Hoshin Kanri - Visual Strategic Planning Student Workbook
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TABLE OF CONTENTS Module 1 – Introducti Introduction on to Hoshi Hoshin n Kanri ________ _______________ _______________ ________________ _______________ ______________ _______ 6 Learning Objectives ___________________________________ _____________________________________________________ __________________________________ ________________ 6 What is Hoshin? ___________________________________ ______________________________________________________ ______________________________________ ___________________ 6 Hoshin Defined ___________________________________ ______________________________________________________ _____________________________________ ___________________ _ 7 Hoshin Principles ____________________________________ _______________________________________________________ ___________________________________ ________________ 7 The Term “Hoshin Kanri” ________________________________ ___________________________________________________ ________________________________ _____________ 7 History of Hoshin ____________________________________ ______________________________________________________ ___________________________________ _________________ 7 Matrix Methodology _________________________________________________ ___________________________________________________________________ ____________________ __ 8 Daily Management and Breakthrough Strategies____________________________________ ____________________________________________ ________ 9 Breakthrough Strategies___________________________ _____________________________________________ _____________________________________ _____________________ __ 9 The Process in a Nutshell___________________________________ _____________________________________________________ _____________________________ ___________ 10 Plan, Do, Study, and Act ______________________________________ ________________________________________________________ __________________________ ________ 10 Who’s Involved in Hoshin? ___________________________________ ______________________________________________________ ___________________________ ________ 11 Critical Rule in Hoshin ___________________________________ ______________________________________________________ ______________________________ ___________ 11 Summary of Hoshin ______________________________________ ________________________________________________________ ______________________________ ____________ 12 Review Questions – Module 1 ______________________________________ ________________________________________________________ _____________________ ___ 12
Module 2 – Gathering Gathering Da Data ta _______________ ______________________ _______________ _______________ _______________ ________________ ___________ ___ 14 Learning Objectives ___________________________________ _____________________________________________________ _________________________________ _______________ 14 Organizational Profiles ______________________________________ ________________________________________________________ ___________________________ _________ 14 Where You Can Gather Data _____________________________________ ________________________________________________________ ________________________ _____ 15 The Environmental Scan ________________________________________________________________________ ____________________________________________________________ ____________ 16 The Past ______________________________________________________________________________________ ____________________________________________________________________ __________________ 16 The Present ___________________________________________________________________________________ __________________________________________________ _________________________________ 16 The Future ________________________________________________________________________________ _____________________________________ _______________________________________________ ____ 16 SWOT Analysis ____________________________________ ______________________________________________________ ____________________________________ __________________ 17 Strengths _____________________________________________________________________________________ ___________________________________________________________ __________________________ 17 Strength Questions Questions __________________________________________________________________________ _________________________________________ _________________________________ 17 Weaknesses ___________________________________________________________________________________ ___________________________________________ ________________________________________ 17 Weakness Questions _________________________________________________________________________ _________________________________ ________________________________________ 17 Opportunitiess _____________________________________________________________________________ Opportunitie __________________________________ _______________________________________________ ____ 18 Opportunity Questions _______________________________________________________________________ ___________________________________________________________ ____________ 18 Threats ___________________________________________________________________________________ ________________________________________ _______________________________________________ ____ 18 Threat Questions _________________________________________________________________ ______________________ ______________________________________________________ ___________ 18
The Voice of the Customer ___________________________________ ______________________________________________________ ___________________________ ________ 19
Solicited __________________________________________________________________________________ _______________________________________ _______________________________________________ ____ 19 Unsolicited ___________________________________________________________________________________ 19
