THE BASICS OF

HOSHIN
KANRI
Randy K. Kesterson
THE BASICS OF

HOSHIN
KANRI
THE BASICS OF

HOSHIN
KANRI
Randy K. Kesterson

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To my parents, Lyle and Barbara, for raising me

To my wife, Susan, for putting up with me

Contents
Preface..................................................................................................... xi
Acknowledgments................................................................................xix
Introduction..........................................................................................xxi

Chapter 1 The Basics of Hoshin Kanri: A Personal Example to

Help Explain the Steps........................................................ 1
Jon...................................................................................................1
Introduction to The Little Book..................................................2
Step 1: Scan—Create a Vision and Assess Reality..............3
The Scan Process.................................................................3
Step 2: Plan.............................................................................14
Bowling Chart...................................................................14
Step 3: Do................................................................................16
Step 4: Check..........................................................................17
Step 5: Adjust..........................................................................18
Back to Step 3: Do..................................................................18
Step 4 Again: Check..............................................................18
Step 5 Again: Adjust..............................................................18
Back to Step 3 Once More: Do.............................................19
Step 4 Again: Check..............................................................19
Step 5 Again: Adjust............................................................. 20
Key Takeaways from Chapter 1............................................... 20
References....................................................................................21

Chapter 2 Hoshin Kanri to Deploy Business Strategy..................... 23

Jon’s Business..............................................................................23
Introduction to The Little Book................................................24
Step 1: Scan.............................................................................25
The Scan Process...............................................................26
The First Working Lunch Meeting.................................26
The Second Working Lunch Meeting............................27
The Third Working Lunch Meeting...............................29
The Fourth Working Lunch Meeting.............................31

vii
viii • Contents

The Fifth Working Lunch Meeting................................33

The Sixth Working Lunch Meeting................................36
Step 2: Plan.............................................................................38
Catchball........................................................................... 40
Key Takeaways from Chapter 2................................................41
References................................................................................... 42

Chapter 3 Interviews with Hoshin Kanri Experts........................... 43

Introduction to Chapter 3........................................................ 43
What Is Hoshin Kanri?............................................................. 44
Three Words to Describe Hoshin Kanri?................................47
The History of Hoshin...............................................................49
Why Use Hoshin?.......................................................................50
Prerequisites, Critical Success Factors, Secrets, and
Keys to Success?..........................................................................52
Lessons Learned?........................................................................63
What Can Go Wrong?...............................................................74
Who Uses Hoshin Kanri? (And Why Not More Users?)......79
Different Approaches to Hoshin?............................................ 80
Importance of Vision?...............................................................81
Hoshin Objectives: How Many and What Should They Be?....82
Cascading of Objectives?.......................................................... 84
The PDCA Cycle (Plan–­Do–­Check–­Act)................................85
The Catchball Process............................................................... 86
The Hoshin Tools........................................................................89
Affinity Diagrams.......................................................................89
The X-­Matrix and the A3..........................................................91
The Hansei–­Hoshin Reflection Tool........................................93
Metrics.........................................................................................93
Balanced Scorecard versus Hoshin?........................................94
How Are Hoshin Kanri and Lean Six Sigma Related?..........98
Index of Expert Interviews......................................................104
The Catalyst for Success with Hoshin Kanri........................108
Some Words of Caution...........................................................110
Recommended Reading...........................................................111
 Contents • ix

Appendix A.......................................................................................... 113

The Traditional Way.................................................................113
The Hoshin Way.......................................................................113
Definitions............................................................................114
The PDCA Cycle.......................................................................114
Appendix B.......................................................................................... 117
Interrelationship Digraph
(a.k.a., an ID, a Relations Diagram).......................................117
What Is It?.............................................................................117
Why Use It?..........................................................................117
How to Use It?......................................................................117
Appendix C.......................................................................................... 123
The X-Matrix and the A3....................................................... 123
What Are They?.................................................................. 123
Why Are They Needed?..................................................... 123
How Does The X-Matrix Work?....................................... 123
More Information About the X-Matrix and A3..............125
Bibliography......................................................................................... 129
About the Author................................................................................. 143
Preface

WHY I WROTE THIS BOOK

This is the story of a shoe that led to this book about Hoshin Kanri.

It was 2002 and I was flying home from Europe. It was a Friday, at the end
of a long week of business travel. Between the bumps and lurches of the
plane, I was working to put together a Strategy Formulation and Deployment
approach for our company. My first attempt was pretty simplistic:

1. FORMULATE STRATEGY: Develop a differentiating strategy that

results in a set of strategic objectives for the business.
2. DEPLOY THE STRATEGY: Carry out the strategy by cascad-
ing objectives down into the business units and functions, and by
launching initiatives to attack the biggest problems, improve the key
processes, and improve the overall business results.

We were using a few tools at that time:

TOOLS TO FORMULATE STRATEGY: A number of strategy for-

mulation tools, including the Balanced Scorecard (along with some
highly paid consultants)
TOOLS TO DEPLOY THE STRATEGY: The Balanced Scorecard, Lean
Six Sigma, and Project Management

xi
xii • Preface

Formulate Deploy the

Strategy Strategy

Tools: Tools:
Strategy Creation Tools Balanced Scorecard
Including Balanced Project Management
Scorecard Lean Six Sigma

FIGURE P.1
Strategy Formulation and Deployment Approach: Version 1.0—A toolbox containing a
few tools.

I remember sketching out our Current State. I will call what we were doing
back in those days Version 1.0 of an evolving Strategy Formulation and
Deployment Approach (Figure P.1). We had a toolbox with some tools. Period.
I was returning home from a trip to Switzerland where I had just met
with the managing director of a company we had recently acquired.
Gerhard and I had talked extensively (well, in retrospect, I talked a lot
while he listened politely) about making significant changes within his
business unit. I remember having the feeling as I was driving back to the
airport in Zurich that the trip had been an utter failure. Gerhard was going
to keep things the way they were before we had acquired them. I remem-
ber reflecting on how the resistance to change was incredible, especially at
some of our newly acquired business units.
However, we couldn’t give up. Gerhard’s business unit’s Return on
Invested Capital (ROIC) was nowhere near our targeted level, and it was
imperative that we (or I) fix this. Somewhere over the North Atlantic, after
a couple of glasses of cabernet sauvignon, I remember drawing another
diagram on the back of a napkin (literally), and this diagram consisted of
a few more boxes. We will call this Version 1.1 (Figure P.2).
The process I drew consisted of four major steps, with Deploy the
Strategy broken into three pieces:

1. FORMULATE STRATEGY: Develop a differentiating strategy that

results in a set of strategic objectives for the business.
2. CASCADE THE STRATEGY: Flow the strategic initiatives (that
came from the strategic objectives) down into the organization (via
numerous scorecards).
 Preface • xiii

Deploy the Strategy

Gain
Formulate Cascade the Execute the Acceptance
Strategy Strategy Strategy and Sustain
the Results

Tools: Tools: Tools: Tools:

Balanced Scorecard Balanced Scorecard Project Management None
Plus Lean Six Sigma
Expensive Consultants

FIGURE P.2
Strategy Formulation and Deployment Approach: Version 1.1—With more details added
on the deployment side.

3. EXECUTE THE STRATEGY: Attack the biggest problems, close the

biggest gaps, improve key processes, and improve the overall busi-
ness results.
4. GAIN ACCEPTANCE AND SUSTAIN THE RESULTS: Truly
engage with the employees (engage with “their hearts and minds,” as
our Human Resources people would say) to eliminate resistance to
the changes and improvements, and to sustain the hard-­fought gains
once they have been achieved.

I listed the tools we were using at that time in support of each of the
four steps:

TOOL TO FORMULATE STRATEGY: Some strategy creation tools,

including the Balanced Scorecard (along with some highly paid
consultants)
TOOL TO CASCADE THE STRATEGY: The Balanced Scorecard
TOOLS TO EXECUTE THE STRATEGY: Lean Six Sigma and
Project Management
TOOLS TO GAIN ACCEPTANCE AND SUSTAIN THE RESULTS:
Nothing. Nada. Blank. We had no formal approach or a tool to help
us in this area.

After I returned to the States, I sent our best Lean Six Sigma black belt,
a guy I will call PhD Stan, to Switzerland to see what he could do about
helping to make the required process-­related changes happen within
Gerhard’s business unit.
xiv • Preface

Fast forward a couple of months. I recall looking up from my desk

and seeing PhD Stan standing in my office doorway. Stan had his head
down, and his body language indicated that he was thoroughly dejected.
“They don’t want to do it,” he said. He went on to explain that he had used
every analytical arrow in his analytical quiver, but he could not convince
Gerhard, the managing director, and his team to make the necessary
changes to improve their key business processes.
A few days later, I explained my problem to Martin, our vice presi-
dent of Human Resources. After listening intently (as HR people tend
to do), Martin suggested that what we needed was Organizational Change
Management. OCM, he called it. I thanked him, but given its roots in the
organizational development (OD) world, I assumed this OCM thing was
grounded in a lot of hand-­holding and singing of “Kum Ba Yah.” It prob-
ably even included the use of the dreaded F-­word, highly promoted by the
HR/­OD world—feelings.
However, I did some research and found that OCM was being employed
successfully in industry. In fact, General Electric had been using an
approach called the Change Acceleration Process (CAP) for several years
with noteworthy results.
I remember thinking that we needed a similar approach—a method-
ology, model, toolset—that was synergistic with the Balanced Scorecard
and the Lean Six Sigma tools; something we could use to eliminate the
tremendous resistance to change we faced in Europe and in other parts of
the business.
My conclusion at the time was that we were using the Balanced Scorecard
to develop “balanced” top-­level objectives, and we also were using it to
some degree to deploy strategy by cascading the scorecards down into the
organization. We also were using the Lean Six Sigma tools (in some areas,
anyway) pretty successfully. However, the thing we lacked was a tool set,
a methodology, an approach that could help us deal with resistance to
change. We needed something that would work well with the Balanced
Scorecard and Lean Six Sigma that we could deploy across the enterprise.
After doing quite a bit of research about OCM, I developed the diagram
shown in Figure P.3.
I concluded that an OCM tool/­approach/­methodology was needed to
help eliminate resistance to the major changes we were trying to make,
i.e., to help gain acceptance/­adoption, and to help us sustain the results.
I scheduled a meeting with my boss (Gerry) to talk about the plans for
the proposed new Strategy Formulation and Deployment approach. I also
 Preface • xv

Deploy the Strategy

Gain
Formulate Cascade the Execute the Acceptance
Strategy Strategy Strategy and Sustain
the Results

Tools: Tools: Tools: Tools:

Balanced Scorecard Balanced Scorecard Project Management Org. Change
Plus Lean Six Sigma Management
Expensive Consultants Org. Change
Management

FIGURE P.3
Strategy Formulation and Deployment Approach: Version 2.0—A new tool is added
(at least on paper).

invited a consultant who was working with us at the time, who happened
to be my Lean Six Sigma black belt instructor from years earlier.
I explained the four-­step model to my boss: (1) Strategy formulation, using
some strategy creation tools including the Balanced Scorecard; (2) Cascading
of the Strategy, using the Balanced Scorecard; (3) Strategy Execution, using
the Lean Six Sigma tools and Project Management; and (4) Resistance
Management, using an approach called Organizational Change
Management. With that, Gerry held up his hand to indicate that I should
stop talking. He said, “I have a change management approach that has
served me very well for over 30 years in business.” I can still see my con-
sultant friend lean forward to listen more intently, as he has always been
eager to learn about new, successful approaches. My boss then swung his
foot up on the conference table, pointed to it, and said, “11-E” (his shoe
size). “If they don’t want to do it, I kick them in the ass,” he said. Gerry
called it his “11-E approach to change management.” I will say that while
my boss at the time had indeed perfected the art of 11-E, he was saying
this mostly in jest. The meeting ended soon thereafter without a positive
resolution (at least from my perspective).
I left that company shortly thereafter and was subject to the restrictions
of a noncompete agreement that limited me from working for any company
within an industry in which they competed. I knew I couldn’t just sit at home
and do nothing, so I decided to go into the world of management consulting,
specializing in an area I wanted to learn more about. You guessed it—OCM.
Note:  There are times when the 11-E approach is needed. A fire in the hall-
way doesn’t call for consensus building. It calls for action. “The building
xvi • Preface

is on fire, get the hell out of here!” And, there are also times and places for
command and control management. For example, can you imagine a mili-
tary environment without a command and control approach? But, when
you are trying to drive strategy down into an organization, a command
and control approach just doesn’t work very well.
I knew from experience that the 11-E approach to change management
was not entirely effective, so I went in search of a new, more enlightened
approach. I intended only to remain in this field until my noncompete lim-
itations expired, but I enjoyed it so much that I continued on that path for
almost four years. The wealth of information that I learned in those four
years about managing resistance and sustaining change proved extremely
valuable. I consulted with a major bank during my time in change man-
agement consulting and I got some great first-­hand exposure (positive and
negative) to Hoshin Kanri. (Hoshin Kanri is a strategy deployment tool,
approach, or system. It is an element of a larger management system intro-
duced to the western world in the 1980s as Total Quality Management
(TQM).) From that point on, I was hooked. I began studying the Hoshin
approach and I talked to people, outside of the bank, who were using it
with great success.
With the introduction of Hoshin Kanri, the result is a strategy deploy-
ment system, no longer just a box of tools (Figure P.4).
I continued to study Hoshin Kanri, reading every book and article I
could find on the subject. I interviewed nearly 100 experts on the sub-
ject—practitioners, executives, consultants, professors, and authors; peo-
ple who had experience with Hoshin, both good and bad. I also had the

Deploy the Strategy

System: Hoshin Kanri

Gain
Formulate Cascade the Execute the Acceptance
Strategy Strategy Strategy and Sustain
the Results

Tools: Tools: Project Management, Lean Six Sigma,

Balanced Scorecard + Org. Change Management
Plus
Expensive Consultants

FIGURE P.4
Strategy Formulation and Deployment Approach: Version 3.0—A deployment system.
 Preface • xvii

An Environment

Deploy the Strategy

System: Hoshin Kanri

Gain
Formulate Cascade the Execute the Acceptance
Strategy Strategy Strategy and Sustain
the Results

Tools: Tools: Project Management, Lean Six Sigma,

Balanced Scorecard + Org. Change Management
Plus
Expensive Consultants
An environment that is built on mutual respect, with
leaders who lead with humility – i.e., no more
“command and control”.

FIGURE P.5
Strategy Formulation and Deployment Approach: Version 4.0—A supportive work
environment.

opportunity to immerse myself inside Milliken & Company, a corporation

with a very unique environment, one in which respect for the individual is
paramount and safety is the primary value, not just an important metric.
What I learned from all of these experiences is that to gain maximum
advantage, it is important to develop an overall work environment that
allows Hoshin Kanri and the other strategy deployment and execution
tools to thrive (Figure P.5).
A work environment is analogous to an onion, and most people spend
their time working “on the surface” to deploy tools and employ new sys-
tems to improve processes. My conclusion is that to make extensive, sus-
tainable gains within an organization, one must attack the issues found at
“the core” of the “onion.” One must change the “How,” how the organiza-
tion is led and managed (Figure P.6).
Lean Six Sigma, Project Management, and Organizational Change
Management are all important sets of tools, and Hoshin Kanri is an
important management system (Figure P.7).
This book is about Hoshin Kanri, but the writer has learned that Hoshin
is but one piece of the puzzle in reshaping an organization.
Randy K. Kesterson
The names in this story have been changed, but the story is true.
xviii • Preface

Tools

Systems & Processes

“THE HOW”
The Leadership Style
The Management Style
The Culture
The Environment Inside

FIGURE P.6
“The How” is at the core of the organizational “onion.”

Lean Six Project

Sigma Tools Management

Systems & Processes

“THE HOW”
The Leadership Style
The Management Style
The Culture
The Environment Inside

Hoshin Kanri

Org. Change
Management

FIGURE P.7
Hoshin Kanri is a system that includes a set of tools.
Acknowledgments
I wish to personally thank the following people for their contributions to my
inspiration and knowledge and other help in creating this book.

Thanks to Susan for her countless hours of expert editing, and to Chase
for being so patient when I worked on the book instead of playing with
him. Thanks to Mike, Nicole, Lori, Kris, Angela, and Jeffry D. for their
unfailing moral support.
Thanks to David Thomas, Ellen Domb, Jane Dwyer, Lisa Boisvert, John
Gaul, Kevin Grayson, Barry Witcher, Lois Gold, Tom Cluley, Gerhard
Plenert, Paul Docherty, Tom Jackson, Bruce Sheridan, Jonathan Ngin, and
James Hinkle for their help with the editing.
Thanks to the people who helped shape my career and my view of the
world of work, to include Dudley Johnson, Larry Mitter, John Wood,
George Yohrling, Blan Godfrey, Jeanenne LaMarsh, and Mike Mulligan.
Thanks to the Hoshin experts from all walks of life who were so gener-
ous with their time, allowing me to interview them, and/or obtain their
comments for the book. Mini-Bios for these people can be found near the
end of Chapter 3.
Thanks to the developers of Hoshin Kanri … Dr. Deming, Dr. Juran,
and the early adopters in Japan. And, thanks to the authors of the early
Hoshin Kanri books written in English …Bob King (1989), Yoji Akao
(1991, with introduction by Greg Watson and translated by Glenn Mazur),
Michele Bechtell (1993 and 1995), Bruce Sheridan (1993), Greg Watson
(1994), Mora Minerva Melum and Casey Collett (1995), Michael Cowley
and Ellen Domb (1997).

xix
Introduction
I’m guessing that you are reading this introduction because you are look-
ing for a simple explanation of Hoshin Kanri. I understand. When I
started my Hoshin exploration, I was overwhelmed by the six-dimensional
X-­Matrices (only a slight exaggeration) and the “A3s for Every Occasion”
found in some of the more advanced Hoshin Kanri materials.
I’m going to simplify it for you by explaining Hoshin Kanri through
the telling of a short story. Chapter 1 of this book contains a story about
a manufacturing executive, Jon Anderson. This story demonstrates how
Jon uses a simple Hoshin Kanri approach to make significant change in
his personal life. Chapter 2 of this book tells how Jon prepares to apply
Hoshin Kanri to deploy strategy within his business. Chapter 3 of the
book contains some fascinating excerpts from my real life interviews with
some of the experts in the field of Hoshin Kanri.

Simplicity is the ultimate sophistication.

Leonardo da Vinci

Everything should be made as simple as possible, but not simpler.

Albert Einstein

Paraphrasing Leonardo da Vinci and Albert Einstein, I hope the book is

simple enough for you, but not too simple.

xxi
1
The Basics of Hoshin Kanri:
A Personal Example to Help
Explain the Steps

If you do not change direction, you may end up where you are heading.
Lao Tzu

You have the brains in your head. You have feet in your shoes. You can steer
yourself in any direction you choose. You’re on your own, and you know
what you know. And you are the guy who’ll decide where to go.
Dr. Seuss

Discipline is the bridge between goals and accomplishment.

Jim Rohn

JON
I’d like to introduce you to Jon Anderson. Jon is a successful business man.
He has enjoyed a career in manufacturing operations that propelled him
quickly to the executive level he enjoys today. As a matter of fact, he has
just accepted a new challenge with an aerospace company, IGC Aerospace,
where sales are flat, and profit and cash flow are at unacceptable levels. Even
with his expertise, he is finding the challenges of this environment over-
whelming, topped with the stress of not seeing eye-­to-­eye with his boss.
Another stressor for Jon is the fact that his job requires frequent travel,
taking him away from home and his family. He is happily married, but
would like more one-­on-­one time with his wife, and his teenage kids.

1
2 • The Basics of Hoshin Kanri

“What are their names?” Seriously, he recognizes the distance growing

between them and realizes that time is ticking away. He will soon wave
goodbye as they leave for college just as he will wave goodbye to his chances
to spend quality time with them.
Yes, all of the stress, all of the wishing things could be different. These
grow right along with his waistline. How he longs for the days when he
could run for miles with no aches and pains. At this point, he would
be thrilled with a daily 30-minute walk. And, again, all that travel—­airport
food, airplane air, rushing to cocktail hours, dinners, endless meetings, jet
lag—Jon knows something has to change.
Then, one day on a business trip, Jon struck up a conversation with an
intriguing gentleman in the seat beside him on the plane. This man appeared
to be in his midfifties, fit, and apparently successful, judging by his sport
coat, shoes, and, especially, by the five-­sided diamond charm Jon handed
back to him after noticing he had dropped it on the floor. As a repayment of
his kindness, the gentleman gave Jon a book. One that would change his life.
There was no publisher information or table of contents, only a simple
title page, The Little Book of Hoshin Kanri: A tool for changing your life.
The book started with an introduction explaining the term Hoshin Kanri.

INTRODUCTION TO THE LITTLE BOOK

The words Hoshin and Kanri have been trans- Strategy Deployment: A process
that follows Strategy Formulation.
lated to mean a number of things. A common It uses the key objectives (e.g., the
definition in English is strategy deployment, “Hoshins”) that were developed in
and you often see a compass used as the image the Strategy Formulation process
to represent the term. Hoshin Kanri is a strate- and makes them available for
review and action throughout
gic objective delivery system used in business.
the organization, both vertically
In this book, you will apply the basics of this down through the organization’s
process to make a significant personal change. layers and across the organiza-
As you might imagine, it is much easier to tion’s functions.
deploy a strategy if you actually have one. So, Hoshin Kanri: A strategy deploy-
before we get into the steps of Hoshin Kanri (i.e., ment tool, approach, or system. It
is an element of a larger manage-
strategy deployment), we are first going to use
ment system introduced to the
the Scan process to create your personal strat- western world in the 1980s as Total
egy for use in this exercise. Then, we will walk Quality Management (TQM).
 The Basics of Hoshin Kanri • 3

through the Plan-­Do-­Check-­Adjust (PDCA) Total Quality Management

cycle used in the Hoshin Kanri process, but, in (TQM) is a management system
with a misleading name. The
this case, we will apply it to a personal objective. name is a misnomer because the
system actually encompasses all
Step 1: Scan (the Strategy Formulation process) elements of an organization, not
Step 2: Plan (the Hoshin Kanri process begins) just quality. TQM is considered
to be an out-­of-­date term by
Step 3: Do
some, but the author believes
Step 4: Check that the concepts remain valid to
Step 5: Adjust this day. This belief is supported
by the fact that several organiza-
tions are employing TQM and
Step 1: Scan—Create a Vision Hoshin Kanri with great success
and Assess Reality as of the writing of this book.

This first step (Scan) is about strategy formu- Strategy Formulation: A pro-
lation and also identifying a few key objectives cess where strategy is created or
in support of the strategy.1 This step starts with revised.
understanding where you are today and where Strategy: An overall approach
you want to be a few years from now. You will to achieve what an organization
proclaims in its purpose state-
create a personal vision for your future self, while
ments (Vision, Mission, Values),
keeping your feet firmly planted in today’s reality. to include the determination
of its strategic objectives. In
this case, Strategy is an overall
The Scan Process approach to achieve an individu-
al’s personal purpose and vision,
1. Develop your Personal Mission Statement to include the determination of
2. Define your Personal Values his/­her strategic objectives.
3. Define your Personal Current State
4. Define your Personal Vision
5. Design your Personal Desired Future State
6. Identify the gaps between the Future and Current States
7. Prioritize the gaps; define your Personal Priorities

1: Develop Your Personal Mission Statement

It’s important for a business to define its purpose, Mission: Why we are here. Why
its reason for being in existence. In this case, it is we exist. Our purpose. Our
reason for being. In the personal
important for you to take a few minutes to reflect
Hoshin example, this includes
on your personal mission (Figure  1.1). Consider the roles we play.
your roles and your purpose in life.
Jon lists his roles and his purpose.
 4 • The Basics of Hoshin Kanri

Define Your Mission:

Roles: Husband, father, executive, son, brother,

uncle, community member, friend
Purpose: To fulfill all of my roles to the best of
my ability

FIGURE 1.1
Your personal mission.

2: Define Your Personal Values

Values for an organization are the guiding principles that communicate
the expected collective norms and behavior of everyone in the organiza-
tion. In other words, values serve as the basis for making decisions within
the organization and act as the foundation for
Personal Values: Guiding prin-
communication with colleagues and customers. ciples that serve as the basis for
Your personal values are the guiding principles the decisions you make.
that serve as the basis for the decisions you make.
Jon lists the teachings of his religion as his personal guiding principles.

3: Define Your Personal Current State

The next step for creating your strategy is to define your Personal Current
State. Take a step back to consider your environment, your current life
situation—your personal Current State, if you will.
Current State: Our current
reality.
Let’s start by examining your current Work-­ Life
Balance (Figure 1.2).
The phrase work-­life balance immediately conjures up the image of a
simple weighing scale, with “work” on one side and “life” on the other.
For most people, the weight on the “work” side easily tips the scale because
“life” often is so far out of balance that it becomes a struggle between time

Life
Work

FIGURE 1.2
Work-­Life Balance.
 The Basics of Hoshin Kanri • 5

WORK FAMILY

“ME”
Everyone &
• My Body
Everything
• My Mind
Else
• My Soul

FIGURE 1.3
Your work-­life balance.

spent at work and time spent with family or friends, or time spent pursu-
ing personal interests. However, as tough as this is, it’s even more com-
plicated than this. As you will see, there are more than two facets to a
well-­balanced life (Figure 1.3).
There are at least four facets to a balanced life. These are time spent

• at work, earning a living;

• with immediate family;
• doing things for you, also known as “me time” or time for improving
body, mind, and soul; and
• with everyone and everything else in the world.

Considering all of these facets, the image that comes to mind for some
is a person trying to keep multiple dinner plates balanced and spinning in
the air. It can certainly feel that way as life can be difficult to manage (and
balance) at times.
Is your life currently in proper balance? And, in addition to the need to
rebalance, are there also aspects of the facets of your life that you would like
to change? If so, what changes do you want to make? The best place to start
for identifying these changes is with an assessment of your current state.

Personal Current State Worksheet

List the things that describe your personal current state. Include both the
favorable and unfavorable aspects of your current life situation. Think
about where you are now in terms of your work and your immediate fam-
ily. Think about your body, your mind, your soul. Think about everyone
and everything else in your life, such as extended family, close friends,
community, your education, your finances, etc. Where are you now with
6 • The Basics of Hoshin Kanri

YOUR PERSONAL CURRENT STATE

INVOLVING WORK INVOLVING FAMILY

I like my new job so far Strong marriage
But, no “date nights” with Cathy
Traveling too much
Kids don’t know me anymore
4+ days a week
And, I don’t know them
3 to 4 weeks per month
In office from 7 am until 6 pm+
Work every Saturday

ABOUT “ME” (Involving my body, Involving Anyone or Anything Else

my mind, and my soul) in the World
30 lbs. overweight No time for golf
Total cholesterol at 280+ No poker nights with buddies
No time for exercise No time for snow skiing
Eating too much fat and sugar No extended family time:
No time for reading (for fun)   Parents live 1,000 miles away
Never go to church with my family   Rarely see siblings and their kids
Rarely see old friends from school

FIGURE 1.4
Your Personal Current State.

each of these things? What is your Personal Current State? Quantify where
you can.
Jon contemplates these questions deeply, then enters his responses into
the current state diagram. Where possible, he includes a “measure” to help
explain his current situation (Figure 1.4).

