1. 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

2. 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.

3. 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.

4. Drawbacks of Traditional Planning Processes
Ends (results) vs. Means (how)
Reactive vs. Proactive
Top-Down Driven

5. 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.

6. 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

7. 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

8. Survey Background:
Examined Strategic Planning & Hoshin Kanri Planning Processes
Mid-Size & Large Organizations
Middle & Upper-Management
273 Surveys Sent Out
64 Surveys Received Back

9. How often is Strategic Planning Conducted?
14% 3% 8% 4%
71%
Sample Size: 273 Surveys 64 Returned

10. 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

11. 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

12. Sample Size: 273 Surveys, 64 Returned
Why Use Hoshin Kanri?
Difficult to track
Progress to Plan %
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 %
Develop & Coach %
Goal Flow-down %
Break-through Strategies 10%
Solve Major Problems %
Sample Size: 273 Surveys, 64 Returned

13. Pre-Existing Conditions Prior to Adopting Hoshin Kanri
Sample Size: 273 Surveys, 64 Returned

14. What Words Describe Hoshin Kanri?
Strategy
Alignment
Execution
Follow Through
Sample Size: 273 Surveys, 64 Returned

15. Critical Success Factors of Using Hoshin Kanri
Key Factors
Sample Size: 273 Surveys, 64 Returned

16. 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

17. Expected Return from Process Improvement Using Hoshin Kanri
Sample Size: 273 Surveys, 64 Returned

18. 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