What Is Hoshin Kanri? (Definition, How-to Guide, and Tips)

By Indeed Editorial Team

Published April 20, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

The effectiveness of how individuals manage a company project can depend on the means they use to streamline business operations. Businesses may use various strategies to rationalize goals, so they can inspire progress and activity within an organization. Understanding this method and how to implement it can help you prepare, track, and sustain a project and business operations strategy that facilitates a company's goals and objectives. In this article, we define what Hoshin Kanri is, describe who uses it, outline its importance, and explain how to implement it.

What is Hoshin Kanri?

Hoshin Kanri is an approach used in project management that entails making consistent enhancements to a company's project operations and management strategies. Managers make improvements by changing individual processes at all levels across a company. By making changes to workflow, a company can improve the quality and value of the products and services offered to its clients.

Currently, most large corporations and small organizations use Hoshin, or an equivalent, in their daily activities, especially during planning processes. Translated from Japanese, the word "Hoshin" means "direction" while "Kanri" translates to "management." This management technique provides unique steps for companies to follow and uses two tools for continuous improvement. Here are the elements of this technique:

The Hoshin planning process

The first stage of this technique involves identifying, reaching, and analyzing company objectives. To achieve this, the company does Hoshin planning that involves these steps:

  • Company vision establishment: The company's management decides on the purpose of the organization holistically and determines whether the current state and activities of the business reflect its mission and vision.

  • Significant objectives development: The company's leadership sets significant goals to achieve within a timeline, usually three to five years.

  • Annual objectives development: Using the breakthrough objectives, managers and leaders set annual goals to achieve.

  • Annual objectives deployment: Leaders then allocate these goals by designating individuals, teams, or departments.

  • Annual objectives execution: Everyone works toward the annual goals.

  • Monthly review performance: Managers analyze individual employees' progress each month to promote efficiency and make adjustments to match the goals.

  • Annual review performance: The company's leadership evaluates progress toward annual and breakthrough goals.

  • Hoshin planning repetition: After completing annual reviews, company management repeats the same cycle of Hoshin planning. To enhance progress, it makes adjustments and implements changes within the cycle.

Hoshin Kanri Catchball

A unique characteristic of the Hoshin management technique is the top-down management process. This helps leaders set goals and a vision for the company and helps maintain a sense of collective effort. Managers do not plan alone, but involve team members by encouraging feedback to improve the process. Both employers and employees then work together to change and implement the adjusted goals. Catchball is a tool in this management approach that fosters this collaboration and collective mindset. It enables departments and their leaders to gauge the steps Hoshin planning requires and then change accordingly.

The Hoshin Catchball tool may help motivate team members and managers to commit to achieving company goals.

Related: What Are the Four Functions of Management? (With Tips)

Plan-do-check-act (PDCA)

The plan-do-check-act (PDCA), or the Deming cycle, is another tool used in the Hoshin strategy to promote continuous improvement. PDCA entails regular analysis of the fifth and sixth steps of the planning cycle, focusing on the company's annual goals and performing a monthly evaluation of progress. The four steps in PDCA are:

  1. Planning: Managers determine a process for reaching the organization's goals.

  2. Doing: Leaders delegate tasks to individuals and teams to begin the work toward company objectives.

  3. Checking: Companies evaluate progress consistently.

  4. Acting: Managers change the process where necessary to standardize them.

Who uses Hoshin Kanri?

Most companies and professionals in the manufacturing and technology space use this planning method. Most of their activities are lengthy and may involve complex procedures that can benefit from the Hoshin process. This operations management technique allows for detailed and structured planning to improve business processes. You can use it as a progress improvement approach, irrespective of the industry and type of business.

The sole condition of the technique is that it expects all individuals within a company to focus on progress. It can also improve your career and is a great tool to track progress. You can use it to pursue a new career, advance in your field, or gain new skills.

Why is Hoshin Kanri important?

