Hoshin Strategic Planning Overview

Hoshin Strategic Planning, also called Strategy Deployment or Policy Deployment, has been adopted by organizations around the world in many different industries, including Xerox, Toyota, Florida Power and Light, Bank of America, Proctor & Gamble and Intel.

In essence, Hoshin Strategic Planning enables business leaders to define long-term breakthrough objectives, set measurable milestones toward achieving those objectives, and align day-to-day operations with strategic goals. Used in conjunction with Performance Excellence methodologies such as Lean Six Sigma, Hoshin Planning provides a consistent and effective framework for achieving business transformation through continuous improvement.

What is Hoshin Strategic Planning?

Hoshin Strategic Planning is a management philosophy that leverages the Plan-Do-Check-Act (PDCA) improvement cycle. As such, it provides a roadmap for developing a strategic plan, identifying and executing the specifics of the plan, and reviewing progress periodically.

As part of the Hoshin Planning process, company leaders agree on a long-term strategic vision. The long-term strategy is broken down into sub-strategies, and then into specific objectives that correspond to process improvement projects. These projects become part of the organization’s annual plan, and ownership is assigned for each one. Throughout the year, periodic reviews are held to ensure that the organization is on track to fulfilling the annual objectives.

In addition, the strategic objectives are shared with employees from all levels of the organization. An approach called “catchball” invites employee review of the objectives in their areas of expertise. Of course, many employees also participate in the improvement projects designed to achieve the strategic objectives. This inclusive approach is another way that Hoshin Planning distinguishes itself from traditional planning methods.

Most importantly, Hoshin Planning results in a unified vision of the organization’s future. By working to achieve this future, the company remains focused on the few key objectives that will move it closer to achieving its vision.

Benefits of Hoshin Strategic Planning

• Provides a standardized strategic planning process that produces actionable plans.
• Involves all levels of the business in defining and achieving strategic goals.
• Divides strategic goals into measurable objectives with timelines.
• Ensures participants are held accountable for achieving specific objectives.
• Leverages Performance Excellence to meet strategic goals.
• Enables the entire organization to focus on a shared vision of the future.

History of Hoshin Strategic Planning

Hoshin Planning was originally known as Hoshin Kanri, a Japanese term which can be translated as a “compass for management.” Its origin is widely attributed to Dr. Yoji Akao, a Japanese engineer and thought leader in the area of problem solving algorithms including Quality Function Deployment (QFD). Dr. Akao developed Hoshin Planning after analyzing the best practices of companies that had been awarded the prestigious Deming Prize. As it turns out, many of the organizations were using the Plan-Do-Check-Act (PDCA) cycle to great advantage, and this became the inspiration for Hoshin Planning.

In 1976, Dr. Akao joined forces with Dr. Shigeru Mizuno, and the two set out to win the Deming Prize on behalf of Yokogawa Hewlett-Packard (YHP). They succeeded, and by 1985, Hewlett Packard had begun using Hoshin Planning throughout its organization.

Today, many organizations from different industries use Hoshin Planning to give focus and strategic emphasis to their Lean Six Sigma or other Performance Excellence program. To learn how your organization can leverage Hoshin Planning, contact us.

Additional Reading

Hoshin Kanri: The Strategic Approach to Continuous Improvement - David Hutchins

Hoshin Kanri for the Lean Enterprise: Developing Competitive Capabilities and Managing Profit - Thomas L. Jackson

Hoshin Handbook, Third Edition - Pete Babich