Hoshin Planning

MissionVisionKey Result AreasKey Result MeasuresKey Strategies

By Harold Philbrick

Agenda• What is a Hoshin Plan?

• Key Terms

• Vision–What Is It

–Why Do We Need It

–Importance of Shared Vision

–Things to Consider

–Examples

Hoshin Plan• Hoshin

–Ho – direction

–Shin –needle

–Hoshin • “direction needle” or compass

• “way of setting direction”

• Kanri–Management or control

Hoshin Plan• Hoshin Kanri in terms of an

organization:–Management / control of the direction

needle

–Aligned toward accomplishing a single or shared goal

• Aligns company resources at all levels

Hoshin Plan• Places focus on the vital few

business priorities

• Defines who we are–Not based on products or services

–Based on our customer’s needs

• Enables everyone to ‘see’ where we are going and our plans to get there

Hoshin Plan• Pushes us to address some

fundamental questions–Who are we?

–What do we want to be?

–How will we act?

–How will we measure ourselves?

–How will we achieve our goals?

Typical North American Company

Do

Plan

Check

Act

…or Maybe it’s Like This

Do

Plan

Check

Toyota’s Use of Time

Do

PlanCheck

Act

Plan• Gemba

–Observe problem or issue first hand

• Determine root causes of problems

• Establish goals and targets

• Create implementation plan

• Create follow-up plan

• Discuss with all those affected

Do• Execute the implementation plan

• Use as an experiment to test working theories

Check• Study the effects to determine

whether the problem was satisfactorily addressed

• Compare results to our goals or targets

• Analyze all deviations from plan

Act• If targets were met:

–Standardize all procedures and methods to maintain gains

–Reflect - what other areas or locations could benefit from these ideas?

• If targets were not met:–Adjust using PDCA

–Act on all deviations from expected results

Key Terms

Mission Statement

• “Why do we exist?”• Describes an organization’s

capabilities, customer focus, activities and business makeup

• Brief description of the organization's fundamental purpose

• Address all stakeholders

Vision

• “Where do we want to go?”

• “What do we want to do?”

• A picture of your company in the future

• The inspiration or the framework for all your strategic planning

• Address all stakeholders

Core Values / Principles

• Behavioral attributes –Uniquely inherent to the organization

–Must be maintained at all costs

• Explain why we do things the way we do

• Act as a guide when making decisions

Targets / Critical Success Factors

• The "vital few" (2 or 3 max) performance points where it's vital to succeed in as a business

• Meant to break the vision down into actionable items that should be accomplishable in 3-5years

Hoshin Terms

• Key Result Areas–Areas of activity in which favorable

results are absolutely necessary for achieving on vision

• Key Result Measures–Used to determine improvement and

progress of the Value Stream

–We must establish SMART goals

Hoshin Terms

• Key Strategies–The overall approach we will take to

achieve the expected results for the KRA’s

• 90-Day Activities–Core activities that will be the focus of

the next quarter

Eight Steps to Transforming Your OrganizationEstablishing a Sense of UrgencyExamining market and competitive realitiesIdentifying and discussing crises, potential crises, or major opportunities

Forming a Powerful Guiding CoalitionAssembling a group with enough power to lead the change effortEncouraging the group to work together as a team

Creating a VisionCreating a vision to help direct the change effortDeveloping strategies for achieving that vision

Communicating the VisionUsing every vehicle possible to communicate the vision and strategiesTeaching new behaviors by the example of the guiding coalition

Empowering Others to Act on the VisionGetting rid of obstacles to changeChanging systems or structures that seriously undermine the visionEncouraging risk taking and nontraditional ideas, activities, and actions

Planning for and Creating Short-Term WinsPlanning for visible performance improvementsCreating those improvementsRecognizing and rewarding employees involved in the improvements

Consolidating Improvements and Producing Still More ChangeUsing increased credibility to change systems, structures, and policies that don’t fit the visionHiring, promoting, and developing employees who can implement the visionReinvigorating the process with new projects, themes, and change agents

Institutionalizing New ApproachesArticulating the connections between the new behaviors and corporate successDeveloping the means to ensure leadership development and succession

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Creating the Vision

Discovering Lean

Lean Pilot (Shop Floor)

Creating the Vision

Discovering Lean

Lean Pilot (Shop Floor)

Lean Transformation Process – Road Map to World Class

Define Enterprise Vision Set Enterprise Long-range

Lean Plan Lean Principles (Enterprise) Implement Lean on Pilot

Value Stream (VSM I) Create Lean Org Reporting

Structure Achieve Pilot Results (VSM I)

Create Pilot Future State (VSM II)

Develop 5 Year Enterprise Transform. Plan (Budget/ROI)

Implement Change Management

Implement Lean on Balance of Shop Floor

Develop Value Stream Hoshin Plans

Achieve Phase II (VSM I) Results

Achieve Phase I (VSM II) Results

Implement Product Development Process

Implement Manufacturing Systems Develop Process

Six Sigma Black Belt Training

Train on Design for Manufacturability / Design For Six Sigma

Implement Knowledge Management System

Train / Impl Lean Acct Process (Lean $ Belts)

Transition to High Performance Work Teams

Restructure Performance Appraisal System (Team Based)

Restructure Reward System (Team Based)

