X Matrix Hoshin Kanri - What, How, 7 Steps Planning Process - Learn Transformation (2024)

Mastering Strategic Planning with X-Matrix Hoshin Kanri

X Matrix Hoshin Kanri method is amid the potent tools in the Lean weaponry for effective strategic management. Hoshin Kanri is a management method that appeared in Japan after World War 2. As it was extremely effective and swiftly adopted by companies in both Japan & the United States, including HP, Toyota, and Xerox. Moreover, Hoshin Kanri is a Japanese word. Furthermore, Hoshin Kanri means Strategic Planning, Policy Deployment, Hoshin Planning, etc.

What is X Matrix Hoshin Kanri?

The word, Hoshin means Compass, And the Kanri means Management. So, The word means you need direction as a way to have powerful management. If implemented correctly, it assists between strategy as well as execution by creating alignment and focus in VUCA. Certainly, Hoshin Kanri strategy marks the requirement to act on and attain planned goals. Further, It also implies that you need to know where you are going, and a map to get there.

We use it for taking strategic goals & progressively communicating them down through the organization, then back up the organization, ultimately put into action by employees with a shared commitment.

In today’s dynamic conditions a tight control of both planning and execution is essential to both survive and thrive. So, It is in times like these that your whole organization needs to pull together, committed to a method, moving in the same direction.

Management requires to avoid choosing too many key objectives to stay focused on what is strategically important. By working on fewer objectives, the organization can achieve them quicker, thus leading to greater desire achievement in the long run, which can appear counterintuitive at first.

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Hoshin Kanri has Many Features which Make it Unique:

Features

• It needs planning in several timeframes, from long-term to immediate actions, with direct links between each timeframe.
• Planning is both top-down & bottom-up, building both company-wide and individual commitment to the plans.
• Where difficulties appear in achieving targets, it also offers a framework for resolving them.
• It measures transformation success using both lagging and leading metrics.

Hoshin Kanri Method Helps you to

• Develop strategic plans.
• Set and attain goals.
• Create consistent schemes.
• Improve communication between management as well as staff.
• Allows the staff to focus on performance.

What is Hoshin 7- Step Planning Process?

We can outline The Hoshin Kanri method with a 7-step process also famous as the Hoshin Planning. So, Hoshin Kanri x matrix involves both planning & execution, in an iterative 7-step process.

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Furthermore, This planning process makes sure that the strategy of a company gets executed across the hierarchy.

1. Establish Organizational Vision.
2. Develop Breakthrough Objectives.
3. Generate Annual Objectives.
4. Deploy Annual Objectives.
5. Next, implement Annual Objectives.
6. Quarterly & Monthly Review.
7. Annual Review.

The 1-4 steps involve planning through a process of catch ball; the last 3 involve execution and review.

1. Establish Organizational Vision

We generally, Perform this at the executive level and focuses on identifying the current status of the organization w.r.t your vision, planning process, and execution tactics. It is wherein you need the enterprise to be and what on the way the appearance like for business transformation.

• What do you currently have in place that permits for objectives created and implemented?
• Do you’ve to get a current vision?
• Are there current longtime period plans already in place?

2. Develop Breakthrough Objectives

These are notable enhancements that will need the whole organization to engage in the process over an established time frame (3-5 years), to complete. So Here, you ought to ask the question: “Which three Breakthrough Objectives do you require to attain in the next 3 years to help achieve that vision?”

The Hoshin Kanri template excel objective set during step two generates a road map for success, allowing management to identify projects & strategies to meet them. So, Choosing what not to do at this stage is critical to success. Each objective should have the following elements to move on:

• Detail of the desired outcome and the elements that it will be measured by.
• Particular metrics will measure the progress and show whether the objectives are completed or not.
• A timetable for the desired completion.
• Who is accountable for achieving each Breakthrough?

It is essential even at this stage that a named individual is listed (generally a member of the leadership team). So, A key precept of Hoshin Kanri x Matrix is that accountability should be with an individual. That person needs to be chosen because they are the best person for the job, not because of their role, seniority, or place in the organizational structure.

3. Develop Annual Objectives

The leadership team, together with the senior management, breaks down the objectives into annual goals. Annual objectives are ones that you will need to finish in the present year to attain the complete breakthrough objective you are striving for. You can ask like: “For every Breakthrough goal, what Annual Objectives you want to attain within the present year, so you can make sure Breakthrough achievement?”

This is generally the point where the Hoshin Kanri Matrix is instilled to help begin the strategy & objective deployment. Focus, accountability, and measurement are again the key elements to be agreed upon.

4. Deploy Annual Objectives

Once the annual objectives are discovered they need to be deployed over all the levels of the organization. So, This is the lean transformation process of goal setting which starts at the top and is spread to each employee. Catchball is the communication process where several parties are involved in an ongoing exchange of information about what it will take to attain a specific objective. It’s both a top-down & bottom-up approach that allows for multiple views to collaborate towards the best approach to achieve an objective.