4: Define Your Personal Vision

For an organization, vision is the picture of the Personal Vision: Your dream
future, i.e., where the business is going. Your for the future. It’s your “picture”
personal vision is your dream for the future. It’s of the future for you.
your picture of the future for you.
After considering his dream for his personal future, Jon enters the follow-
ing in the little book.

Define Your Personal Vision

To be the best I can be in my various life roles. Healthy, helpful, happy,
and successful.
 The Basics of Hoshin Kanri • 7

5: Your Desired Future State

As you head toward your personal vision, your Desired Future State: As we
desired future state is your expectation for where head toward our Vision, this is
our expectation for where we
you should be at a specific point in time.
should be at a specific point in
For this exercise, pick a specific point in time, time. For example, three years
say, a few years from now. Think about what you from today.
like about your Personal Current State diagram and
what you dislike about it. Now, bring the favorable things forward into
your Future State diagram; the things you want to retain as you move for-
ward with changes in your life.
Consider again each facet of the diagram. Ask yourself, “Where do I
want to be a few years from now in terms of work and immediate family?”
Think about your body, your mind, your soul. Then, once again, think
about everyone and everything else in your life. Where do you want to be
with all of these things? What is your Personal Desired Future State? Once
again, try to quantify or think about how you will measure these things.
For example, if your Desired Future State is that you want to improve your
health, a measure may be in eating more fruits and vegetables or exercis-
ing three days a week or having annual checkups.
Jon contemplates his future and decides to define his desired future state
at a point three years from now. He enters his responses into the boxes.
Again, he attempts to include a measure or a metric to explain his desired
future situation (Figure 1.5).

6: Identify the Gaps

Take some time to compare your personal Gaps: The difference between the
Current State and your personal Desired Future Current State and the Future State.
Things that will require change.
State. Now, identify the “gaps.” A gap is a differ-
ence between the Current State and the Future State, i.e., things that will
require change. If you have a lot of gaps, consider which ones are the most
significant. What are the biggest, most important gaps that separate your
personal reality from your vision?
The diagram (Figure 1.6) shows how a transition is needed to move you
from your current state, i.e., from today’s reality, to your desired future
state, heading toward your personal vision.
Jon studies his Personal Current State and Desired Future State diagrams
and enters a few items into the “Identifying the Gaps” Worksheet (Figure 1.7).
8 • The Basics of Hoshin Kanri

YOUR PERSONAL DESIRED FUTURE STATE

Your Personal Vision
As of date: 3 Years from Today

INVOLVING WORK INVOLVING FAMILY

Less overnight business travel! More “date nights” with Cathy
No more than 4 nights away from home More quality time with kids
per month   Get to know them again!
Leave office by 5:45 pm!!!
Only work 2 Saturdays a month, and
when I do, home before noon

ABOUT “ME” (Involving my body, Involving Anyone or Anything Else

my mind, and my soul) in the World
Weight reduced by 30 lbs. (and Time for golf and snow skiing
maintained for a year) Poker nights with buddies
Total cholesterol <200 See parents 2 times a year
Exercise! (5 days a week) See siblings 2 times a year
Eat better (diet plan TBD) See old friends from school every year
Read 1 book a month (for pleasure)
Go to church 3 times a month

FIGURE 1.5
Your Personal Desired Future State.

Vision

Desired Future State

Work Family

Everyone &
“Me” Everything
Else
Current State

Work Family

Everyone &
“Me” Everything
Else

FIGURE 1.6
The change: From Current State to Desired Future State, toward your Vision.
 The Basics of Hoshin Kanri • 9

Identifying the Gaps Worksheet

List your biggest gaps, in no particular order:
My weight: lose weight and keep it off!
My total cholesterol level!
Less time at work
Fewer nights spent away from home on business travel
More quality time spent with Cathy and the kids
More church attendance
More time for golf
More snow skiing. Maybe twice a year?
More reading for pleasure
More time with friends—new friends nearby and old friends far away
More time with extended family (parents, brother, sister, etc.)
More poker night events with my buddies

FIGURE 1.7
Identifying the Gaps Worksheet.

7: Your Personal Priorities

Now that you have defined your gaps, it’s time to prioritize them. You can’t
change everything at once, so you need to decide where you will focus
your attention for the next 12 months. Three tools/­approaches will be used
to help you: something called “Catchball,” Stephen Covey’s “Urgent versus
Important” matrix; and the Interrelationship Digraph (a.k.a., the ID).

Catchball
So far, the Personal Hoshin process has involved Catchball: An interactive process
only you. Now, it’s time to engage others in the of tossing items and possibilities
back and forth like a game of
process. One tool used in Hoshin Kanri for get- “catch.” It sometimes results in
ting constituents involved and engaged in discuss- changes to proposed objectives,
ing business objectives is Catchball. In the book, means, and measures.
Introduction to Hoshin Kanri: Policy Deployment
for Successful TQM,2 Greg Watson describes it this way:
An analogy for this approach—which the Japanese call Catchball—is that
people participate in a dialog in much the same way as a circle of young
children play catch with a baseball. We sometimes call this technique
“tossing an idea around.”

What constituents should you involve in your personal Catchball pro-

cess? Loved ones, very good friends, trusted advisors—anyone you feel
10 • The Basics of Hoshin Kanri

You Personal You Personal

Constituents Constituents

“Catchball” “Catchball”

FIGURE 1.8
The Catchball Process: Steps 1 and 2.

comfortable having involved, but ideally also committed to your personal

change plan (Figure 1.8).
Jon chuckled as he recalled the story of the bacon and egg breakfast.

Question: In a bacon and egg breakfast, what’s the difference between

the chicken and the pig?
Answer: The chicken is involved, but the pig is committed!

He decides to engage Cathy and the kids as his own personal constituents
in his personal change plan. He initiates a Catchball session. Jon shares his
list of 12 gaps. Suffering through some ridicule and eye rolling, he explains
that Catchball involves tossing some ideas around—his ideas to them and
then their ideas, thoughts, and honest feedback back to him. The result is a
refined and, hopefully, an improved plan. One they all partially own and
can buy into.
Jon suggests using Covey’s “First Things First” approach to prioritize his
list as they give their feedback. In this approach, Covey suggests prioritiz-
ing things based on where they fall in a simple “important/­urgent” matrix.
“Important but Not Urgent” items are probably the best candidates for pri-
ority items. The “Important and Urgent” items (e.g., fixing a leaky faucet)
are more likely “Just Do It” items, not in need of an implementation plan.
Figure  1.9 includes some examples. For instance, a crying baby is
“Important and Urgent,” and some phone calls fall into the same category,
while planning and exercise might not be considered urgent, but they can
be very important over the longer term.
 The Basics of Hoshin Kanri • 11

Urgent Not Urgent

Important Crying baby Exercise

Kitchen fire Vocation
Some calls Planning

Not Interruptions Trivia

Important Distractions Busy work
Other calls Time wasters

FIGURE 1.9
Covey’s “First Things First” matrix. (Covey, S. R., A. R. Merrill, and R. R. Merrill. 1994.
First Things First. New York: FIRESIDE. With permission.)

Urgent Not Urgent

Important Some work issues Diet and exercise

Family
Church
Friends

Not Reading
Important Golf
Poker nights
Snow skiing

FIGURE 1.10
Jon’s “First Things First” Matrix.

Jon and family discuss where each of his gaps should fall on Covey’s
matrix. A lot of discussion and polite arguing ensues (Figure 1.10).
By using the Important/­Urgent matrix, they eventually narrow his list
to eight top priorities (Figure 1.11), eliminating four items from his origi-
nal list.
Jon also uses this as an opportunity to ask Cathy and the kids for their
ideas on fun things to do to spend more time together. By giving his fam-
ily an opportunity to offer ideas, he also gains their commitment and sup-
port for meeting these objectives. His son comments that it’s been a long
time since they played basketball together. Cathy suggests more three-­mile
walks. And his daughter wisely points out that taking on so many difficult
objectives seems a bit overwhelming. Together, they use a tool called an
12 • The Basics of Hoshin Kanri

Jon’s “Top 8” Priorities

My weight: lose weight and keep it off!

My total cholesterol level!
Less time at work
Fewer nights spent away from home on business travel
More quality time spent with Cathy and the kids
More church attendance
More time for golf
More snow skiing. Maybe twice a year?
More reading for pleasure
More time with friends—new friends nearby and old friends far away
More time with extended family (parents, brother, sister, etc.)
More poker night events with my buddies

FIGURE 1.11
Jon’s “Top 8” priorities.

Interrelationship Digraph (ID) (Figure  1.12), a Interrelationship Digraph (ID):

cause and effect diagram that helps to prioritize Sometimes called the Root Cause
tool because it helps identify the
items and identify drivers and outcomes. The driv- hidden causes. It shows the cause
ers become candidates for Jon’s personal Hoshins. and effect relationships and helps
to analyze the links between differ-
The Drivers: ent aspects of a complex situation.
C: Less time at work
Driver: The elements in an
F: Less overnight travel Interrelationship Digraph with the
D: Exercise more most outgoing arrows are causes.
E: Eat better They also might be root causes.

Note: Much more about the Interrelationship

Digraph can be found in Appendix B.
Objectives: This is the “what” we
From the Covey matrix and the Interrelationship
are working to achieve. It’s most
Digraph (ID) exercise, Jon and his family decide likely an element of our Desired
on his two top personal priorities for the next Future State. This is a source of
12 months (Figure 1.13). confusion because some use Goals,
You have defined your top personal priori- others use Objectives, some define
a hierarchy where a Goal is supe-
ties for the year. Next, you will turn them into rior to an Objective or vice versa.
Objectives. Make sure to keep the S.M.A.R.T. cri- Within this book, we will simply
teria in mind when defining your objectives. say Objectives.
 The Basics of Hoshin Kanri • 13

In = 5 Out = 1

A
In = 2 Out = 0 Lose In = 3 Out = 0
Weight
J B
More time Lower
w extended cholesterol
family

In = 1 Out = 0 In = 0 Out = 7

C
I
Less time
More
at work
reading time

In = 0 Out = 1 In = 2 Out = 2

H D
More church Exercise
Attendance more

In = 3 Out = 0 In = 2 Out = 2

G E
In = 0 Out = 6
More time Eat better
w Cathy & F
kids Less
overnight
travel

FIGURE 1.12
Interrelationship Digraph.

Top Priorities for Next 12 Months

• Lose weight (and keep it off)
• Improve family/work life balance

FIGURE 1.13
Jon’s “Top 2” priorities.

Specific: Explain what in clear terms

Measureable: Quantify or at least suggest an indicator of progress
Assignable: Specify who will do it
Realistic: Within a practical range of achievement
Time-­related: Specify when the result(s) can be achieved
14 • The Basics of Hoshin Kanri

Jon and family apply the S.M.A.R.T. criteria and develop two objectives:

Objective (Hoshin) #1: Achieve and maintain a healthy weight

Measures: Lose 30 lbs within 20 weeks from today
Objective (Hoshin) #2: Improve My Family/­Work Balance
Measures: 60± hours of quality family time per month

Step 2: Plan
Great work in Step 1. You have identified your Hoshins: The critical few
or the BIG, “breakthrough”
desired personal future state and your critical few
objectives.
objectives for the next 12 months; in other words,
your personal Hoshins. Now, you will create Plan: Recognize an opportu-
your plan to get there. You have defined what you nity and plan a change.
intend to accomplish, now, you need to describe Means: This is the “how;”
how you intend to accomplish each objective. You how the objectives (or
also need to define the Means for each objective Hoshins) will be attained.
Many names are used for
and the Measures. this, e.g., Strategies, Tactics,
Jon’s plan contains two Hoshins and each has a Actions, Initiatives, etc.
way to measure it. Each Hoshin has one or more
Means; in other words, the How to achieve the
Measures: These are the
What. Each Means has a Measure and also a spe- metrics that help us assess
cific due date. You will note that he omitted the our progress toward our
Who from the planning worksheets given that Desired Future State or our
every Who was Jon. Objectives.

Planning Worksheet

Objective (Hoshin) #1 (Figure 1.14): Achieve and maintain a healthy weight

Measures: Lose 30 lbs within 20 weeks from today
Objective (Hoshin) #2 (Figure 1.15): Improve My Family/­Work Balance
Measure: 60± hours of quality family time per month

Bowling Chart
Bowling Chart: Named after
The next step in Hoshin typically involves devel- the scorecard used in the
game of bowling, it’s a visual
oping a Bowling Chart. This tool’s name evolved
management tool used in
because it resembles the scorecard for the game of conjunction with improve-
bowling, which includes 12 frames, similar to the ment projects.
 The Basics of Hoshin Kanri • 15

The Means (HOW) Measures WHEN/­WHO

1. Use a personal trainer Identify trainers By Tuesday

or health mentor Select trainer By Friday
Start program Next Monday

2. Find and follow a Talk to Dr. Garcia This Wednesday

healthy diet Compare options By Friday
Start Program Saturday

3. Work out during Get gym bag for change of Today

lunch on weekdays. clothes
Walk with Cathy in Get new walking shoes Today
evenings and on Put bike rack on car Today
weekends. Walk or bike during lunch Begin tomorrow
four days a week
30-minute walk with Begin this evening
Cathy, five times a week

FIGURE 1.14
Plan for change #1.

The Means (HOW) Measures WHEN/­WHO

1. Leave work at a By 5:30 pm, four nights a week Beginning

reasonable time Monday

2. Limit Saturday work at No more than (2) Saturdays per Begin next
the office month, home before noon weekend

3. Limit business travel Four nights per month max This month
nights away from home

4. When at home, BE at Kids: 1+ hour per night on Starting today

home; spend quality weekdays and 2+ dedicated hours
time with wife and kids per day on Saturday & Sunday

Cathy: One dinner date each Starting today

month and one lunch date each
week (and time walking together
at least five times a week)

FIGURE 1.15
Plan for change #2.
16 • The Basics of Hoshin Kanri

Month 1 2 3 4 5 6 7 8 9 10 11 12

Weight Loss Target –2 –6 –14 –22 –30 –30 –30 –30 –30 –30 –30 –30
Cumulative in lbs.

Actual

Quality Target 30 60 60 60 60 60 60 60 60 60 60 60
Family in hrs.
Time

Actual

FIGURE 1.16
Jon’s Bowling Chart.

12-month annual planning period. What is it for? A Bowling Chart is used

in business to “keep score.” It’s an excellent visual management tool for any
type of improvement project. You can think of it as a time-­phased to-­do list.
In the worksheet in Figure 1.16, enter your personal Hoshins and the
measure you will use to track your progress.
Jon develops his personal Bowling Chart to track his weight loss and the
time spent with his family. His plan involves losing 2 lbs. in month 1, 4 lbs.
in month 2, 8 lbs. in months 3, 4, and 5, for a cumulative total of 30 lbs. by
the time Jon starts month 6.
Jon’s plan for family time involves spending 60 hours a month of “quality
time” with his family, starting with 30 hours in month 1 to allow him (and
them) some time to “ease into” the change. He decides to use “voice of the
customer” from his wife and kids to determine the number of hours of qual-
ity time he will report. Each week, Jon will ask each of them to give him their
number. So, for example, if Jon spends an hour with Cathy and an hour with
each of the kids, he will count it as three hours of quality family time.

Step 3: Do
“Do” in the Hoshin Plan-­Do-­Check-­Act process is the step
Do: Execute the plan.
where the plan is executed. Take care to build your plan into
your daily routine; do not treat it as “something extra” that must be done.
Jon begins to incorporate his plans into his Daily Routine. He makes
changes in his diet, cutting out simple carbs (carbohydrates) and limiting his
fat intake. After talking with his neighbor, a 60-year-­old ex-­marine who can
still pass the Marine Corps Physical Fitness Test for a marine of age 40, Jon
reads the Marine Corp Fitness 3X Fitness Program. The “back to the basics”
 The Basics of Hoshin Kanri • 17

approach of this program fits perfectly with his lifestyle, and he sets aside 30
minutes first thing in the morning, 3 days a week for the workout program.
He also begins walking during his lunch hour a couple of days per week and
with Cathy most evenings and at least once during the weekend.
Incorporating the plans to improve the quality of his family time proves to
be more challenging, but rewarding. He makes every effort to leave the office
as often as possible by 5:30 p.m., but it seems more often than not, there is
an emergency that keeps him later. On the evenings he does get home early,
his kids seem to have homework or plans with friends, so he gets creative. He
starts sitting with them when they do their homework. He drives his daugh-
ter to and from dance twice a week, and he invites his son’s friends over to
play basketball. Limiting his Saturdays at work and consolidating out-­of-­
town meetings also gives him more time for family activities. His favorite?
The new Sunday afternoon neighborhood volleyball tournaments. Lastly,
he schedules date nights with Cathy three months in advance, and makes
the plans and reservations right away.

Step 4: Check
Now that you have implemented your plan, you Check: Review and analyze the
will begin to review and analyze the results. This results; identify what you have
learned.
is where most people fall down. Nearly everyone
is horrible at Checking and Adjusting. Stick with this. It is important.
Jon holds a Monthly Review meeting with his family to monitor the plan
and check results. He uses the Bowling Chart to help capture and explain his
results so far. He is excited to see that he lost 4 lbs. in month 1 versus a target
of 2 lbs. And, he spent 42 hours versus a target of 30 with the family. Great
news. Cathy and the kids applaud (Figure 1.17).

Month 1 2 3 4 5 6 7 8 9 10 11 12

Weight Loss Target, –2 –6 –14 –22 –30 –30 –30 –30 –30 –30 –30 –30
Cumulative in lbs.

Actual –4

Quality Target, 30 60 60 60 60 60 60 60 60 60 60 60
Family Time in hrs.

Actual 42

FIGURE 1.17
Jon’s Bowling Chart after month 1.
18 • The Basics of Hoshin Kanri

Step 5: Adjust Adjust: Take action

based on what
Based on what you have learned in Step 4, you will now you have learned.
take action based on what you have learned. No problems Incorporate what
to solve, no adjustments necessary, full speed ahead. you learned (docu-
ment and standard-
ize), or identify
and implement
Back to Step 3: Do
countermeasures.
Jon now iterates within the Do-­Check-­Adjust steps of PDCA
cycle. He returns to the Do step and continues to work his plan.

Step 4 Again: Check

He returns to the Check step. He holds a second Monthly Review meet-
ing with his family to monitor the plan and check the results. He uses the
Bowling Chart again this month to show his results (Figure 1.18).
Jon lost 4 more pounds. He was now 2 lbs. ahead of the plan. He also spent
73 hours of quality time with his family versus a target of 60. Yeah!

Step 5 Again: Adjust

This time through the cycle, the open discussion during the review meeting
identifies a problem. Jon’s family cries “uncle” during the Monthly Review,
and they ask that he reset his target for quality family time. Jon adjusts his
targets based on feedback from his kids. “Dad, we love you, but we need
some space. Please lower your target for quality time with us.”
Jon lowers his monthly target from 60 to 50 hours after a lot of back and
forth discussion with his family (Figure 1.19).

Month 1 2 3 4 5 6 7 8 9 10 11 12

Weight Loss Target, –2 –6 –14 –22 –30 –30 –30 –30 –30 –30 –30 –30
Cumulative in lbs.

Actual –4 –8

Quality Target, 30 60 60 60 60 60 60 60 60 60 60 60
Family Time in hrs.

Actual 42 73

FIGURE 1.18
Jon’s Bowling Chart after month 2.
 The Basics of Hoshin Kanri • 19

Month 1 2 3 4 5 6 7 8 9 10 11 12

Weight Loss Target, –2 –6 –14 –22 –30 –30 –30 –30 –30 –30 –30 –30
Cumulative in lbs.

Actual –4 –8

Quality Target, 30 60 60 60 60 60 60 60 60 60 60 60
Family Time in hrs. 50 50 50 50

Actual 42 73

FIGURE 1.19
Jon’s (Revised) Bowling Chart after month 2.

Back to Step 3 Once More: Do

Jon continues to work his plan. He even attends church with his family from
time to time.

Step 4 Again: Check

Jon holds a third Monthly Review meeting with his family to monitor the
plan and check the results. He again uses the Bowling Chart to show his
results (Figure 1.20).
This time, Jon lost 8 lbs. in month 3, putting him 3 lbs. ahead of the plan.
And, he spent 55 versus 50 hours of quality time with his family.

Month 1 2 3 4 5 6 7 8 9 10 11 12

Weight Loss Target, –2 –6 –14 –22 –30 –30 –30 –30 –30 –30 –30 –30
Cumulative in lbs.

Actual –4 –9 –17

Quality Target, 30 60 60 60 60 60 60 60 60 60 60 60
Family Time in hrs. 50 50 50 50 50 50 50 50 50 50

Actual 42 73 55

FIGURE 1.20
Jon’s Bowling Chart after month 3.
20 • The Basics of Hoshin Kanri

Step 5 Again: Adjust

With the new, lower Quality Family Time targets, his family is happy. No
problems to solve. No changes needed.
Six months into his personal Hoshin journey, Jon reflects on the dramatic
changes he made. He not only met his weight loss goal of 30 pounds, but
exceeded it by losing 5 pounds more. He enjoyed more quality time with his
family, which greatly strengthened their relationship. As he tracked his prog-
ress on his Bowling Chart, he thought back to all he learned about Hoshin
Kanri through the process. He understood the need to Scan to establish a
personal strategy and set strategic directives for himself. He learned about
the power of gaining direct feedback, buy-­in, and commitment through the
Catchball Process. Most of all, he learned the inherent value of the PDCA
cycle. Not only did this cycle help him to create his plan, but, importantly, it
helped him to stick to it. Several times, he hit plateaus in his weight loss, but
through the Check and Adjust process, he was able to make the changes to
his diet or switch up his exercise plan to get results over the next cycle. The
same was true regarding family time. Jon learned that he had to check and
adjust with his wife, and especially his kids. While they loved having him
around, teenagers still need their space, so Jon adjusted his objectives and
measures accordingly.
Throughout the personal Hoshin journey, Jon drew the obvious parallels
to how he could use the process in his business. He remembered a busi-
ness card that the gentleman had given him along with the Hoshin Kanri
for Personal Change book. He then reached out and received the book that
would change his business.

KEY TAKEAWAYS FROM CHAPTER 1

There is a lot of work to be done before starting the Hoshin Kanri (strategy
deployment) process. Remember the lengthy “Scan” step before you got
to PDCA?

1. YOUR GAPS
Take it seriously. This is your life. Invest some time working through
the Scan step to identify your most important gaps. Spending time
 The Basics of Hoshin Kanri • 21

and energy to try to make a change that doesn’t really matter to you
is dumb.
2. YOUR TEAM
You need to get your key constituents (Jon’s family in Chapter 1)
aligned with you. Remember the bacon and egg breakfast story? You
want them involved, but better yet, you want them committed. You
want them to have some ownership in your personal change.
3. CATCHBALL
Use the Catchball process to have some frank conversations with
your key constituents. Listen to them and adjust when you know
they are right.
4. PRIORITIZE
Use a process to prioritize. Remember to select the “Important” ver-
sus the “Urgent” for inclusion on your short list. Make use of the
Interrelationship Digraph. It is an extremely powerful tool and it is
not nearly as complicated as it looks.
5. FOCUS
Limit your critical few objectives (your personal Hoshins). I say
three or less, especially when you are just starting out.
6. PDCA CYCLE
“Plan” is fairly easy, and the “Do” step often happens. It’s the “Check”
and “Adjust” steps that often fall by the wayside. Stick with it. They
are critical.
7. BOWLING CHART
Use the chart to keep track of your progress. Do it; it works.

REFERENCES
1. Jackson, T. L. 2006. Hoshin Kanri for the Lean enterprise: Developing competitive capa-
bilities and managing profit. Boca Raton, FL: CRC Press, pp. 1–2.
2. Akao, Y. ed. 1991. Introduction to Hoshin Kanri: Policy deployment for successful
TQM. (translated by Glenn Mazur) New York: Productivity Press, p. xxv.
2
Hoshin Kanri to Deploy
Business Strategy

I expect to spend the rest of my life in the future, so I want to be reasonably

sure of what kind of future it’s going to be. That is my reason for planning.
Charles Kettering

Vision without execution is hallucination.

Thomas A. Edison

Alice came to a fork in the road. “Which road do I take?” she asked.
“Where do you want to go?” responded the Cheshire cat. “I don’t know,”
Alice answered. “Then,” said the cat, “it doesn’t matter.”
Lewis Carroll1

JON’S BUSINESS
Jon had inherited a very complicated business challenge in his new role as
president at IGC Aerospace. Bottom line, he was issued a personal chal-
lenge by the chairman to increase profit and cash, while the revenue line
was expected to be flat, at best. In addition, his business unit did not make
safety a priority. He received at least three calls at home last month regard-
ing dangerous safety “near misses.” His vice president of operations resented
him because he had been in consideration for Jon’s job, and, on top of all of
this, he had inherited 24—yes, 24—simultaneous strategic initiatives from
his predecessor, all of which were in process. Finally, Jon knew that his fail-
ure to provide results would not only impact the security of his job, but also
those of his staff.

23
24 • The Basics of Hoshin Kanri

In order to get the results that his boss and IGC’s board expected, he had
to make some significant improvements in business performance. So, at
the end of a weekly staff meeting, he handed every staff member a copy
of The Little Book of Hoshin: A tool for business change. He informed
them that, starting the next week, they would work through the book during
daily lunchtime staff meetings for the next few weeks to turn the situation
around. (He also moved the daily walks on his calendar to before work every
morning during this time.) He requested that they read ahead and come
prepared with their ideas. Jon thought he got a lot of eye rolling at his first
family Catchball meeting, but his staff’s response to The Little Hoshin Book
was priceless.
Much like the book for personal change that he had first been given, this
book was very simple, with no publisher information or table of contents,
only a simple title page. Again, it opened with an explanation of Hoshin
Kanri, but expounded on the importance of the strategy formulation work
that precedes Hoshin. Basically, it included an extended version of the Scan
section in the personal book. This is where Jon and his team started.

INTRODUCTION TO
THE LITTLE BOOK Hoshin Kanri: A strategy deploy-
ment tool, approach, or system. It
Hoshin Kanri is a powerful process used in is an element of a larger manage-
business. The words Hoshin and Kanri have ment system introduced to the
western world in the 1980s as Total
been translated to mean a number of things.
Quality Management (TQM).
A common definition in English is strategy
deployment, and you often see a compass used Total Quality Management
as the image to represent the term. (TQM): A management system
The subject of Strategy Deployment (Hoshin with a misleading name. The name
Kanri) is not simple, but, in comparison, the is a misnomer because the system
actually encompasses all elements
subject of Strategy Formulation is an immense
of an organization, not just qual-
and incredibly complex thing. Experts and ity. TQM is considered to be an
authors cannot even seem to agree on the defi- out-­of-­date term by some, but the
nitions of the terms used within the science and author believes that the concepts
art called strategy formulation. Even the word remain valid to this day. This
belief is supported by the fact that
strategy itself is sometimes treated as a “how” several organizations are employ-
by some experts and authors, while others see it ing TQM and Hoshin Kanri with
as a “what.” great success as of this writing.
 Hoshin Kanri to Deploy Business Strategy • 25

For purposes of strategy deployment, we are going Strategy Deployment: A

to be looking for one thing as a result of the often process that follows Strategy
Formulation. It uses the key
byzantine strategy formulation process—a set of objectives (e.g., the Hoshins)
breakthrough strategic objectives that need to be that were developed in the
deployed into the organization. These “vital few” Strategy Formulation process
breakthrough objectives also are called Critical and makes them available for
Few Objectives, and Hoshin Objectives, or just plain review and action throughout
the organization, both verti-
Hoshins. You get the picture. cally down through the orga-
That’s it. Just a few objectives (or “whats”) that the nization’s layers and across
organization needs to deploy and execute. It seems the organization’s functions.
simple enough, but trust me, a good, short list of Strategy Formulation: A
Hoshins is not easy to come by. process where strategy is cre-
Hoshin Kanri consultants, who assist organiza- ated or revised.
tions with Hoshin, report a surprising number of
Strategy: Within the confines
organizations preparing to deploy a strategy when of this little book is an overall
they don’t really have one. Or, if they do have a strat- approach to achieve what an
egy, it is often not very sound. organization proclaims in its
It is critical to determine a strategic direction purpose statements (Vision,
Mission, Values), to include
before embarking on a strategy deployment. Some the determination of its stra-
organizations call it their “True North.” So, before tegic objectives.
we get into the steps of Hoshin Kanri (i.e., strategy
deployment), we are going to first use the Scan process for creating a busi-
ness strategy as a part of this exercise. We will then walk through the start
of the Plan-­Do-­Check-­Adjust (PDCA) in the Hoshin Kanri process with a
business application.

