Unlock the Power of Hoshin Kanri X Matrix

What is the Hoshin Kanri X Matrix?

A Hoshin Kanri X matrix is a powerful visualisation tool that can manage detailed strategic planning. The template contains the goals and strategies of the organisation, how they are to be aligned with the strategic initiatives, and what metrics need to be improved.
A Hoshin matrix will have four key quadrants :

• Long Term Goals(South)- 3-5 year breakthrough objectives
• Annual Objectives(AO)(West)
• Top-level Improvement Priorities(TLIP)(North)
• Targets to Improve(TTI)(East)

At the corners of each matrix, the dependencies of activities are represented. The far right side visualises the people responsible for the plan implementation.

What is a Hoshin Kanri Catchball?

Hoshin Kanri catchball is one of the most efficient management methodologies that allow you to align your company’s goals and objectives with the team’s actions at all hierarchical levels of the organisation.

Hoshin Kanri catchball is the approach for creating and maintaining open feedback loops across all the levels of the organisational hierarchy by establishing a two-way stream of information sharing.

Catchball has a vertical application. Here the top-level management sets the goals for the company and prepares the strategy proposal. They pass it like a ball to the lower levels and wait to receive feedback from them. Iterations occur before the agreement is reached.

The middle management then tosses the ball to the team leaders, and the process continues until the ball reaches the bottom of the pyramid. The main aim behind this process is to provide every team member working towards achieving these goals an opportunity to give input on their part and align the actions in a common direction that everyone shares.

Though the executives throw down the strategy, the process improvements are tossed by the lower management levels and the regular team members. This gives a clear picture for the employees of how they fit into the bigger picture and how they connect to the organisation’s most important objectives.Benefits of applying the catch ball

• Increase the engagement of the team in strategy planning
• Continuous improvement
• A better understanding of the practicality of the plans
• People from multiple areas contribute to the analysis of the plan.

Why Hoshin Kanri?

A well-thought strategy and a relentless execution can only make your organisation withstand market competition. Aligning the employees with the goals can prove challenging even for small organisations. Here the effective implementation of Hoshin Kanri can help the team to develop a vision, list the breakthrough goals, and create a cascade of complementary goals by ensuring the alignment and providing necessary leverage for successful execution.

Hoshin Kanri otherwise known as Policy Deployment is the methodology that guarantees whether the company’s strategic goals are driving progress and action at every level within the organisation. They also eliminate the waste that comes from inconsistent direction and poor communication.

Hoshin Kanri seeks to get the team to act together simultaneously by aligning the company goals and strategy with the plans and tactics of the middle management and the performance of the employees in the operations. Simply put, Hoshin Kanri bridges the gap between strategy and execution by building alignment and focus.

How to implement Hoshin Kanri?

Follow the implementation steps to have a better idea of your strategic plans.

• STEP 1 Creating a Strategic Plan
  The Hoshin Kanri or strategy deployment starts with strategic planning. This is usually an annual plan set by the top management to further the organisation’s long-term goals. A well-crafted plan it should deal with even minor critical issues.
  Keep in mind the following while creating the plan.
  • Focus on Five Goals at a time: Focusing on a smaller number of goals makes the achievement of the goals create the feeling of progress rather than disbanding the success across a dozen goals.
  • Put Effectiveness first: Effectiveness is doing the right things. Efficiency, on the other hand, is doing things right. Strategic goals need to be effective; if the goal does not have the right impact, it is not strategic.
  • Evolutionary and Revolutionary goals: Goals can be both evolutionary in that the incremental goals are usually achieved through continuous improvement. They can be revolutionary because they can bring about breakthrough changes with a dramatic scope. Both are essential forms of advancement.
  • Get a hierarchical agreement: Though the higher management is responsible for developing strategic planning, discussions with the middle management can be beneficial as the additional perspectives and feedback can help the goals become stronger. Shared responsibility is also created here.
  • Set the KPIs carefully: KPIs track the progress towards the goals. Choose your KPIs with care as they have the significant capacity to drive the behaviour.
  • Own the goal: Every goal should have an owner or a facilitator who can drive the plan to a successful position.
• STEP 2 Developing Tactics
  The mid-level managers develop the tactics and plan to accomplish the goals laid down by the top management effectively. Through the catchball, an up and down exchange of ideas occurs, ensuring the team understands the strategic goals well, there is a proper alignment between the strategy and tactics, and the KPIs are relevant and significant. Tactics vary through the process of fulfilling the goals; in that case, a regular review of the progress should be done.
• STEP 3 Take Action
  The actions in implementing the tactics laid down by the managers occur on the shop floor. Goals and plans are transformed into the results here. The shopfloor forms the real Gemba, and the managers, therefore, make sure that they should closely connect to the activity at this level.
• STEP 4 Review and Adjust As the catchball passes the information from the top management, there is an equal responsibility to share the progress and results in the other direction. The flow of this information closes the loop and controls and adjusts the entire process. Reviewing progress should be done regularly, and this should provide a platform for the adjustment of the tactics and their associated operational details.