Survey to Leaders _____________________________________ _______________________________________________________ _________________________________ _______________ 23 Measuring the Organization ________________________________________ ___________________________________________________________ _____________________ __ 26 Measures _____________________________________________________________________________________ _________________________________________________________________________ ____________ 26 Efficiency Measures ____________________________________________________________________________ 26 Effectiveness Measures _________________________________________________________________________ ______________________________________________________ ___________________ 26 Core Capital Measures Measures _________________________________________________________________________ ________________________________________ _________________________________ 27 Human Capital Measures _______________________________________________________________________ ____________________________________________________ ___________________ 27 Innovation Capital Measures ____________________________________________________________________ ________________________________________________________ ____________ 27 Process Capital Measures _______________________________________________________________________ ____________________________________________________ ___________________ 28 Customer Capital Measures _____________________________________________________________________ _________________________________________________________ ____________ 28 Effectiveness Measures _________________________________________________________________________ ______________________________________________________ ___________________ 29 Efficiency Measures ____________________________________________________________________________ 29 Review Questions – Module 2 ___________________________________ ______________________________________________________ ________________________ _____ 30
Module 3 – The The Hoshin M Matrix atrix ________ _______________ _______________ ________________ _______________ _______________ _______________ _______ 31 Learning Objectives ___________________________________ _____________________________________________________ _________________________________ _______________ 31 Parts to the Matrix ___________________________________________ _____________________________________________________________ ___________________________ _________ 31 Targets/Means & Whats/Hows ____________________________________________ ___________________________________________________________ _______________ 32 Targets and Means Defined __________________ ____________________________________ _____________________________________ _________________________ ______ 32 Importance Ratings _______________________________________________ __________________________________________________________________ ______________________ ___ 33 The Relationship Matrix ____________________________________ ______________________________________________________ ____________________________ __________ 34 Symbols Used U sed in the Matrix ____________________________________ ______________________________________________________ _________________________ _______ 34 Semantics in Strategic Planning ____________________ _______________________________________ _____________________________________ ___________________ _ 34 How to Calculate a Matrix _____________________________________ ________________________________________________________ __________________________ _______ 35 Calculating a Matrix ____________________________________ ______________________________________________________ ________________________________ ______________ 36 Linked from Vision to Action ___________________________ ______________________________________________ _________________________________ ______________ 37 The X-Matrix_________________________________ ___________________________________________________ _____________________________________ ________________________ _____ 37 Review Questions – Module 3 ___________________________________ ______________________________________________________ ________________________ _____ 39
Module 4 – Rooms Rooms in the Ho Hoshin shin Matri Matrixx _______ _______________ ________________ _______________ _______________ _______________ _______ 40 Learning Objectives ___________________________________ _____________________________________________________ _________________________________ _______________ 40 1-Targets ___________________________________ ______________________________________________________ ______________________________________ ________________________ _____ 41 Levels of Abstraction___________________________________________________________________________ __________________________________________ _________________________________ 41 2-Importance____________________________________ ______________________________________________________ _____________________________________ _____________________ __ 41 Hoshin Kanri: Visual Strategic Planning
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3-Competitive Assessment ___________________________________ ______________________________________________________ ___________________________ ________ 41 4-Competitive Index ______________________________________ ________________________________________________________ ______________________________ ____________ 42 5-Owner ____________________________________ _______________________________________________________ _____________________________________ ________________________ ______ 42 6-Measure _____________________________________ ________________________________________________________ _____________________________________ _____________________ ___ 42 7-Actual ____________________________________ ______________________________________________________ _____________________________________ _________________________ ______ 42 8-Goals ____________________________________ _______________________________________________________ ______________________________________ _________________________ ______ 42 9-Means ___________________________________ ______________________________________________________ ______________________________________ _________________________ ______ 42 11-Importance____________________________________ _______________________________________________________ ______________________________________ ___________________ 43 12-Organizational Difficulty __________________________________________ ____________________________________________________________ ___________________ _ 43 13-Owner, Measures, Actual and Goals ___________________________________ ___________________________________________________ ________________ 43 Examples of Matrices ___________________________________ ______________________________________________________ ________________________________ _____________ 43 Vision vs. Strategy _____________________________________________________________________________ __________________________________________________________ ___________________ 44 Strategy vs. Objective Objective _________________________________________ __________________________________________________________________________ _________________________________ 45 Objective vs. Goals _____________________________________________________________________________ _____________________________________ ________________________________________ 46 Goals vs. Team Actions _________________________________________________________________________ ________________________________________ _________________________________ 47 Total Plan on One Matrix ___________________________________________________________________ ________________________ _______________________________________________ ____ 48 Customer Service Example______________________________________________________________________ _____________________________________ _________________________________ 49
