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Deploying Hoshin Kanri as a Competitive Weapon

This presentation evaluates the Hoshin Kanri concept, what it is, how it works, what can go wrong and how to make Hoshin really work.

TimBell
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Deploying Hoshin Kanri as a Competitive Weapon

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  1. Deploying Hoshin Kanri as a Competitive Weapon!

  2. What are we going to cover? • What is Hoshin Kanri and what does it promise? • How does it work (in theory)? • What can go wrong (in practice)? • What’s behind this? • 4 key challenges to overcome • Proven strategies to make Hoshin really work • Key takeaways

  3. Hoshin Planning – The Concept Ho Shin Kan Ri 方 針 管 理 A ‘Vision Compass’ • Direction • Needle • Control • Channeling • Reason • Logic Hoshin Planning is a systematic and disciplined process to align, communicate and execute strategy by focusing on those few breakthrough objectives that give you competitive advantage. Management Direction Needle, or Compass

  4. Hoshin Planning – The Process Hoshin Process in Concept

  5. Reasons Not to Do This.... And the leaders will say.... • We already do this. • We do not have enough time to do this. • We can not possibly plan that far into the future. • We have tried this before. • Our corporate leadership (insert board if appropriate) will never give up control. • The way we do it today is just fine. • We will not maintain this process. • Etc, Etc, Etc...

  6. Recognise these symptoms? And the organisation will see... • Too many bad projects in process. • Very long lead-times for improvements. • Constantly missed budgets and forecasts. • Senior management vision does not match organizational activities. • Annual objectives rolled out in March instead of January. • Way too many good projects in process. • Year to year plans never seem to connect. • Most employees never seem to feel a part of the team. • Little connection between strategy and continuous improvement.

  7. The Basic Model.... A simple model..... • Performance Management Systems are really designed to help organisations perform three basic tasks: • Monitor… We have to examine our core activities on a regular basis. Collecting data. • Learn…From that examination we have to better understand what is working and what is not. Turning data into information. • Improve… Take the information and turn it into ACTION!

  8. Hoshin is rapidly becoming the de facto strategy deployment methodology in Corporate America

  9. Hoshin can clearly be a Competitive Weapon...

  10. The 10,000 Foot View

  11. Hoshin and the Balanced Scorecard... Hoshin Plan Strategy Map Financial Increase Profit Maximise Utilisation Customer Retain Customers Low Cost Offer Objective Measure Target Initiative Internal On Ground Time On Time Departure 25 Minutes 95% Flights Achieve Fast Ground Turnaround Reduce Turnaround Time Fast Turnaround Learning Motivated Crew

  12. How Hoshin Works (In Theory) –The X Matrix 3- HOW Use dots to show relationship of Targets and Resources to the Improvement Priority 5- WHO Use dots to show relationship of Improvement Priorities to Annual Objectives Top Level Improvement Priorities NOTE: Only Solid dots on a resource deploy to the next level Annual Breakthrough Objectives Targets to Improve 2- HOW FAR 3-5 Year Breakthrough Objectives 4- HOW MUCH RESOURCES = Primary Responsibility 1- WHAT = Secondary Responsibility OWNER

  13. Balanced Scorecard Strategy Map to X-Matrix Example

  14. How Hoshin Works (in Theory)- Cascade and Action Planning

  15. How Hoshin Works (in Theory) –Strategy and Performance Review

  16. How Hoshin Works (in Theory) - Countermeasures Countermeasures are reactive – they address how to get back to plan when a goal is missed for a period Monthly Miss Jump Off Point (JOP) to stretch target Action Plans are proactive – they address how to achieve a particular goal from the jump off point (JOP) to the stretch target

  17. Some recent data...

  18. Hoshin Planning in Practice –4 Key Cultural Challenges to Overcome #1 – The “Commitment” Challenge #2 – The “Stretch Goal” Challenge #3 – The “Shoot the Messenger” Challenge #4 – The “Bureaucracy” Challenge

