B R E A K T H R O U G H M A N A G E M E N T G R O U PB R E A K T H R O U G H M A N A G E M E N T G R O U P

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Hoshin Planning: Vision-driven Leadership for Breakthrough Improvement

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Our Agenda for TodayOur Agenda for Today

• What Exactly is ‘Hoshin Planning’ ?

• Why use It.

• Metaphors and Key themes: Hoshin made Simple… hopefully!

• The 7 step Hoshin Planning Process

• How Hoshin Planning relates to Performance Excellence

• Benefits

• Questions and Closing

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What Exactly is ‘Hoshin Planning’?What Exactly is ‘Hoshin Planning’?

With Hoshin Planning, there are many practitioners, and many different definitions. Here are a few:

‘We define Hoshin Planning as …. an approach to planning for breakthrough improvements towards an organization’s vision. Hoshin Planning draws on systems thinking, teamwork, the PDCA cycle, and a series of creative and logical tools designed to accelerate the achievement of the ‘Hoshin’ objectives.’

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What Exactly is ‘Hoshin Planning’?What Exactly is ‘Hoshin Planning’?

‘Strategic planning that selects a breakthrough objective annually, aligns the plans at all levels, and implements, reviews, and improves the plan on a regular and annual basis.’

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What Exactly is ‘Hoshin Planning’?What Exactly is ‘Hoshin Planning’?

‘Hoshin Planning is the tool used to facilitate the creation of business processes that result in a sustained competitive advantage in Innovation, Quality, Delivery, and Cost.’

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What Exactly is ‘Hoshin Planning’?What Exactly is ‘Hoshin Planning’?

‘Hoshin’ = the most important annual objective towards the breakthrough.

Before we get ahead of ourselves, a few key terms and definitions:

‘Vision’ = whatever you do, done to perfection.

‘Breakthrough’ = a radical and dramatic improvement in one or more organizational competency. Probably a long-term effort, and will require a fundamental re-thinking of the affected processes and systems.

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What Exactly is ‘Hoshin Planning’?What Exactly is ‘Hoshin Planning’?

So, what’s this word ‘Hoshin’ all about?

First, it’s really Japanese. Origins at the Kobe shipyards and at Bridgestone in about 1965-67.

The Japanese is actually ‘Ho Shin Kan Ri’.

‘Shining Metal Pointing Direction’.

A Compass! A VISION COMPASS!

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Why Use Hoshin Planning?Why Use Hoshin Planning?

Policy Deployment

Breakthroughs

WorldClassPerf.

To Align the Business Strategy and Execution to VOCTo Align the Business Strategy and Execution to VOC

Competitive

Environment

VOC Strategic

Plan

Innovation

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Why Use Hoshin Planning?Why Use Hoshin Planning?

“the way we operate”

StrategyStrategy

SystemsSystems

PeoplePeople

Performance

Excellence

“the way we think and plan”

“the way we lead”

“the way we interconnect”

ProcessesProcesses Outcomes:

PerformanceExcellence

Sustained Profitability

Customer & Employee Satisfaction

Growth & Innovation

To Align Targets and Means throughout an OrganizationTo Align Targets and Means throughout an Organization

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Key Themes of Hoshin PlanningKey Themes of Hoshin Planning

Planning based on prediction is ‘iffy’ at best.

The only way to predict the future is to create it.

Prevention doesn’t equal creation.

‘If everything is a priority, then nothing is.’

Leverage. It’s all about leverage.

Planning vs. ‘The Plan’.

Make it visible what is your ‘moon’?

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Basic ElementsBasic Elements

Hoshin Planning – Key Elements

•Driven by the organization’s vision – not today’s problems.

•A system to translate the vision into tangible and measurable objectives for achieving the breakthrough.

•Alignment created by cross-functional planning to achieve short-term objectives each year.

•‘Smart wedges’ – fewer and fewer more focused efforts, versus more and more and more…

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Basic ElementsBasic Elements

Hoshin Planning – Key Elements

• Fosters learning through the review process… you become better planners every cycle.

• At the heart of the Hoshin process is the Plan-Do-Check-Act cycle of continuous improvement.

• ‘Catchball’ as the driving force of alignment, clarification, and employee involvement.

• The thought process that drives the plan is called ‘Backwards from Perfect’, or ‘BFP’.

• Use of the ‘MP’ tools to creatively and systematically probe and assess possible strategies.