Hoshin strategy can be beneficial to companies as it plays a crucial role during strategic planning, which is a critical element in lean management. Lean management is a procedure used to implement a business strategy. Since communication can be a crucial element to success, this project management method fosters efficient communication across all departments and levels within organizational management hierarchies, especially during phases of planning and feedback. Each individual can see how their goals and work fit within the general business objectives, and how they contribute to the organization's strategic plan.

Since employees work toward collaborative planning, they may feel more motivated and committed to achieve set targets, which can reduce staff turnover and boost team morale. It can help counter the challenges associated with poor management, such as a lack of unified direction, absence of common purpose, and poor progress review and adjustments. The method can help managers and team leaders manage consistent improvement by delegating tasks to employees and dividing operations into more manageable steps. This can lead to improved process efficiency that encourages productivity, leading to increased quality of the business's products and services.

Related: What Is Strategic Management and Why Is It Important?

How to implement the Hoshin strategy

Hoshin strategy can be a beneficial management technique when implemented across all levels of a business, including planning, operations, and reviewing. You can follow these steps to implement Hoshin strategy:

1. Establish a plan

You can collaborate with company management to develop a strategy to improve a company's processes. You can start by establishing no more than three to five long-term goals. Distributing focus across many goals may make it harder to communicate a coherent message within the organization, which can diminish your progress. To improve business operations, you can list all company goals and select the ones with a higher priority. It's also essential to ensure the goals align with a company's mission and vision.

Focusing attention on a few goals increases the chances that you may succeed. Ensure all departments align with the goals, and that they can develop efficient strategies to achieve each objective. Also, set key performance indicators (KPIs) that can help quantify progress and act as a control. These can help when you want to adjust processes or notify management of unexpected challenges.

Related: What Is a Project Management Plan? With Tips and Examples

2. Determine an approach

After creating the plan and establishing goals, team leaders and managers can determine how individuals can help work toward the set goals. The approach may delegate tasks to teams or individual employees. Hoshin Catchball encourages collective responsibility for progress tracking and management, so that employees can change processes to make plans more efficient.

3. Implement the plan

After deciding an approach, managers can then work toward the annual or monthly goals established in the Hoshin planning process. The company can then progress productively, reaching each aim or long-term goal. The managers can then monitor teams' and individual employees' productivity, provide support, and receive feedback in the Catchball cycle.

Related: What Is Project Management? Definition, Steps, and Skills

4. Review and adjust the process

In this strategic planning technique, managers can use PDCA to promote the effectiveness of their strategy, receive feedback from company leaders, and report on concerns from their teams. Using these assessments, the company can then adjust the planning cycle to increase efficiency and promote productivity within its operations. The managers can use the set KPIs to understand the rate of progress toward company objectives. Businesses can then analyze any bottlenecks or factors slowing down progress and then can seek credible solutions to improve productivity.

Tips on implementing Hoshin strategy

Implementing Hoshin strategy can be a less challenging procedure if you have the right resources and knowledge to employ this technique. Here are a few tips you can use to transition to or implement this technique during strategic planning:

  • Train team individuals and managers: The training can focus on implementing a Hoshin strategy and ensuring every member understands the technique's benefits. Ensure everyone understands why the company has opted to use this method and the role everyone plays.

  • Select each stage's goals carefully: You can select each stage's goals and plan them within the organization efficiently using the SMART goals framework. Communicate all goals across the organization to ensure collective actions toward improving company processes.

  • Align individual goals with performance metrics: Ensure that employees' goals and performance metrics align with the company's strategic plan. This can ensure they complete all tasks effectively, and that teams work toward matching performance indicators.

  • Use software tools: Use software to promote daily improvements and keep track of goals. Software tools can make it easier for you to keep track of tasks and to efficiently coordinate all departments.

  • Celebrate and note progress: This can improve morale and motivate employees to continue using the Hoshin strategy to reach their work goals. By recognizing employees who have performed well, you can often motivate the rest of the team to work harder and increase productivity.

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