Once we have worked out or reviewed the business model, (Canvas) the strategy is the next step to review. The strategy is the game plan and provides a clear focus for the company in order to succeed in the market place and to distinguish you from your competitors.
Strategic planning is the creation of a unique value proposition involving a set of different activities. The essence of strategy is the decision to perform activities differently than rivals do.
All companies need to use Hoshin Kanri. We often see the following situations that would not happen if Hoshin Kanri were used:
- Year-to-year plans never seem to connect.
- Most employees never seem to feel part of the team.
- Little connections between strategy and continuous improvement.
- Bad projects in process.
- Improvement time is too long.
- Budget and forecasts are constantly not met.
- The vision of senior management does not coincide with the activities of the organization.
- Too many good projects in process.
Hoshin Kanri is a systematic approach for identifying, ordering, and resolving activities that require drastic change or improvement.
Hoshin Kanri functions as a framework based on the cooperation of the whole company to achieve long-term strategic objectives and the short-term management plan.
After the Second World War, some Japanese managers blended the teachings of management by objectives from Dr. Deming and Juran and developed a framework, known as Hoshin Kanri.
Hoshin = Direction of the needle of the compass,
Kanri = Management.
Other terms for Hoshin Kanri:
- Hoshin Planning (Hewlett-Packard).
- Policy Deployment (AT&T, Infineon Technologies).
- Priority Management (Texas Instruments).
- Performance Management (Xerox).
- Priority Management.
- Process “Catch-ball”.
Hoshin Kanri is an alignment tool across the entire structure of the company by setting top-down goals, translating the organization´s objectives into actions based on the priorities determined by the management, aligning goals of individuals, teams, and functions with those of the organization and finally choosing only the projects that will most help meet the business goal.
Benefits of Hoshin Kanri:
There is a clear line of sight. There is clear leadership at all levels. Each employee is clear about his/her role and objectives. Everyone understands the goals of the organization.it aligns resources, objectives, and metrics to all goals and levels of the organization. Employees are involved in setting goals, improvements schedules, and reviews.
When is it used?
Start of operations: Basic plan Hoshin Kanri and Global Box Score (1-week duration).
Annually: Main plan update Hoshin Kanri (2-4 days).
Monthly: Evaluation of global progress, Global Box Score, or Balance Scorecard (1 hour).
Weekly: Evaluation of value chain advances of the Box Score (30 minutes).
Daily: Evaluation of advances per hour and daily Floor Board (5 minutes).
Hoshin Kanri is also a one-page tool to help leaders communicate the vision, strategy, and projects
and will be used to manage the execution. As you can see, this is a very simple, but powerful tool
that every manager should understand and continually practice, even for planning every person’s life.