1. Method Name

Hoshin Kanri (Policy Management)

2. Alternative Names

Policy Deployment, Strategy Deployment (Hoshin = direction, compass; Kanri = management, control)

3. Brief Description

Hoshin Kanri is a systematic method of strategic planning and management that ensures that the company’s top-level goals and strategies are aligned and cascaded into specific objectives and activities at all levels of the organization. It ensures that everyone is “rowing in the same direction.”

4. Purpose / When to Use

It is used to align day-to-day operations with the company’s strategic goals. It helps prioritize resources, focus on a few key breakthrough objectives, and ensure their achievement through the PDCA cycle.

5. Procedure / How to Apply It

1. Setting the Vision and Breakthrough Goals (PLAN): Senior management defines a long-term vision (3–5 years) and, based on that, 3–5 key breakthrough goals for the coming year.
2. Cascading Goals (Catchball): These goals are cascaded downward. Mid-level managers propose their own goals and metrics that contribute to the higher-level goals. This process is two-way (like “passing a ball” – catchball) until consensus is reached and alignment is achieved across levels.
3. Implementation and Execution (DO): Teams at the lowest level carry out specific improvement activities (Kaizen) that align with the established goals.
4. Regular Review (CHECK): Performance and progress are regularly monitored at all levels (monthly, quarterly). Visual boards and KPIs are used.
5. Annual Evaluation and Adjustment (ACT): At the end of the year, the achievement of objectives is evaluated. Findings and lessons learned are used in planning for the following year.

Tool: X-Matrix
This is a key visual tool of Hoshin Kanri on a single A3 page. It clearly brings together:
- South: Long-term goals (3–5 years)
- West: Annual milestone
goals - North: Priorities for improvement (specific projects/activities)
- East: Metrics for measuring success (KPIs)
- Corners of the matrix: Responsible individuals.
The dots at the intersections indicate the strength of the connection between the individual elements.

6. A Real-World Example

The company has set a strategic goal: “To become a leader in innovation.” Hoshin Kanri process:
1. Top management (annual goal): "Launch 3 new products and generate 20% of revenue from products less than 2 years old."
2. Catchball with the Development Department: Development sets the goal of "Reducing development time by 30%.
" 3. Catchball with the Production Department: Production sets the goal “To reduce the time required to bring a new product into production by 50%.”
4. Implementation: Teams carry out specific projects (e.g., implementing Agile in Development, SMED in Production).
5. Monitoring: Every month during meetings, progress toward these goals is tracked using A3 reports and KPIs.

7. Benefits

- Aligning the organization: Ensures that everyone knows what the priorities are and how their work contributes to overall success.
- Focusing resources: Helps the company focus on a few critical goals instead of spreading its energy across dozens of initiatives.
- Increases engagement: The “catchball” process involves people in strategy development, thereby increasing their buy-in to the goals.
- Aligning strategy with execution: It bridges the gap between “big plans” in the boardroom and the actual work on the shop floor.

8. Risks / Limits

- Too many goals: If management sets too many “breakthrough” goals, none of them will be a priority.
- Insufficient “catchball”: If goals are simply dictated from above without discussion, the main benefit of involving people is lost.
- Bureaucracy: If Hoshin Kanri becomes merely an exercise in filling out matrices and reports, it kills the spirit of the process.
- Lack of connection to day-to-day work: If daily management and improvement are not linked to strategic goals, Hoshin Kanri will remain merely on paper.

9. Practical Tips

- Less is more: Focus on 3–4 truly key goals that will be game-changers.
- The X-matrix must be a living document: Review it regularly during meetings, update it, and use it as your primary management tool.
- Catchball takes time and patience: Don’t expect to reach consensus at the first meeting. It is an iterative process of dialogue.
- The vision must be inspiring: People need to understand “why” these goals are important.