What are the advantages of using the Hoshin Kanri X Matrix for strategic planning?

• Envisioning long-term strategies and aligning the goals with the actions.
• Creation of connection between organisational alignment and individual accountability.
• Prioritisation of the important tasks.
• Transparency in the entire project
• Connecting to other lean tools such as kanban in facilitating the outcome.
• Enable the team to define and develop SMART goals.

Is Hoshin Kanri a lean tool?

Hoshin Kanri is the lean tool used for strategy deployments in the organisation. Hoshin Kanri (Ho-method, shin-compass and Kanri- management) is the policy management tool that sets the direction of improvement initiatives and integrates the organisational strategy.

What are Hoshin pillars?

The guiding principles of Hoshin Kanri or the Hoshin pillars help organisations to define their strategic long-term breakthrough objectives. The five Hoshin pillars are:

• Communicated Objectives: A clear understanding of the organisation’s strategic objectives enables the teams to go in the same direction. This functions well only if the employees entrusted with the strategy execution are involved in defining the goals. An annual announcement of the yearly goals does not help. The reinforcement of the plans, status updates and regular reviewing of the goals should be done to produce an effective outcome.
• Status analysis: To understand whether your team is moving on the right path, it is essential to know where you stand. Have a deep understanding of how the organisation operates in relation to the key strategic objectives.
• Widespread Engagement: In the culture of improvement, employees will be entrusted, encouraged and equipped to make advancements that can facilitate Hoshin Kanri.
• Prioritisation of resources: Identifying the opportunities that align with the strategic objectives and effectively executing them rather than creating a long list of options for improvement.
• Performance Insights: Set the performance metrics that can review and track the progress and interfere if the progress slows down.

Why is Hoshin Kanri important?

Successful implementation of Hoshin Kanri ensures that the company’s improvement process aligns with the organisation’s strategies and goals. Along with the continuous monitoring of the progress and managing the outcomes, Hoshin Kanri assures that everyone is toiling towards the same goal and is rowing in the same direction.

How to read your Hoshin Kanri X matrix template?

Hoshin Kanri is a single-page visual of your objectives, measures and action items. Starting from the centre of the X matrix, first, fill in the vision and mission of the organisation in the centre, along with the strategies. Now let’s read the four arms of the X matrix template.

• South → 3-5 year Breakthrough Objectives
  Primary, top-level goals developed by the senior leadership team are listed here. The top-level improvement priorities, targets and annual objectives contribute to these breakthrough objectives of the organisation.
• East→Target to Improve
  List your action programs and initiatives that can aid you in getting where you want to be at the end of the year and eventually at the end of five years.
  Every team will have a distinct target to look up to, and this process needs to be executed with the help of catchball to make it smooth.
• North→ Top level Improvement Priority
  Mark your action items on your high-level to-do list or top priorities to be achieved over the coming months.
• West → Annual Objectives
  Record your measures by breaking down your big objectives into yearly outcomes for the teams. Set your path right for what you want to accomplish first and develop from there.
• Far-East→ Responsible
  On the far right side, add the team members who hold the primary and the secondary responsibility for the top-level priorities.

How to build your Hoshin Kanri X matrix?

Suppose the organisation is implementing the matrix on a large scale. In that case, the leader of the organisation takes the responsibility of setting it up or else the manager does it at the team level.
Follow steps by which you can prepare your X matrix in your organisation:

• STEP 1 Setting the strategic vision and goals
  While filling the X matrix template, the essential part of the diagram is the one closest to the centre. Start with your long-term goals, which are the breakthrough objectives of 3-5 years.
  List them at the bottom quadrant of the X matrix template. Every initiative will have many smaller tasks that the team needs to process before achieving the goal. Before jumping into long-term goals, make sure that your team has the capacity to achieve them. An easy way to calculate the total number of tasks is to break down every initiative into an execution plan to a possible minor task before listing the next long-term strategy in the matrix.
• STEP 2 Defining the key mid-term objectives
  After setting the long-term goals, decide on your most important short- term objectives, e.g. within the time frame of one year and place them in the left quadrant of the Hoshin Matrix. To create the mid-term objectives, you need to accomplish what needs to keep you on track and start building from there.
• STEP 3 Set short-term actions and metrics
  The next step is filling the top quadrant with the most important activities that the team need to complete to achieve the short-term goals. This is the basic to-do list of the manager in the forthcoming months. The right side quadrant is for the metrics that will keep you on the right track while executing the organisation’s goals. Make sure each of your lean teams has its own distinctive Key Performance Indicators, so be careful while putting down your key metrics.
• STEP 4 Agree on the Key Performance Indicators
  This is the perfect time to apply the Hoshin Kanri catchball and share your plans with the rest of the stakeholders. Here agree on the most crucial metrics that need to be improved and list them. On the far east side, right next to the key metrics, is the list of the key stakeholders responsible for leading the completion of the activities in the matrix’s top quadrant. However, every member of the team is responsible for the successful delivery of the strategic goals, for more clarity, list only the person who is responsible for the activities, such as the team leaders, managers and process owners.
• STEP 5 Connecting the dots
  In the final step, you can complete the picture by marking the dependencies between every listing in the matrix. Start with creating a legend of different correlation markers that will connect each quadrant to the next. Though you can have plenty of flexibility to customise them, it is better to keep it simple and add no more than three different ways of correlation.

For instance, the primary and the secondary ways of correlation can be distinguished using different figures like circles, squares etc. The matrix should remain transparent, and every person looking into it should understand the information inside it at a glance.

What are the challenges faced while using the traditional policy deployment matrices?

The common challenges faced while using the traditional policy deployment matrix such as Excel or paper are:

• Visibility of breakthrough objectives and annual targets will be missing.
• Difficulty in visualising the overlapping of business activities between the distinct business areas in the larger organisations.

What is Hoshin Planning, and what are the six major elements of the Hoshin planning system?

Hoshin Planning is a strategic management process that helps organisations align their goals, plans, and actions for achieving long-term success. The six major elements of the Hoshin planning system are:

• Vision: A clear and inspiring vision of the organisation's future state.
• Breakthrough Objectives: Ambitious and specific goals that will drive significant progress towards the vision.
• Strategies: The overarching approaches and initiatives designed to achieve the breakthrough objectives.
• Action Plans: Detailed plans that outline the specific actions, responsibilities, and timelines required to implement the strategies.
• Deployment: Cascading the strategic objectives throughout the organisation, ensuring alignment and clarity.
• Execution: Implementing and monitoring the plans, reviewing progress, and making adjustments as necessary to achieve the objectives.

How to use the Hoshin Kanri X matrix for strategic planning?

• Identify Strategic Goals: Begin by clearly defining your organisation's strategic goals. These goals should align with the overall vision and mission of the organisation.
• Determine Key Performance Indicators (KPIs): Identify the specific metrics and KPIs that will be used to measure progress towards each strategic goal. These should be measurable and aligned with the desired outcomes.
• Create Action Plans: To achieve each strategic goal, it is important to create action plans that outline the specific tasks, initiatives, and projects involved. Ensure that each action plan is aligned with a specific strategic goal and has assigned responsibilities.
• Fill in the X Matrix: The X matrix consists of a grid with rows and columns. Label the rows with your strategic goals and the columns with the KPIs and action plans. Place each action plan in the corresponding cell where the strategic goal and KPI intersect.
• Assign Priorities and Targets: Determine the priority levels for each action plan and set targets for the associated KPIs. This helps in focusing resources and efforts on critical initiatives.
• Review and Align: Conduct a thorough review of the X matrix, ensuring that the action plans, KPIs, and targets are aligned with the strategic goals. Seek input and feedback from relevant stakeholders to ensure clarity and agreement.
• Monitor and Update: Regularly monitor the progress of each action plan and track the performance against the set targets. Update the X matrix as needed, making adjustments and refinements to keep it relevant and aligned with evolving circumstances.

How to utilise Hoshin Kanri policy deployment for successful TQM?

The deployment of the Hoshin Kanri policy should be aligned with the overall strategic objectives of an organisation to ensure successful Total Quality Management (TQM). By cascading these TQM goals throughout the organisation, utilising catchball communication for collaboration and feedback, and implementing the PDCA cycle for continuous improvement, Hoshin Kanri policy deployment ensures that TQM principles are integrated into the organisation's strategic planning and execution processes, leading to improved quality, customer satisfaction, and overall business success.

How can you integrate Hoshin Kanri into other lean tools, such as Kanban, to maximise its effectiveness?

Using Hoshin Kanri, along with other lean tools, such as Kanban, can maximise efficiency by allowing for a holistic approach to strategic planning and operational execution. This fosters a culture of continuous improvement.