Step 1: Scan (The Strategy Formulation process)

Step 2: Plan (the Hoshin Kanri process begins)
Step 3: Do
Step 4: Check
Step 5: Adjust

Step 1: Scan
This first step, Scan, is about taking some steps to identify a few key objec-
tives in support of your strategy.2 It presupposes that the organization
has done some strategy formulation work in the recent past that included
an examination of both external and internal influences on strategy
to include:
26 • The Basics of Hoshin Kanri

• The external environment

• Industry attractiveness
• Your competitors
• Your value chain
• Your capabilities and competencies
• Your competitive advantage

This step starts with understanding where you are today and where you
want to be a few years from now.

The Scan Process

1. Develop your Mission Statement

2. Define your Values
3. Define your Current State
4. Define your Vision
5. Design your Desired Future State
6. Identify the gaps between the Future and Current States
7. Prioritize the gaps; define your Business Priorities

The First Working Lunch Meeting

The first working lunch did not go as well as planned. To sum it up, it was
a disaster. The idea of Hoshin Kanri was met with considerable suspicion,
and when talk shifted to reducing the number of strategic initiatives, no one
wanted to give up the ones they considered to be “theirs.” Especially resistant
was Jon’s vice president of operations, who owned five initiatives, all focused
on cost reduction. Though Jon pointed out the need to also focus on safety,
quality, and on-­time delivery, his staff rallied together again (unfortunately,
against Jon), arguing that cost reduction needed to be the focus next year to
achieve the very aggressive profit and cash targets.
This meeting opened Jon’s eyes. To make the changes needed to improve
performance, he had to overcome his staff’s resistance. He had to get them in
his corner. Jon had attended a change management seminar led by Jeanenne
LaMarsh a few years back. Because he had been so impressed with the pro-
cess, he reached out to her for help.
In their conversation, Jon explained that, while reading The Little Book
of Hoshin for personal change, he had used a very simple Current State/­
Desired Future State model to help him clarify his personal change plan, but
 Hoshin Kanri to Deploy Business Strategy • 27

his situation at IGC Aerospace called for a different approach. The situation
at IGC was far more complicated. He described the significant resistance he
was facing and shared his desire to use Hoshin Kanri as a tool to help drive
change in his new organization.
Jeanenne explained that the LaMarsh Managed Change™ (www.lamarsh.
com) methodology and Hoshin Kanri complement one another very well.
She explained that the methodology not only defines an organization’s
Current State and Desired Future State, but also identifies and mitigates
resistance within highly skeptical organizations, like the one Jon described.

The Second Working Lunch Meeting

The second working lunch went somewhat better than the first. Together,
Jon and his staff began walking through the Scan process in the little Hoshin
workbook, which was in some ways similar to the Personal Change work-
book, yet more complex for use in a business environment. Before defining
the Current State and the Desired Future State, the workbook explained the
importance of creating a mission statement, defining the organization’s val-
ues and vision statement, and completing an external and internal analysis
to help define the current reality.
Jon decided that, rather than “reinvent the wheel,” it would be best to start
by examining what IGC Aerospace had already created. He posted sum-
maries from the previous year’s strategic planning documents on the wall
for review. He pointed out that in the previous year the focus was on under-
standing the strategic environment and on formulating strategy and a set
of strategic objectives. The strategic objectives had been translated into 24
strategic initiatives and basically “tossed out” to the organization for imple-
mentation. And, this they had to do along with their daily workload and
departmental and individual objectives—a recipe for disaster. His people
all nodded to show their agreement. Jon added that the remainder of this
year and next year would be about reviewing what was developed last year
and deploying, in a more effective and efficient manner, a set of critical,
breakthrough objectives. He drew a big rectangle covering his white board
and labeled it Environment. Inside the larger rectangle, he drew a slightly
smaller rectangle and labeled it IGC Aerospace. Jon told them that this year
they were going to briefly review what was developed last year, but spend
most of their time looking inside IGC Aerospace. With this new perspective
in mind, they began to develop the Mission Statement (Figure 2.1).
28 • The Basics of Hoshin Kanri

IGC Aerospace

Environment

FIGURE 2.1
The focus is inside IGC Aerospace.

1: Develop Your Mission Statement

The Mission Statement defines who you are as an Mission: Who are we? What
organization, what business you are in, and what business are we in? Our pres-
value you provide. A typical mission statement ent main activities? What
value do we provide?
might include comments about the key constitu-
ents, such as customers, shareholders, employees, suppliers, and the com-
munities within which you reside. It also might include comments about
industries, product, and service offerings.

Define Your Mission:

We make high quality components and subsystems for the aerospace
industry. Our success will ensure that customers will build their busi-
ness, employees will build their futures, and shareholders will build
their wealth.

After some discussion, the IGC Aerospace team agreed to stick with the
Mission Statement they had created the previous year with the help of
the hugely expensive consultants.

2: Develop/­Define Your Values

Values: Guiding principles,
Values are the guiding principles of an organization the expected collective norms
that communicate the expected collective norms and behavior of everybody in
and behavior of everyone in the organization. In the organization.
other words, Values serve as the basis for making decisions within the
organization and act as the foundation for communication with col-
leagues and customers.
 Hoshin Kanri to Deploy Business Strategy • 29

The prior president at IGC Aerospace had been a bit of an autocrat and
had imposed his own Basic Beliefs on the organization, but very few in the
organization had really “owned them.” With input and agreement from the
entire staff, Jon and his team chose the following values, in which each felt
invested and obligated to uphold.
• Safety: Our foundational value. We care for our employees.
• Performance: We measure results and reward achievement.
• Integrity: We uphold trustworthiness and business ethics.
• Respect: We value everyone, and we lead with humility.
• Innovation: We encourage creativity.
• Teamwork: We work together to succeed.

Collectively they spelled S.P.I.R.I.T.

Jon concluded the second meeting with a sense of accomplishment. Great
strides had not been made, but they did come together in agreement over a
few things. He would take that.

The Third Working Lunch Meeting

3: Define Your Current State

Take a step back to consider your environment, your Current State: Our current
current situation, your Current State, if you will. reality.
For this exercise, you will use an Affinity Diagram, Affinity Diagram: A tool
which is a tool used to help organize ideas generated used to help organize ideas
in brainstorming or problem-­solving meetings. You generated in brainstorming
or problem-­solving meetings.
will first list as many observations as possible about
your current state, and then you will classify each statement into one of
five categories: Structure, Process, People, Culture, or Metrics (Figure 2.2).

Structure Process

People Culture

FIGURE 2.2
Categories used to define the
Metrics
current state.
30 • The Basics of Hoshin Kanri

As everyone walked into the conference room for their third lunch-­time
working session, they noticed a large, blank whiteboard with Modified
Affinity Diagram written at the top. When Jon asked who was familiar
with this tool, he was met with blank stares. He explained that an Affinity
Diagram is a tool used to help organize ideas generated in brainstorming
or problem-­solving meetings. Ideas with an affinity for one another are
grouped together by category. In this case, the categories have been provided
in advance and the ideas are to be placed in the provided categories.
Referring to The Little Book, Jon described the process. He motioned to
the pads of sticky notes in front of each staff member and asked that they use
as many as they needed to describe the current situation at IGC Aerospace,
sticking them on the board as they go. He emphasized that the descriptions
need not be negative or positive, just honest observations. When the activ-
ity finally died down, Jon looked with pride at the whiteboard, which was
covered with notes of all colors.
He then stepped to another whiteboard, divided the board into four rect-
angles and wrote the words Structure, Process, People, and Culture in the
four boxes. Near the bottom of board, he wrote Metrics.
He handed each of them a list of brief definitions (Figure 2.3).
Next, he asked his staff to work together to place each sticky note into
one of the five categories shown on the whiteboard. They got right to work
and were soon working together and seemed to be thoroughly enjoying
the process.

• PROCESS
• How we do work
• STRUCTURE
• Organization structure, systems
• PEOPLE
• Skills and competencies
• CULTURE
• Beliefs, behaviors, rules (written and unwritten)
• METRICS
• What we measure and how we measure it

Source: www.LaMarsha.com

FIGURE 2.3
Definitions used in LaMarsh Change Management™ Methodology.
 Hoshin Kanri to Deploy Business Strategy • 31

When they finished, Jon thanked them for their excellent work. He noticed
more camaraderie among the team and more excitement with the process.
He explained that in the following meeting they would take the next step.
They would define the Desired Future State of the business, and he asked
that again, they come prepared to share their ideas.

The Fourth Working Lunch Meeting

Jon’s staff entered his office with smiles on their faces. Most of them had
enjoyed the Current State exercise, and he hoped they would be equally
energized for their work today. A few of them even carried their copy of The
Little Book with them. They noticed the modified Affinity Diagram again,
now blank, and a blown-­up picture of the previous meeting’s diagram hang-
ing on the adjacent wall (Figure 2.4).
Jon started the meeting by welcoming everyone in attendance and thank-
ing them for what they had accomplished the day before. He reminded them
that today’s exercise was about designing their Desired Future State, and
that the first step to this was to create the vision.

4: Define Your Vision

For an organization, vision is the picture of the
future, i.e., where the business is going. For a busi- Vision: Our dream for the
future. It’s our “picture” of
ness, vision is a picture of the future that might the future.
include things, such as customers, employees, sales,

IGC Aerospace’s Current State

STRUCTURE PROCESS

xxxxxxxxxx xxxxxxxxxx

PEOPLE CULTURE

xxxxxxxxxx xxxxxxxxxx

METRICS:

FIGURE 2.4
IGC Aerospace’s Current State.
32 • The Basics of Hoshin Kanri

profit, suppliers, community relationships, structure, process, people,

culture, and metrics. This “picture” might include words, such as global,
leader, premier, most respected, or successful.

Define Your Vision:

To become the most successful aerospace manufacturing company in
the world.

After much deliberation, the IGC Aerospace team agreed that the Vision
they had worked so hard to create just a few months earlier was still an
accurate picture of IGC’s desired, ultimate future.

5: Your Desired Future State

As we head toward our vision, our Desired Future Desired Future State: As we
State is our expectation for where we should be at a head toward our Vision, this
is our expectation for where
specific point in time. we should be at a specific
For this exercise, pick a point in time a few years point in time. For example,
from now. Think about what you like about your five years from today.
Current State diagram and what you dislike about
it. Now, bring the favorable things forward into your Future State dia-
gram. These are the things you want to retain as you move forward mak-
ing changes in your organization.
Consider again each facet of the Future State diagram. In terms of struc-
ture, process, people, and culture, ask yourself (based on any strategy for-
mulation work you concluded recently and the strategic objectives that
came out of that process): Where do we need to be in five years? Where
do we need to be with all of these things? What is your Desired Future
State? Once again, try to quantify or think about how you will measure
these things. For example, if your Desired Future State involves improv-
ing employee satisfaction, how will you measure it? What metric(s) will
you use?
A lot of what showed up in the Current State was negative, but not all of
it. One of their challenges was to identify the positive aspects in the Current
State that should be carried forward into the Future State. Using the modi-
fied Affinity Diagram process again, Jon asked his staff to review the Current
State comments, and then use the sticky notes again to describe how they
want the Future State to look. He told them to include both the favorable
aspects from the current situation that they would like to carry forward, as
well as the changes they would like to make. The team studied the Current
 Hoshin Kanri to Deploy Business Strategy • 33

IGC Aerospace’s Desired Future State

As of date: 5 Years from Today

STRUCTURE PROCESS

xxxxxxxxxx xxxxxxxxxx

PEOPLE CULTURE

xxxxxxxxxx xxxxxxxxxx

METRICS:

FIGURE 2.5
IGC’s Desired Future State Worksheet: As of date: Five years from today.

State, and then busily jotted down notes and stuck them in the correspond-
ing category (Structure, Process, People, Culture, Metrics) on the white-
board, now labeled Desired Future State.
After an hour, the activity started to slow. Jon watched as his staff mem-
bers walked back and forth in front of the board, reading the comments that
had been posted by their teammates. Many nodded as they read the words
written by others. He hoped they would bring the same energy to the next
meeting. It would likely be a long one.
Earlier that afternoon, he had checked in with Jeanenne to update her on
their progress. She reminded him that once he and his team agreed on the
Current State and the Desired Future State, the next step would be to iden-
tify the biggest “gaps” requiring closure. What were Hoshins: The critical few
the critical few things that must change? In other or the BIG, “breakthrough”
words, the team would be working to establish their objectives.
Hoshin Objectives, or Hoshins (Figure 2.5).

The Fifth Working Lunch Meeting

6: Identify the Gaps

Take some time to compare your Current State and Gaps: The difference between
your Desired Future State. Now, identify the “gaps.” the Current State and the
A gap is a difference between the Current State and Future State. Things that will
require change.
the Future State, i.e., things that will require change.
34 • The Basics of Hoshin Kanri

Vision
Desired Future State
(5 Years from Today)

Current State
(Today)

Structure Process

People Culture

FIGURE 2.6
The change: From Current State to Desired Future State, toward the Vision.

If you have a lot of gaps, you need to consider which ones are the most
significant. What are the biggest, most important gaps that separate your
organization’s reality from the vision?
As Figure 2.6 shows, change will be required to move from the Current
State to the Desired Five-­Year Future State, all while heading toward the
organization’s vision.
Friday’s extended lunch session started with a review of the Current State
and Desired Future State diagrams. Jon now had both diagrams blown up
and posted side-­by-­side on the conference room wall. He asked the team to
take the next hour to look for the big gaps between the two (Figure 2.7). He
asked that they try their best to consider the differences between the Desired

Identifying the Gaps Worksheet

List your biggest gaps, in no particular order:

Jon and team listed 45 major Gaps!

FIGURE 2.7
Identifying the Gaps worksheet.
 Hoshin Kanri to Deploy Business Strategy • 35

Future State and the Current State that were most important to the organi-
zation as a whole.
Now, Jon reminded them that they were already working on 24 strategic
initiatives, and he posted the list of these initiatives on the wall. He expressed
the need to find a way to group and then prioritize
Interrelationship Digraph:
the gaps they needed to close, while also considering Sometimes called the Root
the major projects already underway. The lead Lean Cause tool, because it helps
Six Sigma Master black belt on Jon’s staff suggested identify the hidden causes.
that they use an Interrelationship Digraph—a It shows the cause and effect
relationships and helps to
Cause and Effect Diagram that helps identify drivers analyze the links between
and outcomes (Figure 2.8). The drivers become can- different aspects of a complex
didates for Hoshins. situation.

In = 7 Out = 4
In = 2 Out = 1
A In = 1 Out = 6
M Improve
Improve B
On‐time
Employee Improve
Delivery
In = 4 Out = 0 Satisfaction Employee
L Trust
Improve In = 5 Out = 0
Customer
Satisfaction C
Improve
Profit

K In = 4 Out = 0
In = 6 Out = 0
Reduce
Mfg. Costs D
Improve
In = 4 Out = 4 Cash
J In = 0 Out = 9
Improve
Productivity E
Improve
Safety
I In = 3 Out = 2
In = 0 Out = 5
Reduce
Employee In = 1 Out = 5 F
In = 3 Out = 1
Turnover Improve
G
H Supplier
Reduce
Reduce Quality
Scrap &
Inventory
Rework

FIGURE 2.8
Interrelationship Digraph (see Appendix B).
36 • The Basics of Hoshin Kanri

DRIVERS:
Driver: The elements in an
E: Improve Safety (9)
Interrelationship Digraph
B: Improve Employee Trust (6) with the most outgoing
F: Improve Supplier Quality (5) arrows are causes. They also
G: Reduce Scrap and Rework (5) might be root causes.

As a result of the analysis performed involving several processes, 12 candi-

dates still remained as potential Hoshins for the next year. A decision had to
be made. Jon asked that each one of his staff members, by Monday morning,
review the list of 12 Drivers and choose their top five, only five, and e-mail
them to him in ranked order. For example, the no. 1 Driver is the gap they
believe is the most critical to close, the no. 2 Driver would be the second
priority, and so on. Jon would make the ultimate decision, but he wanted to
base his decision on their input.
The group surprised Jon by breaking out into applause.

The Sixth Working Lunch Meeting

7: Your Priorities
Now that you have defined your Gaps, it’s time to prioritize them. You
can’t change everything in the business at once, so you need to decide
where you will focus for the next 12 months.
The team assembled again in Jon’s office. By now, the group was working
together comfortably, with the exception of his vice president of operations.
It had become apparent that he had no interest in the process and did not
care for Jon’s leader­ship style. Jon came to realize that he would soon have to
transition this vice president out and find a replacement.
As everyone settled in, Jon asked for their Top Five lists, and he charted
them on his whiteboard. The voting showed quite a bit of consensus.
Jon considered what to do about the final list, and once again with the
help of his Lean Six Sigma Master black belt, he created a Priority Matrix.
For each issue, the team assigned a 1 to 10 ranking to indicate: Importance
to the Customer, Gap in Performance, Significance to Long-­Term Plan, and
Urgency. By summing A + B + C + D, a total point value was obtained
and used to rank the issues. In the example in Figure 2.9, Issue X ranked at
the top of the priority list with 35 total points.
Jon explained that when they started the Interrelationship Digraph with
Employee Satisfaction and Employee Engagement as the desired outcomes,
 Hoshin Kanri to Deploy Business Strategy • 37

PRIORITY MATRIX FOR SELECTING “HOSHINS”

EVALUATION CRITERIA
Issue (A) (B) (C) (D) (E) Rank
Importance Gap in Significance to Urgency Total Based on
to Customer Performance long-term plan 10 = VERY = (A)+(B) points in
10 = VERY 10 = HUGE 10 = VERY 1 = NONE  +(C)+(D) column (E)
1 = NOT 1 = NONE 1 = NOT
Z  8 10  5 5 28 2
X 10 10 10 5 35 1
V  5  7  8 6 26 4
W  1 10  5 5 21 5
Y  4 10  6 7 27 3

FIGURE 2.9
Priority matrix for selecting “Hoshins.”

Safety was found to be the Driver, i.e., the place to start. Hence, Hoshin no. 1
was about Safety.
When they started the Interrelationship Digraph with Customer
Satisfaction as the desired outcome, Quality (supplier quality, to be more
precise) was found to be the Driver, i.e., the place to start. Hence, Hoshin
no. 2 was about Quality.
In the book Beyond Strategic Vision, Michael Cowley and Ellen Domb
describe the “Three Ds” approach, a tool to help organizations reduce ini-
tiatives to a manageable number.3

1. Can we delete it?

2. Can we defer it?
3. Should we delegate it?

and, in some cases

4. Just do it (if it fits into the plan and it is obvious that something needs
to be done) or finish it (if it fits into the plan and we are near the
finish line).

Using this approach, Jon and his team decided to finish two strategic ini-
tiatives that were almost complete. They deleted six, deferred eight, delegated
four, and four of the strategic initiatives readily folded into and supported
their two Hoshins.
38 • The Basics of Hoshin Kanri

IGC’S CHANGE PRIORITIES (The “Hoshins”)

1. Improve Safety—make it a value at AGC

2. Improve Supplier Quality

FIGURE 2.10
IGC’s change priorities.

Jon explained to the team that for the next year, they would apply the Four
Ds to most of the preexisting strategic initiatives and focus on the two things
that were most impacting employee and customer satisfaction: Safety and
Quality. For those who expressed concern about cost, Jon explained that cost
would come (Figure 2.10).
In the back of his mind, Jon remembered what a boss from early in his
career used to say: “Make Safety and Quality priority no. 1 and no. 2 and
Delivery and Cost will almost always take care of themselves.” Jon had seen
many examples during his career that had confirmed his boss’ wisdom.

Step 2: Plan
Make sure to keep the S.M.A.R.T. criteria in mind when defining
your objectives.

Specific: Explain what in clear terms

Measureable: Quantify or at least suggest an indicator of progress
Assignable: Specify who will do it
Realistic: Within a practical range of achievement
Time-­related: Specify when the result(s) can be achieved

Jon and the team applied the S.M.A.R.T. criteria to the Hoshins and cre-
ated Planning Worksheets (Figure 2.11).

Objective (Hoshin) #2: Improve Supplier Quality from 94 to 99 percent

in 12 months
Measures: Percent of Supplier receipts accepted, identify some leading
indicators (Figure 2.12 and Figure 2.13)
 Hoshin Kanri to Deploy Business Strategy • 39

Planning Worksheet
Objective (Hoshin) #1: Change behaviors by making safety the #1 “Value”
at IGC Aerospace
Measures: Employee surveys, leading indicator metrics, safety results

Means
(HOW) Measures WHEN/WHO

1. xxx xxxxx xxx Xxx Xxxx

2. xxxxxx xxxxx Xxx Xxx

3. xxxx xx xxxx

FIGURE 2.11
IGC’s plan for change no. 1.

Means
(HOW) Measures WHEN/WHO

1. xxx xxxxx xxx Xxx Xxxx

2. xxxxxxxx xxxx Xxx Xxx

3. xxxx xx xxxx

FIGURE 2.12
IGC’s plan for change no. 2.

Month 1 2 3 4 5 6 7 8 9 10 11 12

xxxxx Target Xx xx xx xx xx xx xx Xx Xx xx xx xx
in xxx

Actual

xxxxx Target Xx xx xx xx xx xx xx Xx Xx xx xx xx
in xxx

Actual

FIGURE 2.13
IGC’s Bowling Chart.
40 • The Basics of Hoshin Kanri

Catchball

So far, the Hoshin process has motivated only the senior

leaders in the organization. Jon realized it was time to Catchball: An interac-
tive process of tossing
engage others in the process by using the Catchball items and possibilities
process. The diagram for the process in The Little Book back and forth like a
for Business Change is a little complex, but it involves game of “catch.” It some-
a fairly simple concept (Figure 2.14). times results in changes
to proposed objectives,
The Leadership team meets with people at the next means, and measures.
lower level to toss ideas back and forth in the catch-
ball process.
Let’s say at the leader­ship level, the Objective (the What) is “Improve safety
and make safety a Value at IGC” and the Means (the How) is determined to
be “Focus the organization on safety-­related behaviors versus the results.”
When this cascades to the middle management level, “Focus the orga-
nization on safety-­ related behaviors versus the results” becomes the
Objective (the What) and “Design and roll out a new Gain Share program
that rewards employees for the ‘right’ safety behaviors” is determined to
be the Means (the How).
When this cascades to the line management level, “Design and roll out
a new Gain Share program that rewards employees for the ‘right’ safety
behaviors” becomes the Objective (the What) and “Ensure that employees
are exhibiting the ‘right’ safety behaviors” is determined to be the Means
(the How).
At each point in the cascade process, Catchball is used to discuss the
objectives, means, and measures. Are they realistic? Are they achievable?
How should the objective be met? How should results be measured? What
targets should be set?
The cascading process continues, eventually reaching the working (shop
floor) level (Figure 2.14).
Jon is ready for the next little book.
 Hoshin Kanri to Deploy Business Strategy • 41

Leadership What? How?

Team

Catchball, a 2-way dialogue

Middle What? How?

Management

Catchball, a 2-way dialogue

Line What? How?

Management

FIGURE 2.14
The Cascade process, with Catchball.

KEY TAKEAWAYS FROM CHAPTER 2

Here are a few of the main takeaways from Chapter 2 of this book.

1. HAVE A STRATEGY
Before you consider embarking on the Hoshin Kanri journey, make
sure you have a strategy worthy of deployment. Mission and Vision
statements are not enough. The Hoshin process will look for some
“meaty” objectives upon which to “chew.” Spending time and money
deploying a bad strategy (or less than impactful objectives) is not smart.
2. INVOLVE YOUR TEAM
You need to get your key constituents (Jon’s staff in Chapter 2)
aligned with you. Remember the bacon and egg breakfast story? You
want them involved, but better yet, you want them committed with
you in the change. You want them to have some ownership.
3. APPLY ORGANIZATIONAL CHANGE MANAGEMENT
Within an organization, there is always some resistance to any
change, and I do mean ANY change. You could offer to give every-
one in the business $1,000 in cash, and you still would have a few
resisters/­
detractors. Organizational Change Management (OCM)
is a methodology/­set of tools designed to help identify and mitigate
resistance. Jon needed to use OCM to help explain and “sell” the idea
of using Hoshin Kanri within the business. He also will continue to
use it on a project-­by-­project basis to help eliminate the resistance
to some of the more significant change projects that flow from the
Hoshin objectives.
42 • The Basics of Hoshin Kanri

4. EMPLOY CATCHBALL
Use the Catchball process to have some frank conversations with
your staff, and for your staff to have similar conversations with their
people, and so on.
5. PRIORITIZE (AND DESELECT)
Use a process to prioritize. Use tools like the Interrelationship
Digraph to help identify the Drivers from the Outcomes. Use a
Prioritization Matrix to include some data in your prioritization
process. If nothing else, apply the “Important” versus the “Urgent”
test to your short list.
6. FOCUS! FOCUS! FOCUS!
Limit your critical few objectives (your Hoshins) to three or less,
especially when you are just starting out.
7. STICK WITH THE PLAN-­DO-­CHECK-­ADJUST (PDCA) CYCLE
“Plan” is fairly easy, and the “Do” step often happens. It’s the Check
and Adjust steps that often fall by the wayside. Stick with it. They
are critical.
8. USE THE BOWLING CHART
Use the Bowling Chart to keep track of your progress.
9. INVESTIGATE THE X-­MATRIX AND THE A3 REPORTS
The X-­Matrix and A3 are outside the scope of the short stories
included in this little book, but most Hoshin Kanri deployments
make use of them. See Appendix C for some information on the
basics. In addition, the Recommended Reading List section of this
book includes great resources for both tools.

REFERENCES
1. Carroll, L. 2000. Alice’s adventures in wonderland and through the looking glass.
New York: Signet Classic Printing.
2. Jackson, T. L. 2006. Hoshin Kanri for the Lean enterprise: Developing competitive capa-
bilities and managing profit. Boca Raton, FL: CRC Press, pp. 1–2.
3. Cowley, M., and E. Domb. 1997. Beyond strategic vision: Effective corporate action
with Hoshin planning. New York: Routledge, p. 95.
3
Interviews with Hoshin Kanri Experts

By three methods we may learn wisdom: First, by reflection, which is

noblest; second, by imitation, which is easiest; and third, by experience,
which is bitterest.
Confucius

You cannot create experience. You must undergo it.