  19. #1) The “Commitment” Challenge – How to ensure leadership stay the course... Typical Mistakes.... • Not starting with/agreeing breakthroughs • Poor discipline in the cascade • Constant jerking of the chain • Lack of linkage to reward and recognition • Misalignment with the budget

  20. Proven Strategies for Building Commitment... Perception that the effort will deliver improved performance Perception that Improved performance will lead to the outcome Value of Outcome Degree of Effort Improved Performance •  Three Pre-requisites for Sustained Commitment • Clear line of sight to the breakthroughs • Clear evidence that Hoshin approach delivers better outcomes • Reward and recognition is actually linked to executing hoshin plan Perceived value of the outcome

  21. #2) The “Stretch Goal” Challenge – How to stretch whilst keeping the plan realistic and achievable... We need to double sales by 2015 A Parody...? That’s a serious stretch boss. I’m not sure the team will buy it... The boss needs us to double sales in three years, I’d like achieve that in 2. XYZ Achieved 200% of quota last year – it shows it can be done – so I’m setting quotas on this basis this year.... CEO We’ve got no choice, the stock’s taking a battering and we need to project growth fast, plus the team can always do more... How? Best we’ve ever done in one year was 20% and that was with double the resources we have now... But nothing’s fundamentally different ... What makes you think we’ll get a different result this year? SVP Ok, we’ll give it a go, but don’t be surprised by the result... Look, if we shoot for the stars, at worst we’ll hit the moon... VP, Sales Look we need sales people who can deliver... If that’s not you... Sales Lead I’m not sure this makes sense, but ultimately it’s your call... Time to dust off the CV...

  22. The objective A3 provides a basis for a constructive dialogue on what can be achieved...

  23. #3) The “Shoot the Messenger” Challenge – How to ensure the process remains constructive... Let me tell you what happened... I hope he doesn’t blame me... Who Screwed Up? These numbers aren’t comparable Better not raise the XYZ issue... All we’re doing is alleviating the symptom...

  24. Proven strategies to ensure the dialogue stays constructive and focused on the future... Are we likely to hit the future targets? Bowling Chart Focus on the ‘forecast’ reds If not, why not? What’s the root cause and what can we do about it – short and long term? Countermeasure Plan Majority of time should focus on reviewing the countermeasure plan...

  25. The “Bureaucracy” Challenge – Avoiding the administration getting in the way of the process... Bowling Chart X Matrix Bowling Chart Counter Measure X Matrix Bowling Chart Counter Measure X Matrix Bowling Chart Action Plan Counter Measure Counter Measure X Matrix Bowling Chart Action Plan X Matrix Action Plan Action Plan Action Plan Action Plan Action Plan Action Plan Action Plan Action Plan Action Plan Counter Measure Bowling Chart X Matrix Bowling Chart X Matrix X Matrix Bowling Chart Counter Measure

  26. Let the right software take the strain.... X-matrices Ideal Hoshin Platform Requirements • Integrated - Brings together all X-matrices, Action Plans/A3s and Bowling Charts in one system. • Simple - As easy to use as the spreadsheets it replaces. • Right Functions - Offers functions that underpin the culture needed to sustain the Hoshin process. • Hassle Free – Available 24x7, scaleable, installation free. Bowling Charts Action Plans/A3s

  27. Key takeaways... • Hoshin is rapidly becoming the de facto Strategy Deployment approach. • Executed well, Hoshin can be a real competitive weapon. • Development and reinforcement of a supportive culture is the primary challenge. • Organisations typically achieve more, in less time, with the Hoshin process with external help. • The right software can improve the probability of success by taking the “heavy-lifting” out of the Hoshin process.

  28. Questions? Thoughts? “There is great power in knowing where you are going and passion in knowing how as an individual you fit in!” Anonymous • “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” • Charles Darwin Find out more: www.i-nexus.com

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