Develop & Implement Business Growth Strategy

Develop Organizational Development Strategy

Implement Lean Supplier Program

Implement Lean Procurement

Implement Lean in the Office

Six Sigma Green Belt Training

Develop Six Sigma Projects via Lean VSMs

Achieve VSM Results Create Future State

VSM’s

Leaning the Shop

Defining the Long Range Plan

Operational Strategic Planning

Leaning the Shop

Defining the Long Range Plan

Operational Strategic Planning

Leaning Product / Mfg System Development

DFM / DFSS / Knowledge Mgmt

Lean Accounting

Leaning Product / Mfg System Development

DFM / DFSS / Knowledge Mgmt

Lean Accounting

High Performance Work Teams

Performance Reward Systems

Business Growth Strategy

High Performance Work Teams

Performance Reward Systems

Business Growth Strategy

Leaning the Supply Chain / Materiel

Lean & ERP

Leaning the Office

Shop Floor Six Sigma

Leaning the Supply Chain / Materiel

Lean & ERP

Leaning the Office

Shop Floor Six Sigma

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Work effort

Enterprise Hoshin Plan (Vision, Mission, KRA, KRM)

Established Pilot Team (Core Team)

Pilot Implementation Goals / Metrics

Implemented Pilot Future State (VSM I)

Deliverables

5 yr Strategy / Budget Workforce in Position

for Change Shop Floor Converting

to Lean Hoshin Plans for Value

Streams (Shop/Office) $ Savings in Mfg

Main Suppliers Interfaced to Shop Floor

Supplier Partnerships & Order Agreements

Implemented Office VSMs ERP Processes that

Support Lean Strategy Trained Six Sigma G-belts

Product Devel / Mfg SystPhases & Gates Process

Trained Six Sigma B-Belts Trained Lean Facilitators DFM / DFSS Standards KM Repository Lean Accounting

Methodology

0 Mo. 12 Mo. 18 Mo. 36 Mo. 48(Mo. 15 – 60)

High Performance Work Teams in Place

Team Based Performance & Reward System

New Business Growth Plan

Empl Devel Process

What is a Vision Statement?

• A guiding image that defines what our success will look like–Uses visual metaphors, imagery to

create a picture of the future that we can see

• It gives us two points that help us to “plan our trip”–Current reality and the future

What is a Vision Statement?

• It tells us where we want to go without inhibiting the path we take to get there–Multiple routes that will get us there

• Serves as a “landmark” or guide as to whether we are effectively implementing our Hoshin

Why Do We Need a Vision?

• Requires the organization and it’s members to stretch their expectations, aspirations and performance–The loftiness of the vision can compel

new ways of thinking and acting

–Can foster risk taking and experimentation

Why Do We Need a Vision?

• The pursuit of that image is what helps motivate people and teams

• Provides clear decision making criteria by providing direction–As people begin seeing it, it becomes

a shared experience, a shared vision

Shared Vision

• High performing teams often have a shared vision and purpose

• Everyone is focused on the “ultimate” goal–Connected by a common purpose

• Everyone must feel the contributed to the vision

Shared Vision

• People must be able to internalize–Each person sees his or her own

“picture” of the vision

• Helps people to see themselves as a part of it–Must allow multiple, personal visions

to exist–Allows everyone to find the role they

will play

Shared Vision

• Must connect with the personal visions of those throughout the organization to become truly shared

• When all employees are committed to the long term direction we are more like to make daily decisions that are inline with that direction

Compliance, Enrollment & Commitment

• Commitment–Wants it

–Will make it happen

–Creates whatever path is needed

• Committed people bring energy, passion and excitement to the effort

Compliance, Enrollment & Commitment

• Enrollment–Wants it

–Will do whatever can be done today• “within the spirit of the law”

–The process of becoming part of something by choice

Levels of Compliance

• Genuine – “Good soldiers”

• Formal – “Pretty good soldiers’

• Grudging – “Does enough to get by”

• Noncompliance – “I won’t do it, you can’t make me”

• Apathy – “Is it 5 o’clock yet?”

Things to Consider

• Employees must believe they can shape their future in order to believe the can impact the vision

• Leader must “build” the vision daily

• People must be able to see current reality while holding onto the vision

Why Visions Die

• People’s visions are too far apart–Creates conflicting visions

–Need to harmonize the personal visions• Dig deeper and find the common thread

to tie them back together

–Build it together

Why Visions Die

• People become discouraged by the gap between current reality and the vision–Become disheartened or cynical

–Help them define their role• Personal visions help with this

Why Visions Die

• People become overwhelmed by current reality demands and lose focus on the vision–Exhausted and frustrated

–Find ways to focus less on firefighting

–Break up responsibilities• Day-to-day versus attaining vision

Examples

• John F. Kennedy –“by the end of the decade… man on

the moon

• Martin Luther King–“I have a dream…”

Examples

• Henry Ford–“I will build a car for the great

multitudes”

• AT&T–“universal telephone service”

• Kyocera–Appeals to employees to look inward

and “always aim for perfection”

Effective Vision Statements

• Have clarity and lack ambiguity

• Vivid and clear picture

• Describe a bright future

• Memorable and engaging wording

• Realistic aspirations

• Aligned with organizational values and culture

How to Create a Vision Statement

• Done with a group, not alone

• Brainstorming–Where do we want to go?

–What do we want to do?

–What are the key opportunities in the future?

–What would success look like?

How to Create a Vision Statement

• Look for things that make the organization unique

• Identify some possible statements based on all the feedback–Kick the ideas around

–Debate and discuss

Balancing Act

Grow, Get , Keep Better, Cheaper, Faster

Customers

Employees Shareholders

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