Albert Camus

Experience is simply a name we give our mistakes.

Oscar Wilde

INTRODUCTION TO CHAPTER 3
What follows is the result of numerous interviews with Hoshin Kanri
experts—practitioners in industry, consultants, authors, and professors.
Many of these experts were on the ground at Hewlett-­Packard, Danaher
Corporation, and Florida Power & Light when Hoshin Kanri was first
implemented in the United States. Others have deep personal experience
with Toyota. I’ve scoured through countless pages of notes from my inter-
views and have included some of the most insightful responses about suc-
cesses and failures with Hoshin. I hope you will find their comments as
fascinating as did I. Listed below are the contents of this chapter.

43
44 • The Basics of Hoshin Kanri

WHAT IS HOSHIN KANRI?

Joe Colletti: Hoshin Kanri is primarily a visual deployment system for
strategic planning. Hoshin’s greatest power is that it creates
visual templates at each level of the organization that connect
the plan down through the organization in such a way that you
can ensure alignment of individuals across the organization,
both vertically and horizontally. It lets you see where you’re
going, and it puts you in a position to monitor things and work
together effectively. It’s powerful!
Hoshin is fundamentally all about creating and leveraging
visibility around your plan.
Lisa Boisvert: A strategic planning practice that defines a direction and priori-
ties, aligns the organization around that direction through dia-
log and detailed plans, then implements and measures against
those plans in a disciplined way.
Mara Melum: Hoshin Planning is a system that helps leaders identify the
most important goal to break through to new heights of success
and then to align the organization so there is deep and broad
engagement to achieve the breakthrough goal.
Larry Rubrich: It’s a way of connecting an organization’s goals with the
Lean tools to achieve those goals.
Tom Cluley: The Hoshin process helps the entire organization align by set-
ting strategic objectives and metrics that are key performance
metrics, instead of just performance metrics that measure the
performance of the organization against the objectives of the
organization. The alignment helps to create the focus. It’s the
Hoshin needle, so it gives organizations their true north.
Tom Jackson: Have you heard of the Balanced Scorecard? It was derived
from Hoshin Kanri. Hoshin has been around for a long time
… and people use it. They use pieces of it and aren’t aware of it.
You’ve heard of the Malcolm Baldridge Award and the Shingo
Prize? Those prizes are based upon Hoshin Kanri. You may not
have heard the term Hoshin Kanri, but you’re probably famil-
iar with some of the techniques that have been derived from it.
You’ve probably also heard of the Plan-­Do-­Check-­Act cycles or
the Deming cycles. Most people in manufacturing have heard
of it. This is the scientific method, right? Hoshin, a.k.a., Strategy
 Interviews with Hoshin Kanri Experts • 45

Deployment, is just an application of the scientific method. It’s a

way to execute strategy.
A. Blanton Godfrey: It’s a way of taking strategic goals and turning them
into action items. Key strategies support the organization’s
vision, and from strategies come goals, which must be measur-
able, and from goals come actions.
Jeffrey Liker: 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.
David Silverstein: I think Hoshin gets confused too often with being about
both creating and executing strategy. It’s really just about exe-
cuting strategy. Strategy is the input to Hoshin. We need to keep
Hoshin focused on strategy execution and implementation.
Lois Gold: Hoshin Kanri is about making and cascading objectives and
metrics.
Bruce Sheridan: On the Hoshin side, you start by considering the envi-
ronment you are in, then you develop your Vision, Mission,
and Long-­Term Strategy. You also develop a One-­Year Tactical
Agenda. We found at Florida Power & Light that the One-­Year
Tactical Agenda should be based on a rolling 12 months, and
not tied to the fiscal calendar.
On the Kanri side, the governance side, it’s where you manage
getting the strategic plan accomplished. We held, at a minimum,
monthly meetings to review the Hoshin plan, the progress we
had made, where we were falling short. And, then, whenever we
saw that we were falling short, we would decide what to do. Did
we need to start a Design for Six Sigma project, a Lean project,
or a problem-­solving project? You had to get financial approval
and approval from a master black belt regarding the approach
to take. We let the strategy drive the projects we were going to
work. We found the gaps, i.e., where we were missing the strate-
gic plan, then we launched projects to close the gaps. Over time,
we got the whole company aligned to our corporate strategies,
and our corporate dashboards and metrics. All of our Lean Six
Sigma projects were 100-percent aligned with the strategy. It
helped move FP&L from being considered one of the worst per-
forming utilities to one of the best. And, then, people wanted to
come visit us—in droves.
46 • The Basics of Hoshin Kanri

Paul Docherty: I would say it’s about aligning your organization to exe-
cute with purpose to achieve a few key things that matter to you
strategically.
Gerhard Plenert: Hoshin Kanri is a strategic planning and management
tool focused on the expertise of the individual. It integrates the
individual tribal knowledge into a strategic map. The goal is to
create an organization focused strategically on quality. It uses a
mapping process that integrates the collective thinking power
of all employees to create an organization that is the best in its
field. Hoshin is a management system wherein all employees
participate, from the top down and from the bottom up. It cre-
ates goals, identifies control points and milestones, and links
daily control activities to company strategy.
Wes Waldo: Hoshin Kanri is a process for consistently achieving break-
through objectives and turning them into daily practice.
Michele Bechtell: Hoshin is a proven methodology to reliably achieve radical
changes in measurable strategic levels of performance (covered in
my book, The Management Compass (AMACOM, 1995)).
A key stumbling block in experiencing the power of Hoshin
is infrequent review with timely corrective action. The solution
is adherence to a simple set of disciplined review protocols that
routinely communicate deviations from plan, accelerate factual
gap analysis, and verify sufficient corrective action. Frequent
factual review is common sense. Doing it in group formation
requires disciplined protocols for coordination (covered in my
book, On Target: How to Conduct Effective Business Reviews
(Berrett-­Koehler Publishers, 2002)).
Once learned, Hoshin becomes a way of life. It applies to the
workplace, civic government, charitable organizations, and per-
sonal life management.
In many ways, implementing Hoshin is like learning to ride
a bike. The first year, the simple mechanics promise distance,
speed, and choice destinations, yet coordinating the mechanics
initially feels awkward; the objective is to climb on and stay on
the bike despite a few spills and skinned knees along the way.
The second year, the conscious repeat of each action becomes
familiar and self-­reinforcing with a focus on gears, balance,
and coordination. The third year, the rider no longer thinks
about the mechanics of the bike, rather the focus is on purpose,
 Interviews with Hoshin Kanri Experts • 47

destination, and speed, not the mechanics of the transport. And,

once learned, one never forgets it. Now think of a group of nov-
ice bikers at different locations aiming for a continually chang-
ing sequence of destinations with variable weather conditions.
Many people believe that Hoshin cannot be implemented
before gaining company-­wide skills, such as factual root cause
problem solving and continuous process improvement. Not
true. Hoshin can be implemented at the same time to great
effect. It can be used to accelerate company-­wide acquisition of
such skills to achieve strategic imperatives.

THREE WORDS TO DESCRIBE HOSHIN KANRI?

I asked the experts to describe Hoshin Kanri using only three words. The
words used most frequently are shown in Figure 3.1.

Greg Watson: Catchball, Coordination, and “Self-­regulating responsibil-

ity management.” I know that the last is not a single word, but I
don’t know a good word to express the idea.
Michael Bremer: Focus on importance.
David Silverstein: Structured, Strategy, Execution.
Lois Gold: Accountability, Transparency, Alignment.

Words Used to Describe Hoshin

16
14
12
10
8
6
4
2
0
us

ls
e
en

en
lin
g

i
io

oa
sh
c

te
nm

itm
at
Fo

ip

G
ra

er
ic

isc
St

ad
lig

m
un

D
Le

m
A

Co
m
Co

FIGURE 3.1
Three words to describe Hoshin Kanri.
48 • The Basics of Hoshin Kanri

Rafeek Kottai: Direction, Alignment, Communication.

Barry Witcher: Manage, Purpose, Focus.
Mara Melum: Breakthrough, Alignment, Engagement.
Kevin Meyer: Aligning the Future.
Gary Vance: Structure, Involvement, Disciplined follow-through.
Bob King: Hoshin saved P & G $2 billion!
James Hinkle: Strategy. Support. Execution. Communication.
Wes Waldo: Stretch. Structure. Sustainment.
Mark Caponigro: End in Mind.
Mark Caponigro: All Together Now.
Bob Emiliani: Process. Practice. Patience.
Jane Dwyer: Clear vision. Focus. Alignment.
Zane Ferry: Catchball. Patience. Commitment.
Rafeek Kottai: Effective Strategy Implementation.
John Gaul: Strategy, Alignment, Transformation.
Adrian Mulder: Interactive, Breakthrough, and Follow-­up.
Lisa Boisvert: Focused, Hardworking, Measurable.
Thom Williams: Approach, Deployment, Results.
Chandrashekhar Kulkarni: Strategy, People, Review.
Paul Docherty: You can sum the Hoshin process up in four words: Focus,
Clarity, Alignment, and Follow-­up.
1. Focus. Focus is about focusing only on a few key, wildly
important goals, and success is as much about what you
choose not to do than it is about what you actually choose to
do. Without focusing, we set ourselves up from the beginning
for failure.
2. Clarity. Clarity is about explicitly defining in terms every-
body can understand exactly what success means. Clarity
is not about saying we want to be the best space agency in
the world. Clarity is about saying I want to put a man on the
moon and bring him back alive by the end of the decade.
3. Alignment. Alignment is about getting as many people
engaged with, as well as believing in, the particular plan
you are trying to execute. Without a Hoshin-­style cascade/­
catchball process to drive alignment, you can easily get what
I call the 10-percent problem, i.e., less than 10 percent of
employees’ objectives are aligned with the goals (and even
fewer can explain how their objectives support the goals),
 Interviews with Hoshin Kanri Experts • 49

which means that 90 percent of the energy of the organiza-

tion is pointing in the wrong direction.
Follow-­up. Follow-­up is about relentlessly checking to under-
4.
stand whether your actions have actually moved the dial and
then acting to do something about it if they are not.

THE HISTORY OF HOSHIN

Question to Lisa Boisvert: You worked for Bob King back when Hoshin
Kanri was very new in the United States. What has been lost from those
early days that should be resurrected?

Lisa: I … think some organizations continue to apply Hoshin as part of

an overall system of improvement, but it can also be seen as a
stand-­alone tool for planning now, outside a framework like
GOAL/­QPC’s TQM Wheel.
In GOAL/­ QPC’s Wheel, Daily Management, the starting
point, is where each employee knows clearly and simply what he
or she has to do in order for the organization to run smoothly.
Next would come Vertical Alignment, which includes Hoshin
Planning. Hoshin helps to align everyone around the direction of
the company. And, then, possibly a more advanced stage of orga-
nizational development is Horizontal Alignment, where unnec-
essary organizational silos have been brought down, and the few
core processes of the business can be managed cross-­functionally.

Question to Bruce Sheridan: You were involved in an early (maybe the

first?) major application of Hoshin Kanri in the United States. Can you
tell me about it, including how Hoshin Kanri became known initially as
“Policy Deployment”?

Bruce: Yes, I was there. I was at Florida Power & Light in the 1980s, and we
had the Union of Japanese Scientists and Engineers coming to
see us every three months, for about two weeks at a time. We were
translating Hoshin Kanri into English, and it involved 16-hour
days, with reviews continuing on Saturdays and Sundays. We all
50 • The Basics of Hoshin Kanri

made a lot of mistakes. I believe one of the translation mistakes

made at that time involved the name given to Hoshin Kanri by
the Japanese—“Policy Deployment.” Looking back, I believe it
should have been translated as “Strategy Deployment.” In the
United States, “Policy” related more to Human Resource or
Legal type of issues.

Question: What prompted Florida Power & Light to take Hoshin Kanri on?

Bruce: Our CEO at the time, Marshall McDonald, went to Kansai Electric
in Japan on a benchmarking trip and saw a storyboard that
showed meter reading errors. It was all in Japanese, so an inter-
preter was translating for the visitors. “As you can see, Kansai
Electric is achieving its target of 20 missed meter readings.”
Reportedly, the CEO turned to another FP&L person on the trip
and said, “What’s the big deal? Our target at FP&L is 5.” The
interpreter went on with the explanation of the storyboard and
said, “As you can see, they are significantly below the 20 missed
meter readings per million meters read.” The CEO refused to
believe that this was possible. FP&L had a target of 5 missed
readings per thousand and couldn’t hit it, while Kansai Electric
was achieving better than 20 per million? This meant that Kansai
Electric’s results were 250 times better than FP&Ls! With FP&L
having 4 million customers, this meant that at best they had
20,000 meter reading errors per month, whereas Kansai Electric
would have less than 80. The CEO came home, FP&L adopted
Hoshin Kanri, and FP&L went on to be the first company out-
side of Japan to win the Deming Prize in 1989.

WHY USE HOSHIN?

Questions to Joe Colletti: Why is Hoshin needed?

Joe: I’ve found that American organizations are pretty good at figuring out
what they need to do. The problem is with deployment—getting
it done.
 Interviews with Hoshin Kanri Experts • 51

There are a lot of great consulting firms out there to help an

organization figure out where they need to go and how they
need to get there. The real question becomes: How do you get
your plan deployed down into the organization so that every-
body is aligned, both horizontally and vertically?

Question: Your thoughts on how Hoshin impacts alignment?

Joe: Here in the United States, we’re pretty good at vertical deployment,
but we’re lousy at horizontal alignment. Hoshin gives you the
ability to achieve both. If you don’t know what someone on your
left or right in the organization is doing, and you don’t know
that they’re in trouble, how can you possibly help them?

Question to Larry Rubrich: How do you know if an organization needs

help with strategy deployment?

Larry: A good test for effective strategy deployment involves asking the
employees at all levels about the goals of the organization. When
they don’t know, or when they list a bunch of personal opinions,
you know the organization’s strategy deployment is ineffective.

Question to Jerome Hamilton: What benefit did Hoshin Kanri provide

at 3M?

Jerome: Hoshin Kanri helped us to focus on the vital few priorities, the
vital few objectives.
Also, within the 3M Industrial Business Group, the Kanri
piece needed to be improved. We were really good at developing
plans, but not so good at doing the check step all year to make
sure our plans were being executed properly, and that we were
getting the desired results by implementing them.

Question to Jeffrey Liker: How are employee engagement and Hoshin

Kanri related?

Jeffrey: What I say in my books, and what I learned from Toyota, and what
we practice is that “the only way to get employee engagement is
52 • The Basics of Hoshin Kanri

to engage employees.” You don’t get employee engagement by

talking about it, or by making managers more interpersonally
sensitive. Employees must be engaged by leaders with a deep
understanding of problem solving, who are teachers of daily
improvement driven toward clearly defined targets. Once you
have the improvement skills and a culture aligned around solv-
ing problems, you can connect the targets people work toward
with Hoshin Kanri.

Question to Wes Waldo: Why use Hoshin?

Wes Waldo: The primary reason to use Hoshin is to directly involve the
entire organization in fulfillment of the business strategy itself.
It creates buy-­in, and what I call an “emotional commitment” to
the work to be done, not just a “fiduciary responsibility.”

PREREQUISITES, CRITICAL SUCCESS FACTORS,

SECRETS, AND KEYS TO SUCCESS?
Question to Wes Waldo: One of your three words for Hoshin was “Stretch.”
Can you tell me more about that?

Wes Waldo: The goal of Hoshin, from my perspective, is not meant to be

merely project management. Some people devolve into that, and
they use it as a tool to manage all of their activities. But, it’s orig-
inal intent was to create breakthrough objectives. It’s not break-
through if it’s not stretching your organization. So, the goal is
to pick something that you know you need to do, but you’re not
sure how you’re going to do it.

Question: What are the prerequisites for success with Hoshin?

Mike Cowley: In my consulting work, I wouldn’t consider helping a com-

pany unless I knew I had the support of the top management.
It’s really important to have the top leader­ship of a company
engaged and convinced that something drastic has to change in
 Interviews with Hoshin Kanri Experts • 53

the company, because Hoshin, for most companies, really is a

dramatic change in approach.
The next thing would be that the education component is
really pretty important. You need anecdotes, and it’s really help-
ful to have people who have used Hoshin to come in and talk to
the executives. We did that at Hewlett-­Packard. We had people
from the Japanese subsidiary, where we got a lot of insight from
the experts before we launched into full-­scale implementation
of the process. And that helped. This was in the 1980s and there
was a huge cultural abyss. The CEO at the time, John Young,
really became convinced that we needed a change. He was smart
enough to pick up a big business need that we had and put together
a long-­term vision for meeting that need. The basic need was to
dramatically improve the quality of all of our products. A lot of
people thought that HP products were the best in the world, and
they were. But, compared to Japanese levels of expectation and
quality of electronics, we were pretty low on the scale. And our
Japanese customers told us that pretty bluntly. So, it’s important
to have leader­ship from the top so you can really get stuff done.
You need to be able to get people’s attention—call meetings and
have people show up. The top guy’s got to support it.
It’s important to maintain a focus. There’s a temptation for
any process that seems efficient for getting a lot of stuff done.
The temptation is to try to boil the ocean and apply it to every-
thing at once, and that’s a big mistake. You really have to main-
tain the focus. I always insist that clients select one Hoshin
objective—maybe it’s a six-­month objective—and they put a
full court press on that. Relegate everything else to … “use the
business practices we always did.” Maybe you can make minor
improvements, but make sure you focus on a legitimate business
problem and make some progress in a six-­month period. A lot of
CEOs get greedy and want to solve their laundry list of favorite
topics and problems, and that’s a big mistake. It just overwhelms
the organization.
Bob Dodge: You really need commitment and consistent visibility from the
top; not just buy-­in, and not just the launch, but regular rein-
forcement of the commitment and visible leader­ship. Without
this, you are wasting time and money.
54 • The Basics of Hoshin Kanri

Barry Witcher: I would start on daily management/­operations first. Get

that sorted out before strategy deployment. Especially the
PDCA principle.
David Silverstein: Make sure you have a REAL strategy, not just clichés
and buzz words. Effective strategic planning is predicated on
one big assumption … that you have a strategy. Some have a
vision statement, and a mission statement, and a bunch of buzz-
words on the wall, but they don’t have a ROBUST strategy.
Make sure you have a really good fundamental strategy
before you start trying to use Hoshin to make a strategic plan.
Do you really have a differentiating strategy and not just a bunch
of things to do? That’s what happens to most companies with
Hoshin … it becomes a “to-­do” list, because they don’t really
tie back to a strategy. If they don’t have a really well articulated
strategy to focus on, then Hoshin just becomes a set of initiatives
all over the map. That’s why it often gets called strategies—with
an “s” (plural). A company should only have one strategy. If it’s
plural, there’s something wrong.
Greg Watson: If we take the perspective that the purpose of Hoshin Kanri
is to steer organizationally strategic change management proj-
ects that have the support of the leader­ship team, then there are
a couple of prerequisites that should help.
First, the organization needs a “predictive” type of perfor-
mance measurement system. This is not a balanced scorecard. It
is a system that allows the organization to use its internal pro-
cess knowledge to predict future performance events based on
factors that drive business performance results. This is differ-
ent from financial measurement systems, which are based on
average performance and a lot of guesswork. (We typically use
the fancier term allocation in a discussion of the use of rules of
thumb to make decisions in finance.)
Second, management must be committed to continual
improvement. This implies that the senior business leaders accept
their role as informed reviewers of performance improvement
and that their decision-­making contribution will be allowed to
be steered by the variation that is observed in the process per-
formance. Is this variation significant or is it just random noise?
 Interviews with Hoshin Kanri Experts • 55

Third, management will decide to choose improvement proj-

ects based on conditions of business change imperatives and
process capability shortfalls.
And finally, business leaders must appoint competent process
specialists to manage such change projects. Innovation, cus-
tomer intimacy, and competence development are all required
to steer the business organization in the future. What Hoshin
Kanri does in this process is to improve the project selection
and change management processes and increase the commu-
nications effectiveness throughout the formal and informal
organization structure. This way everyone knows what strategic
changes the management believes are necessary for the future
health of the organization.

Question: What are some important cultural factors for Hoshin Kanri
readiness?

Zane Ferry: [In answer to an earlier question] I alluded to what I firmly

believe is the most essential requirement for strategic success
by any organization—lasting commitment by company execu-
tives and directors to improve the life quality of every employee
salaried and hourly. This is the ultimate strategic goal, which
so few organizations attain. If we truly prioritize the develop-
ment of employees by creating problem-­solving skills, diverse
functional competency, systems thinking, process-­driven team-­
based responsibilities, self-­awareness, and interpersonal com-
munication skills, then our organizations become engines of
strategic change driven by every interaction our people have
with customers, products, their communities, and each other.
Narrowly speaking, a focus on people development is thought
of by traditional strategists as an enabler for the real work of mar-
ket positioning, acquisition, and product/­service innovation.
What research and standout success of certain companies have
shown over the past 50 years is that creation of organization-­
wide effectiveness through intensive human resource develop-
ment is the most successful long-­term strategy. Methodically
designing an environment where employees thrive physically,
56 • The Basics of Hoshin Kanri

emotionally, and creatively attunes everyone to the key factors

of their organization’s success. “Nice to have or must have?” is
the question I have to think Peter Drucker was responding to
when he famously said to Mark Fields, then president of Ford
Motor Company, “Culture eats strategy for breakfast.”
Mark Caponigro: The ability to engage and maintain two-­way commu-
nication is key. Hoshin Plans are not just posted on the wall by
the cafeteria. Creating a dialog is important. There should be an
effort to test for understanding and opportunities to educate.
Deming’s #1 was to have a constancy of purpose. The Hoshin
Kanri process is a great vehicle to articulate the purpose.
Lisa Boisvert: Here are three:
First, a compelling reason to change. People either perceive
that they’re in crisis or that they’re about to be. The crisis is
often financial in nature. The more intense the anxiety, the more
ready they are.
Second, an appreciation for the correct pace for the deploy-
ment. I’ve been involved with Hoshin Kanri for 18 years, and
I’ve consulted in this space for 14. I still don’t have a magic rem-
edy for knowing the right pace up front. If an organization has
already been through a large-­scale deployment of a methodol-
ogy, that often helps them have a better sense for the pace that
will work best for them.
Third, there is a tremendous benefit to having resident process
improvement skills. If the organization has some experience with
mapping processes, conducting root cause analysis, reading run
charts and histograms, that’s a big help to a Hoshin deployment.
It’s not exactly cultural, but it’s helpful for readiness.
Joe Colleti: Most organizations would find that Hoshin would work for
them so long as leader­ship doesn’t “beat people up” for what
appears to be a lack of performance. One of the greatest things
visibility does for you is that you can see where things are going
wrong way ahead of time. A dysfunctional management prac-
tice involves “wading in and beating people up” when things
aren’t working instead of saying: “How can we help?” “How can
we turn this around?” “What support do you need?”
As a leader, if you “beat people up” when things go bad, you
will find that future datum gets obfuscated, it gets concealed
because your employees are protecting themselves. For Hoshin
 Interviews with Hoshin Kanri Experts • 57

to work, you have to have leader­ship that is committed to the

success of the organization, meaning that you’re going to help
people succeed. And when you have that, it’s really powerful.
Wes Waldo: The biggest critical success factor is that … you don’t have to
have the most senior leaders involved when you start this thing,
but you cannot create a plan that runs counter to what the senior
leader­ship vision is of the future. Some people will ask, “How
can I get started if I don’t have the CEO’s involvement … it’s just
a waste of time.” And I’ll tell them, “No, it’s not. It works very
well at the business unit level in trying to get yourself organized
and motivated. But if the plan you come up with at the business
unit level, you show it to the CEO, and they say, “What are you
doing? You’re leading completely opposite of where we need to
go,” then you have a problem. So, even if you don’t have the CEO
involved, you still need to have an idea of their path and vision
of the future.
Another critical success factor involves an organization’s
response failure. When you create a stretch goal, very often
you’re not going to quite meet it. And, what I run into a lot
is companies will say, “Okay, we’re going to grow revenue by
50 percent in two years.” That’s the Hoshin, let’s say. And, they
grow revenue by 45 percent. And, people look at that and say,
“Well, we didn’t succeed; we failed.” And, I say, “Wait a minute.
When is the last time you’ve grown revenue by 45 percent in two
years?” And, their response is: “Well, never.” It’s critical to try to
redefine what failure means in that environment.
Kevin Meyer: A desire to be aligned and focused on the future and an
ability to willingly stop work on projects that do not align with
the plan.
Steve Darrish: Hoshin Kanri must start from the mindset of changing the
way the organization operates—the behaviors. In the perfect
world, you want buy-­in from the top. Build and get buy-­off on
the strategic plan at the enterprise level if possible, and begin to
cascade the operating plans across the business units and down
the functions. It is better to pilot the Hoshin Plan instead of try-
ing to swallow the elephant in one bite. Ensure you are work-
ing in the impactful areas of the business if possible. Embed the
plans using Kanri and drill objectives and targets into Human
Resource mechanisms to ensure people are held accountable.
58 • The Basics of Hoshin Kanri

Do the math, do the metrics roll-­up and drive the next level up
performance; all the way to the strategic plan. If so, success.
Brian Leonard: For Hoshin Kanri, and Lean, in general, to be effective,
there are numerous cultural obstacles we must overcome.
Leaders must be willing to empower others in making deci-
sions. Leaders often unfortunately believe empowering others
means losing power, when, in fact, empowering others enables
us to shift from managing to leading. The culture of power
and control will prevent progress. Leaders must also be deeply
involved in Lean, providing support and even participating in
Lean initiatives in order to become well versed in Lean. Be vis-
ibly supportive, as noted by many Lean experts, and people will
respond by taking ownership in project work. We must also seek
to develop internal talent. When team members show genuine
interest, then talent leaders should take every step to allow and
encourage their development.
Executive leaders must also be willing to mandate Lean and
to stick to that decision regardless of resistance. Communicate
this mandate, then immediately reassure people their input is
not only needed but critical. This mandate will often be met with
negativity from department-­level managers. This obstacle may
very well be the toughest to overcome. Do all we can to get man-
agers onboard, but do not turn a blind eye if managers become
the anchor, preventing progress. Work closely with managers
to educate them as to the basics of Lean, and get them involved
early in supporting improvement initiatives, serving as process
owners [who are] held responsible for results. In settings such as
healthcare, executive leaders may also need to improve relation-
ships between themselves and clinical professionals. Physician
and executive leader­ship relationships are, in some situations,
quite strained. There will be little or no lasting improvement
until these relationships are improved—working all as one team.
Hourly team members must also have a new set of expec-
tations. Everyone should be expected to participate in project
work. Of course, this comes in time as not everyone can be pulled
from their daily routine to work on projects. We can, however,
expect everyone to begin contributing ideas for improvement.
When these ideas are submitted, do not allow Lean to become a
recommendation program. Act on employee contributions. To
 Interviews with Hoshin Kanri Experts • 59

establish a Lean culture, it must become routine for everyone on

all levels in an organization. Use Hoshin Kanri to build struc-
ture and help team members see how their efforts contribute to
organizational goals.
Lastly, culture will not change until we have established new
habits, with Lean being the routine. One way to achieve this is to
change the goals we set for managers. Departmental goals and
managerial goals must be tied to Lean metrics. Furthermore, if
hourly employee job performance is being evaluated, we must
modify the evaluation process to include contributions to qual-
ity improvement and process improvement.
James Hinkle: The biggest cultural requirement for Hoshin Kanri is sup-
port. When we first started, we had the necessary support from
management; we were encouraged to try new things and look
at things differently. As new ideas came up, they were not “shot
down,” rather, they were tested. We continued to meet as a cross-­
functional team, and though it was a little rough at the start, dia-
log soon came, and we were able to knock down silos and foster
a mentality of strategy, support, execution, and communication!
Bob Emiliani: Desire to do Hoshin Kanri well, rather than half-­assed.