Once you have developed your action plan and how these objectives will be met through “catch billing,” you’ve got the manner to install your annual objectives confidently.

5. Implement Annual Objectives

With this step, the real execution of Hoshin Kanri starts. This step goes equally with the next two. Unlike other approaches, Hoshin Kanri doesn’t assume that because you plan, everything will go smoothly. This is in which having the plan in the region with well-understood goals and responsible owners makes a difference.

6. Monthly Review

Throughout the review process, you come across objectives that were missed or not met. Hoshin Kanri applies the Plan-Do-Check-Act (PDCA) cycle. Any deviance from the plan needs instant action. Hence, There is a need to evaluate root causes and counteractions developed to restore the progress. At every quarter, reviews tackle a distinct impression. PDCA (plan-do-check-act) becomes very critical in this phase of the Hoshin process.

The monthly reviews make sure that the plan is finishing in line with the plan.

7. Annual Review

At the end of the year, there is an annual review, which confirms the results are achieved or not. Hence, This is the time to reflect on what did & didn’t work throughout the process. It’s a time to learn and teach one another what you’ve learned. Annually, Hoshin Kanri template excel needs a review of the year as well as a review of the Breakthrough Objectives, and adjustments are made before the process begins again.

What is Hoshin Kanri Catchball?

The Hoshin Kanri planning is not only a top-down approach. It is a combined effort between a manager & a subordinate who have to mutually agree on the optimal set of goals. If management commands people into attaining certain goals, without gathering feedback first, they risk demotivation as well as costly errors.

Hoshin Kanri planning has built-in continuous improvement mechanisms, which are a key element to making the method successful. So, These are the Catchball & PDCA tools.

1. Catchball:

It is one of the practices that make Hoshin Kanri x Matrix template for lean policy deployment one of the potent approaches for managing teams. Hoshin Kanri Catchball is a technique for developing & maintaining open feedback loop overall levels of your organizational hierarchy by generating a two-way stream of information sharing. Furthermore, Catchball allows you to align your company’s objectives & goals with the people’s actions on all hierarchical levels of your organization.

It is a simple but exceptionally valuable practice of the Hoshin Kanri planning process in Lean.Thus, Catchball has several benefits:

• Including a staff that feels as though they took part in the development, which can lead to a sense of ownership & motivation in the process.
• It leads to a quick increase of engagement in your team.
• It can help get a better understanding of the practicality of your plans and also decide whether or not they will be a success.

2. Plan-Do-Check-Adjust / Plan-Do-Check-Act (PDCA)-

The PDCA cycle is a 4-phase graphical model for carrying out change at your organization. The method is cyclical, so the PDCA cycle should be repeated again and again.

• Plan – Find a problem or opportunity & set out a plan for consistent change and effective transformation. Create a hypothesis for what possible issues may be.
• Do – This is the testing phase. So, This will be a small-scale test where you can easily measure results & obtain a higher understanding of your hypothesis.
• Check – Evaluate if the problem is fixed.
• Act – If the preliminary test was successful, repeat it on a larger scale.

When to use Hoshin Kanri Method?

Use Hoshin Kanri if:

• Your staff performance isn’t improving.
• You’ve been struggling to achieve annual objectives in VUCA.
• You have a distinctly defined top-down management structure.
• Your decision-makers are ready to listen to staff feedback.

What are the Disadvantages of Hoshin Kanri?

The only disadvantage to Hoshin Kanri Planning is the fact that no one can forecast what would happen in a year. So, This annual goal setting has broadly rejected the agile community and this is no wonder.

While the big goals & vision must exist, for an organization to be successful, there needs to be a system in place that adapts it to the dynamic world of today. One of the feasible answers is Portfolio Kanban.

How to Implement Hoshin Kanri X Matrix?

The most famous way of implementing Hoshin Kanri is applying the X matrix.So Now, you will learn what is the Hoshin Kanri X matrix, how to read it & how to get the most of it.

The X-Matrix is Hoshin Kanri strong visualization aid that is used to manage detailed strategic planning. The purpose of the Hoshin Kanri X Matrix Template is to develop & implement plans that are both strategic, tactical, and coordinated across people across the organization. So, The Hoshin Kanri X matrix template is a single-page document that includes strategies, goals, strategic projects, and owners. Certainly, A typical X-Matrix is traditionally stored in an Excel file or printed on an A3 piece of paper.

In Lean transformation, the purpose of making use of the X matrix is to align the long-time period desires with strategic initiatives, identify the most essential activities along the way & list the metrics that you need to improve.

A typical X matrix would normally look like this:

The name comes from the X that divides the matrix into 4 key quadrants:

• Long-term Goals (South): The first step is the long-term goals. In which direction you need to move your company?
• Annual Objectives (West): Out of the long-term objectives the annual objectives are developed. What do you want to attain this year? In the matrix between the long-term goals & the annual objectives, you mark which long-term goal is align with which annual goal.
• Top-level Priorities (North): Next you develop the different activities you want to do to attain the annual results. In the matrix in the corner, you again connect the previous annual objectives with the different priorities to attain these objectives.
• Metrics to Improve (East): Based on the top-level priorities, you create targets to attain this year. Among the top-level priorities & the targets, you mark which priority effects which target.
• Responsible: On the very far right you add which person is responsible for what top-level priorities.

