In his 2004 book titled Hoshin Kanri: Policy Deployment for Successful TQM, author Yoji Akao writes “The daily crush of events and quarterly bottom-line pressures do not take precedence over strategic plans; rather, these short-term activities are determined and managed by the plans themselves.” In that one sentence, Akao has concisely and eloquently articulated why it’s crucial for organizations to invest in a meaningful strategy deployment process. Too many organizations pay lip service to the concept of strategy deployment but their management approach and daily decision making reveal that they are highly reactive and subject to the so-called “tyranny of the now.”
Hoshin Planning in Brief
Hoshin Planning is a method and process that, if implemented well, forces the organization to frame all activities within the context of its overall vision and long-term strategic objectives.
If you’re not familiar with Hoshin Planning, it involves a 7 step process:
- Establish Your Organizational Vision
- Establish Your “Breakthrough” (3-5 Years) Objectives
- Establish Your Annual Objectives
- Deploy Your Annual Objectives
- Implement Your Annual Objectives
- Perform Monthly Reviews
- Perform Annual Reviews
There are various tools and methods designed to assist with Hoshin Planning, including a “catchball” process whereby leaders and teams at different levels discuss and align on the objectives that have been established, and the X-Matrix, which is a one page document that captures the objectives and improvement priorities defined through the process. However, the purpose for this post is not to describe in detail how to perform Hoshin Planning. Instead, I think the focus needs to be on the critical inflexion point when it comes to strategy deployment. In our experience that inflexion point starts with step 5 in the above process because that’s the step that should move the organization from discussion and alignment-setting toward taking real action on behalf of the business. Unfortunately, many organizations have tremendous difficulty when it comes to execution against the strategic objectives that they’ve defined regardless of the process used to define them (e.g., Hoshin, Balanced Scorecard, etc.).
The Challenge of Strategy Execution
There are a number of reasons why strategy execution is challenging, not the least of which is the unpredictable nature of the work environment. Boxer Mike Tyson once said, “Everyone has a plan 'till they get punched in the mouth.” He was referring to his opponents of course, but that statement rings true in business as well. We may intend to work on the things that are going to drive the business forward, but sometimes unforeseen events happen (e.g., employee turnover, equipment failure, supply chain disruption, etc.) that leave us scrambling. And all of a sudden we’re half way through the year and the “daily crush of events” referenced by Akao have taken precedence almost without us realizing it.
In another article I talk about the tension between the urgent and the important, so now I want to address another reason for poor strategy execution; the general lack of visibility on a “real time” basis into the decisions made and actions taken that will either drive the strategy or not. The intent of steps 6-7 in Hoshin Planning is to ensure a repeatable review process, and I would venture to say that most organizations have a governance model of some kind in place to review performance at regular intervals. However, monthly or quarterly review sessions, no matter how well designed, are not sufficient in a dynamic business environment to really manage strategy execution well. In fact, if I wanted to be deliberately provocative I could make a pretty strong case that monthly review sessions are not really very Lean because they represent a “batch and queue” mentality.
And, quite frankly, there’re no need to operate this way anymore because Phase 5 Group has developed a platform solution specifically designed to create ongoing visibility into the status of all improvement work taking place across your organization and how that work supports its key strategic objectives. That platform is called EON. Through EON, companies can deploy strategy at all levels, link improvement projects to strategic objectives, generate and manage detailed improvement plans, and view the status of everything through our Leading Indicators Scorecard.
One more thing…EON is not wedded to a particular strategy deployment method. On the contrary, you can use it irrespective of method because the value is tied to the visibility it creates and the intelligence it provides in executing the strategic objectives you’ve defined.