Question: What are the secrets to success?

Mark DeLuzio: The key is focus on the critical few. The hardest thing to do
with Hoshin is not figuring out what you are going to do … it’s
agreeing on what you are NOT going to do. Hoshin planning
is all about focus!
Lisa Boisvert: There is a lot of subtlety to Hoshin Kanri. People who take
an overly technical approach to it often fail.
Lois Gold: For an organization to do Hoshin really well, they have to be
really grounded in process management, because all strategies
are about figuring out which of your business processes are
either broken or need to be created. Broken can mean literally
broken or just maxed out in capacity. A strategy is just which
process to fix, expand, or create. And to do that, you have to
understand that the outcomes you’re seeking are really driven
by the processes that drive your business.
If a plan is about transformation, we know that fundamen-
tal to a transformation is process. You can only go so far by
60 • The Basics of Hoshin Kanri

focusing on culture. You drive strategy deep into an organiza-

tion because there are different levels of process granularity that
have to be impacted in order to build back to your objectives
and goals.
Let’s say a corporation has an objective to increase market
share in product X, and that’s what they cascade down. Unless
they create a decision tree and understand the cause and effect
relationship among the processes that are going to get them
there, along with the facts and data that determine “where are
the holes?” Without all of that, you’re just taking shots in the
dark, and you’re hypothesizing based on gut feel about what’s
going to improve your market share.
Mara Melum: Top leader­ship champions, first of all. Secondly, enough
organizational pain that the company knows that incremental
changes are not going to give it the success it wants. So, the com-
pany is looking for a breakthrough versus incremental change.
Third, a good balance of wise judgment and use of the tools to
make decisions. Fourth, developing a “golden thread” to ensure
that the breakthrough goal really is deployed throughout the
organization as opposed to just stopping after one or two levels.
And fifth, continuous evaluation and improvement.

Question: What are the Critical Success Factors for Hoshin?

Lois Gold: The organization must be held accountable for resourcing and
actually implementing the strategies. It doesn’t matter what
planning process you use. The senior management must really
hold their direct report’s feet to the fire, and so forth down the
line as far as you need to go to cascade this to ensure that it is
a priority of the organization. What happens is that a manager
has many objectives, and they have some that contribute to the
overall corporate goals, and they have others that contribute to
their own functional goals, product line goals, etc. Unless the
organization understands that you have to resource Hoshin
goals first, and they hold people accountable by having strong
metrics and a formal review process, it’s not going to work. But,
if you do that, you really drive accountability for the organiza-
tion metric throughout the institution.
 Interviews with Hoshin Kanri Experts • 61

If you’re doing this (Hoshin) well, you’re looking at both your

dependent and independent variables on a regular basis. So, you
have transparency through a formal review process of “what’s
the deviation from plan?” And, if there is a deviation, how are
you going to course correct it?
Essentially what you’re doing when you put the plan in place
is you’re making a series of (hopefully) fact-­based assumptions.
“That if I do X, Y, and Z, ergo the strategy, that I will get the
outcome that I’m looking for … the objective and the goal.” If
your goal is moving in the right direction, but your strategy
metrics aren’t, then you don’t know why you’re getting your
results. So, you may be fat, dumb, and happy, but you can’t rep-
licate it. And, you’re at the whim of the same happenstance that
drove you in the right direction could easily drive you in the
wrong direction.
Hoshin also takes persistence. You have to start at the very
top. Hoshin Kanri worked at HP [Hewlett Packard] for several
years when we had a series of CEOs who understood it and held
people accountable.
It takes patience and persistence. It’s much easier to say,
“… just give them a financial goal and let them figure out how
to do it.”
When you have multiline organizations and conglomerates,
unless the organization truly develops shared goals, there is
little incentive for the organization to work collaboratively.
People assume Hoshin is just a strategy planning device, but
Hoshin doesn’t take hold, and it won’t be successful, unless it’s
part of a broader system that focuses on strategic metrics and is
founded on strong process understanding and process metrics.
So, people try to put it (Hoshin) in without that fundamental
understanding, and the people that are asked to implement it
and internalize it don’t understand it. If you just brainstorm
ideas, you don’t drive a fact-­based culture. In that kind of envi-
ronment, you can do any kind of planning.
Mark DeLuzio: Hoshin needs to be process-­focused and results-­oriented.
A lot of Strategy Deployment I see, people have 50 measures,
and they’ll deploy the measures. They’ll say, “What is your
department going to do to improve inventory turns?” What is
62 • The Basics of Hoshin Kanri

Manufacturing going to do? What is Quality going to do? What

is Engineering going to do? You need to use cross-­functional
teams that work together on the same objective, but they work
on the process. You need to deploy the process. You drive your
action plans and your Kaizen activities toward building a better
mousetrap that delivers results that are sustainable.
And, it all needs to start with a good strategic plan. If you don’t
have a good strategic planning process, you probably don’t have a
good strategic plan. Strategy deployment starts with a good stra-
tegic plan. And, regarding the strategic plan, I like to say, the
quality of the plan is inversely related to the size of the book.
Your takeaway from the strategic plan is: “Here are my three
breakthrough objectives.” We developed two or three annual
improvement plans (AIPs) per breakthrough objective. Many
companies merely deploy operating metrics, which is wrong.

Question: What advice would you give someone just starting out on their
Hoshin Kanri journey?

Beth Cudney: As with any journey, you must be flexible. As you start down
this path, it is a new way of thinking strategically; therefore,
plans will change as new challenges come to light. It is impor-
tant to continuously communicate progress to all employees
and provide appropriate training at all levels of the organization
throughout the journey.
Gary Vance: I have two pieces of advice for someone just starting on their
Hoshin Kanri journey. First, don’t worry too much about the
Hoshin Kanri planning format that you follow. There are many
books, consultants, and plans available, and, for the most part,
they are pretty much the same. The key is to select one and get
started. You may have to make minor adjustments later, but that
is better than spending months analyzing various options before
finally making a selection. Second, don’t underestimate the
importance of the work that follows the initial planning. There
are many examples of great plans gathering dust on a bookshelf.
The planning is not always easy, but the follow-­up is by far the
hardest part requiring tremendous commitment and discipline.
If you are not willing or able to commit to the follow-­up, don’t
waste the time and money on elaborate planning.
 Interviews with Hoshin Kanri Experts • 63

Mark Caponigro: Understand the limitations of the process would be first.

Assign someone to be “editor-­in-­chief” of the output. Inputs to
setting the key themes come from conversations with multiple
leaders. Generally, they do not speak the same way and will have
different views on hot buttons. The editor will need to synthesize
the input into a common language output that will be under-
stood at the levels of the organization. The editor also needs to
manage the cohesiveness of the language and intent through the
layers of themes to goals to objectives to focus areas. The editor
must also revisit the leader­ship to assure that the original intent
is not lost or weakened by the modified wording.
Jane Dwyer: Don’t make the mistake of cascading to all levels at the begin-
ning, the task will be too daunting and there will not be enough
commitment and understanding to drive buy-­in and culture
change. Ensure that the top level of leadership is committed and
understand the value of the Hoshin process.
If the leader­ship says they want to engage all levels in the first
year of Hoshin, then that is a sign that they do not understand
what and how Hoshin works. Business and Culture strategy
must align from the top first. Foundation must be set so that the
next level can see the change in the status quo and see the com-
mitment toward realizing our vision. There must be confidence
and evidence of that before you engage the next level.
Rafeek Kottai: Communication is the key. You can never over commu-
nicate, so use all options possible. Consistent and timely com-
munication must be maintained to gain trust and cooperation
from all. Leadership must be actively involved in the process of
setting goals and priorities.

LESSONS LEARNED?
Michael Cowley: I found in a lot of companies, upper management oper-
ated somewhat remotely from the rest of the employees, not
really knowing what was going on. You’re better off telling
people what you’re trying to do, and involving them as the
Hoshin process is designed to do. Find something they can help
with that is reasonably aligned with what you’re doing for the
64 • The Basics of Hoshin Kanri

breakthrough objective. My experience is that it makes work a

lot better if you do that.
My personal approach has always been to be somewhat flex-
ible in implementation; make sure that the really important ele-
ments are adhered to, but you are reasonably flexible in terms
of format, that sort of thing. There are a couple of things that
business groups are tempted to do, and one of them is to not
do reviews. And, that’s a big mistake. The review process is the
most important, I think, of all of the steps. You learn the most
from it. It’s tempting to say, “These things are tedious and they
take a lot of time” and “Let’s just get on with it.”
I also try to integrate the normal business planning, a lot of
people call it a budget, but it’s really a tactical plan, with the
Hoshin plan for a couple of reasons. One reason is they compete
for resources. And, the second is there’s usually a huge amount
of synergy between your normal tactical plan and the Hoshin,
the breakthrough plan, in that you can kill a lot of birds with
one stone in some cases. So, it’s valuable to begin thinking about
that, at least at the outset. If you do a good job of setting up what
I describe as Daily Management—all the normal stuff you have
to do to run the business and the business processes—if you set
them up, over time with metrics and measures and goals and
reviews, you begin to uncover things that are worthy of future
breakthroughs. That happened in my division at HP when we
found a business process that was not working too well. It was
simply our manufacturing scheduling, where we scheduled the
building of all of the products we sold. We had something like
1,000 line items that emanated from a few semiconductor pro-
cesses, and we just didn’t have a good way of scheduling those,
all the way out to the point where we shipped to customers and
committed to them to make a shipment in x weeks. And, it’s very
difficult to do that if you don’t have a very robust scheduling sys-
tem. So, one year, that’s what we did. That was our Hoshin. And,
it was remarkable. It enormously benefited the division. The
customers were delighted, and the field sales guys were ecstatic,
because we were able to pinpoint delivery times for product and
meet our commitments.
My book is pretty detailed in the “nitty gritty” of getting ready
for meetings. And that’s important. You’re bringing a lot of
 Interviews with Hoshin Kanri Experts • 65

people into this thing and you owe them a well-­designed pro-
cess that someone has given thought to so that the meetings
are efficient.
Lois Gold: Deployment of Hoshin can’t be successful without a full
Change Management Plan supporting it. Managers need to be
trained in the concepts and methodology. You cannot just send
out an email with templates and calendar and expect reason-
able implementation. The notion of cascaded and linked objec-
tives and strategies is not inherently obvious to people. If they
don’t understand the concepts, they will simply try and force the
objectives they wanted to work on into the format, regardless of
whether they truly support the top down objectives.
Tom Cluley: My experience with Hoshin Kanri is that nobody gets it right
out of the chute. It takes several iterations.
Wes Waldo: You get people that get really excited up front, and you haven’t
properly prepared them for just how much work this is. People
often look at it like it’s some sort of “magic pill” they’re going to
swallow. But, when you’re into your third or fourth month of
your monthly review process and people are saying they don’t
have time, and they don’t want to go to the meetings, or pull
things together, you have to remind them that filling out the
X-­Matrix was the first and sometimes the easiest step. Sticking
to the process year over year is the tough part. And to me, the
lesson learned is making sure I have adequately prepared the
entire team for just what the effort is going to look like.
Brian Leonard: Expect Hoshin Kanri to be extremely challenging for
the first 12 to 18 months. The process of completing the
Hoshin X-­Matrix, in order to assess alignment between True
North Metrics, Annual Objectives, Value Streams targeted for
improvement, and proposed Lean projects, while seemingly
common sense, can be highly stressful. One must be open to
an entirely new way of thinking. Furthermore, possibly the best
advice is to stick to it. Many abandon Hoshin Kanri claiming
it is too difficult or of little value. The fact is simply this, if we
are not practicing Hoshin Kanri to select projects, which will
truly have an impact on the customer and our strategic goals, we
are merely leaving it to chance. Regardless of how challenging it
may initially be, we must stick to Hoshin Kanri and use it as our
organizational GPS. Many also discover their strategic plan is
66 • The Basics of Hoshin Kanri

poorly written once Hoshin Kanri is applied. If this is the case,

use what you learn from Hoshin Kanri to help improve the way
your strategic plan is written, enabling one to develop a strategic
plan that is actually meaningful.
Barry Witcher: It’s all about senior leader­ship. Leaders must understand
and proactively manage the Hoshin Kanri process. It goes
beyond implementation to seniors actually using PDCA [Plan-­
Do-­Check-­Adjust] to manage how people work. The way people
do things revolves around how senior leaders do things. That’s
the basis of culture. In the United Kingdom, many of the Japanese
firms took over sites and plants that had a long history of indus-
trial trouble, and afterwards the Japanese seemed to instill new
organizational cultures quite successfully. I don’t really believe
in culture. I believe in management. But, I do worry that human
beings can’t really manage (that’s another story).

Question: What is a major lesson learned?

Jerome Hamilton: People need to understand the real purpose of the tools.
Sometimes with Lean, people get “tool happy.” For example, you
can overdo A3s and you can overdo X-­Matrices.

Question: What are your words of advice with regards to using Hoshin Kanri?

Ellen Domb: Prepare to do a lot of work. Hoshin sounds so sensible … you

are going to establish strategies, and you are going to check the
strategies for reality and how to achieve them, and then you’re
going to get everybody in the company understanding both
the strategy and his or her personal role in achieving it. Then, as
you and your team do your work, there’s going to be a focus on
how you do your everyday work so that it contributes to achiev-
ing the long-­term strategy. This sounds incredibly simple, and
management sometimes thinks that it means that once they get
it set up and running, it’s less work for them. Don’t expect senior
and middle management to do less work. You’ll be doing more
work. It’s because you need to pay more attention. You need to
realign constantly. You need to show people throughout the
company by your actions, not just your words, that you really
 Interviews with Hoshin Kanri Experts • 67

are committed to the strategy. So, the first thing I would tell you
is it’s not going to get easier to manage under Hoshin.
The second thing I would tell you is that the biggest change
from conventional ways of management is the active review
phase of Hoshin. In the first couple of years, you need to expect
that you’ll make a lot of changes as you go, and these changes
have to be viewed as positive, in that, very often, when you start
off, you have a five-­year multiyear strategy, and you honestly
don’t know which are going to be the most important activities
for creating it. So, you have to get started, but as you learn things,
you can change the plan. And to me, that’s the biggest difference
between conventional MBO (Management by Objectives) and
Hoshin. With the MBO approach, you make a plan and stick
to it. With Hoshin, you make a plan and when you learn some-
thing, you might change it. The power of Hoshin is the power of
frequent review based on the “what did we learn and how do we
change the plan to incorporate what we learned?” Hoshin is the
only system I’ve seen that requires people to systematically go back
and ask, “Are we doing the right thing?” … not once we’ve made
the decision everybody runs with it.

Question: Speaking of a Hoshin focus, what are the dos and don’ts?

Jim Buchanan: In my experience, Hoshin should be focused on the things

that drive results, not on the results themselves. For example,
I’ve seen organizations focus on financial results rather than the
things that can drive those results, such as employee satisfaction
and capability, and customer satisfaction. When you focus on
the results, it’s like trying to lose weight by stepping on the scale
every day. You lose weight by focusing on the drivers of weight
loss: diet and exercise.

Question: Can you tell the reader about your Hoshin review meetings?

Jane Dwyer: All levels are linked on their reviews through our
Leadership Standard Work review meetings. As an example,
Level 1 and 2 review a certain time every month, Level 2 and 3 do
their review prior to this meeting, so that any issues, priorities,
68 • The Basics of Hoshin Kanri

or misalignment get resolved or identified. If it is not resolved

on this meeting, the Level 2 leader­ship will bring it up to the
Level 1 meeting to resolve or reprioritize. Another meeting is
set to flow down information from the Level 1 meeting and any
adjustment that must be done.
This is done as a standard leader­ship cadence for us and is set
on our yearly calendar. Metrics and actions from each level are
reviewed during these meetings.
Mark DeLuzio: When Hoshin was first used at Danaher [Corporation],
we allowed people to come in and explain away their problems.
There were no countermeasures, no real problem solving. In
our early Policy Deployment reviews, people would come with
40-page PowerPoint® decks and just “explain away.” Policy
Deployment should be centered around the Deming cycle: Plan-­
Do-­Check-­Act. We used Plan-­Do-­Check-­Explain.
What to bring to the meeting? Four pieces of paper: an
X-­Matrix, a Bowling Chart, an A3 Countermeasures sheet, and
an Action Plan. No PowerPoint. If you can’t explain it using
those four pieces of paper, you have to go back to the drawing
board; 15 to 20 minutes per team.

Question: What is management’s role at the review meetings?

Mark DeLuzio: It’s not management’s job to solve the problem for the team.
A lot of VPs, in particular, think that they’re the smartest people
in the room, and they’re going to solve the problem for the team.
Their job is to make sure they’ve clearly articulated the prob-
lem, they’re meeting frequently enough on their action plans to
make meaningful differences, the countermeasures make sense.
They’re not there to solve the team’s problem.
So many meetings I’ve seen go on for eight hours, because
you’ve got all these big-­headed vice presidents sitting there say-
ing, “I think you should do X, and I think you should do Y,” and
they don’t have a clue what the problem is. A Toyota guideline:
If the leader hasn’t seen the problem and personally experienced
it with his/­her own eyes, he/­she can’t comment on it. How many
times have you seen executives give their “two cents” on a prob-
lem when they have no clue what the problem really is? And
that’s when you start getting into real minutia. An organization
 Interviews with Hoshin Kanri Experts • 69

that does well with Hoshin has the discipline to stay with the
facts and stay with the data and not opinions or speculation.
Bob Dodge: Management has an opportunity to coach and mentor, which
lessens the dependency on Management to have the answers.
The keys here are asking questions and walking the talk.

Question: How was the deployment at Danaher different from Hoshin

Kanri at Toyota?

Mark DeLuzio: Some companies are trying to be like Toyota, with regard
to Lean and strategy deployment (Hoshin Kanri). This is a mis-
take. I think they need to be Toyota-­like.

Question: What advice would you give someone just starting out on his or
her Hoshin Kanri journey?

Zane Ferry: Some of my initial suggestions would be around clarifying

expectations for the “journey” and better defining the “vehicle”
for the trip. Start with the second part: ditch the Japanese term
Hoshin Kanri. It’s unnecessary. There are several good expres-
sions for this in English. In my experience, jargon and foreign
words do more harm than good in aligning diverse individu-
als to a common cause. Unless unique terminology generates
itself naturally as a group matures and defines itself, it distracts
and confuses. This approach to strategic execution will be chal-
lenging enough without foreign terms and secret handshakes at
the door.
Next, what expectations do you have for this strategy defini-
tion and management process? Specifically, what problems are
you trying to solve? This is the place to start. And it usually takes
more time (much more time), thought, and analysis to answer
that question than most organizations have devoted prior to
rolling out new strategy initiatives. Charles Kettering’s familiar
quote, “A problem well-­stated is a problem half solved,” implies
success depends upon good analysis. I’ve never heard anyone
deny that out loud. Still, organizations that value their success-
ful public image more than the need to learn and adapt (which
is most) resist the notion they may not fully understand their
true problems.
70 • The Basics of Hoshin Kanri

In most cases I suggest starting here, before the beginning of

what most companies want to start doing when strategy creation
and execution is their agenda. “We may not know everything,
but we certainly know what our problems are,” is a common
unspoken reaction I see. Do not ignore it. Openness (or resis-
tance) to reexamination of deeply imbedded organizational
problems is the first test of readiness for adoption of the Hoshin
Kanri process in my experience. At this point, you’re still gaug-
ing maturity and organizational effectiveness. Remember, as
you said in the question, this is a journey not a one-­day trip
to the beach and back. The metaphor of a journey implies that
resources, endurance, cooperation, and adversity will all be
challenges along the way. The group, whether it’s an executive
leader­ship team or goal deployment steering committee, will
have to navigate these obstacles and establish numerous “base
camps” as they advance. Assessing readiness, then shoring
up gaps and establishing consensus about core organizational
problems, is akin to testing the ground before pitching a tent
or building a shelter. If the ground is soggy, uneven, or overly
rocky, time will be wasted trying to get the tent stakes to hold.
A sense of early failure may set in among stakeholders still ten-
tatively onboard. So, avoid this with a systematic organizational
culture and effectiveness assessment that combines thorough
stakeholder analysis. A number of reliable models for this exist
and I strongly suggest employing one or more of them to the
fullest as preparation for Hoshin Kanri implementation.
Jonathan Ngin:
1. Be prepared to answer the difference between Hoshin Kanri
and Goal Flowdown from leader­ship.
a. The difference is Hoshin Kanri connects all levels of
leader­ship via the X-­ Matrix, ensuring the organiza-
tion’s Top 3–5 “Breakthrough” Strategies are aligned to
resources, who are assigned “SMART” projects that are
tracked via A3 methodology.
b. Goal Flowdown typically connects different levels of
organizations via metrics that are designed to hit an
Annual Operating Plan for Safety, Quality, Delivery,
Inventory, and Cost/­ Productivity. Those metrics are
then broken down by each level of leader­ship, where
 Interviews with Hoshin Kanri Experts • 71

employees are asked to come up with projects that will

allow that team to hit their targets for performance.
2. Be prepared to explain that a Leader, who assigns an A3 that
is tied to a “Breakthrough Strategy,” also requires them to be a
mentor, guiding the mentee through the journey of Discovery,
Analysis, Change, Refinement, and Implementation. There
are no shortcuts. Each phase must be well understood before
moving to the next.
David Thomas: Hoshin Kanri is the first step on the journey to the suc-
cessful implementation of a change program or a new project.
Without it, the implementation may take a lot of effort, utilize
(unnecessarily) resources, and may not be sustainable, so it must
be done right [the] first time. Particular attention should be paid
to receiving world-­class coaching, mentoring, and skills trans-
fer, especially in the technique of “nemawashi” (the achievement
of genuine consensus).
John Petrolini: The establishment and implementation of Hoshin Kanri
should be seen as a multiple-­year journey not a short-­term pro-
gram. It is not for the faint of heart or the impatient. I would
suggest breaking this highly integrated and complex system into
multiple, manageable-­sized pieces. For instance, the process of
determining an overarching Hoshin Goal and/­or identifying
the vital few goals is significantly different than the challenge
of deploying and communication goals throughout the orga-
nization, which is again much different than the challenge of
learning to actually monitor progress and make midcourse cor-
rections. In addition to this, there should already be a culture
of problem solving (via fact-­based gap identification and causal
analysis) versus a typical culture of “let’s brainstorm solutions
to a particular problem.” Finally, the first and most important
requirement is that this is driven from the top of the organiza-
tion, i.e., the CEO. The responsibility for implementation might
be delegated to a senior individual, but the overseeing and man-
agement of it starts at the top. Without the involvement—not
the interest, but involvement—of the CEO, the initiative will
surely fail.
Judith Oja-­Gillam: Those starting out on their journey need to ensure
their sponsorship is sustainable for at least two years to be able
to demonstrate positive results to strategic business outcomes.
72 • The Basics of Hoshin Kanri

Mark McDonald: Stay focused on effectively managing efforts to deploy

a strategy for specific results; do not be distracted by details of
tools and techniques that can be refined over time.
Kevin Meyer: Focus first on determining the key principles that govern
your organization. Vision and mission may also be appropriate,
but understanding and truly believing in the core principles is
critical. From this, you can begin to look at long-­term strate-
gies, perform SWOT [strengths, weaknesses, opportunities, and
threats]/etc. analyses to develop intermediate strategies, and then
align the organization.
Steve Darrish: Advice—Start small, have early success, and expand on it.
Ensure you have champions that can evangelize the approach.
It doesn’t have to start at the top, although that would be desir-
able. Hoshin Planning without performance measurement is
not really Hoshin Planning. Make measuring easy to do. Pick a
measurement approach where you can leverage existing systems
if possible.
James Hinkle: Stick with it. When we first started our journey, it was
tough. We struggled to figure out what we wanted to report and
how we wanted to report it. We started off small, and bit-­by-­
bit change occurred, and the process got better. To this day, we
are continually monitoring what we are reporting and making
changes as needed. We are still learning throughout the process;
the important part is to stick with it.
Rafeek Kottai: You need to use the Hoshin review meetings to recognize
and celebrate your wins, and never use Hoshin Kanri meetings
to find faults or punish people. Even small wins need to be recog-
nized and celebrated to create the momentum. All involved need
to feel they are respected and provided opportunity (responsible
freedom) to contribute outside of normal day-­to-­day operations.
Bob Emiliani: It takes three to four annual cycles before you really start to
understand it.
Jim Bossert: Anyone starting out on their Hoshin Kanri journey needs
to recognize that this takes two to four years to get the culture
changed. It gets easier the more you do it. The first year is rough,
and the plans are not as refined as they should be, but it is a start.
It gets easier the second year and in the third year. My expe-
rience has been that the company then starts producing solid
 Interviews with Hoshin Kanri Experts • 73

plans that are being cascaded deep within the organization. To

expect change and excellence sooner is unrealistic. It takes time
and you should plan for it.

Question: What happens when an organization tries Hoshin Kanri before

it is ready?

Gerhard Plenert: Hoshin is a very powerful tool, and sometimes it’s too
powerful. It has to be put into the right organization, and it’s
usually an organization that has already developed some level of
sophistication in its strategic planning. It’s not for the organiza-
tion that is just now trying to figure out how to spell “strategy.”

Question: What happens when a less sophisticated company (in terms of

strategic planning) tries to use Hoshin?

Gerhard Plenert: I’m talking out of experience here. It tends to scare them
a little bit, because it is a little bit complex.
Unfortunately, I’ve worked with organizations like this, that
don’t know how to get together in a group, and know what
strategy, brainstorming, visioning, goal setting is, if they’ve
never done that before, and you come in there and whip out
this Hoshin net for them, it’s going to rattle them a little bit.
So, you’ve got to work them into it a little bit. You’ve got to do a
little bit of visioning: Where do you plan to be five years from
now? And what is it going to take to get there? That kind of stuff.
And then, once they’ve started understanding, these are the
things I need to accomplish, and these are the steps it’s going to
take, and these are the people that are going to be involved in
the accomplishment, then you can map it and say, “Look what
we’ve got here; look what we’ve come up with.” But, you’ve got to
build them into it; you can’t just come out and build a map and
say, “Hey, guys, this is what we’re going to do today.” Ultimately,
Hoshin is definitely the right long-­term tool. If the organiza-
tion is on track to make a difference, to get things accomplished,
Hoshin is definitely the best tool.
If you take Hoshin and go into it one step at a time, using
those same basic principles, it’s the right way to go.
74 • The Basics of Hoshin Kanri

Question: How should Hoshin plans be created?