Review Questions – Module 4 ___________________________________ ______________________________________________________ ________________________ _____ 50
Module 5 – Deploying Deploying the Hoshin P Plan lan _______ _______________ _______________ _______________ ________________ _______________ _________ 51 Learning Objectives ___________________________________ _____________________________________________________ _________________________________ _______________ 51 Catch Ball _____________________________________ ________________________________________________________ ______________________________________ _____________________ __ 51 The Annual Planning Cycle _____________________________________ _______________________________________________________ ________________________ ______ 52 A Steering Committee for the Planning Process _____________________________ ____________________________________________ _______________ 53 Deploying The Plan _____________________________________ ________________________________________________________ _______________________________ ____________ 54 Complex Deployment_____________________________ ________________________________________________ ______________________________________ ___________________54 Deploy Down & Review Up ____________________________________ ______________________________________________________ _________________________ _______ 55 55 Vision to Action _____________________________________ ________________________________________________________ ___________________________________ ________________ 55 Planning Tables _________________________________________________ ____________________________________________________________________ _______________________ ____ 56 Contradictions Matrix_______________________________ __________________________________________________ ____________________________________ _________________57 Short term, mid-term & Long term ___________________________________ _____________________________________________________ ____________________ __ 57 Who’s in the Review Process_____________________________________ ________________________________________________________ ________________________ _____ 58 Review Questions – Module 5 ___________________________________ ______________________________________________________ ________________________ _____ 59 Hoshin Kanri: Visual Strategic Planning
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Module 6 - Leadership Leadership in a Hoshin En Environmen vironmentt ________ ________________ _______________ _______________ _______________ _______ 60 Learning Objectives ___________________________________ _____________________________________________________ _________________________________ _______________ 60 A Leader’s Role ___________________________________ ______________________________________________________ _____________________________________ __________________ 60 Role of a Leader in a Hoshin Environment ____________________________________ ________________________________________________ ____________ 61 Questions for Setting Strategic Direction______________________________________ __________________________________________________ ____________ 62 Creating a Vision & Mission ____________________________________ _______________________________________________________ _________________________ ______ 62 Questions for for Visioning ________________________________________________________________________ _______________________________________ _________________________________ 62 Questions for Creating a Mission Statement _______________________________________________________ ___________________________________________ ____________ 62 Creating Change ______________________________________ ________________________________________________________ _________________________________ _______________ 63 Individual Change _____________________________________________________________________________ _____________________________________ ________________________________________ 63 Team Change _____________________________________________________________________________ __________________________________ _______________________________________________ ____ 63 Organizational Change _________________________________________________________________________ _____________________________________________________________________ ____ 63 Environmental Change _________________________________________________________________________ _____________________________________________________________ ____________ 64 Circle the Words That You Use to Describe Change ___________________________________ ________________________________________ _____ 64 Team Building ____________________________________ _______________________________________________________ _____________________________________ __________________ 65 Interpersonal Communication Skills ___________________________________ _____________________________________________________ __________________ 65 Organizational Communication ________________________________________ __________________________________________________________ __________________ 65 Who Are Your Customers? _____________________________________ ________________________________________________________ _________________________ ______ 66 Road Blocks to Hoshin ________________________________ __________________________________________________ __________________________________ ________________ 66 Review Questions – Module 6 _____________________________________ _______________________________________________________ ______________________ ____ 67
Module 7 - Tree Tree Diagrams ________ ________________ _______________ _______________ _______________ _______________ ________________ ___________ ___ 68 Learning Objectives ___________________________________ _____________________________________________________ _________________________________ _______________ 68 What is a Tree Diagram? _____________________________________ _______________________________________________________ ___________________________ _________ 68 When to Use a Tree Diagram ____________________________________ ______________________________________________________ ________________________ ______ 68 How to Complete a Tree Diagram ______________________________________ ________________________________________________________ __________________ 69 Guidelines for Creating a Tree Diagram ______________________________________ __________________________________________________ ____________ 69 Example of a Tree Diagram _________________________________________________ ______________________________________________________________ _____________ 71 Review Questions – Module 7. ______________________________ _________________________________________________ _____________________________ __________ 71 71
