Hoshin Planning: Your most common questions answered in just three words

Lean Methods Group Oct 2015

Hoshin Planning: your most common questions answered in just three words

In the past, when I have been asked to summarize Hoshin Planning into a few simple principles, admittedly, I struggled. After all, there are many talented and experienced practitioners who have spent their careers designing and executing the Hoshin Planning process. It can feel like there are so many moving parts, all of which are important. Couple that with a strong desire to give a thorough explanation, and a simple summary doesn’t seem so simple.

Today, I find that as my comfort with this process has grown, this type of request is really no trouble at all. I have also come to realize that most of the typical questions raised with early zeal are really just “mental roadblocks” that have been disguised as questions. Knowing the source helps better frame the answer. Here are the three new “S” words I use: Structure, Stretch and Sustainment.

The first word is Structure

One of the primary purposes of Hoshin Planning is to directly engage the entire organization to the appropriate degree in the achievement of the business strategy and long-term vision. Seldom does any other methodology so encompass an entire staff and grant it near-perfect focus on common objectives.

The first question that often arises is, “Who should be involved in the Hoshin Planning process?” This question comes from the first mental roadblock which is that only senior-level leaders should be designing the execution strategy. After all, isn’t that what we pay them for? The truth is that the cascading structure of the Hoshin process allows for one of the most empowering aspects – catchball. By engaging the middle managers in the creation of the tactics, that will enable the long-term strategy to be fulfilled, the typical resistance felt by senior managers can often be eliminated.

The next question that arises is, “Does the senior leader have to be bought into the process?” Simple answer…yes. “Have people done this without the senior leader’s buy-in?” Simple answer…yes. You can start this somewhere in the middle of the organization, and for a while, it will work fine, but eventually, the business unit that began Hoshin will collide with all of the others that have not and then the fun begins. The structure of your actual business will get in the way of your achievements. At some point, the senior leader will have to demonstrate commitment by using the process or enthusiasm for Hoshin will fade. The structure is also important to overcoming the mental roadblock that the “big boss” can have with giving up control as it relates to the execution of the business strategy.

Hoshin is not a project management tool, though many organizations have used it as such. The question of “Shouldn’t we put all of our projects in the X-Matrix?” comes up all of the time. I have even had leaders call me to ask if I have a different version of the spreadsheet, one that has more rows and columns. You see, they could not squeeze all of the pet projects and old ideas into the structure of the version that I gave them. You can only imagine my reply. Hoshin Planning is about breakthrough not managing your budget or departmental KPIs.

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The second word is Stretch

A Hoshin is often defined as the “True North” for the organization. There is room for only a few of these meticulously selected Breakthrough Objectives, (or BTOs for short), because of the resources required to make any one of them actually occur.

The obvious question here is, “How do you know if you have a BTO?” A BTO will simultaneously get you extremely excited and a little bit nauseous. It is something that you know you have to do but are not sure how you are going to do it. It is something that causes the organization to stretch beyond its normal limits. We do not want to select targets that are 10 percent better; we want 50 percent. We do not just want to own the largest share of the market; we want to figure out how to create new markets.

This leads to the question of, “What if we fail?”. When you create a stretch goal, it is common to have many months in the red on the bowling chart. That does not make it a failure. The concept of stretch forces us past the mental roadblock that our definition of failure has created. How many times have you set a target of 10 percent improvement, made 12 percent occur and then celebrated success? Take the same organization and the same process, select a 50 percent improvement and then only achieve 45 percent. If your definition of failure will not allow you to celebrate that unbelievable accomplishment, then you are going to struggle with selecting Breakthrough Objectives. I will take the 45 percent improvement over the 10 percent any day, and let someone else hold on to their mental roadblock. Hoshin Planning should allow you to create a big dream and then put the plans in place to go get it.

The third word is Sustainment

If you are at least a little familiar with Hoshin Planning, then you already know that words like “sustainment” generally have no place in the process. We are not trying to sustain anything. Instead, as we mentioned before, we are striving for breakthrough. There is one exception, though: We have to sustain the Hoshin process itself. Early on, leaders can get excited about the prospect of driving meteoric organizational success. They can envision Hoshin being a gateway to the future, connecting incredible strategy with pinpoint execution. Then you get a question about all of the paperwork. The lustre is gone.

“Do we have to use the X-Matrix? Why do we need bowling charts, A3 reports, and countermeasures?” Those leaders just hit the next mental roadblock. If you are leading this process for your organization, it is important to stay the course. Trust that once you get going, the reporting gets much easier and actually supports your ability to communicate and maintain alignment. It forces collaboration, especially early on, when this may be something that the organization normally struggles to achieve.

Once you get past the “paper barrier,” you then have to deal with the monthly review meetings. You start to hear questions about the needed frequency and “Can’t we just email the information to each other? Who has time for more meetings?”. The lesson here is making sure that you have adequately prepared your team for what the effort is really going to look like. Level setting expectations will allow you the emotional space to push them until a cultural habit has formed. The meetings are not just needed but form the backbone of the organization’s ability to pivot around the long-term strategy as many unanticipated issues threaten to take the organization’s eye off of the prize.

So, as you proceed through your Hoshin Planning journey, remember the three “S” words of Structure, Stretch and Sustainment. You will then be sure to remove all of those mental roadblocks treacherously disguised as pesky questions.

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