Your organization will not survive in these economic conditions by thinking and planning as it has in the past. Strategic planning should be a driver of competitive advantage and not just an exercise we do every year as we continue to bleed out. There is a better way to plan and it involves a “lean” approach utilized by the healthiest organizations worldwide. It is known as the Hoshin Kanri method of strategic planning.
Hoshin Kanri is a Japanese term that loosely translated means “direction setting” or I have heard it referenced as “compass-like” in nature. This hints at the nature of the methodology that has a dual approach, the first being to set the long range objectives of the company or the “vision” and second, to make ongoing improvements on a day-to-day basis as you are striving for that future vision.
The Benefits of Hoshin Kanri
The first benefit to the Hoshin Kanri approach is that you are forced to re-evaluate your current vision of the company and apply creativity in setting its future direction. There is nothing wrong with setting a vision that is truly visionary in nature. You do not need to take into account your current issues but rather think of a future state where your clients are happy, auditors are easy to deal with, and you are getting payment for your services without disruption. Whatever it is you desire in your business, you place it at the center of your vision.
The second benefit is the built-in accountability and ownership the process provides. The accountability and ownership is directly tied to its use of measurements and metrics. Each subcomponent of action supporting the efforts to reach the vision is tied to one or more metrics. The constant review of these metrics and the creation of reports on these metrics make the progress visible to all those involved.
The third benefit to the Hoshin Kanri methodology is its familiarity. Many of the main tools used in its application are already in use. This shortens the learning curve associated with major initiatives. You have peace of mind in knowing you are truly addressing what lies at the root of your opportunities and understand the impact your decisions will have to your bottom line.
Implementation of Hoshin Kanri
1. Identify Critical Business Issues. The Senior Leadership Team identifies high-level opportunities within the organization that need attention. A Strategic Business Consultant can assist in the identification of these opportunities based on prior engagements. They can also act as a guide to high-level vision creation.
2. Establish Business Objectives That Address Issues. The Senior Leadership team establishes objectives that directly address the opportunities identified in the previous step. It is imperative that the objectives identified directly impact the issue or impact processes that run parallel to the issue.
3. Define Company Goals. Senior Leadership defines company goals. The goals, either enhanced from past initiatives or recently created, should be looked at as “perfect state” goals or as “if money and time were no object.” This is then defined as the “Perfect State,” and the subsequent steps will be considered BFP or working Backwards From Perfect.
4. Develop Creative Strategies That Support the Goals. The cross functional team of client employees and the Consulting Project Manager use creative, outside-the-box techniques to develop strategies that directly support each of the independent goals. These strategies do not take into consideration the current state of things within the organization, but rather stand independently as supporters of the goals. As stated earlier, the strategies will be developed working backwards from the “Perfect” goal.
5. Define Sub-goals That Support Strategies. At this step detailed templates are used to capture each individual goal, the sub-goals, owners of the sub-goals, as well as sub-goal-related metrics. The metrics are developed in the next step. The information gathered at this step is designed for use in the critical Hoshin concept of reflection. You should take a step back and see if indeed you are accomplishing what you hoped to accomplish.
6. Establish Measurements for Business Fundamentals. This is critical to the success of the overall effort. You have to keep an eye on the fundamental items that are important to the success of a key business process. If you start to slip here you have to make adjustments as needed before you can get back to the long-range strategy efforts. These metrics should be tracked in an easy-to-read dashboard to make the metrics visible.
In summary, the Hoshin Kanri approach utilizing creative strategic approaches will provide you with the structure that is necessary to improve your business-related processes in line with an overall strategic direction.
Content contributed by hiSoft Technology International Limited, a consulting services firm. For more information, contact Patrick Sullivan, Managing Consultant and Process Excellence Knowledge Domain Leader in the U.S. Consulting Division, at firstname.lastname@example.org or 704-944-3155 or visit www.hisoft.com.