Module 8 - Affinity Affinity Diagr Diagrams ams _______ _______________ ________________ _______________ _______________ ________________ _______________ _________ 72 Learning Objectives ___________________________________ _____________________________________________________ _________________________________ _______________ 72 What is an Affinity Diagram? ____________________________________ _______________________________________________________ ________________________ _____ 72 When to Use an Affinity Diagram ___________________________________ ______________________________________________________ _____________________ __ 72 Hoshin Kanri: Visual Strategic Planning
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How to Complete an Affinity Diagram____________________________ Diagram_______________________________________________ ________________________ _____ 73 Guidelines for Creating an Affinity Diagram ____________________________ ______________________________________________ __________________ 73 Example of an Affinity Diagram ____________________________________ ______________________________________________________ _____________________ ___ 74 Review Questions – Module 8. _______________________________ __________________________________________________ ____________________________ _________ 75
Module 9 - Cause Cause & Effec Effectt Diagram ________ _______________ _______________ _______________ _______________ ________________ ___________ ___ 76 Learning Objectives ___________________________________ _____________________________________________________ _________________________________ _______________ 76 What is a Cause & Effect Diagram? Diagram? _________________________ ___________________________________________ ______________________________ ____________ 76 When to Use a Cause & Effect Diagram Diagram _____________________________________________ ___________________________________________________ ______ 77 How to Complete a Cause & Effect Diagram ___________________________________ _______________________________________________ ____________ 77 Guidelines for Creating a Cause & Effect Diagram D iagram _________________________________________ _________________________________________ 78 Example of a Cause & Effect Diagram ____________________________________ ____________________________________________________ ________________ 78 Review Questions – Module 9. ______________________________ _________________________________________________ _____________________________ __________ 79 79
Module 10 - Flow Chart Charting ing ________ ________________ _______________ _______________ ________________ _______________ _______________ __________ __ 80 Learning Objectives ___________________________________ _____________________________________________________ _________________________________ _______________ 80 What is a Flow Chart? _____________________________________ _______________________________________________________ ______________________________ ____________ 80 How to Create a Flow Chart _____________________________________ _______________________________________________________ ________________________ ______ 80 Guidelines ____________________________________ ______________________________________________________ _____________________________________ ______________________ ___ 81 Example of a Flow Chart ____________________________________ _______________________________________________________ ____________________________ _________ 81 Review Questions – Module 10. ______________________________ ________________________________________________ ____________________________ __________ 82
Biography of Your Instructor – Karen Roberts __________________________ ________________________________________ ______________ 83
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MODULE 1 – INTRODUCTION TO HOSHIN KANRI LEARNING OBJECTIVES –
Understand the basic definition and principles of Hoshin Kanri
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Define the basic philosophy in Hoshin of inclusion, creativity and communication Know the history of Hoshin Kanri Understand how Deming’s Plan, Do, Study, and Act model fits into Hoshin Kanri Identify who is involved in the Hoshin Kanri planning process
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WHAT IS HOSHIN? Hoshin comes from Japan. It was created by Dr. Yogi Akao after Deming, Juran and others talked to the Japanese about leadership and control. You'll also hear it called Policy Deployme Deployment, nt, especially when Hoshin is used for individual departments. The foundation for Hoshin is inclusion, creativity and communication. Inclusion means that everyone everyone in th thee organization is involved in either giving input into the company’s plan or executing action items related to critical strategies. Communication is critical because it’s how we make sure that everyone knows what is going on and how well the organization is meeting goals and objectives. objectives. In Hoshin, we call this “catchball.” And finally, creativity creativity is realized when new ideas are brought to the table as a result of having cross-functional teams of people discovering the best way to get things done. Hoshins are the breakthrough strategies strategies that create needed change toward contin continuous uous improvement. They can be stretch goals or whatever the organization must do to survive. The fundamental premise of Hoshin is that the best way to obtain the desired result for an organization is for all employees to understand the long-range direction and participate in designing the practical steps to achieve the results. This form of participative management evolve evolved d and was influenced by the Japanese refinement of Drucker’s Management by Objectives (MBO) and through the birth and growth of the quality circle movement. In order for workers to understand their workplace effectively, they must have performance measures of their processes and monitor these measures to assure a ssure that they ar aree contributing to continuous improvement as well as closing the gap toward the strategic targets. Policy deployment became the tool that Japanese busin business ess leaders used to align the work of their front-line employees to the strategic direction of their company.
