Using Measurement and Metrics in the Hoshin Planning Process

Much has been written on the effectiveness of Hoshin Kanri (also known as Hoshin Planning or policy deployment), which is a method for ensuring that the strategic goals of a company drive progress and action at every level within that company, and the power of a shared strategic vision. This past March, Lisa Boisvert published an interesting new book -- Reflections on Hoshin Planning: Guidance for Leaders and Practitioners -- that examines Hoshin Planning through the ever-shifting and imperfect lens of daily life in organizations. I recently asked her: "How do C-suite and executive leaders currently use measurement and metrics in the Hoshin Planning process?" Here is her complete answer:

In Hoshin Planning, the purposes of measurement and metrics in executive discussions on the strategic plan are at least threefold. We measure to agree on an objective definition of a desired end state; build understanding around an area that is new to the organization—a breakthrough; and ensure that our strategic choices and related activities are meeting the organization’s business objectives. Including metrics as part of the dialogue in these three areas is essential to getting high quality consensus among the organization’s leaders, a consensus that gets results when the plan is implemented across the rest of the organization.

• Building a shared, objective definition of a desired end state. The evidence of a consensus decision is that once it is made, everyone who participated in making the decision begins to behave consistent with the spirit of that decision. The results of a Hoshin plan are influenced by whether consensus is achieved along the course of its selection and implementation. One means for arriving at consensus is the dialogue that takes place to create an objective (measurable) definition of success.

• Leaning out, learning how to measure what the organization hasn’t done before. If the Hoshin is a bona fide breakthrough, it’s likely to involve the application of designs and processes that are unprecedented for the organization. As a result, the organization’s ability to measure performance may be limited at first. Leadership focus, and openness to learning what monitoring metrics give the best indicator of business success as the Hoshin work advances, helps keep plans real and improves results.

• Integrating Hoshin metrics with business fundamentals. Hoshin Planning aficionados sometimes take some teasing for being overly fond of fancy matrices, but some way of showing how all the measurable goals and activities of the organization are related is essential. Senior leaders need to create a visual that shows how their business, Hoshin, and operational goals impact and support each other.

Has Hoshin planning been successful in your organization? Has flexibility been a problem?