Many companies involved in Lean initiativesknow the effectiveness of Hoshin Kanri as a policy-deployment methodology. It ensures that an organization's clear strategic goals drive progress and action at every level within that company and it incentivizes proper behavior. Earlier this year, Javier Villalba-Diez published a book that expands on the concept called The Hoshin Kanri Forest: Lean Strategic Organizational Design. In this book, Javier introduces a theory called the Hoshin Kanri Forest that considers organizations as networks with organizational structure, functional connectivity, and effective dynamic patterns for attaining an optimal strategic organizational design towards the strategic goal of Lean management. I had a chance recently to speak with Javier about his book, and I asked him “What makes the Hoshin Kanri Forest methodology different and more effective than traditional Hoshin Kanri?” Here is his answer: The crucial finding (there are others) of Hoshin Kanri Forest, and what makes it more effective than traditional Hoshin Kanri methodologies, is that it embeds complexity within the organizational design configuration. For the first time in Lean history, Lean practitioners have a model that enables them to embrace complexity in the management system. Traditional Hoshin Kanri approaches aim to create alignment throughout the organization by coordinating several organizational units. This is typically done by describing a Hoshin (long-term goal) and cascading or deploying this goal throughout the organization (usually through some sort of problem-solving empowerment methodology). The problems with this approach, which is very deterministic and regular, pops up when complexity arises and the matrix-like thinking is no longer able to cope with the complexity associated usually to product or environmental variability. To picture an example, the average path length (the number of managers information needs to touch to get from one manager to another in average) of a matrix organization of N=800 managers equals 100. This means that in average, to transmit a message/management order from any given node to any other, we would need 100 steps. The Hoshin Kanri Forest introduces the standardization of business communication through (CPD)nA (which is a developed form of the traditional current-state / target-state based PDCA). By doing so, the Hoshin Kanri Forest is able to create forest-like organizational networks that present several important topological advantages as compared with traditional organizational design configurations. In the previous example, the APL of a Hoshin Kanri Forest organization is typically APL=ln(ln(N) which for N=800 managers equals APL=1,9!!! This is a 50-fold increase in performance than the traditional design configuration! With the same organization, with the same people, the Hoshin Kanri Forest changes the organizational design to enable the organization to compute complexity.
In addition, the Hoshin Kanri Forest shows why methodologies such as Kata do not provide the necessary tool set to compute organizational complexity. But to find out more detail about this and other advantages of Hoshin Kanri Forest, you will need to read the book! ;-)
You can visit the book´s website for more information: www.hoshinkanriforest.com
Here is a video of Javier explaining the differences between traditional Hoshin Kanri and the Hoshin Kanri Forest:
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?
Randy Kesterson recently published a book titled The Basics of Hoshin Kanri, and it explains the basic steps to a strategy deployment and execution approach that has proven to be highly effective by companies such as Toyota, Danaher, and 3M. The book includes interviews with many of the world’s leading Hoshin Kanri experts. For example, when asked to define Hoshin Kanri, Jeffrey Liker stated: “It’s a method for deciding the strategic direction from the top and then cascading that down to goals and objectives and then the means to achieve those goals and objectives.” Lisa Boisvert defined Hoshin Kanri as: "a strategic planning practice that defines a direction and priorities, aligns the organization around that direction through dialog and detailed plans, then implements and measures against those plans in a disciplined way.” My direct question to Randy was: "What makes Hoshin Kanri a unique and useful strategic objective delivery system?" Here is Randy's complete answer: What makes Hoshin Kanri unique can be summed up in two words … Catch Ball (which is an interactive process of tossing items and possibilities back and forth like a game of “catch.” It sometimes results in changes to proposed objectives, means and measures). Hoshin is unique in that it involves an unusual level of employee engagement in the strategy deployment process by means of the Catch Ball process, which is explained in the book. Hoshin Kanri and employee engagement enjoy a symbiotic/synergistic relationship. Hoshin Kanri requires employee engagement to be effective, and the effective use of Hoshin Kanri will dramatically improve employee engagement within an organization. What do you think of Randy's summation of Hoshin Kanri? Has Hoshin Kanri been applied in your organization? Feel free to discuss your results.
