Hoshin Planning: What Is It & How Can You Use It?

Curious if Hoshin planning is right for your organization
Hoshin Planning: What Is It & How Can You Use It?
Curious if Hoshin planning is right for your organization

What Is Hoshin Planning?

Hoshin Kanri is a strategic planning method derived from Japanese tradition, developed in the ‘60s and ‘70s.

It is used to help bring organizations together in order to successfully manage their key strategic initiatives. Hoshin planning is meant to eliminate inefficiencies that can result from a lack of communication and direction among different departments within a company. Many organizations—especially manufacturers—have gotten into Hoshin planning in recent years, making it a popular choice.

Below, we’ll discuss how to use Hoshin planning, what to focus on if you’re looking for software to manage your Hoshin plan, and some similarities and differences between the Hoshin planning process and the Balanced Scorecard.

How To Use Hoshin Planning

If you’ve done any research on how to put a Hoshin plan to use in your organization, you’ve likely found a variety of answers. But at the core of it, there are four critical steps you’ll use to begin your Hoshin planning:

1. Identify your key goals

The first critical step to successful Hoshin planning is to sit down with your leadership team and the necessary executives to establish your strategic plan. If you already have an approach to strategic planning—or are in the process of creating your strategic plan—you don’t need to start Hoshin planning at this step! You can take what you’re doing and adapt it to the Hoshin approach later.

2. Play catch(ball)

One thing that sets Hoshin planning apart from many other strategic planning methods is catchball. This term is used to describe the concept of throwing ideas back and forth for alignment’s sake.

In other words, your senior management will come up with the three- to five-year major goals for the organization. Then, they’ll speak with the lower-level managers about those goals, who will in turn speak with their teams about them. This feedback mechanism helps you get buy-in across the organization.

3. Get your gemba on

Unrelated to Zumba, another element unique to Hoshin planning is gemba. Gemba refers to getting out on the factory floor and tracking the execution of your key goals and initiatives.

The idea behind this is that in order to stay connected to the integration of your Hoshin plan, managers must constantly review how the ideas are being integrated at the ground floor and catchball to gather feedback in the process.

Note: If you do not have a factory floor, when you think of the gemba process, consider what that means for your leadership team being out in the front lines. It could mean spending time with your sales representatives or your software development team or working closely with the team in your customer service department.

But you should define it as it pertains to your organization and set a definition both your leaders and front-line employees will understand. You want everyone involved to understand how gemba works in your company specifically, not just the concept in general—so adapting it to fit your organization is critical.

4. Make the adjustments you need

All three of the previous steps deal, to some degree, with gathering feedback. But what good is feedback if you don’t put it to good use? This final step ensures that you do—and you make the adjustments necessary to keep your short-term and long-term initiatives on track.

The Big Question To Ask About Hoshin Planning Software

If you’re doing Hoshin planning and you’re looking for software to manage it, you first need to ask:

Do you your software to be able to handle a Hoshin matrix?

A Hoshin matrix is essentially a one-page visual of your objectives, measures and targets, measure programs, and action items. Some strategic planning software like ClearPoint Strategy can handle the key components of Hoshin planning—but you need to be sure that you can structure your Hoshin planning inside the software you choose.

For example, Balanced Scorecard software like ClearPoint Strategy might be perfect for your Hoshin planning—but others might be too rigid or strictly structured around the BSC and not flexible enough for the way you do your Hoshin planning.

You should look for software that will meet your approach to planning. It may need a discussion board for online catchball, or it may just need to be able to track projects and measures that align to meet your goals.

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Hoshin Planning vs. Balanced Scorecard: Similarities & Differences

Hoshin and the Balanced Scorecard (BSC) are both excellent strategic planning models with quite a bit of overlap—but they do emphasize different things. Here are a few:

  • The creation of key goals is different. While Hoshin tries to get you to focus on the your top 3-5 key goals—whatever those may be—the BSC’s goals are balanced across four unique perspectives: finance, customers, internal processes, and human resources. In other words, when your team gathers your top initiatives using Hoshin, they could be focused on anything—but in the Balanced Scorecard, they’ll follow a logical order.
  • Both use measures in an effective way. This means that with either a BSC or a Hoshin planning process, you are setting your high-level goals and measuring your progress toward achieving those goals. If you’re doing them both right, you’re properly measuring your key strategic goals.
  • Strategic execution is different. While the BSC focuses on quarterly or monthly meetings for execution, Hoshin believes in gemba—or being out on the factory floor—for managers to really understand the front lines of the business. Nothing will prevent you from doing both, but you might see a focus on one or the other depending on what materials you read.
  • Both require regular reviews and adjustments as needed. Both processes tell you that you should be reviewing your results on a regular basis (both monthly and quarterly) based on what you learn about your ability to execute strategy.

A quick word of caution before you get started: Don’t create a hybrid approach to managing your strategy. Merging together a partial-Balanced-Scorecard, partial-Hoshin-planning approach is sure to confuse your team members and steer you further away from your goals. You can make adaptations, but start with the core of one of these approaches in mind.

In other words, there are a lot of approaches to managing and executing your strategy—but it is much less about which one you use, and much more about selecting one and sticking to it. When you stick to one approach, you can better manage it, measure it, and have a systematic approach for executing on it.

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Hoshin Planning: What Is It & How Can You Use It?

Dylan Miyake

Co-Founder & Code Geek

Dylan is a Co-Founder and Managing Partner of ClearPoint Strategy and spends his time either in the clouds or in the weeds.

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