David Silverstein: If you’re the boss, it’s not okay to say, “I need a Hoshin
plan for your department.” If I, as the boss, don’t make the time
to sit down with my managers and develop that Hoshin plan
with them so I know what’s going on in their Hoshin plan, that
it’s rolling back up to support the overall corporate objectives,
then shame on me. If I just delegate to my managers the creation
of Hoshin plans for their department, because I’ve got to deliver
that to my boss, then we’ve got a problem. It is my job to become
their facilitator and to sit down with them and to actually do it
together, to make sure it all ties together. And, too often peo-
ple get too busy, and they delegate that, and that’s why Hoshin
breaks down and why it becomes a worthless exercise.
Bob Dodge: What David [Silverstein] says is true. At the same time, the
boss should not attempt to develop it without the engagement
and contributions of the team: the people with the perspectives,
the people who will need to execute, and the people who will be
impacted by the end result.

WHAT CAN GO WRONG?

Question: Why doesn’t Hoshin Kanri work in every organization that
introduces it?

Jeanenne LaMarsh: Because it is a change in how the organization plans

and executes its strategy. And, that change often misses a key
element that a change requires; namely paying attention to why
people would resist that change. Here are some of the reasons:
• They don’t see the need. Think the way things work today is
fine.
• They don’t understand Hoshin Kanri or don’t like it; want a
different process.
• The time it takes to do it takes time away from more impor-
tant things like production.
• There are other changes in the organization that need their
attention.
 Interviews with Hoshin Kanri Experts • 75

• The change effort to learn Hoshin Kanri is insufficient.

• They are not being held accountable for maintaining the dis-
cipline of following the process. There is no consequence for
dropping out of that discipline.
• They do not see their management serious about, demon-
strating their belief in, and enforcing this methodology.
And, there are more reasons that block the embracing of this
as a change that takes at least a full-­year cycle or more time of
applying solid change management and project management
until practicing Hoshin Kanri becomes the way the organiza-
tion does its strategy design and execution.

Question: Why does Hoshin Kanri fail?

Larry Rubrich: There are success stories out there, but I will tell you there
are many more failure stories. Primarily, failure with Hoshin
Kanri comes from the fact that most leaders see Lean as a set of
tools. Leadership might decide to “do Lean,” but their definition
of “doing Lean” is to find a Lean champion or a Lean facilitator
and then hand the Lean implementation over to them. This is
a mistake, because the greatest change in an organization, for
Lean to be successful, occurs at the leader­ship level.
The leader­ship teams in most companies are used to telling
people what to do and not taking the personal responsibility for
doing it, for modeling it. They expect Lean to be some kind of
“silver bullet” or “magic pill.” They seem to believe that once
they teach their people about Lean, it will just all magically hap-
pen. Leadership teams aren’t prepared to do the hard work to get
the whole thing started.

Question: What can go wrong with Hoshin?

David Silverstein: Hoshin can become merely a “to-­do” list if it doesn’t tie
deeply to core or fundamental strategy.
Lois Gold: If you don’t have the data to drive the strategies in the first
place, so that your assumptions are fact-­based, it can go very
wrong. You can drive the wrong set of objectives and metrics.
Tom Jackson: They’ve built no linkage to the front line. If you get an MBA
today, even from MIT, Harvard, or wherever, you’re probably
76 • The Basics of Hoshin Kanri

still learning. … There are a couple of models of leader­ship that

are still very dominant, even though we hear a lot of talking
about servant leader­ship; really, people still grow up learning
the command and control model of the Prussian military. And,
then, on top of that, we add the old idea of management account-
ing of targets and audits that came out of General Motors. These
are the constructs that I find most managers still live within.
Many of them are still very “command and control” and those
that have learned the General Motors system, the manage-
ment accounting system of targets and audits, it’s still very far
removed. You learn about the disconnect between strategy and
implementation far too late, and these are the failure modes. In
the case of command and control, you literally disempower your
workforce by telling them what to do. And, in the case of the
General Motors’ management accounting construct, the target
and audit construct, it can be empowering, but not for enough
people, and the feedback mechanisms are very sluggish. This is
really why, in my mind, General Motors went bankrupt. Very
sluggish feedback mechanisms, and they weren’t really trying
to implement Hoshin; they’re probably thinking about it now.
Mara Melum: Common challenges include: (1) prioritizing many good
ideas to come up with just one breakthrough goal; (2) shifting
leaders’ focus; and (3) seeing Hoshin as a bunch of tools instead
of as a leader­ship system. And then you have the millions of
things that can go wrong with people and people interactions.
Lisa Boisvert: Common mistakes made?
1. Choosing too many Hoshins.
2. Ignoring the organization’s fear or resistance to change and
undervaluing the need to lead the culture and communicate.
3. Not being clear about how success will be measured. A resis-
tance to measurement in general.
Jim Buchanan: A company can start out focused on the “critical few,” and
then employees, customers, and shareholders start to add to the
list, and you end up with the “trivial many.” They lose focus. It
definitely impacts the effectiveness of the Hoshin approach.
Wes Waldo: The thing that kills Hoshin is when you have too many objec-
tives. To me, Hoshin is meant to be more of a deselection pro-
cess instead of a selection process. Everybody looks at “how am
I going to populate it?” I’ve never had a problem finding new
 Interviews with Hoshin Kanri Experts • 77

opportunities. Our problem is always taking the list and nar-

rowing the 20 down to the 8 or 9 that you need to do. Having
too many objectives is that thing that usually goes wrong. Even
if you’re successful at getting people to understand that they can’t
have too many (objectives) in their top level matrix, people try to
sneak in what I call a “bigger, higher-­level objective,” and they try
to sneak them in somewhere down in the cascade. In other words,
they will put their own objective down in a level 2 or level 3, that
doesn’t really fit, but they just couldn’t let go of it. And, they say,
“What’s the harm?” Well, if everybody does that, pretty soon
you’re right back to where you started—too many objectives.
Gerhard Plenert: Implementation and execution problems occur because
Hoshin assumes the organization already has an existing level
of sophistication. For example, it assumes daily controls and
performance measures are in place. If the information founda-
tion exists, Hoshin is the most effective strategy planning tool at
systematizing the strategic planning process.

Question: What are some of the mistakes you have seen people make with
Lean and Hoshin?

Mark DeLuzio: The implementation of Lean can become the objective,

Lean can become the strategy. And, that’s the wrong objective,
the wrong strategy. I believe your strategy is your business strat-
egy, and it’s customer focused, and it takes into account all your
stakeholders. You then need to align your Lean initiatives, your
Kaizen activities, with your strategy.

Question: Why aren’t more companies using Hoshin Kanri?

Ellen Domb: Because it’s hard work. It’s so much easier to go on a three-­day
retreat, set up the plan, and then spend the next year meeting
your quotas. Frankly, I’m not surprised that more companies are
not using Hoshin for strategic planning. As a public company
CEO, you hear the following about Hoshin: First, I have to spend
a lot more time. Second, everybody in my company is going to be
critiquing the plan. Third, strategic planning is not going to be a
“once a year thing,” it’s now going to be a monthly and quarterly
reexamination of the plan, including changes to the plan when we
78 • The Basics of Hoshin Kanri

find out we’re doing dumb [expletive deleted]. And, then, I have
to go off and explain quarterly changes to the board of directors.
I’m going to look like a “wishy washy” nonleader, because other
people are telling me what to do. So, from a classical CEO’s point
of view, I can see Hoshin as being a very hard sell.

Question: What are the biggest obstacles to Hoshin?

Jeffrey Liker: The biggest pitfall in using Hoshin Kanri is when you don’t
have problem-­solving skills, and you don’t understand Lean
methods.

Question: What are the biggest mistakes made by those using Hoshin?

Paul Docherty: The first thing that causes failure in an organization that
attempts to introduce the Hoshin process is overconfidence,
i.e., not recognizing that defining and cascading goals using
a Catchball process is hard, and that it takes effort and needs
facilitation, particularly when the management team involved is
not used to a more structured approach to causal thinking. My
advice is to ensure you bring in some external facilitation sup-
port for the early sessions; somebody who has real experience
of how it works in practice and can guide the team to apply the
process in a systematic and disciplined way.
The second reason why Hoshin fails is that it tends to be an
activity where there’s a lot of energy and excitement in the initial
cascade process and only a fraction of the energy and excite-
ment in the part that really matters—the ongoing execution and
follow-­up. Successful organizations focus on creating an execu-
tion “heartbeat” by establishing a monthly timetable of reviews
(often called the Monthly Operating Reviews, or MOR, process).
These reviews keep the team focused on the goals by forcing a
regular assessment of not just whether the teams are on track,
but what is being done to ensure they stay on track.
Probably the third biggest mistake (and this is in my experi-
ence the thing that leads to failure in the longer term) is not
creating the kind of supportive leader­ship culture needed to
make Hoshin stick. I think the fundamental problem is that, in
many organizational cultures, the default behavior (when, for
 Interviews with Hoshin Kanri Experts • 79

example, they see a red traffic light on a chart) is to blame peo-

ple for things not happening, rather than seeing it as a signal
of a problem in the future that they, as a leader­ship team, have
an opportunity to resolve. Building a leader­ship culture that is
open to bad news, focuses on support rather than blaming the
team, and values the perspective of the team on what can be
done and how it should be done is most likely to be able to suc-
ceed with the Hoshin approach.
There are many other practical, obvious ways you can make
mistakes, but in terms of really wasting the energy, those are
what I would say would be the big three.

WHO USES HOSHIN KANRI?

(AND WHY NOT MORE USERS?)
Question: When/­where have you see Hoshin Kanri used with success?

Ellen Domb: Hoshin seems to work best when it fits the CEO’s personality.
In my experience, even a board member can’t bring Hoshin into
a company. It needs to be “personally owned” by the CEO. And,
this won’t help you being a business unit president within a billion-
dollar corporation, but it seems to work well in small- to medium-­
sized companies where ownership and decision making are one.

Question: Who, in your opinion, is using Hoshin Kanri most successfully?

Michael Bremer: I’ve observed that very few companies are using Hoshin
to great benefit: Danaher and Autoliv to name two. And, the
most successful organizations have been influenced by Toyota,
but they’re walking a different path.

Question: Why aren’t more companies using Hoshin?

Mara Melum: It can appear overwhelming. Many companies are look-

ing for a streamlined approach. Many organizations are doing
parts of Hoshin, they just don’t call it that. I wouldn’t say it’s not
catching on.
80 • The Basics of Hoshin Kanri

When I talk with organizations, they are often looking for

a Hoshin-­type transformation with a breakthrough goal. And
most companies I work with want to harness and engage the
power of their people … which gets back to Hoshin processes
like catch ball and alignment. Many elements of Hoshin are part
of organizational leader­ship systems.

DIFFERENT APPROACHES TO HOSHIN?

Question: Have you seen different approaches to Hoshin?

Joe Colletti: Every organization I’ve worked with over the years seems to
do it a different way. Given a standard Hoshin deployment chart,
they will modify it to fit what works for them. They make it their
own. This is also true of the Japanese companies I studied.
With a few forms of Hoshin Kanri implementation I’ve seen,
the organization spends more time updating complex charts
than achieving the plan itself. I believe it’s best to start with a
simple approach and then grow from there.

Question to Mark DeLuzio: What was different about the Hoshin Kanri
deployment you led at Danaher?

Mark DeLuzio: There are several flavors of Hoshin out there in the mar-
ketplace. Most are very operationally focused. The Hoshin that
I developed for Danaher in the early 90s (and they are still using
it today) is more strategic- and business-­oriented, focusing on
strategic breakthrough objectives, not strictly operationally
focused. Most Hoshin deployments I’ve seen are strictly an
Operational play, focused on Quality, Delivery, and Cost, and
Operational metrics. The Hoshin deployment at Danaher was
about implementing our strategy.

Question: What types of Hoshin Kanri have you seen? Can you explain this?

Michael Bremer: I believe there are two basic “flavors” of Hoshin Kanri, and
most organizations are using what I will call “Type I.” Type I is
 Interviews with Hoshin Kanri Experts • 81

about the Current State. It’s based on where we are right now
as an organization, and the question being asked is: “What are
the right things to do?” Then there is what I will call “Type II
Hoshin Kanri.” Type II is about the Future State, and the ques-
tion is: “Where do we need to be as an organization in x years?”

Question to Michael Cowley: What departures did you (at HP) make from
the Japanese Hoshin Kanri approach?

Michael Crowley: When I went to Japan in the 1980s, what I found was
that most Japanese companies were not using Hoshin. And,
many didn’t know what we were talking about when we said,
“What about Total Quality Management?” That changed over
time. What we did find was that the Japanese had many dif-
ferent styles of using Hoshin, so it’s really hard to nail down
one Japanese style. I was baffled by a lot of the literature that I
read 15 years ago when we wrote the book. Because there were
so many different Japanese experts, all had a somewhat differ-
ent approach to Hoshin. So, it’s hard to answer your question.
We adopted pretty much of the methodology at Yokagawa that
Hewlett-­Packard was using.

IMPORTANCE OF VISION?
Question: What is the importance of Vision?

Michael Cowley: Doing the Vision properly really, really makes a differ-
ence, because it’s a good point of departure for setting objec-
tives. A lot of executives just want to set objectives, yet doing
all of the work that leads up to the Vision, including the Vision,
creates the context for setting the objectives. A lot of times, the
executives have complete 180 turnarounds when they decide
what it is they really want to do after they go through the Radar
Chart and the Relationship Diagraph; whatever you want to call
it. If you want to call the ID the Cause and Effect diagram, that’s
fine. It is reasonably important and helpful to go through all of
those steps, in particular, the Vision. In reality, you don’t have to
82 • The Basics of Hoshin Kanri

do all of the preparatory work to do a Vision, but I think you get

a much better one if you do the preparatory work. Sometimes,
with a small group, I’ll just say, “Let’s create the Vision, and
imagine out two or three years, what do we want to be like?”
That just opens up a lot of good ideas, and it calibrates all of
the participants against each other as to where their thinking is.
And, it’s valuable to bring divergent thinking into the process.
This is a way of doing it.
Lisa Boisvert: With most clients—after the usual front-­end work of assess-
ing the environment, SWOT analysis, etc.—we begin by painting
a picture of an ideal state 3, 5, 10, 20 years out, depending on the
pace of their industry, how they are owned, etc. Working back-
wards from that vision increases the odds that the priorities we
choose today are the ones that will lead to where we want to go.
The Affinity Diagram is a strong tool for building that vision
as a group. The Interrelationship Digraph then helps the leader­
ship team determine what parts of the vision are most likely to
leverage the system toward the desired state.

HOSHIN OBJECTIVES: HOW MANY

AND WHAT SHOULD THEY BE?
Question: Hoshins? How many?

David Silverstein: I believe that keeping things fairly simple with Hoshin
is smart. I try to have a lot of discipline around the number of
major Hoshins—five to seven maximum; three or four is okay.
Lisa Boisvert: One! Okay, maybe two, but maybe not. I’ve been working
with executive teams on Hoshin Planning in different sized
organizations and different industries, sometimes with lots of
resources available, and very smart people since 1998, and I still
believe that achieving one Hoshin at the breakthrough level is
what most organizations can manage.
Could you achieve 10 to 20 percent success on several objec-
tives concurrently? Probably. Can you knock more than one
major organization-­wide breakthrough improvement out of the
 Interviews with Hoshin Kanri Experts • 83

park fully at one time, probably not. Hoshins are not incremen-
tal improvements.
Lois Gold: Big organizations can certainly benefit from Hoshin, but you
can’t drive more [than] one to three (maximum) Hoshin strate-
gies or objectives through your organization.
When an organization has nine objectives, it shows a lack
of understanding of prioritization and resource allocation. It
doesn’t matter what strategy planning process you use if you
have that many objectives. The goal of Hoshin at HP? What are
the critical few things that had to be done that year or during that
multiyear planning cycle? And, the concept of the critical few
got lost somewhere along the way. It will be just as unsuccessful
in a monoline business if you don’t understand that concept.

Question: What should a Hoshin objective be?

David Silverstein: Some clients want to include things like, “14 percent
EBITDA [earnings before interest, taxes, depreciation, and
amortization], because that’s what I’m accountable for to my
board.” I tell them, “No. That’s not a Hoshin. That can be one of
our metrics.”

Question: What are your thoughts about Hoshin objectives?

Paul Docherty: … when you think about the things that you’re deploy-
ing, that you focus on the process that you’re trying to influence.
Let’s take an example. If you say, “A Hoshin objective might be
to bring a new product to market.” Well fine, but the Hoshin
objective should be about shortening the cycle time, or improv-
ing the efficacy of the process to bring a product, not a specific
product being brought to market. And, I think a lot of times
organizations focus on objectives which are one-­off objectives
rather than solving the process. That’s where the real multiplier
gains come from with Hoshin.
Wes Waldo: For the “South” in the highest level X-­Matrix, I don’t want it
to be tactical in nature. I want it to be something that’s bigger,
more visionary, something that’s really a stretch “go get” that
you don’t know how you’re going to do it. It’s almost impossible
84 • The Basics of Hoshin Kanri

when you’re doing this with a team to not come up with some
sort of target around revenue or profitability, or both. Of the
three to five breakthrough objectives, which is how many I rec-
ommend (most organizations have more than that), you’re going
to have one or two around financial. So, I tell them [that] once
we get those in there, now we need to focus on the other parts
of the business. What about your infrastructure? What about
your learning and development? What about your customer
that we need to create some sort of objective around? When we
look all the way around the “North” in that X-­Matrix, when I get
to the Improvement Priority, I teach people to start off writing
what I call “job to be done statements;” we pull this from the
Innovation lexicon because very often what they do, if I take it
more to the tactical level and a Kaizen event and you look at the
problem statement, and what you’re seeing is a solution. It’s not
about resolving the problem, but I want you to go implement this
solution. I tell them, “You don’t really need a problem-­solving
team for that. You need some engineers and a Gantt chart if you
already know what you want to do.” The same thing should be
true for what’s up “North” in the X-­Matrix. It should be written
more in the form of: “What is the job to be done,” and then let
the lower-­level teams become more tactical and determine the
best way to go make that happen. It’s a bit of a learning point
for most people because they don’t get comfortable with writing
their “job to be done statements” up front. I already know what
I want to do. But, we find that’s when you start to cut off things
like new business model selection, some of the more innovative
acquisition strategies if you’re not careful.

CASCADING OF OBJECTIVES?
Question: How many layers to cascade down?

David Silverstein: I’d rather err on the side of a little too much than a little
too little. Why? Because people get more done when they have
goals and objectives. They just work a little harder, and they get
a little bit more done. So, I err a little bit more toward driving
 Interviews with Hoshin Kanri Experts • 85

it down that extra layer, risking it getting a little messed up as

opposed to not having it, because it’s kind of like sales. Sales
is an activity-­driven type of thing. The more calls you make,
the more emails you send out, the more opportunities you’re
going to get and the more sales you close; even though you know
some of that is wasteful effort, some of it is inefficient, some of it
we’re calling the wrong people. But the more activity, the more
results we get. We know that. That tends to be true also as people
tend to get hunkered down in their day-­to-­day job, and if they
have that Hoshin plan, then there’s something else in addition
to their day-­to-­day job that they are getting done to help move
things forward.

Question: How do you know when you are ready to cascade to the next level?

Jane Dwyer: When the current level can show understanding of the pro-
cess and articulate benefits of the Hoshin process. This can be
assessed by:
• All in the Current Level have a consistent understanding
and [are] able to show how tools that we use work. (Example:
Feedback from outside auditors, such as OSHA or ISO, tell-
ing us that interviews with top management reflects consis-
tent understanding of our Hoshin process.)
• Those in the Current Level are able and willing to facilitate a
Hoshin development process for their next level down.
• The Current Level wants and shows need to move to the next
level as a group. (Feels confident that we are showing the cor-
rect values through actions that reflect our vision).

THE PDCA CYCLE (PLAN–­DO– ­CHECK–­ACT)

Question to Tom Jackson: In your book, Hoshin Kanri for the Lean
Enterprise [Productivity Press, 2006], the PDCA process is pre-
ceded by a “Scan” step. Can you please explain?
Tom Jackson: Yes, a company should start by scanning the environment
before they charter a team. This Scan step is intended to define a
problem or a challenge for strategy to address.
86 • The Basics of Hoshin Kanri

Question to David Thomas: You mentioned that some use PDSA versus
PDCA, where “Study” is substituted for the “Check” step in PDCA. Can you
please explain?

David Thomas: Some experts have recommended that we change the word
Check to Study. The reason, I understand, is a concern that the
metrics being gathered were merely being ticked as collected,
but not acted upon as such (check mark = a tick in the box).
As long as the metrics existed, it did not matter whether they
were good or bad or off target as long as they were collected. The
desire is for them to be analyzed and the root cause identified
and acted on, hence, changing the step to Study.

THE CATCHBALL PROCESS

Question: What about Catchball?

David Silverstein: Catchball is a good process. It’s mostly about talking

about the things we need to do and the obstacles we need to
overcome to implement strategy.
Lois Gold: For Hoshin to be successful, you need the Catchball perspec-
tive, which is not command and control. It’s got to be a top-­
down, bottoms-­up, meet in the middle; really figure out what
the right targets and things are. In a typical command and
control environment, unless senior management’s approach is
fact-­based, the targets they drive down into the organization are
often just not doable.

Question for Jane Dwyer: How does the Catchball process work at Knoll?

Jane Dwyer: The Catchball process is ingrained in our Leadership Standard

Work, which is our cadence on when we do our reviews and
Hoshin development.
We start review and planning for the next year in September.
We go over our Core Values, Vision, performance against our
metrics and actions for the year, confirm relevance to our Vision,
and define and prioritize gaps that must be resolved for the next
 Interviews with Hoshin Kanri Experts • 87

year. Then, we start developing the Level 1 breakthrough objec-

tives and strategic actions for the following year. (This is done
with Level 1 and 2 leader­ship team.) Once agreed, the Level 2 is
guided by the Level 1 Actions and start to develop their Level 2
actions with the help of their Level 3.
Once Level 2 Hoshin development is completed, we use the
X-­Matrix to check for alignment across all the areas. Any actions
that are lacking supporting actions from another department
between Level 1 and 2 must be discussed and realigned. Then,
the next level does the same process. Alignment check is done
between and across all levels during this process. Any misalign-
ment is reviewed and resolved on our next monthly Hoshin
review. If any actions or priorities change during the course of
the year, all level X-­Matrix actions will get adjusted.
Wes Waldo: To me, Catchball is one of the more enjoyable elements of
this. The strategy process is often what I call a “go to the cave”
mentality. What I mean by “go to the cave” [is] if you get the top
20 or 30 or 50 leaders, they’ll go off for two or three days to some
offsite session, and they will come back with something they
will call “the strategy.” And, the problem is that the goal is to try
to get it rolled out by the end of the fiscal year, because January,
everybody is supposed to start running with what their objec-
tives are, but they spend the next month or two trying to defend
it, explain it, get people to understand what they’re talking
about because they never got involved to begin with. So, they’re
spending all that time doing change management and commu-
nication when you’re in March before most people get running
on their objectives. And, this is a very common problem that we
run into, and that happens when you “go to the cave.”
The opposite of “going to the cave” is what we call Catchball.
With Catchball, the goal is for those top-­level leaders to start off
with those breakthrough objectives. Once they have an idea
of what those are, they quickly get down to the next level of
management and say, “What do you think about this?” The next
level of management might not be able to completely change it,
but they should be able to influence it. And, they continue to do
that as you move down the different levels of objectives—you’re
going back and forth. By the time we are done creating the stra-
tegic plan, everybody has already seen it. It’s not a surprise.
88 • The Basics of Hoshin Kanri

There’s not an unveiling that has to happen where some orga-

nizations treat strategy like an event. We had the offsite event;
now we’re going to have the communication event, and every-
body going to go home for Christmas with their head spinning
thinking, “What in the world just happened to us?” Whereas,
what happens with Catchball is that everybody has their finger-
print on it and had some ownership and helped create the emo-
tional commitment to this process. Now, they’re not trying to
defend somebody else’s idea, they’re defending their own, or at
least something they had a chance to participate in. To me, that’s
the beauty of Catchball.
What people sometimes misunderstand with Catchball is
that they expect all of the strategy to come from lower levels of
the organization. It’s quite the opposite.

Question: How does change management fit into Hoshin Kanri?

Wes Waldo: I’ve never been a huge fan of just saying, “Okay, we’re going to
do two days of training on change management and then every-
body’s going to be good to go.” I think the only way to do change
management is to build the tools and techniques right into your
everyday process. So, for example, Catchball is meant to be the
change management vehicle within Hoshin Planning. It’s to give
people the chance to make suggestions. The monthly review pro-
cess itself is part of the change management vehicle, because if
you have scorecards that people can see, they can see their efforts
resulting in changes to the numbers, and they can see whether
they’re behind or ahead. Then, they can get a lot more excited
about some of the work they’re participating in. To me that’s
part of change management. So many times we wait until a
quarterly review or a six-­month review to let people know how
they’re doing, and they get surprised. And, then, all of a sud-
den they’re playing catch up. To me, the way we set up Hoshin
Planning itself, it’s designed to have those change management
techniques already built into it, if you do it right. But, if you skip
out on the monthly reviews, and if you skip out on having peo-
ple do their action plans and their A-3 reports like you’re saving
their time, the truth of it is you’re cutting out the people part of
the process and I think that’s a mistake a lot of folks make.
 Interviews with Hoshin Kanri Experts • 89

Bob Dodge: Any time you attempt to implement a change in direction,

approach, methods, tools, people, etc., if you don’t identify who
might resist, why they would resist, and mitigate that resistance,
you might as well not start.

THE HOSHIN TOOLS

Question: What are your comments regarding the value and use of the
Hoshin tools?

Lisa Boisvert: The tools do at least three things:

• Make the planning work visible
• Organize a large amount of discussion “data” into usable form
• Provide a process and mechanics that support executive
teams in working well together.

AFFINITY DIAGRAMS
Question: What are your thoughts regarding the Affinity Diagram?

Michael Cowley: Another thing that I consider valuable, and it’s fairly dif-
ficult to do, because I think American culture is that the really
smart people work by themselves and come up with great ideas,
patent them, and all that sort of thing. And the value of “group
think” is underestimated. Personally, I’m a big believer, at least
at the outset of some project, in getting all of the people that are
going to be involved in a room together to do several things.
One would be to create the vision of what this project is going to
do for us, and how is it going to do it. Whether it be the strategic
plan or a new product or a new business process and then again
when the implementation starts, what are all the things we have
to do? I personally find the Affinity Diagram a really helpful
process. It gets people talking to each other. It gets an enormous
amount of material on the table in a manageable form. So, if you
do nothing else, I suggest you use Affinity Diagrams.
90 • The Basics of Hoshin Kanri

A client had an enormous project that was absorbing all of

their energy. They wanted to buy up all of their distributors and
they had no idea how to do that. I got the executives together,
and we just did Affinity Diagrams, what are all of the things we
have to do. And, within an afternoon, we had a pretty damned
good plan of attack. The executives were amazed at how effective
that was and how “on board” it got 25 or 30 people in the room.
It was relatively smooth sailing; they pretty much put the plan
together themselves, and the natural leaders emerged from the
group. It was fairly amazing.

[The following is from Michael Cowley and Ellen Domb’s book, Beyond
Strategic Vision: Effective Corporate Action with Hoshin Planning
(Routledge, 1997, pp. 170–172). With permission.]