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HOSHIN DEFINED Hoshin is a comprehensive step-by-step planning process that takes a systems approach to change towards continuous improvement. improvement. This unique methodology methodology is founded on the guidin guiding g principle of inclusion. inclusion. Hoshin planning is the system that orchestrates continuous continuous improvement and breakth breakthroughs. roughs. It picks the area that needs improvement, makes sure all the right people get involved, involved, and that the improvement is implemented. Hoshin is a data driven, dr iven, participative methodology methodology that relies heavily on understanding the root cause of a problem.
HOSHIN PRINCIPLES • • • • • •
Measuring the system as a whole gives management a clear understanding of how the organization is performing Setting targets for the business and communicating, those targets to the entire organization gets everyone focused Everyone, including workers, sets their own monthly and yearly goals Understanding the operating environment allows for sound decision making and innovative future thinking Prioritizing resources on key objectives make the organization more effective and efficient Back and forth communication, “catch-ball”, is encouraged both vertically and horizontally h orizontally within the organization
THE TERM “H OSHIN KANRI” Hoshin is composed of two Chinese characters, "ho" and "shin." "Ho" meaning method or form, and "shin" meaning shiny needle or compass. compass. Taken together, the word "Hoshin" "Hoshin" means a methodology for strategic direction setting. It is the guiding strategic process that aids an organizati organization on as they make their way through a foggy environment into a clear and shining future. Ho = method or form Ho Shin = shiny needle or compass Shin Kanri = management or control
HISTORY OF HOSHIN •
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1950 - Dr. Deming presents the “plan, do, study and act” model to Japanese. 1954 - Dr. Juran conducts workshop for the Japanese on quality control. 1954 - Peter Drucker’s book which proposes management by objectives (MBO) is published in Japanese. 1962 - Toyota publicizes top-level cross functional management systems. 1964 - Bridgestone Tire Japan introduces the term Hoshin Kanri. 1965 - Dr. Akao defines “items of daily management” in relation to goals and policies in a cross functional management system. 1968 - Bridgestone outlines Hoshin Kanri methodology.
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1970 to Present – An increasing number of companies adopt Hoshin Kanri.
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MATRIX METHODOLOGY Hoshin is a matrix methodology that provides a way to link an organization's top objectives with the goals in every department in the company. There are numerous types of Hoshin Hoshin matrices. There are T Matrices, X Matrices, etc. The type of matrix that this course focuses focuses on is a linked L Matrix. By linking Hoshin matrices, yo you u can determine where to place resources. Hoshin provides a clean and robust way to ensure that everyone in the company is working on action action items that matter the most to the business and the customer. Although the matrix is important in a Hoshin process, it is the intent of the process that is more m ore important.
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DAILY MANAGEMENT AND BREAKTHROUGH STRATEGIES Hoshin planning should always include the daily activities that management must adhere to, in order to make the organization organization operate effectively. effectively. These activities include safety, accounting, internal production, human resources, etc. Hoshins, or breakthrough strategies, are the aspects a spects to strategic planning that move the organization into greater areas of innovation innovation and creativity. creativity. These breakthrough ideas are driven by what the marketplace is doing, best in class standards, what the competition is doing and most importantly, what the customer expects from your company. Another way to look at this is daily management activities are tied to the mission of a company and breakthrough strategies are tied to the vision.
BREAKTHROUGH STRATEGIES Breakthrough strategies, or Hoshins, can take an ordinary organization and make it an extraordinary organization. organization. Thinking outside the box differentiates your organization and provides greater value to your customers. However, breakthrough strategies aren’t always absolute “breakthroughs.” They can also be strategies that will imp improve rove the organization and support the organizational goals.
