I first learnt about Hoshin from the outstanding management team at the Nissan plant in Sunderland in the UK that opened in 1986. Over the next few years I watched them struggle to make Hoshin the core of the way they managed and then to teach Hoshin to their suppliers, as Toyota did a few years later. I tried several times to use Hoshin myself but could always think of many more interesting things to do than I had time for and exciting new opportunities were always over the horizon to keep me busy.

So Hoshin is not easy to do without the right capabilities and a clear understanding of purpose. We now have a much better understanding of what it takes to really use Hoshin. Practicing A3 thinking every day is for me the foundation. It changes the way you think about everything. It also opens up a new way of working together effectively, which is the heart of Hoshin. John Shook points out that Hoshin, like A3 thinking, is itself a process involving lots of dialogue and an evolution of thinking and acting over time. In other Lean Edge posts Michael Balle points out that it all starts with grasping the situation at the Gemba and Jeff Liker shows how important it is to have the right Sensei mentoring support to practice problem solving.

But before you start using Hoshin it is worth asking what the business problems are that you are trying to solve. Yes it is about understanding how you could better serve your customers, how you could unblock the flow of value creation they are paying for and what capabilities will be required across the organisation to do so. But it is also about improving the effectiveness of your management system in making all this happen.

A good place to start is by asking yourselves how your managers use their time and how much of their time is spent creating value for the organisation? This is a tricky question because management does not directly create value for customers. It is either necessary and enabling non-value creating work or an expensive waste of time and resources. Three sets of questions shed light on what is really going on.

First how many live projects are there in your organisation? The consequence of Management by Objectives is always too many. We discovered more than 500 live projects in a typical hospital. We have also seen Boards struggle to get the list down into single figures, only for it to creep back up again as each function defends it’s own projects. How many targets are reviewed each month and how much effort goes into compiling and reviewing them? Again the answer is usually several hundred. And adding up the time required to complete that list of talks, how overburdened are your managers? A time budget analysis will certainly reveal this adds up to 150 to 200 per cent of the time available. No wonder managers complain that they don’t have time for additional lean projects. If management could really agree on the vital few actions and have confidence that they would be done, how much management time would this free up that is currently spent on doing unnecessary things?

Second how much management time is spent in long meetings, planning and reviewing initiatives and projects across the organisation? How easy is it to get cross-functional agreement to cooperate on projects? How much management time could be saved by making commitments to action visual and by breaking the work down into small increments of time so deviations from the plan can be reviewed and responded to on a daily or weekly basis?

Third how much management time is spent fire-fighting and dealing with emails? Usually a lot! How much of this time could be saved by spending more time at the Gemba along the value stream helping to establish basic stability, making plan versus actual visible and helping to diagnose and address the causes of these interruptions? It is amazing how the emails and fire-fighting fade away when the work is stable and when there is a clear escalation process to resolve issues quickly.

You might add a further two topics to this analysis. Now you can see how to free up management time what are you going to do with it? Does this for instance allow your managers at every level more time to mentor their subordinates to develop the capabilities across the organisation? Does this also allow managers to spend more time preparing to meet new challenges, leading initiatives to develop new solutions for your customers that steal a march on your competitors?

All these issues need to be surfaced and discussed as you embark on your Hoshin journey. It will not be easy to agree on the vital few, deploy the right projects and create stable value streams. However it will develop a common language and behaviours as well as the necessary cooperation to face the future with confidence.

Leadership is by and large about dictating what needs to be changed and carrying the changes through –hopefully for improved performance. The specificity of lean leadership is doing so by using the PDCA cycle to learn, as opposed to just charge ahead. In this sense, the first step is to grasp the situation before formulating a strategy, which means assessing the need for change from changing business environment conditions and from assessing the current state of human and technical resources (basically, can we achieve the necessary change with who and what we’ve got?).

Hoshin Kanri differs from the usual strategy-making because this assessment doesn’t stem from the strategists’ brilliant insights or top-notch consulting presentations, but from an appreciation of the gemba and real-work conditions. The first step of HK is to set up the control points to be able to measure the system as a whole and not just by its financials.

Rather than start with deployment, I usually get each of the company’s units to come up with a list of ten to twenty operational indicators that reflect the state of its operations, its “control points”. Essentially:
• Safety (lost time accidents and illness)
• Quality (complaints, internal ppm, supplier ppm)
• Productivity (pph, equipment utilization)
• Inventory (turns, days of finished goods, WIP and BOP)
• Suggestions
• Etc.
List and calculation will vary from business to business, but the idea is to get each workplace to converge on similar practical measures that can be understood on the shop-floor even if their aggregation (particularly for productivity measures) is often questionable. These indicators are made for the workplace: they are the essential process based control points that will let us measure the system as a whole.

Then, after a few months of gemba discussion with local managers (plant manager level), and from our assessment of where the market is going, it’s possible to pick the key dimensions to change, and which indicators should be moving, such as, say, reduce quality complaints by half every year. Because of the shop floor discussion, when the top level plan is put together on two to five key indicators, local management is not surprised and usually sees the logic of what needs to be done.

