Hoshin Kanri Harnessing the Collective Thinking of All Employees to Deploy Policies that Operationalize Strategic Goals ISM – Dallas, TX October 8, 2015 Dennis M. Gawlik Faculty – Sustainable Operations The Pinchot University – Bainbridge Graduate Institute
Current Strategic Planning Process’ Ailing Symptoms Does the business you work with experience any of these common business problems? Many competing initiatives / goals / priorities that do not ever seem to get implemented? Spending a great deal of time in unproductive meetings? Slow to respond to changing customer needs / concerns? Disengaged employees? If yes, it may be due to the planning process your business uses.
Traditional Planning Process Strategic planning is an organization’s process of defining its long-term strategy, or direction, and making decisions on allocating its resources to pursue this strategy. It involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy of Management by Objective (MBO) describes what ends/goals needs to be achieved.
Drawbacks of Traditional Planning Processes Ends (results) vs. Means (how) Reactive vs. Proactive Top-Down Driven
Hoshin Kanri The Toyota Way In Japanese, (方針管理), Hoshin means "compass needle" or "direction". Kanri means “control” or “management”. A method devised to capture and cement a strategic goal(s) as well as flashes of insight about the future, and develop the means to bring these into reality. This method aligns an organization toward accomplishing a single goal or a strategic plan in a way that creates organizational flexibility to adapt to marketplace conditions and changes for long-term success.
Attributes of Hoshin Kanri Align shared improvement goals both vertically and horizontally within the organization ‘Means’ Focused Customer / Business Centric Builds Employee Ownership Execution at All Levels Proactive / Flexible Periodic Follow-Up & Review Reflection / Learning Organization Inclusive in Approach
Comparison between Management By Objective (MBO) and Hoshin Kanri Slide time: Management by Objectives Hoshin Kanri Short-Term, No Philosophy Long-Term, Strong Guiding Principles Results Oriented Evaluation of Effort Concerned with Results and Process with Focus on People Development Top down Communication Top down Direction Setting and Bottom-up flow of Information and means Directive Participative Primarily Authority Oriented Primarily Responsibility Oriented Jeffrey Liker: Developing Lean Leaders At All Levels; A Practical Guide: 2015, Figure 7-7: Comparison between Management by Objectives and Hoshin Kanri
Survey Background: Examined Strategic Planning & Hoshin Kanri Planning Processes Mid-Size & Large Organizations Middle & Upper-Management 273 Surveys Sent Out 64 Surveys Received Back
How often is Strategic Planning Conducted? 14% 3% 8% 4% 71% Sample Size: 273 Surveys 64 Returned
Satisfied With Process? 68% Not Satisfied with Process 68% - Indicated that Their Strategy was Not Successful or Neutral 32% Indicated that Their Strategy was Extremely or Quite Successful 50% indicated that their strategy was either Extremely or Quite successful while 50% of either neutral, not very successful, not successful or somewhat successful 32% Satisfied with Process Sample Size: 273 Surveys 64 Returned
Components of a Successful Strategy Strong Upper Management Support Needed Leadership Buy-In Meets Priorities Helps Achieve Strategic Objectives Sample Size: 273 Surveys 64 Returned
Sample Size: 273 Surveys, 64 Returned Why Use Hoshin Kanri? Difficult to track Progress to Plan 27% Organizational Goals Confusing 26% No Plan Continuity 18% Misinterpretation of Direction 12% Projects not Related to Goals 10% Management’s Role in Hoshin Kanri: Set Clear Objectives 33% Develop & Coach 24% Goal Flow-down 14% Break-through Strategies 10% Solve Major Problems 10% Sample Size: 273 Surveys, 64 Returned
Pre-Existing Conditions Prior to Adopting Hoshin Kanri Sample Size: 273 Surveys, 64 Returned
What Words Describe Hoshin Kanri? Strategy Alignment Execution Follow Through Sample Size: 273 Surveys, 64 Returned
Critical Success Factors of Using Hoshin Kanri Key Factors Sample Size: 273 Surveys, 64 Returned
Relationship between Hoshin Kanri & Daily Management Daily Mgmt. (DM) with Kaizen P D C A P D C A Hoshin Performance (KPI) P D C A P D C A P D C A DM with no HK P D C A HK with no DM Time - Both are essential - Maintain good balance - Both are essential - Maintain good balance Jeffrey Liker: Developing Lean Leaders At All Levels; A Practical Guide: 2015, Figure 7-5. Hoshin Kanri and Daily Management work together for breakthroughs and sustainment
Expected Return from Process Improvement Using Hoshin Kanri Sample Size: 273 Surveys, 64 Returned
Conclusion Over 70% of Organizations conduct Annual Strategic Plans 68% Not Satisfied with the Process Hoshin Kanri Ties Strategy Development with Daily Management Hoshin Kanri Aids in Engagement, Alignment, Execution & Follow Through Expect to See Return Between 3 and 12 Months