Examples of Breakthrough Hoshins: – –
Implement Lean strategies across the organization Create a customer oriented product development process Recruit top talent throughout the organization Create a paperless system for engineering change notifications Improve overall operating performance through the use of online training & testing Implement an ISO 9001 quality system
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Examples of Stretch Breakthrough Hoshins: Apply and win the Malcolm Baldrige Award
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Eliminate the competition
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THE PROCESS IN A NUTSHELL If you were to look at Hoshin as a systematic process, it would include the steps of evaluating the environment and the organization, determining critical issues, holding review sessions that are called “playing “playing catch-ball.” You would then implement the plan while holding periodic review sessions. The final step is taking the positive end result of the activities and standardizing the actions as policy. This is a very similar process to a popular quality model called the plan-do-study-act model.
PLAN, DO, STUDY, AND ACT Hoshin has been called the application of the plan-do-study-act plan-do-study-act model to the management process. The plan, do, study and act model is also called the Deming Deming cycle or the Shewhart Model. The foundation fo forr this model was created by Dr. Walter Shewhart working in the Bell Telephone Laboratories in the 1920’s conducting research on methods to improve quality and lower costs. Shewhart developed the concept of control with regard to variation, and came up with continuous improvement. Doctor Deming built upon Shewhart’s work and took the concepts to Japan following world war two. There, Japanese industry adopted the con concepts cepts whole heartedly. heartedly. The resulting high quality of Japanese Japanese products is world renowned.
Plan Set up and determine organizational objectives and strategies, means and targets. targets. Create a Hoshin Hoshin plan. Do Get out there and implement the plan Study Evaluate the performance and check on the progress pr ogress being made Act Standardize the results and determine what needs to happen if the solution didn’t work.
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WHO ’S INVOLVED IN HOSHIN? Customers and Suppliers
Who’s involved in a Hoshin effort? Basically everybody! Hoshin philosophy philosophy encourages that everyone in the organization be involved in having input into the strategic direction for the company. It creates workingon communication system that focusesaeveryone common goals.
Everyone in the organization!
One of Hoshin's premises is that by listening to the Voice of the Customer (VOC) and understanding the Strengths, Weaknesses, Opportunities and Threats (SWOT) facing your organization, you can formulate strategies that create innovative breakthroughs.
CRITICAL RULE IN HOSHIN
A Critical Rule of Hoshin:
Every Hoshin plan must fit to the organization's individual culture and needs. What we are suggesting is a template, and you must tailor the template to fit to your company’s unique culture.
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SUMMARY OF HOSHIN To summarize, Hoshin is a way to measure the organization from the vision right down to the tactics that teams execute. Next, Hoshin Hoshin is a process that includes includes everyone in the organization. organization. Hoshin provides a “catch ball” environment where goals, strategies and action items are tossed back and forth between management and a nd employees. Finally, Hoshin becomes an enabling feature in the continuous continuous improvement process for many reasons, but the primarily reason is because Hoshin makes it clear where to place the most valuable resources in order to reach the most m ost critical business objectives.
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REVIEW QUESTIONS – MODULE 1
1. What is Hoshin Kanri?
2. What are the three critical guiding principles?
3. What American quality guru introduced quality control to the Japanese after WWII?
4. How does the PDSA model fit into Hoshin?
5. Who should be involved in Hoshin?
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MODULE 2 – GATHERING DATA LEARNING OBJECTIVES –
Comprehend the many ways to collect c ollect organizational data
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Know the components included in an environmental scan Identify the components in a SWOT analysis Understand how to gather information from the employees within your organization Know the importance of the “Voice of the Customer” Understand how to measure the organization
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ORGANIZATIONAL PROFILES Before you begin gathering information about your organization, it will be important to understand your company's organizational profile. profile. By understanding the organization's profile, you gain an understanding of the different types of data you’ll need to collect and analyze. The model you see on this page comes comes from the Malcolm Baldrige National National Quality Award program. The Malcolm Baldrige National Quality Quality Award recognizes U.S. organizations for performance excellence. excellence. The Baldrige Award is the only formal recognition of the performance excellence of both public and private U.S. organizations given by the President of the United States. The Malcolm Baldrige National Quality Award organization also provides free paper and pencil surveys that you can download and use to gather information from employees. You can find downloadable copies copies of these surveys on the home page of this this course. There is one survey for workers workers and one survey for managers.