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Management by Objectives (MBO): Concerned only with results

Hoshin Planning: Concerned with the establishment of results oriented

processes

Hoshin Planning vs. MBO SystemsHoshin Planning vs. MBO Systems

Process is: Result Is: Hoshin Planning says:

MBO Says:

Bad Bad Bad Bad

Bad Good Bad Good

Good Bad Can't Happen? Bad

Good Good Good Good

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Once a Breakthrough Objective is achieved, the process for achieving the objective will become standardized.

Therefore, the processes that are established when achieving Breakthrough Objectives will eventually become part of the Daily Management systems of your organization

Breakthrough to Daily ManagementBreakthrough to Daily Management

Breakthrough Daily Management

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7 Step Hoshin Planning Process7 Step Hoshin Planning Process

1. Establish Organizational Vision

2. Strategic Planning: Develop 3-5 Year Breakthrough Objectives

3. Develop Annual Objectives

4. Deploy Annual Objectives

5. Implement Annual Objectives

6. Monthly Review

7. Annual Review

Catchball

Lean & OtherTools

Self Diagnosis

PD

C

A

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Establish Organizational Vision Establish Organizational Vision

Vision - Where are we going?

Mission - What do we do?

Values - What do we stand for?

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Strategic Planning: The WHATStrategic Planning: The WHAT

Strategic Planning

Time Line 3-5 Years

Pe

rfo

rma

nc

e L

eve

l

Current Situation

The Competition

World Class

What is the Gap?

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Develop Annual ObjectivesDevelop Annual Objectives

Defined:

Annual Objectives are those objectives that we need to achieve this year which will enable us to reach our

overall 3-5 year Breakthrough Objectives

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Develop Annual Objectives: HOW FARDevelop Annual Objectives: HOW FAR

Time Line

Per

form

ance

Current

Comp

WC

Gap

Strategic Planning

Current Situation

World Class

Year 1 = 50% of Gap

Year 2 = 30% of Gap

Year 3 = 20% of Gap

Annual Objectives

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Deploy Annual Objectives: HOWDeploy Annual Objectives: HOW

Current Situation

World Class

Year 1 = 50% of Gap

Year 2 = 30% of Gap

Year 3 = 20% of Gap

Annual Objectives

Top Level Improvement Priorities 1. Ask 5 Why’s and

identify root causes

2. Use Problem Solving to find ways to bridge the gap

3. Identify Key Driver Processes with greatest impact.

4. Use the 7 MP tools to determine priority.

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Deploy: HOW MUCH/WHENDeploy: HOW MUCH/WHEN

0

0.2

0.4

0.6

0.8

2010 Plan 0.65 0.6 0.55 0.5 0.45 0.45 0.4 0.37 0.34 0.31 0.3

2010 Actual 0.68 0.62 0.63 0.51 0.44

JAN FEB MAR APR JUN JUL AUG SEP OCT NOV DEC

0.00%

20.00%

40.00%

60.00%

80.00%

Current Month 65.00% 15% 7% 5% 8%

Last Month 73.00% 12% 5% 4% 6%

Stock OutShort

Promised DateWrong Sales

InfoCustomer Change

All Other

Determine Measures and Track Targets are measures of

the effectiveness of a given process

Think in terms of process capability (statistics)

Improvement Priorities tell “how”, Targets tell “how much” & “by when

Targets should not be established based on “averages

Targets are a means to measure the effectiveness of a given process. Do not confuse targets with objectives!

Targets are a means to measure the effectiveness of a given process. Do not confuse targets with objectives!

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Identify the resources with the greatest influence or opportunity to impact the Improvement Priority and Target to Improve

The largest or most available resources will not always have the greatest impact

Deploy: Identify ResourcesDeploy: Identify Resources

30%

30%

20% RelativeImpact On

ImprovementPriority

Monitor the Distribution

Of Resources

Team A

Team B

Resource C

Resource D

Team E

100%

0% 0%

100%

5%15%

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Deploy Annual ObjectivesDeploy Annual Objectives