Even at the Hoshin 101 level, if people knew how to do

nothing else, I’d make sure they knew how to do the Affinity
Diagram. If you’re trying to put a plan together, for doing any-
thing, I don’t care what it is, as complex as you can imagine, this
is a pretty good way to do it. At the strategic level you can use it
to identify your strategies. Let’s critically look at what we’ve cre-
ated here, poke holes in it. Critique it. It’s important to step back
and perform a mathematical analysis and say, “Is this really
going to work?”
I, a lot of the times, jump right into an Affinity Diagram with
the executives, especially if there is some god-­awful problem
going on that needs to be fixed right away. The philosophy is that
the house is burning down. We’ve got to put the fire out first.
Yeah, we can do strategic planning and prevent future fires. So,
we start right off, what are we going to do? At eight o’clock in the
morning you do an Affinity Diagram. First, what do we have to
do to fix our problem, and then, second, avoid a repetition, and
then, third, find the root causes (PDCA), the standard problem-­
solving methods. A lot of times the answer is right in front of you
if you ask the right people. I’ve found that time and again. And,
it might emerge in days where it [otherwise] might take weeks or
months if you run it through the normal chain of command. I
consider that tool (Affinity Diagrams), if they learn nothing else,
but they know how to use that tool, that’s a valuable new skill.
 Interviews with Hoshin Kanri Experts • 91

THE X-­M ATRIX AND THE A3

Question: There seems to be a lot of confusion about the use of the X-­Matrix
and the A3. Can you please help clarify things?

Tom Cluley: Basically, the X-­Matrix tracks the entire strategy deploy-
ment, linking the cascading structure from the Breakthrough
Objectives to the Enterprise Annual Improvement Priorities
down to the lower-­level Annual Improvement Priorities, ensuring
that there are tangible targets and that the efforts are resourced.
The A3s are narrower in focus, creating a disciplined PDCA
approach to each supporting objective or project, following a
process similar to DMAIC (Define, Measure, Analyze, Improve,
and Control). The problem statement and various stages of the
PDCA are posted on a single A3-sized document.
Gerhard Plenert: The X-­Matrix is an overall strategy planning tool used for
tracking strategic priorities and activities. It validates the cost/­
benefits, confirms that each project is sponsored and supported
correctly, and ensures that the project has strategic alignment.
The A3 is focused on one specific project/­activity/­R IE and
tracks “what we doing/­why are we doing it/­who has authorized
it/­what metrics will be used to govern it.” The A3 then tracks
the root cause analysis, creates solution countermeasures,
and tracks the execution of the countermeasures. The A3 man-
ages the specific steps that one specific project should go through
in a lot more detail than the X-­Matrix, and it standardizes that
process for the entire company.
Bruce Sheridan: For the sake of discussing the X-­Matrix and the A3,
let’s think of Hoshin Kanri in three major steps: Strategy
Development, Organizational Alignment, and Execution. Using
this setup, the X-­Matrix is specifically targeted for Organizational
Alignment and the A3 for Execution. Even though they are used
at different stages, the X-­Matrix and A3 share an attribute. They
both serve to provide an organized view of a vast array of infor-
mation arranged logically to communicate a message or a story
that otherwise would be difficult to see. The X-­Matrix links the
Long-­Term Strategy, Tactical Agenda, Projects, and Metrics
all on one page in addition to discussing how the work will be
92 • The Basics of Hoshin Kanri

resourced. The A3 is named for the size of the paper typically

used to display the information, A3 or, in the United States, 11 ×
17. The A3 is used to guide a project team through the execution
of their work using predefined steps. During the project, the A3
serves to guide the team through problem solving or lean steps
as well as serves as a way to update peers and management on
progress. In the end, the A3 serves as a storyboard documenting
the improvement achieved by a project team.
Tom Jackson: The A3 (referring to either Toyota’s strategy A3 or its prob-
lem A3) is essentially a high-­level project plan. You can also
view it as a team charter.
An X-­Matrix is a table of A3s. Normally these are strategy
A3s, but can incorporate problem A3s as they crop up during
the course of the year. The X-­Matrix is used to check the align-
ment of multiple A3s by analyzing them in different dimensions.
The dimensions I include in my X-­Matrices include:
1. Thematic, i.e., does the A3 in question contribute to high-­
level strategic themes or goals? These themes or goals are
normally recorded to the west of the X.
2. Financial, i.e., does the A3 in question contribute the bottom
line? I park financial targets south of the X.
3. Process-­related, i.e., does the A3 in question contribute signif-
icantly to leading indicators of financial success? The [key per-
formance] indicators (KPIs) often appear to the east of the X.
4. Resource-­related, i.e., what human resources are required to
execute? The human resources appear to the far east of the X.
Sometimes, it is helpful to write a master A3 that corresponds
to the X-­Matrix. This helps leader­ship boil down its elevator
speech to its essentials. I have also drafted A3s to define stra-
tegic themes (and define KPIs). But, the main interpretation of
“A3” will be the first one I listed above, namely, either strategy
or problem A3s.

Question: What is the secret to success with the A3?

Tom Jackson: It’s not about the A3, it’s about the coaching relationship
between the manager and the supervisor or the CEO and the
vice president. Hoshin really is a structure of coaching “dyads”
(two people working together) … “coaching duos” might be
 Interviews with Hoshin Kanri Experts • 93

a better way to explain it … and to establish that relationship

takes time. It took Toyota 10 years to do Hoshin from the board-
room at NUMMI and down to the frontline supervisor level.
So, I think that’s plain ol’ Toyota conservatism. I don’t think
you need to take 10 years, but that shows you how careful they
were. And so, when you’re first getting started, I like to say (and
I think this is particularly true of small companies), keep the
circle of involvement; define the circle of involvement, and keep
it. Start off small, and then grow intelligently.

THE HANSEI–­HOSHIN REFLECTION TOOL

Question: Can you please explain the origin of the Hansei–­Hoshin Reflection
tool? Where did it come from? How/­when do you use it?

Jane Dwyer: We do Hansei every quarter as part of our Leadership Standard

Work, to allow us to reflect and do a strategic PDCA process.
This process allows us to review where we are and to see if we
need to make any adjustments on actions, focus, and priorities.
The Hoshin reflection tools that we used were created from a
series of information that I researched from several sources: Lean
article, Hoshin process Internet search, and Lean Culture book. We
picked the tools that apply best to our group and use it as an evalu-
ation of our maturity. It’s also tied into the Leadership Training
that we designed specifically to support the Hoshin process.

METRICS
Question: What about metrics?

Jim Buchanan: Let’s use customer satisfaction as an example. You need to

really think through the logic tree—the cause and effect—and
then identify the drivers of customer satisfaction and how best
to monitor and measure it.
Bob Dodge: Remember, if you can’t measure it, you can’t manage it. This is
a very tough concept for many.
94 • The Basics of Hoshin Kanri

BALANCED SCORECARD VERSUS HOSHIN?

Question: Many organizations use the Balanced Scorecard. Is it the same
as Hoshin Kanri?

Joe Colletti: The question I would ask a Balanced Scorecard user is, “How
are you deploying your Scorecard down into the organiza-
tion? What is your process, your visual process, for deploying
the strategies required to achieve the key metrics down?” Nine
times out of 10, I’ll bet you that information is not available to
the people who need it. It’s written down in a book somewhere,
and it’s on somebody’s desk. Also, the Balanced Scorecard tells
you what you’ve ultimately got to accomplish, it doesn’t tell you
how you’re going to achieve it.
Wes Waldo: When I teach it, I don’t teach it as one or the other, but I
do think that both have a “home.” One of the biggest problems
people have with Hoshin Planning is that they see that as the
actual strategy creation. You have to figure out where the origi-
nal breakthrough objectives come from. What are those things
that go into “South” of whatever the top-­level matrix is going to
be? To me, the Balanced Scorecard is an efficient and effective
tool to help make sure we have looked at the breadth of objec-
tives that should be out there. And, looking at those four differ-
ent perspectives and saying, “Am I over-representing financial?”
“Do I have something from infrastructure?” “Do I have some-
thing about people?” It forces me to look at the total breadth
of objectives that need to be out there. So, I use the Balanced
Scorecard to help me populate the top-­level matrix. Then, the
more effective of the two tools for doing the cascade and actu-
ally communicating it down into the organization and coming
up with the tactical plan; that’s when the X-­Matrix really takes
over, and it’s much more effective, and the Hoshin Planning
process works much better. I’ve had people use the Balance
Scorecard, and they feel like every level of the cascade has to
have one of each of the metrics. They had to have four, one for
each of the quadrants. That’s not the case. You get down to an
engineering department, and they may not have anything in
particular to do with “HR-­t ype” objectives.
 Interviews with Hoshin Kanri Experts • 95

Question: What are the pros and cons of the Balanced Scorecard versus
Hoshin?

Tom Jackson: There’s a lot to like about the Balanced Scorecard. The thing
they got right was you can’t get where you want to go with-
out managing the methods and means by which you intend to
achieve your targets, and that’s one of the things the Balanced
Scorecard does. I often use the Balanced Scorecard literature.
My background is in economics, and I taught business for years
and years, so there’s really nice literature that I can dip into and
give the kind of theoretical foundation.
What the Balanced Scorecard did not get right is they really
didn’t see a true purpose, at least in my perspective. The Balanced
Scorecard tends to live in the boardroom. I’ve rarely seen com-
panies that have managed to link their Balanced Scorecard with
frontline operations. And, so, there’s a lot of talk, there’s a lot of
spending on fancy consultants (like me); you have a lot of beau-
tiful charts, but there’s really not a lot on the bottom line that
I’ve seen. It doesn’t get connected to operations. Where Hoshin
excels, if you understand it correctly, is that you don’t stop. You
don’t stop deploying until you make that final linkage between
strategy and what happens at the front line of operations. I often
tell the clients, “I will know when you have deployed your strat-
egy when I can see it on the shop floor.” But I rarely can see it on
the shop floor, and I will take my clients, and I will walk to the
shop floor and say, “Okay, where is it?” And, “Do these numbers
add up to the bottom line figures I saw in your Boardroom?”
“How would you know?” “How quickly would you know?” It’s
that linkage that the Balanced Scorecard does not excel at.
Barry Witcher: The BSC [Balanced Scorecard] comes from Hoshin Kanri,
but it doesn’t use Hoshin as a management of deployment sys-
tem. In theory, they complement each other. The BSC could be
used to formulate and develop corporate-­level Hoshins, and
Hoshin Kanri used to deploy and manage them in daily man-
agement. As one manager told me, the BSC is good at what
should be achieved, and Hoshin Kanri is good at how objectives
can actually be accomplished. The top is good at telling workers
what’s got to be done, but not so good at saying how it should
be done.
96 • The Basics of Hoshin Kanri

Howard Rohm: Having good performance information delivered to the

people who need the information on time and with high busi-
ness intelligence value is one of the key benefits of a good
Balanced Scorecard system. Many scorecards, especially early
ones that have not kept up with changes in the underlying
concepts of scorecard development, are focused on simple per-
formance measures and data reporting. Modern scorecard sys-
tems depend on much more than a software solution for data
reporting—they require an understanding of [how] organiza-
tion strategy, planning, budgeting, alignment, accountability
and execution are related. And all this in a climate of change.
There are three main versions of the Balanced Scorecard
originally created by Drs. Kaplan and Norton over 20 years
ago. The first type—measurement scorecards—are driven by a
quest for nonfinancial performance measures to complement
the financial measures most organizations currently use. Many
early scorecards were built like this and still exist today. It is
the original design of the management scorecard; to be suc-
cessful, organizations need to measure more than financial
performance, specifically they need to know about customer
satisfaction, internal processes, and the ability of an organiza-
tion to learn and grow.
The second type is newer and started life five years or so
after the first generation. In these scorecards—strategy score-
cards—measurement is enhanced by adding strategic measures
to operational measures and focusing on strategy execution for
competitive advantage. The addition of a strategy map to the
original scorecard design provides the basis for this embellish-
ment. Any organization that has kept up with scorecard devel-
opment improvements would have added or will add strategy
mapping to build a more robust system where progress against
strategy can be tracked, reported, and acted upon. But, the main
focus of these systems was/­is still around measurement.
The latest generation of scorecards are truly systems that take
previous designs in a new direction. In these systems, the score-
card is used as the basic structure to integrate strategic planning,
strategy alignment, and strategy execution into one single system.
These systems are built by internal teams, not consultants, who
use principles of strategic thinking and change management to
 Interviews with Hoshin Kanri Experts • 97

develop a holistic system that “connects the dots.” The Balanced

Scorecard Institute’s Nine Steps to Success™ framework, for
example, is widely deployed worldwide and was the first frame-
work to incorporate elements of strategic thinking and organiza-
tion improvement into a single system to help an organization
move to higher performance. This framework incorporates
change management, leader­ship development, visioning, goal
setting, strategy formulation, risk management, customer value,
strategy profiling and mapping, strategic and operational perfor-
mance measurement development and target setting, initiative
priority setting, budget formulation, strategic operational plan-
ning, alignment, strategy analysis and execution, and strategy
evaluation into one disciplined, easy to understand approach to
planning and management. Using this system, employees “get
it” and see how the work they do connects to the organizations
strategy and goals. Measurement and visual reporting are inte-
gral to the framework, but the framework is designed to “change
hearts and minds” to get everyone on the same sheet of music.
A modern Balanced Scorecard system not only tells you
(everyone in the organization, not just the board, C-­level execu-
tives, or managers) how your work connects to organization
goals, it gives you a roadmap of how to get there, focus on
what’s important, measure what matters, build accountability
for results, and involve everyone in the organization in build-
ing a higher performing organization. It does this by aligning
the organization around strategy, not performance measures or
activities. The process of having employees develop their score-
card system creates accountability and understanding.
A modern Balanced Scorecard system has the following
benefits:
• Involves everyone in the organization in the development
and implementation of strategy
• Builds individual and collective accountability for results
• Provides a roadmap (through a strategic operating plan) of
how to achieve business goals or mission purpose
• Focuses on what’s important
• Measures what matters
• Involves everyone in the organization in transforming the
organization to a higher performing entity
98 • The Basics of Hoshin Kanri

In our framework, we align “shop floor” actions to enterprise

strategy by breaking down high-­level strategy into actionable
strategic objectives, then cascade the objectives down to busi-
ness and support units, and then down to employees or teams of
employees. Only after objectives are aligned (and ownership for
results assigned) are performance measures identified to track
strategic progress. This is very different than the approach used
in many previous scorecards, which involve a cascading of mea-
sures from high-­level down to individual activity and project
measures. Systems built like this are not strategic; strategic focus
gets lost soon if one focuses on measures and projects only. We
call people who build scorecards like this “potential new clients!”

HOW ARE HOSHIN KANRI

AND LEAN SIX SIGMA RELATED?
Question: How are Hoshin and Lean Six Sigma related?

A. Blanton Godfrey: The actions I mentioned earlier can be executed by a

task force or via an initiative, and they can also become Lean Six
Sigma projects.
John Gaul: Lean Six Sigma problem solvers have impressive skills that
should be leveraged to continue transforming the business and
provide ongoing solid Daily Management. Most strategy has
an element of cost and quality competitiveness, and Lean Six
Sigma is the right tool set to apply. In addition, related tools from
Design for Lean Six Sigma can lead to breakthrough designs in
products, services, and even business models, thereby useful to
strategy via Hoshin. Viewing the value-­creating activities as a
Value Stream (core concept in Lean Six Sigma) at various levels
brings proper perspective, scalability, and a better understand-
ing of the impact of the supply chain and the distribution and
demand side. I’ve run into too many green and black belts who
are not working on the right things, because their company
doesn’t really have a strategy, just a bunch of to-­dos and projects
that are simply improvements to ongoing metrics. There may
be initial enthusiasm for their Lean Six Sigma project, but then
 Interviews with Hoshin Kanri Experts • 99

interest wanes, because the winds of the to-­dos have shifted

and something else is now more important. This is a waste of
talented resources. If a black belt can’t get people excited about
their project, they are not working on the right stuff—period.

Question: How do Hoshin Kanri and Lean Six Sigma fit together?

Beth Cudney: Hoshin Kanri and Lean Six Sigma fit hand-­in-­hand. Hoshin
Kanri provides the strategic goals for the organization. Lean Six
Sigma comprises all of the tools necessary to achieve the stra-
tegic vision. The continuous improvement projects should be
selected based on their linkage to the strategic goals, metrics,
and tactics outlined using Hoshin Kanri.
Mark Caponigro: Lean relies on the developing and planning against the
big picture view of the company. Focus area and then proj-
ect selection will be greatly enhanced by a solid Hoshin plan.
Closing the loop through Lean efforts we gain a better under-
standing of the core processes and their respective capabilities.
This understanding could/­should be used to create the SMART
gap and goal setting.
Jonathan Ngin: Hoshin Kanri and Lean Six Sigma fit very nicely together as
true Lean Six Sigma implementation focus[es] on developing and
respecting people’s ability to solve problems and to both run and
improve the business via a standardized operating system built on
Lean Six Sigma methodology. Hoshin Kanri is about connecting
the different levels of the organization and entrusting the right
resource is aligned to the “Breakthrough” Strategy. An individual
who is trained/­exposed to Six Sigma Lean methodology is armed
with the right skill set to truly go through the A3 process of
Discovery, Analysis, Change, Refinement, and Implementation.
Gary Vance: Hoshin Kanri and Lean Six Sigma fit together well to help us
realize our vision. Hoshin Kanri facilitates the clear develop-
ment and dissemination of our goals, goal achievement plans,
and results. Lean Six Sigma principles (waste elimination,
respect for the individual, start with the customer, etc.) feed
into the Hoshin Kanri planning and Lean Six Sigma tools (kai-
zen events, DMAIC, 5S, standard work, etc.) enable us to carry
out our plans and uncover root problem causes. We need both
Hoshin Kanri and Lean Six Sigma to get where we want to go.
100 • The Basics of Hoshin Kanri

Zane Ferry: As need dictates. What I mean is that if you drew a Venn
Diagram, with one large circle for Hoshin Kanri and smaller
individual circles each representing Six Sigma, Lean, Theory of
Constraints, etc., the overlaps and subsets would look different
for different organizations. The relationships of those circles
would also change over time for an organization [as it] matured
and developed different needs. It is not a question of Hoshin
Kanri relying on some tools and excluding others. The real ques-
tion is what needs to be done when and how, by whom, in order
for our strategic efforts to succeed and be sustainable over time.
Wes Waldo: When we get down into the deployment aspects, the imple-
mentation aspects of Hoshin Kanri, that’s when you pull in
tools and methodologies like Lean and Six Sigma. Now, people
will say that Lean and Six Sigma are more of a philosophy and
not a “tool bag,” and I get that when you start to think about
day in and day out, if you understand that basics principles, it
does affect the way you manage. And, actually, I think it makes
you appreciate something like Hoshin Kanri. These are not two
things that are in competition with one another. I think they’re
congruent in the way we go about doing things. When I start
to look at the lowest level X-­Matrix and start to populate action
plans, that’s where I expect to see things like kaizen events,
DMAIC projects, DMADV [define, measure, analyze, design,
and verify], Innovation projects, and the like. We should be able
to tie the metrics from those events directly back to the metrics
we found in our Bowling Chart for Hoshin.
David Thomas: Hoshin Kanri is the “Plan” (Deming/­Shewart cycle) part of
approach to the implementation of strategy, or in Six Sigma terms
the Define, Measure, and Analyze steps. We use Six Sigma to
develop and establish our Policy Deployment Matrix (PDM)
and, in particular, the Improve and Control steps, to ensure that
appropriate resources and skills are available and to deselect
activities if appropriate.
With the plan in place, we use Six Sigma again to ensure that
each activity in the PDM is successfully analyzed, resourced,
implemented, and measured for outputs against key performance
indicators and critical success factors. Once the PDM is imple-
mented as a whole, Six Sigma then continues as the process for
improvement and achievement of stability within the business.
 Interviews with Hoshin Kanri Experts • 101

John Petrolini: One of the most complementary things about Hoshin and
Six Sigma is that, if an organization is already “proficient” at Six
Sigma, then they should have a sound system of determining
and prioritizing the vital few things to improve (which is similar
to the process of determining a Hoshin Goal), an administra-
tive system to track and review projects (similar to monitoring
progress), and have, hopefully, already instilled a culture of fact-­
based problem solving. Organizations with a robust Six Sigma
program in place significantly increase their probability of suc-
cessfully implementing Hoshin Kanri.
Barry Witcher: I see the latter (Lean Six Sigma) as a daily management
and lower-­order dynamic capability. Hoshin is a higher-­order
dynamic capability; it provides direction for daily management.
Jane Dwyer: Both drive the business and culture change that is needed to
achieve the vision and drive the performance expected to reflect
that. Hoshin helps to set the destination and direction. Lean
process is part of the vehicle that will get you there.
Jim Bossert: Hoshin Kanri and Six Sigma are complementary efforts.
Hoshin Kanri depends on good data and projects aligned to
it. Six Sigma works on projects that are aligned to the Strategic
goals, as well as working on getting meaningful data on pro-
cess performance. In addition, both are reliant on Voice of the
Customer to drive improvement.
Mark McDonald: Hoshin Kanri is how strategy is managed; Lean Six
Sigma is one effective means to effect change to support strate-
gic objectives.
David Silverstein: A Lean Six Sigma history certainly should help teach
and develop the discipline to use a structured approach like
Hoshin. Hoshin is a very structured, methodical approach
to the implementation and execution of strategy, so Lean Six
Sigma is a good foundation.
No strategy, no strategic plan will be successful if you’re not
realistic about the fact that you’re going to run into obstacles,
things that you didn’t anticipate—market shifts, customer
shifts, competitor shifts—which means you have to be in con-
stant problem-solving mode. To truly execute your Hoshin plan,
a good Hoshin plan lays out the very big, bold, metrics-­driven
objectives where you don’t necessarily have all of the answers as
to how you’re going to achieve those objectives. And, if you don’t
102 • The Basics of Hoshin Kanri

have all of the answers, then that necessarily says that a big part
of executing the Hoshin plan will be problem solving. So, if you
do not have a good problem-­solving methodology, you are not
likely to achieve most of the goals of your Hoshin plan. So, the
problem solving is very important.
The third piece is that good Lean and Six Sigma backgrounds
and the tool sets and the methodology are a lot about project
management. Part of your Hoshin plan is going to be about mar-
keting, part of it is going to be about the financial engineering
your company, but a big part of it will be about the operations
of your company. If your Hoshin plan does not include elements
of continuous process improvement, then I think something is
missing from your Hoshin plan. It doesn’t need to dominate it.
If your strategic plan is not about competing on costs and qual-
ity, then continuous improvement might be a smaller part of the
Hoshin plan. In this day and age, things commoditize very fast,
so there are always parts of your business that must be improv-
ing in terms of quality, price, and delivery. If that’s not in your
Hoshin plan, then something is probably missing.
So, Lean and Six Sigma are vital to the upfront discipline
required for success with Hoshin, it’s vital to the continuous
problem solving, and it’s also vital to the specific parts of your
Hoshin plan that call for continuous improvement.
Steve Darrish: Six Sigma and Hoshin Planning: Both are top-­down meth-
odologies that depend on alignment of work/­ organizations.
Both are measurement driven. Putting Hoshin Planning in
place helps align organizations to do enterprise-­level Six Sigma
programmatically. Hoshin Planning can be a readiness exercise
for Six Sigma deployments. Hoshin Planning integrates with
Six Sigma in that it provides the operating gaps that need to be
identified to align the project work with. It ensures that teams/­
organizations are working on meaningful areas of the business.
Hoshin Kanri can be the strategic side of Six Sigma. Without it,
organizations are just really doing TQM at some level.
Lois Gold: Think about Lean as an implementation methodology.
Remember, the basic premise is about improving, transform-
ing, or creating processes (the strategy, the how), which will
enable you to achieve the objective/­goal. If you need to drive
 Interviews with Hoshin Kanri Experts • 103

cost savings, or streamline to create capacity and reallocate

resources to other value added work, then Lean is an approach
that you can use.
Brian Leonard: Hoshin Kanri, as mentioned previously, is the GPS for a
Lean transformation. Without an accurate plan for achieving
organizational strategic congruence, Lean initiatives may not be
as impactful. Hoshin Kanri lays out the path. Lean tools and our
people are the means by which we get there. Hoshin Kanri can
be the difference between a successful Lean transformation and
a flavor of the month. The Six Sigma methodology, while provid-
ing effective concepts for statistical process/­quality control, can
become a burden if we can’t achieve a balance between Lean and
Six Sigma. Using the data-­driven mindset of Six Sigma to poten-
tially measure the extent of alignment of project work to True
North metrics can certainly be an advantage. However, do not
allow Six Sigma to slow us to a crawl due to analysis paralysis.
This is true not only for Hoshin Kanri, but for Lean in general.
Use data to quickly analyze processes and then move forward.
Many become so caught up in Six Sigma tools and fail to move
forward as quickly as could have been possible. For example, not
every data set requires hypothesis testing, but many encounter
such pitfalls. Use the data analysis side of Six Sigma to comple-
ment Lean, but don’t allow it to prevent progress.
James Hinkle: Hoshin Kanri and Lean Six Sigma go perfectly together.
Hoshin Kanri allows an organization to focus its efforts in the
correct places and timely complete goals and objectives. As
this occurs, the amount of time spent on completing the goal is
reduced and the benefits of the goal/­objective are achieved much
sooner. These benefits could include improved safety, quality,
delivery, costs, culture, and so much more.
Bob Emiliani: Fits fine with Lean. Does not fit with Lean Six Sigma (wrong
time-­scale).
Kevin Meyer: I am not a fan of Lean Six Sigma, so I really cannot answer this.
I believe that Lean Six Sigma as typically taught and practiced
bastardizes two excellent and potentially complementary con-
cepts, thereby leading to a poor and often failed implementation
of both/­either. Typically Lean Six Sigma includes no recognition/­
teaching of the underlying philosophy, or especially the critical
104 • The Basics of Hoshin Kanri

“respect for people” principle; instead just teaching a subset of

tools. Similarly, Lean Six Sigma generally includes just a subset
of the Six Sigma body of knowledge. Personal hot button of mine.