To people who have in no way seen a Hoshin Kanri X-Matrix before, it could appear complex. So, It moves South and clockwise: from your vision to your 3-year objectives, to your 1- year objectives, to your next quarter’s priorities or goals. Further, It has containers for all of the factors important to plot your strategy, including, on the East face, how the priorities could be measured, and who could be accountable for their achievement.

Hoshin means a compass that points to True North.

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How to Develop Hoshin Kanri Matrix?

Developing the Hoshin Kanri X-Matrix needs both lateral & vertical thinking.

• Develop or Find a Template- Firstly, you’ll want a template in your matrix. Keep a blank one available, as you’ll need to repeat the process at regular intervals.
• Fill in Your Matrix- Place long-term objectives in the bottom (south) quadrant. Then, move clockwise around the quadrant. Put annual objectives for the next year only best within the left (west) quadrant. Next, the most important tasks that your group wishes to finish so that you can achieve annual objectives.
  Add these to the top (north) quadrant. And lastly, your metrics to help you recognize whether or not you’re hitting your targets. These go in the right (east) quadrant. On the far right (above Resources) list the people who will be responsible for, completion of the activities. These are commonly the managers.
• Mark your Dependencies- Everyone performs this step distinctly. Some teams use only a single marker, others use a lot of them. But the aim is to show, at a glance, which objectives, tasks, and metrics are related and (if desired) how.
• Share the Matrix- Help people to understand the purpose of their new tasks by sharing the Hoshin Kanri X matrix template throughout your team.

How to Apply X Matrix Template?

Generally, the leader of your organization is responsible for setting up the matrix or any manager who is implementing it on a team level.

When filling the Hoshin Kanri X matrix template, you need to list the essential parts of the diagram closest to the center.

1. Set the Strategic Vision & Goals

• Begin with the long-term goals of your team which are normally in the timeframe of 3 – 5 years.
• Put them at the bottom quadrant of the Hoshin Kanri X matrix template. Observe the capacity of your team before moving into putting 10 long-term goals.
• An easy way to calculate the number of tasks that your team will have to complete is to break down every initiative into a real plan for execution to the smallest feasible task before list the subsequent long-time period plan in the matrix.

2. Define Key Mid-term Goals

• After setting long-term goals, plan the most essential goals which you goal to attain in a shorter time frame (e.g.1 year) and place them within the left quadrant of the Hoshin Kanri X matrix.
• To generate these, you’ll want to consider what you need to accomplish first to keep you on track and then build on from there.

3. Define Short-term Actions & Metrics

• Now, fill the top quadrant with the most essential activities that your team has to complete to attain the short-term goals. As a Lean manager, this is your to-do list for the upcoming months for effective lean transformation in the organization.
• The right quadrant is for the metrics that will keep you on track when you execute the company’s goals.

4. Agree on Key Performance Indicators

• This is just the perfect time to apply the Hoshin Kanri Catchball & share your plans with the rest of the stakeholders.
• Collectively, you can agree on the compelling metrics that you need to improve and list them on the diagram.
• Right next to the key metrics, you need to list the key stakeholders who will be responsible for the completion of the activities within the top quadrant of the matrix.
• List only the people responsible for the successful delivery of the team’s work.

5. Connecting the Dots – Mark the Dependencies

• In the end, you should complete the picture by defining the dependencies among every listing in your Hoshin Kanri matrix.
• Begin with generating a legend of the different correlation markers that will connect each quadrant to the next.
• For instance, you can list a primary and a secondary way of correlation. To distinguish one from another, use different figures for visualizing them (triangles, circles, squares, etc.).

Benefits of Using the X-Matrix for Strategic Planning

• It allows your organization to focus on limited goals: choosing what not to do is critical, meaning that priorities are set & resources will be maximized resulting in successful organization transformation.
• It presents the clear linkage from vision through to the next quarter’s goals and, once again, means that any disconnects can be easily identified.
• By asking for a clear measurement of success, it forces people to describe and create a SMART goal.

Bottom Line

Hoshin Kanri is an important Lean transformation method for ensuring that the strategy of a company gets executed across the hierarchy. If Hoshin Kanri X Matrix is implemented efficiently, it provides a vision and a list of breakthrough goals, creates a flow of complementary goals, which ensures alignment. A fundamental part of Hoshin Kanri is chasing continuous improvement using Catchball & PDCA.

Frequently Asked Questions-

Key Takeaways

• To promote alignment, establish clear, cascading objectives and priorities for frontline staff.
• Establish actionable initiatives and projects that advance the strategic goals and focus on urgent areas for improvement.
• Establish a culture of continuous improvement by regularly measuring and monitoring progress using key performance indicators (KPIs).