• Aligning Kanban with Strategic Objectives: Ensure that the work items and tasks managed through Kanban boards directly contribute to the strategic goals defined in the Hoshin Kanri plan. This alignment ensures that operational activities align with the overall strategic direction.
• Prioritising Work: Use the Hoshin Kanri X matrix to identify and prioritise the most critical initiatives and projects. This prioritisation can be reflected in the Kanban system, guiding the workflow and ensuring that resources are allocated to the most important tasks.
• Visualising Progress: Kanban boards provide a visual representation of work in progress. By integrating this visual management approach with the Hoshin Kanri X matrix, teams can easily see how their tasks and projects contribute to the broader strategic goals. This transparency facilitates better decision-making and promotes accountability.
• Feedback Loops: Implement feedback loops between the Kanban and Hoshin Kanri processes. Regularly review the performance of tasks and projects tracked in Kanban against the defined strategic goals. This feedback helps identify gaps, adjust priorities, and make data-driven improvements to the overall strategic plan.

What are the advantages of Hoshin Kanri X Matrix software or digitalised solution over X Matrix Excel templates?

While Excel templates can still be effective for small-scale implementations, Hoshin Kanri X Matrix software or digitalised solutions offer enhanced efficiency, collaboration, data visualisation, accuracy, tracking, reporting, and integration capabilities, making them a valuable choice for larger organisations or those seeking to optimise their strategic planning processes.

Is Hoshin Kanri a better way for your organisation to achieve True North?

Hoshin Kanri is a method that helps organisations reach their True North by providing a structured and systematic approach. This is achieved through aligning strategic goals, promoting collaboration, emphasising accountability, and encouraging continuous improvement.

Hoshin Kanri example

Let's see the Hoshin Kanri example for a Manufacturing industry and how implementing the Hoshin Kanri X Matrix in their organisation affects their strategic planning and management.

The Manufacturing company specialising in producing industrial machinery aims to improve product quality and competitiveness in the market, thereby increasing customer satisfaction. The management team identifies its strategic objectives, specific initiatives and action plans to achieve this goal.

Creating a Hoshin Kanri X Matrix helps them visualise how the alignment between strategic objectives and operations could be set up. Each strategic objective is included in the row, and the initiatives are in the columns. The intersection of a strategic objective and initiative represents a specific action.

Once the Hoshin Kanri template is set up, the manufacturing company establishes Key Performance Indicators (KPIs) to track the progress of each initiative. Regular reviews and progress monitoring ensure that initiatives are on track and action plans are conducted accordingly.

Being a versatile tool used in various industries, including manufacturing, automotive, healthcare, electronics, energy, and many more, Hoshin Kanri helps organisations prioritise strategic objectives, define actionable initiatives, and monitor progress effectively. By implementing Hoshin Kanri, organisations across various sectors can enhance their strategic planning process and drive continuous improvement.

How do Hoshin Kanri X Matrix templates help organisations to track progress and adjust business plans accordingly to gain a competitive advantage?

Hoshin Kanri X Matrix templates help organisations track progress and adjust business plans by visualising strategic goals, action plans, and Key Performance Indicators (KPIs). The templates allow organisations to monitor and measure their progress against the set goals, enabling timely identification of performance gaps. By regularly reviewing the X Matrix, organisations can make data-driven adjustments to their business plans, reallocating resources and refining strategies to stay on track and gain a competitive edge.

What is the difference between Hoshin Kanri X Matrix and Balanced Scorecard?

Hoshin Kanri X Matrix and Balanced Scorecard are both strategic execution frameworks, but they have some key differences:

• Purpose:
  • Hoshin Kanri X Matrix focuses on goal deployment and alignment throughout the organisation to drive strategic execution.
  • Balanced Scorecard aims to translate the organisation's strategy into specific performance measures and targets to monitor and manage performance.
• Structure:
  • Hoshin Kanri X Matrix uses a matrix format that visually represents strategic goals, action plans, responsible parties, and performance indicators.
  • Balanced Scorecard typically consists of four perspectives - Financial, Customer, Internal Processes, Learning and growth (FCIL) with associated objectives, measures, targets, and initiatives.
• Focus:
  • Hoshin Kanri X Matrix emphasises the top-down alignment of strategic objectives across the organisation, cascading goals from the strategic level to operational levels.
  • Balanced Scorecard provides a balanced view of performance across multiple dimensions (financial, customer, internal processes, learning and growth) and encourages a more holistic approach.
• Implementation:
  • Hoshin Kanri X Matrix often involves a collaborative process to establish and deploy goals, with regular reviews and adjustments to ensure alignment and progress.
  • Balanced Scorecard requires defining and tracking specific metrics, with periodic performance reviews to monitor progress and make strategic adjustments.

