitive
weapon.
• Development and reinforcement of a supportive
culture is the primary challenge.
• Organisations typically achieve more, in less time,
with the Hoshin process with external help.
• The right software can improve the probability of
success by taking the “heavy-lifting” out of the
Hoshin process.
28. Slide 28Copyright i-nexus 2012. All rights reserved.
Questions? Thoughts?
“It is not the strongest of the species
that survives, nor the most intelligent,
but the one most responsive to
change.”
Charles Darwin
“There is great power in knowing
where you are going and passion in
knowing how as an individual you
fit in!”
Anonymous
Find out more: www.i-nexus.com