INDEX OF EXPERT INTERVIEWS

Michele Bechtell is an international expert in strategic planning and
implementation, continual market alignment, and organizational
transformation. She has written three books on the subject of Hoshin
Kanri including The Management Compass: Steering the Corporation
Using Hoshin Planning (AMA, 1995).
Lisa Boisvert, principal consultant at Business Centered Learning.
Author of Strategic Planning Using Hoshin Kanri: Implementing
Corporate Strategy Through Hoshin Planning (GOAL/­QPC, 2012).
Jim Bossert, PhD, master black belt. Formerly with Bank of America,
General Electric, Nokia, Kodak, and Xerox.
Michael Bremer, executive director, Chicagoland Lean Enterprise
Consortium and vice president of Association Manufacturing
Excellence. Author of several books including Escape the Improvement
Trap (CRC Press, 2010).
Jim Buchanan, owner at Winning Customer Love, master black belt,
formerly with Bank of America.
Mark Caponigro, director, Business Process Transformation at
Manpower Group, formerly with Wells Fargo, Bank of America,
Honeywell.
Tom Cluley, owner at Above The Fray Advisory Services, LLC. Formerly
with The Wiremold Company; author of several books including
co-­author of Driving Strategy to Execution Using Lean Six Sigma
(CRC Press, 2012).
Joe Colletti, president of the Woodledge Group. Author of Hoshin
Kanri Memory Jogger (GOAL/­QPC, 2013) and Focused Planning:
Hoshin Kanri–­American Style (Woodledge Group, 1996).
Michael Cowley, PhD, managing partner, CW Consulting Associates,
LLC. Formerly with Hewlett-­ Packard. Co-­ author of Beyond
Strategic Vision: Effective Corporate Action with Hoshin Planning
(Routledge, 1997).
 Interviews with Hoshin Kanri Experts • 105

Beth Cudney, PhD, ASQ Fellow, associate professor, director of the

Design Engineering Center, Missouri University of Science and
Technology; formerly with Danaher and Dana Corporation. Author
of several books, including Using Hoshin Kanri to Improve the Value
Stream (CRC Press, 2009).
Steve Darrish, director of Lean Enterprise at PricewaterhouseCoopers.
Master black belt; formerly with Bank of America and Microsoft.
Mark DeLuzio, CEO Lean Horizons Consulting, LLC. Formerly with
Danaher Corporation; helped launch Hoshin Planning while an
executive at Danaher.
Paul Docherty, founder and executive director at i-­nexus. Developer of
“How to Make Hoshin Planning Work: Bridging the Achievement Gap.”
Bob Dodge, co-­founder of IDI, a management consultancy, former
LaMarsh and Associates director of Consulting Services, trusted
business advisor, business coach, and peer board facilitator; member
of The Alternative Board.
Ellen Domb, PhD, TRIZ consultant at PQR Group. Formerly with
GenCorp-­Aeorjet. Co-­author of Beyond Strategic Vision: Effective
Corporate Action with Hoshin Planning (Routledge, 1997).
Jane Dwyer, director of Supply Chain Integration at Knoll. Formerly
with Honeywell, GECOM, and Alcoa Fastening Systems.
Bob Emiliani, PhD, principal, The CLBM, LLC; professor at
Connecticut State University. Formerly with United Technologies
and author of several books on the subject of Lean.
Zane Ferry, Value Stream coach, Ingersoll Rand.
W. John Gaul, Jr., principal consultant, BMGI. Certified Lean Six
Sigma master black belt & quality engineer. 20 years manufactur-
ing experience prior to 10 yrs. at BMGI. Contributing writer to: The
Innovator’s Toolkit—Wiley.
A. Blanton Godfrey, PhD, dean at NC State University. Formerly with
Juran Institute and AT&T Bell Labs. Author of several books includ-
ing co-­author with Dr. Joseph M. Juran of Juran’s Quality Handbook
(McGraw-­Hill, 1999).
Lois Gold, vice president of Enterprise Program Management at
MetLife. Formerly with CitiBank and Hewlett-­Packard. While direc-
tor of Corporate Quality at HP, she was involved in translating the
original Hoshin Kanri materials for use in the United States.
106 • The Basics of Hoshin Kanri

Jerome Hamilton, vice president, Lean Six Sigma, Corporate Quality

& Acquisition Integration (Global) at 3M; formerly with Ford and
General Motors.
James Hinkle, director of Operations at Cornerstone; Hoshin plan-
ning practitioner.
Tom Jackson, PhD, principal of Rona Consulting Group; author of the
Shingo Prize-­winning Hoshin Kanri for the Lean Enterprise (CRC
Press, 2006).
Bob King, co-founder, chairman, and CEO of GOAL/­QPC. In the early
1980s, he was the first to launch a regional Deming users group.
In the late 1980s, he led the research of advanced Japanese quality
methods. He was the first to publish books in English on Quality
Function Deployment and Hoshin Planning. He led the adoption
of these methods at many U.S. organizations, including Ford, Intel,
Procter & Gamble, Hewlett-­Packard, IBM, Bethesda.
Rafeek Kottai, president and CEO, founder at Maxxion Technologies
Inc. and HoshinOnline.com.
Chandrashekhar Kulkarni, owner, Neptune Engineers.
Jeanenne LaMarsh, executive director of Consulting Services at
LaMarsh Global. Developed Managed ChangeT model and method-
ology and author of many books on change management including
Change Better: Survive—and Thrive—During Change at Work and
Throughout Life (Agate B2, 2010).
Brian Leonard, Lean Six Sigma managing advisor at Purdue
Healthcare Advisors.
Jeffrey Liker, PhD, Liker Lean Advisors, professor at University of
Michigan. Author of several books, including The Toyota Way
(McGraw-­Hill, 2003).
Mark McDonald, senior Operations Excellence executive; master black
belt; formerly with Accenture, George Group, IBM, and Michelin
North America.
Mara Melum, president of Minerva Leadership Institute, Inc.,
Consultant, Executive Coach and author of book, Breakthrough
Leadership: Achieving Organizational Alignment Through Hoshin
Planning.
Kevin Meyer, co-­founder and partner of Gemba Academy. Formerly
with Abbott Labs; author of several books.
 Interviews with Hoshin Kanri Experts • 107

Adrian Mulder, owner of TEAM Lean Six Sigma, The Netherlands.

Has performed key roles in various Lean Six Sigma deployments
including General Electric, Shell, Caterpillar, Royal Dutch Philips,
KLM, ING, and DHL.
Jonathan Ngin, director of Quality and Process Improvement at
Express Scripts. Formerly with Honeywell and Tyco.
Judith Oja-­Gillam, Business Architecture Practice lead at IAG
Consulting. Formerly with Royal Bank of Scotland and HSBC.
John Petrolini, director of Continuous Improvement at Pegasystems.
Formerly with Teradyne.
Gerhard Plenert, PhD, president, Institute of World Class Management
(IWCM), author of 15+ books including co-­author of Driving Strategy
to Execution Using Lean Six Sigma (CRC Press, 2012).
Howard Rohm, president and CEO of the Balanced Scorecard
Institute; author of The Institute Way: Simplify Strategic Planning
and Management with the Balanced Scorecard (The Institute Press,
2013).
Larry Rubrich, owner, WCM Associates; co-­author of Policy Deployment
& Lean Implementation Planning (WCM Associates, 2009).
Bruce Sheridan, director, Business Transformation, head of
Reengineering at Citi Mortgage. Formerly with Bank of America
and Florida Power & Light. Master black belt, and author of Policy
Deployment: The TQM Approach to Long-­Range Planning (Quality
Press, 1993).
David Silverstein, president and CEO, BMGI. Formerly with Seagate
Technology. Author of several books including The Innovator’s
Toolkit (John Wiley & Sons, 2012).
David Thomas, director, D2 Associates (change consultants), Toyota-­
trained Continuous Improvement specialist. Formerly with Unipart
Group of Companies. Co-­ author of Build Lean: Transforming
Construction Using Lean Thinking (Ciria, 2011).
Gary Vance, dean of the College of Adult and Professional Studies
at Charleston Southern University. Formerly with JW Aluminum,
The HON Company, Peterbilt Motors, INA USA, Toyota Motors
Manufacturing of Indiana.
Wes Waldo, COO and president of the Americas at BMGI. Formerly with
Danaher, Gillette (Duracell), and Ralston Purina (Eveready Battery).
108 • The Basics of Hoshin Kanri

Greg Watson, PhD (ABD), chairman, Business Excellence Solutions,

Ltd. Formerly with Hewlett-­Packard, Compaq, and Xerox. Author of
several books, including Business Systems Engineering (John Wiley
& Sons, 1994).
Thom Williams, Master black belt, Bank of America.
Barry Witcher, PhD, Reader Emeritus, Norwich Business School,
University of East Anglia. Author of several books including co-­author
of Strategic Management: Principles and Practice (Cengage, 2012).

THE CATALYST FOR SUCCESS WITH HOSHIN KANRI

There are a few enablers that will help immensely if you plan to use Hoshin
Kanri in your organization. Together, they form the catalyst, the “spark”
that will help you ignite the process.

RESPECTFUL and RESPECTED LEADERSHIP

The leader­ship team is respectful of the employees/­associates and the
employees/­associates truly respect their leaders. I believe that lead-
ing with humility aids tremendously in gaining employee/­associate
respect. Command and control leaders and impactful managers will
kill a Hoshin deployment. Look for the leaders with the “What do
you think?” versus the “Thou shalt” approach. Move the dictatorial
leaders and managers out of the way.

DEMONSTRATED DISCIPLINE
The leader­ship team and the organization need to have the proven abil-
ity to “stick with things” and to “see things through.” If this is a prob-
lem, do not attempt Hoshin.

THE PROVEN ABILITY TO FOCUS

The leader­ship team and the organization must have proven the abil-
ity to “just say no” to initiatives. Selecting the Hoshin objectives
is more about deselecting things than it is about selecting new
ones. The entire team must be able to select the “critical few” and
then resist the temptation to allow the list to expand back to the
“trivial many.”
 Interviews with Hoshin Kanri Experts • 109

A SOLID LEAN FOUNDATION

A foundation built on an understanding of, and application of, the Lean
principles is key. The foundation should include extensive expe-
rience with Daily Management and the Lean Six Sigma toolset, a
Continuous Improvement mindset, and solid project management
skills. The aforementioned help provide the discipline the organiza-
tion will need to be successful with Hoshin Kanri.

A HOSHIN KANRI EXPERT

It helps immensely to have someone on board who has “been there and
done that” with regard to a successful Hoshin Kanri launch.

ORGANIZATIONAL CHANGE MANAGEMENT (OCM)

OCM is like “oil for the rusty machinery.” It can help you identify and
mitigate resistance to: (1) the overall Hoshin Kanri initiative and
(2) the improvement projects that will result from the deployment.

With the catalyst in place, enabled by organizational change manage-

ment, employee engagement starts to grow. The Catchball process helps
to increase vertical alignment across the organization. Finally, as more
parts of the organization participate actively in the Hoshin process, cross-­
functional alignment begins to improve. As the Hoshin Kanri process
grows in maturity, the business results improve, as represented by the
increasing size of the spiral (Figure 3.2).

Cross Functional
Alignment Employee
Engagement
The Catalyst

Vertical
Alignment

FIGURE 3.2
Hoshin Kanri drives improved business results.
110 • The Basics of Hoshin Kanri

Be the chief but never the lord.

Lao Tzu

Humility is not thinking less of yourself, it’s thinking of yourself less.

C. S. Lewis

One of the most sincere forms of respect is actually listening to what

another has to say.
Bryant H. McGill

Humility is the solid foundation of all virtues.

Confucius

There is no respect for others without humility in one’s self.

Henri Frederic Amiel

Humility is to make a right estimate of one’s self.

Charles Spurgeon

Today, no leader can afford to be indifferent to the challenge of engaging

employees in the work of creating the future. Engagement may have been
optional in the past, but it’s pretty much the whole game today.
Gary Hamel

SOME WORDS OF CAUTION

Charles Kettering lived long before the time of Hoshin Kanri, but I believe
his words describe it well:

Knowing is not understanding. There is a great difference between know-

ing and understanding: you can know a lot about something and not really
understand it.
Charles Kettering (1876–1958)

… it is often impossible to “think your way into a new way of acting.”

Rather, guided by correct principles, one may do, observe, learn, and then
do something else until we “act our way into a new way of thinking.”
John Shook
 Interviews with Hoshin Kanri Experts • 111

RECOMMENDED READING
Bechtell, M. 1995. The management compass. New York: AMA Management Briefing.
Cowley, M., and E. Domb. 1997. Beyond strategic vision: Effective corporate action with
Hoshin Planning. New York: Routledge.
Jackson, T. L. 2006. Hoshin Kanri for the Lean enterprise. Boca Raton, FL: CRC Press, Taylor
& Francis Group.
Plenert, G., and T. Cluley. 2012. Driving strategy to execution. Boca Raton, FL: CRC Press,
Taylor & Francis Group.
Sobek, D. K., II, and A. Smalley. 2008. Understanding A3 thinking: A critical component of
Toyota’s PDCA management system. Boca Raton, FL: CRC Press, Taylor & Francis
Group.
Appendix A

THE TRADITIONAL WAY

Within an organization that operates in the “traditional way,” executives
spend their time involved with “strategic matters.” Supervisors and opera-
tors spend their time on daily activities (i.e., getting the work done). And
managers, depending on their role, spend their time working somewhere
in between (Figure A.1).
Executives rarely get involved with daily activities unless it’s part of a
facility tour or an infrequent “all-­hands” meeting with employees.
Supervisors and operators rarely get involved in “strategic matters”
unless it’s listening to the boss explain this year’s plan and the flowdown
of objectives to their level in the organization.

THE HOSHIN WAY

Within an organization that embraces the “Hoshin The diagram in Figure A.2
Way,” people from all levels can play a role in both shows the time spent on
Strategic and Daily Management. The executives organizational activities. For
example, the shaded area
still spend most of their time involved with Strategic represents the time spent on
Management, but they also might spend some time Strategic Management.
involved with Daily Management via the Catchball
process and review meetings.
Depending on their role, managers might split their time between
Strategic and Daily Management.
Supervisors and operators still spend most of their time on Daily
Management, but they also might be occasionally involved with strategy
deployment and execution via the Catchball process and review meetings.

113
114 • Appendix A

Executives Strategy

Managers

Supervisors and
Operators Daily Activities

FIGURE A.1
The Traditional Way.

Executives
t
en
em
ag
an

t
en
M

Managers m
ic

ge
g

a
te

an
ra

Supervisors and M
St

ily
Operators Da

FIGURE A.2
The Hoshin Way.

Definitions
Strategic Management is about seeing the BIG picture and then guid-
ing the Vision, Values, Mission, and Strategy for the organization.
Daily Management is work carried out that is primarily about
shorter-­term operational and functional activity. It helps to reduce
process variation and daily firefighting, and it creates the organi-
zational stability needed to allow a culture of continuous improve-
ment to thrive.

THE PDCA CYCLE

At the core of Hoshin Kanri is the PDCA cycle, also known as the Deming
or Shewhart cycle:

P = Plan C = Check
D = Do A = Act (in this book, A stands for “Adjust”)
 Appendix A • 115

Plan

Adjust Do

Check

FIGURE A.3
PDCA steps on a five-­sided pyramid.

The five-­sided pyramid was selected to represent these steps. When you
flatten the pyramid, you get (Figure A.3):

Plan = Develop the plan

Do = Execute the plan, take action
Check = Monitor the plan, check the results
Adjust = Make adjustments and make improvements; if the plan is not
fulfilled, analyze the cause and take further action by going back to
the plan

And once a year, you go through the “Scan” step (Figure A.4):

Scan = Taking steps (explained below) to identify a few key objectives

in support of your strategy
Plan = Develop the plan
Do = Execute the plan, take action
Check = Monitor the plan, check the results
Adjust = Make adjustments and make improvements; if the plan is not
fulfilled, analyze the cause and take further action by going back to
the plan

Scan is about taking some steps to identify a few key objectives in sup-
port of your strategy. It presupposes that the organization has done some
116 • Appendix A

Plan

Adjust Scan Do

Check

FIGURE A.4
Scan PDCA steps on a five-­sided pyramid.

strategy formulation work in the recent past that included an examination

of both external and internal influences on strategy to include:

• The external environment

• Industry attractiveness
• Your competitors
• Your value chain
• Your capabilities and competencies
• Your competitive advantage

This step starts with understanding where you are today and where you
want to be a few years from now.
The Scan process includes:

1. Develop your Mission Statement

2. Define your Values
3. Define your Current State
4. Define your Vision
5. Design your Desired Future State
6. Identify the Gaps between the Future and Current States
7. Prioritize the Gaps, define your Business Priorities
Appendix B

Note to reader:  I know this appears to be hugely complicated, but it’s not.
For starters, the name itself is a bit of a mouthful, but don’t be scared away.
The ID is a fairly simple tool, but quite powerful.

INTERRELATIONSHIP DIGRAPH
(A.K.A., AN ID, A RELATIONS DIAGRAM)
What Is It?
The Interrelationship Digraph shows cause-­and-­effect relationships and
helps to analyze links between different aspects of a complicated situation.

Why Use It?

• You wish to explore the cause-­ a nd-­
effect relationships among
many issues.
• When you have limited resources and need to focus your efforts on
one or two priorities.
• You have completed an affinity diagram, fishbone diagram, and you
want to more completely explore the relationship of the ideas.

How to Use It?

1. Create a problem statement.
Example: Jon has too many “gaps” to resolve between his Personal
Future State and his Personal Current State and he wants to nar-
row the list to two or three critical gaps to focus on for closure
this year.
2. Assemble a team and agree on the problem/­issue.
3. Develop a list of ideas.
The list can come from a brainstorming session, or from an affinity
diagram, fishbone diagram, etc.

117
118 • Appendix B

4. Record the ideas on separate note cards, pieces of paper, or sticky

notes.
5. Lay out the ideas in a circle on the wall and identify each one with a
letter or a number (Figure B.1).
6. Ask the team to work together to look for relationships between the
items. Start with A. How is A related to B? How is A related to C?
How is A related to D? And, so on. Then move on to B. How is B
related to C? How is B related to D? How is B related to E? And, so on.
7. If there is a cause-­and-­effect relationship between two items, draw
an arrow from the cause to the effect. If no apparent relationship
exists, move on to the next pair of items.
8. Review and revise the arrows until the team reaches consensus
regarding the relationships.
9. Now, draw the Interrelationship Diagraph (ID) and tally the Ins and
Outs for each item. An In is an arrow pointing toward the item. An
Out is an arrow pointing away from the item (Figure B.2).
10. Use the ID information for planning. The items with the most Outs
are called Drivers and they are candidates for possible actions to
be taken.
 Appendix B • 119

A
Lose
weight
J B
More time Lower
w extended cholesterol
family

C
I
Less time
More
at work
reading time

H D
More church Exercise
attendance more

G E
More time Eat better
w Cathy & F
kids Less
overnight
travel

FIGURE B.1
Ideas on sticky notes positioned in a circle form the ID in Chapter 1.
120 • Appendix B

In = 5 Out = 1

A
In = 2 Out = 0 Lose In = 3 Out = 0
weight
J B
More time Lower
w extended cholesterol
family

In = 1 Out = 0 In = 0 Out = 7

C
I
Less time
More
at work
reading time

In = 0 Out = 1 In = 2 Out = 2

H D
More church Exercise
attendance more

In = 3 Out = 0 In = 2 Out = 2

G E
In = 0 Out = 6
More time Eat better
w Cathy & F
kids Less
overnight
travel

FIGURE B.2
The ID from Chapter 1 with Ins and Outs tallied.
 Appendix B • 121

A
M
Improve
Improve B
On‐time
Employee Improve
Delivery
Satisfaction Employee
L Trust
Improve
Customer C
Satisfaction Improve
Profit
K
Reduce
Mfg. Costs D
Improve
Cash
J
Improve
E
Productivity
Improve
Safety
I
Reduce F
Employee Improve
Turnover H G
Reduce Supplier
Reduce Quality
Inventory Scrap &
Rework

FIGURE B.3
The ID from Chapter 2.
122 • Appendix B

In = 7 Out = 4
In = 2 Out = 1
A In = 1 Out = 6
M Improve
Improve B
On‐time
Employee Improve
Delivery
In = 4 Out = 0 Satisfaction Employee
L Trust
Improve In = 5 Out = 0
Customer
Satisfaction C
Improve
Profit

K In = 4 Out = 0
In = 6 Out = 0
Reduce
Mfg. Costs D
Improve
In = 4 Out = 4 Cash
J In = 0 Out = 9
Improve
Productivity E
Improve
Safety
I In = 3 Out = 2
In = 0 Out = 5
Reduce
Employee In = 1 Out = 5 F
In = 3 Out = 1
Turnover Improve
G
H Supplier
Reduce
Reduce Quality
Scrap &
Inventory
Rework

FIGURE B.4
The ID from Chapter 2 with the Ins and Outs tallied.
Appendix C

THE X-MATRIX AND THE A3

What Are They?
“… let’s think of Hoshin Kanri in three major steps: 1. Strategy Development;
2. Organizational Alignment; and 3. Execution. The X-Matrix is specifi-
cally targeted for Organizational Alignment and the A3 for Execution.
Even though they are used at different stages, the X-Matrix and A3 share
an attribute. They both serve to provide an organized view of a vast array
of information arranged logically to communicate a message or a story that
otherwise would be difficult to see.”
Bruce Sheridan

Why Are They Needed?

“The X-Matrix links the Long-Term Strategy, Tactical Agenda, Projects,
and Metrics all on one page in addition to discussing how the work will
be resourced.
The A3 is named for the size of the paper typically used to display the
information, A3 or in the US 11” x17”. The A3 is used to guide a project
team through the execution of their work using predefined steps. During
the project, the A3 serves to guide the team through problem solving
or lean steps as well as serve as a way to update peers and management
on progress. In the end, the A3 serves as a story board documenting the
improvement achieved by a project team.”
Bruce Sheridan

How Does The X-Matrix Work?

Here’s one example (see Figure C.1) of how the X-Matrix is used at three
levels in an organization.

123
124 • Appendix C

LEVEL 1

Strategies

Objectives
Goals

Teams & People

Objectives

Projects
Goals

LEVEL 2

Teams & People

Projects
Goals

Tasks

LEVEL 3

Teams & People

FIGURE C.1
An X-Matrix in use at three levels in an organization.
 Appendix C • 125

Improvement
Priorities

Targets to Improve
Annual Objectives

Breakthrough
Objectives

FIGURE C.2
Another X-Matrix example.

At Level 1, the upper level of the organization, Goals (including Hoshins)

are included in the X-Matrix, along with Strategies, Objectives, and the
Teams and People who will do the work.
At Level 2, the Objectives from the Level 1 X-Matrix replace the Strategies
in the X-Matrix’s “northern” quadrant and Projects replace Objectives in
the X-Matrix’s “Eastern” quadrant.
At Level 3, the Projects from the Level 2 X-Matrix replace the Objectives
in the X-Matrix’s “northern” quadrant and Tasks replace Projects in the
X-Matrix’s “eastern” quadrant.
Here’s another X-Matrix (see Figure C.2) with a different approach to
the four quadrants. In this case, we start in the “southern” quadrant of the
X-Matrix with Breakthrough Objectives, and then move to the “western”
quadrant with the Annual Objectives. The “northern” quadrant includes
Improvement Priorities, while the “eastern” quadrant includes the Targets.

More Information About the X-Matrix and A3

See the books on the Recommended Reading list for more information on
the X-Matrix and the A3.
126 • Appendix C

Improvement
Priorities

Targets to Improve
Annual Objectives

Breakthrough
Objectives

Reduce order to delivery

leadtime by 25%

STEP 1

FIGURE C.3
Step 1, Include Breakthrough Objectives (including Hoshins) in the X-Matrix.

Improvement
Priorities
Targets to Improve
Annual Objectives
Reduce leadtime by 10%
this year

Breakthrough
Objectives

Reduce order to delivery

leadtime by 25%
STEP 2

FIGURE C.4
Step 2, Identify Annual Objectives in support of the Breakthrough Objectives.
 Appendix C • 127

STEP 3
Develop a Value Stream Map
for 5 key processes

Improvement
Priorities

Targets to Improve
Annual Objectives
Reduce leadtime by 10%
this year

Breakthrough
Objectives

Reduce order to delivery

leadtime by 25%

FIGURE C.5
Step 3, Identify Projects in support of the Annual Objectives.

STEP 4
Develop a Value Stream Map
for 5 key processes

Improvement
Priorities
Leadtime to be reduced by
Targets to Improve
Annual Objectives
Reduce leadtime by 10%

10% on top 3 products

this year

Breakthrough
Objectives

Reduce order to delivery

leadtime by 25%

FIGURE C.6
Step 4, Assign Targets to the Projects.
128 • Appendix C

STEP 5
Develop a Value Stream Map
for 5 key processes

Improvement
Priorities

Leadtime to be reduced by
Resources

Targets to Improve
Annual Objectives
Reduce leadtime by 10%

10% on top 3 products

this year

Jane Smith
Breakthrough
Objectives

Reduce order to delivery

leadtime by 25%

FIGURE C.7
Step 5, Assign Resources to the Projects.

A3 Example

Performance, gaps, and targets This year’s action plan (milestone chart)

Reflection on last year’s activities and results

Follow-up and unresolved issues

Rationale for this year’s activities

Signatures:

FIGURE C.8
An example of an A3 with steps shown.
Bibliography
Akao, Y., ed. 1988. Hoshin Kanri: Policy deployment for successful TQM. New York:
Productivity Press, pp. xxi, xxiii. (Printed in English in 1991)
Carroll, L. 2000. Alice’s adventures in wonderland and through the looking glass. New York/
London: Signet Classic Printing/Penguin Group.
Cowley, M., and E. Domb. 1997. Beyond strategic vision: Effective corporate action with
Hoshin Planning. New York: Routledge, pp. 95, 170–172.
Fayad, V., and L. Rubrich. 2009. Policy development and Lean implementation planning.
Ft. Wayne, IN: WCM Associates, pp. 88–93.
Jackson, T. L. 2006. Hoshin Kanri for the Lean enterprise. Boca Raton, FL: CRC Press, Taylor
& Francis Group, pp. 6–9.
King, B. 1989. Hoshin Planning: The developmental approach. Salem, NH: GOAL/QPC,
pp. 1–10, 1–11.
Sobek, D., and A. Smalley. 2008. Understanding A3 thinking: A critical component of Toyota’s
PDCA management system. Boca Raton, FL: CRC Press, Taylor & Francis Group,
pp. x, 11.

129
About the Author
Randy Kesterson has held executive level positions at General Dynamics
and Curtiss-Wright, with prior successful experience at Harsco Corporation,
John Deere, and at privately held Young & Franklin/Tactair Fluid Controls.
He also worked as a management consultant to organizations such as
Bank of America, Caterpillar, Motorola, Bank of Montreal, Ford Motor
Company, Milliken & Company, RJ Reynolds, and the Federal Aviation
Administration (FAA).
Randy serves as the Chair of the Advisory Board for the Center for
Global Supply Chain and Process Management at the University of South
Carolina’s Moore School of Business. He earned his Six Sigma Black Belt
at North Carolina State University/IES.
He earned his Bachelor of Science Degree in Engineering Operations
from Iowa State University and attended Syracuse University where he
earned his MBA with a concentration in Operations Management.
Randy and his family live in North Carolina.

131
Lean Methods & Implementation / Leadership Strategy

The problem with most Hoshin Kanri books is that they describe a
complex methodology that is overwhelming to most leaders and their
organizations. The need to essentially change the culture of the entire
organization to make Hoshin work isn’t practical for most companies
when first starting out.

The Basics of Hoshin Kanri uses an easy-to-follow story format to

simplify and explain Hoshin Kanri – a method for strategy deployment.
Supplying clear descriptions of the steps of Hoshin Kanri, it advocates
using Hoshin as an important tool for improving an organization’s
existing planning and execution system while simultaneously moving
the culture of the organization forward.

The book provides readers with a new understanding of Hoshin Kanri

as a powerful deployment system for strategic planning, defining a
direction and priorities, and aligning the organization around that
direction. It begins by telling the story of a manufacturing executive
who uses a simple Hoshin Kanri approach to make significant change
in his personal life.

Next, the book illustrates how this executive prepares to apply Hoshin
Kanri to deploy strategy within his or her business. It concludes by
presenting fascinating excerpts from the author’s own interviews with
experts in the field of Hoshin Kanri.

All business leaders want their organizations to be “great” in all

respects, but the reality is that they must get to “good” before they
can consider becoming “great.”

K22148
ISBN: 978-1-4822-1869-5
90000

9 781482 218695