HO

W

HOW FAR WH

AT

HOW MUCH

Resources

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Deploy Annual ObjectivesDeploy Annual Objectives

l l

l l

l Primary Responsibility

m Secondary Responsibility

Resources

Gillette - Policy Deployment 2003

AnnualObjectives

Benefits

3-5 Year Breakthrough

Objectives

Target to Improve

l l

l l

l Primary Responsibility

m Secondary Responsibility

Resources

Gillette - Policy Deployment 2003

AnnualObjectives

Benefits

3-5 Year Breakthrough

Objectives

Target to Improve

PRIORITY2003 YTD

ACT2003 JAN

2003 FEB

2003 MAR

2003 APR

2003 MAY

2003 JUN

2003 JUL

2003 AUG

2003 SEP

2003 OCT

2003 NOV

2003 DEC

SAFETYPlanAct

QUALITYPlanActPlanAct

DELIVERYPlanActPlanAct

COSTPlanActPlanAct

GROWTHPlanActPlanAct

<Name of Company >Policy Deployment Top Level Bowling Chart

Top LevelBowling Chart

l l

l Primary Responsibility

m Secondary Responsibility

Resources

2nd Level Policy Deployment Matrix

AnnualObjectives

Benefits

Annual Objectives

Target to Improve

PRIORITY 1997 ACT 1998 ACT 1999 ACT JOP2000 YTD

ACT JAN FEB MAR APR MAY JUN JUL AUG

SAFETYPlanAct

QUALITYPlanActPlanAct

DELIVERYPlanActPlanAct

COSTPlanActPlanAct

GROWTHPlanActPlan

<Name of Company >Policy Deployments Second Level Bowling Chart

= Plan x = Progress at Review

Action Step/ Kaizen Events Milestone J an Feb Mar Apr May J une J uly Aug Sept Oct Nov Dec

Core Objective: *

TimelineTarget Improvement

Planned Dates

Status ImpactOw ner

Policy Deployment Action Plan

Review Team: * Next Review : **-**-02

Environmental Situation Summary: *

Improvement Priority Title: *

Department/Location: *

Management Owner: * Date: **-**-02

Second Level Bowling ChartAction Plan

POINT OF

IMPACT

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There is a monthly review process for each level of deployed objectives within the organization

Focus on exceptions only - Countermeasures

Use “Bowling Chart” to track monthly progress

One bowling chart per PD matrix

Monthly Review ProcessMonthly Review Process

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How effective is our Policy Deployment Process.

Do we move breakthroughs to daily management?

Did we apply resources effectively?

Were PD matrices and action plans deployed to proper level?

Did we appropriately use Process Excellence tools?

Did we put in sustainable processes or did we get short-term results?

Were our monthly PD reviews effective or do they need to be changed in structure?

Did we just dust the matrix off at the end of the year, or did we track it month to month?

Annual Review ProcessAnnual Review Process

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A little more . . .A little more . . .

Challenges and Deficiencies Addressed by Hoshin:

•Plans aren’t used – the ‘doing’ isn’t connected to the ‘thinking’.

•Plans are not suited to the realities of the ‘shop floor’.

•Plans aren’t aligned and connected across the system.

•Measures may or may not exist, and may or may not be appropriate.

•‘By what method?’

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A little more . . . A little more . . .

Challenges and Deficiencies Addressed by Hoshin:

• Plans aren’t reviewed. Ever.

• Plans don’t take into account a changing environment.

• Plans never lead to the kind of change necessary to truly move ahead.

• Next years’ plan may or may not have anything to do with this years’ plan.

• The planning process itself never improves.

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How does Hoshin relate to Performance Excellence?How does Hoshin relate to Performance Excellence?

First, you need a solid foundation in Quality Improvement.

Hoshin is typically a ‘second generation’ application.

Builds upon early successes (‘low hanging fruit’).

Creates tighter alignment across work systems.

It’s a ‘tonic’, and will take you to the next level:

from improvement to innovation, and from prevention to creation.

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How does Hoshin relate to Performance Excellence?How does Hoshin relate to Performance Excellence?

Performance Excellence is a continuous improvement initiative that, when implemented correctly, will accelerate an organization’s ability to achieve it’s strategic objectives.

Hoshin Planning is a disciplined approach to creative thinking that, when implemented correctly, will ensure the most bold and creative set of strategic objectives possible.

Lean, Six Sigma, TRIZ, Change ManagementLean, Six Sigma, TRIZ, Change Management

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The BenefitsThe Benefits

Focus.

Alignment and synergy of efforts

Enhanced creative problem solving everywhere.

A whole new set of decision making tools.

An objective approach to deal with subjective data.

Radical breakthrough improvement, the likes of which you’ve likely never seen before.

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Remember: ‘F-A-D-I-R’Remember: ‘F-A-D-I-R’

FIND your Hoshin.

ALIGN the organization and your objectives.

DEPLOY the plans.

IMPLEMENT the changes.

REVIEW and improve all along the way.

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Time for ConversationTime for Conversation

QUESTIONS?