It's worth noting that while they have differences, Hoshin Kanri X Matrix and Balanced Scorecard can complement each other and be combined to enhance strategic execution and performance management in organisations.

How can organisations maximise the effectiveness of using the Hoshin Kanri X matrix template for strategic planning?

• Clear communication of goals, plans, and benefits: Organisations should ensure that strategic goals, action plans, and Key Performance Indicators are clearly communicated to all stakeholders, providing a comprehensive understanding of the purpose and benefits of the Hoshin Kanri process.
• Collaboration involving stakeholders from various levels: Encouraging cross-functional collaboration and involving stakeholders from different levels and departments enhances organisational alignment and promotes buy-in. Engaging stakeholders leverage their knowledge and expertise, creating a more robust strategic plan.
• Utilise the catchball process for consensus building: Through iterative dialogues and negotiations, catchball ensures that goals and action plans are communicated, understood, and accepted at each level of the organisation. This two-way communication fosters collaboration, consensus building, and a sense of ownership.
• Regularly review and refine the X matrix: Organisations should regularly review and refine the Hoshin Kanri X matrix to ensure its relevance and alignment with changing market conditions. By monitoring performance and incorporating feedback, organisations can adapt their strategies and bridge any execution gaps that may arise.
• Training and support for employees: Providing training and support to employees involved in the Hoshin Kanri process is essential. Educating them on the principles of Hoshin Kanri, the X matrix's purpose, and the tool's effective utilisation enhances their ability to execute the strategic plan.

How can Hoshin Kanri X Matrix bridge strategic execution gaps?

Hoshin Kanri X matrix aligns strategic goals, action plans, and Key Performance Indicators to bridge strategic execution gaps. By clearly mapping out these elements in the X matrix, organisations can identify gaps or misalignments between their strategic intent and the execution of their plans. This visibility enables them to make informed decisions and take corrective actions to address anomalies.

How can you utilise Bowling Charts to measure the progress of your initiatives from your detailed X matrix?

Bowling charts can be utilised to measure the progress of initiatives from a detailed X matrix by visually representing the performance and progress of each initiative. The bowling chart typically consists of a set of vertical bars, where the height of each bar represents the current status or progress of an initiative.

By regularly updating the chart with the latest data, teams can easily track and compare the performance of different initiatives over time. This visual representation helps identify gaps or areas where initiatives fall behind. It enables teams to make data-driven decisions, prioritise resources, and take corrective actions to ensure the successful execution of the initiatives outlined in the X matrix.

What makes Hoshin Kanri different from OKRs and OGSM?

Hoshin Kanri, OKRs (Objectives and Key Results), and OGSM (Objectives, Goals, Strategies, and Measures) are all strategic planning and execution frameworks, but they have some key differences:

• Hoshin Kanri emphasises a top-down approach to goal deployment and alignment throughout the organisation. It focuses on cascading strategic goals from the top level to lower levels, ensuring alignment and integration of efforts.
• OKRs are a goal-setting framework that combines ambitious and measurable Objectives with specific Key Results. They are often set at various organisational levels and clearly focus on outcomes and measurable results.
• OGSM is a strategic planning framework that defines the overall Objectives, specific Goals, the Strategies to achieve them, and the Measures to track progress. It provides a comprehensive strategic planning approach, incorporating goal-setting and strategic actions.

While Hoshin Kanri focuses on goal deployment and alignment, OKRs primarily focus on ambitious goal setting with measurable results, and OGSM provides a more comprehensive strategic planning framework. Each framework offers a different approach and can be chosen based on an organisation's specific needs and context.

What are the challenges faced while using the Hoshin Kanri matrix, and how to overcome the challenges in implementing Hoshin Kanri X Matrix?

• Having strong leadership support and commitment is the key to overcoming the leadership challenge.
• Conducting training sessions and workshops can help address the challenge of team members not being aligned or understanding the Hoshin Kanri X Matrix.
• Setting realistic and achievable objectives and KPIs can be challenging. Ensure your objectives and KPIs are realistic and aligned with your organisation's strategic goals by regularly reviewing and adjusting them.
• Clear and convincing explanations of the Hoshin Kanri X Matrix's advantages are crucial to addressing employee resistance and lack of commitment.
• A major obstacle to implementing the Hoshin Kanri X Matrix is the shortage of resources and time. To overcome this, it is crucial to prioritise and allocate resources appropriately.