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Hoshin Kanri Strategic Management
A process to envision a dream and empower a reality

Hoshin Kanri is a Japanese process for strategic management that was developed in the 1960s by Komatsu and has only been used in the United States in the last ten years by progressive firms like AT&T, NASA and Hewlett Packard.

The term Hoshin literally means "bright shining object points direction" while Kanri means "management process." Essentially, this process is a COMPASS to point corporations and nonprofits toward the realization of future goals.

Hoshin Kanri is built on the basic premise of the Deming PDCA process, which was developed in the 1950s. The PDCA process stands for PLAN, DO, CHECK and ACT.

This process leads one to:

PLAN: Evaluate the need and potential solutions
DO: Implement the potential solutions into regular practice.
CHECK: Evaluate the results of the plan.
ACT: If the results are satisfactory, implement the planned solutions.

If results are not satisfactory, go back to PLAN.

This PDCA process and its "cousin" TQM, or Total Quality Management, continue to be the most prevalent strategic planning processes used in U. S. corporations today. While PDCA and TQM are both methodical plans to lead people through testing different solutions to everyday work, both of these processes fail to be strategic, since there is no link to the company's future vision of its potential. Therefore, these traditional planning methods are best suited to solving operational problems rather than defining a strategic vision. PDCA and TQM processes are also typically used by management to create plans for management. Because there is no inclusion of front line workers in developing the plan, there tends to be little ownership from those who typically are the ones to implement solutions in day-to-day work.

Hoshin Kanri has become the "next generation" of PDCA/TQM by taking the best parts of PDCA and joining it with the concept of strategic visioning over strategic planning.

This means all future planned actions of the organization are focused on realizing the future potential of the organization. Hoshin also includes people at all levels of an organization and honors all ideas contributed to the process to give people increased ownership of the plan.

How Does Hoshin Kanri Work

Hoshin Kanri uses are series of several basic components. In simple terms, these include:

Structured brain-storming
Organization of Ideas by Affinity (Affinity Diagraphing)
Prioritization of Ideas
Analysis of Driving Forces (Matrix Diagraphing or Relationship Diagraphing)
Gap Analysis

All of these processes are designed to meet the following criteria:

To eliminate failure from the process
To assist in the exchange of information between members of the group
To let the "best" ideas rise to the top while keeping all ideas in the process
To include "unfiltered expression" and a variety of viewpoints to build ownership
To break the "complicated"planning into small pieces to ease completion of tasks

These processes can be used to:

Create an organizational strategic plan
Create organizational mission and vision statements
Achieve consensus and ownership on a variety of issues by encouraging communication and prioritizing ideas

Why You Should Plan

Planning is a process to move organizations from where they are today to where they want to be at a defined point in the future. In today's increasingly changing environment, that means an organization's vision of its future becomes its anchor. You should always link your planning to your organization's mission and vision statements.

Those two overarching ideas of who you are and where you are going help ensure that the processes you are planning are actually going to help you strategically reach your image of your potential while remaining true to your core services.

Planning should be used when these conditions exist:

Dissatisfaction with current conditions
New and increased financial pressures and/or competition in your core service area
A view of what the future holds that will require you to change to succeed
Availability of visionary leadership that can allow you to plan wisely and boldly

Characteristics of good planning include:

Comprehensive-includes entire organization
Integrated-looks at the whole and not just the aggregate of parts
Long-range-looks at the vision of potential in the future rather than what to do today
Flexible
Action-oriented
Achievable
Dynamic

However, another key part of good planning is an objective evaluation of where you are today and the resources you have to improve your position.