At which state, and this is the second large differentiating feature of HK from traditional strategy deployment, each local manager will be asked to:
1. Specific how much of the overall objective they can contribute by when
2. Present their plan of how they intend to achieve these targets.

In my experience, alignment is not obtained by clarity so much as by repeated muddling through. In real life, everything is open to discussion: how indicators should be measured, what the objectives should be, whether the plans are up to the desired results and so on. And that is the very point. Rather than have once-a-year reviews, the process is ongoing and leads, slowly and often somewhat painfully to a real common understanding that makes sense on the shop floor (the six monthly formal reviews are simply a matter of keeping the beat of change, and wondering whether a change of direction is needed).

In the situation you mention, I’d not pull Hoshin Kanri out of the hat – you’re more likely to create further confusion than anything else, – but, to:
1. Set up a formal schedule or top management gemba walks
2. Start each visit with a list of key shop-floor indicators
3. Discuss grasp the situation and goals at each gemba walk
4. Set up overarching goals in terms of indicator targets
5. Ask operational managers to come up with six-monthly plans
6. Check progress through the gemba walks
7. Do it all over again.

A common theme on those resources indicates that there is one tricky and
sometimes difficult to accomplish element of Hoshin Kanri. And that is
the early step of bringing all the “liars” to the room (at the same time).
Even when that is possible, the job is far from done.

I recently facilitated a smaller scale PDCA (Hoshin is a PDCA in larger
scale in my view) with the executive team of a multi billion dollar
company. Although that same team met for monthly meetings, surprisingly
enough, there were constant signs of misalignment. They would all know
who their top competitors were, OK. But digging any deeper, they all
realized that each of them had their own interpretation of the current
situation.

Some examples: when asked why customers would buy from competitors, some
justified that competitor 1 offered better cost. A few others disagreed.
Others showed that competitor 2 had better deliveries, many disagreed.
Their perceptions diverged in other areas including quality, customer
service, long term deals, name recognition, regional market presence, etc.

Bringing all this back to the original question, how can a leadership team
plan and establish the road map from point A to point B, if each member
thinks point A is in a different location? Shouldn’t leadership be able
to precisely establish point B so they can get the right things done?

The Lean community has been talking about strategy deployment for 20 years. In short, the objective is arrows lined up (i.e., individual process improvement efforts working toward common goals) and an up-and-down dialog that keeps both the top and the operational levels informed about unfolding realities.

So far so good. But the approach we took to operationalize this idea has not been very effective.

We tried to copy Japanese companies’ mature Eastern approach, called Hoshin Kanri, but basic principles of skill-building and brain science suggest this benchmarking or copying approach won’t work because (a) it’s like telling a beginner athlete to copy and replicate an experienced athlete and (b) typical Western organizational culture is different from an Eastern one. Hoshin Kanri has been interesting, but not very replicable here.

Like any athlete or musician who’s learning new skills, you start where you are, practice some basic new routines and, as your proficiency grows, you fine-tune and develop your own style.

Fortunately, almost every reader of this is already using a tool that can help them start practicing better strategy deployment today:  Future State Mapping. In the following SlideShare (link below) Gerd Aulinger takes you through an example to clearly illustrate how future-state mapping and the routines of the Improvement Kata /Coaching Kata come together to effectively connect daily improvement with the strategy and breakthrough challenges of the organization.

A Practical Approach to Strategy Deployment

Notice that Gerd refers to “future-state mapping.” The main purpose of drawing a current state value stream map is not to see problems or wastes for quick resolution, but to provide the basis for designing a future state. Once you have a future-state value stream design, then work toward it by applying the Improvement Kata at the processes in that value stream. That’s goal-directed working, which Gerd illustrates well in the SlideShare.

If you study the details of Gerd’s SlideShare you’ll be amazed at how logical, consistent and powerful the combination of Future-State Mapping and the Improvement Kata can be for (finally) achieving strategy deployment. Keep in mind that you can download the SlideShare… it’s nearly the equivalent of a Lean handbook.

Mike

My “lite” version (which I obviously recommend) focuses on identifying problems vs. solutions, gaining consensus around the priorities, reducing the number of priorities, using a modified version of catchball, and avoiding organizational ADD throughout the year–versus achieving Hoshin nirvana. The leadership alignment that results from gaining consensus around and commitment to organizational priorities is a powerful first step that’s needed before they’ll be successful with true Hoshin Kanri. In one of my clients, for example, we were at the end of day two of a 3-day planning process before anyone mentioned what ended up being the #1 priority for the coming fiscal year – a vexing product quality problem that had, surprisingly, been displaced from the top priority spot the year before by something less relevant. It’s that type of discovery that points to the immaturity of some organizations that makes it premature to dive directly into pure Hoshin.

In my experience, it can take 2-3 years for a leadership team to habituate the practice of going to the gemba and becoming proficient with PDSA. It’s for all of these reasons that I expose them to Hoshin elements before I even mention the “H” word. But my clients may be different from those that others on the panel provide support to.

Good luck! Be deliberate in each step you take and reflect deeply before taking the next step.