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WHERE YOU CAN GATHER DATA Hoshin is a data driven driven process. Gathering good data is critical to creating a great Hoshin Hoshin plan. There are many avenues for data collection. An environmental scan focuses on learning lesson from the past, present and future. A SWOT analysis helps to uncover areas of weaknesses in both the external environment and internally to the organization. Surveying of employees brings internal issues to light and understanding the voice of the customers lets an organization design design new products and services that capture market share. share. Finally, organizational data should always act as a compass of what is working well within your company and what needs to be analyzed for change.
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The Environmental Scan THE PAST What did your organization look like? What about your competition? What about the economics of your industry (did you predict that it would
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happen?) Was the company prepared? Was your competition prepared? What worked well in the past that isn’t being utilized today? How did the economy influence your company? How did technology influence your company? c ompany? How did personnel changes either help or hinder your company?
THE PRESENT What needs to change? What would happen if we did not change? What change forces are internal? What change forces are external?
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How much time do we have to change? Who has to change? What is going right? What is going wrong? What needs are not being met? What resources are unused or under-utilized? What opportunities are not being exploited? What challenges are not being met? What do competitors do better?
THE FUTURE
How do you see it in the future? What needs to change? What is the change? How does the change fit to t o the overall business strategy? What will the future state look like? o For the organization as a whole? o From the perspective of the customers? What changes need to happen to our key processes? If you had a magic wand, what would you like to see it happen? What trends do you anticipate?
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SWOT ANALYSIS STRENGTHS
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A distinctive competence Adequate financial resources Good competitive skills Well thought of by buyers An acknowledged market leader Well-conceived Well-conceive d functional strategies Insulated from strong competitive competitive pressure Proprietary technology Cost advantages Competitivee advantages Competitiv Product innovation abilities
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What advantages do you hold? What do other people see as your strengths? What do you do well? What significant resources (equipment, skilled employees) do you have? Is there intellectual property that protects your market position?
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Does yoursignificant company have strong brands? Are there barriers to entry in your market? Does the company have strong financials (balance sheet, cash flows, credit rating)? Can the employees be cross-trained in order to increase flexibility? flexibility? Can incentive plans make sense s ense to boost employee performance?
WEAKNESSES
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A deteriorating competitive position Obsolete facilities Lack of manageria manageriall depth and talent Missing key skills or competencies Poor track record in implementing strategy Internal operating problems Vulnerability Vulnerabil ity to competitive competitive pressures Falling behind on R&D Narrow product lines Weak market image Below-average marketing skills Unable to finance needed changes in strategies High unit cost compared to competition
W EAKNESS Q UESTIONS
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What are your weak brands? What improvement projects are currently identified but under resourced? What do you hope that your competition doesn't discover about your organization? When the organization needs to spend money, is it in a position to pay or borrow? Are there new and innovative products in the pipeline? Does your company successfully recruit and retain talent? What do your customers complain about? What areas could your organization / department improve? What do do your your suppliers internal customers What complaincomplain about? about? Why do our customers leave?
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OPPORTUNITIES
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Serve additional customer groups Enter new markets or segments Expand product lines to meet broader range of customer needs Diversity into related products Vertical integration
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Ability to move to better strategic Complacency among rival firms group Faster market growth
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What is the competiti competitive ve position of the company? Are there new products (yours or someone else's) that leave the buyer needing something else? Are there significant purchase or trends you are aware of? Is there technology availab available le that provides a cost reduction in business operations? Are there attractive acquisition targets? Can the company take advantage of cheaper marketing channels? Can the company grow internationally? Can the company create new relationships (partnering, collaboration)? Is the economy changing in a way that favors your product line or offerings? Are there trade shows that might be good places to share your product? What new relationships can your organization/department build to improve performance? What could your organization/department do to better meet your customer’s needs?
THREATS
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Likely entry of new competitors Rising sales of substitute product productss Slow market growth Adverse government policies Growing competitive pressures Vulnerability Vulnerabil ity to recession and business cycles Growing bargaining power of customer or suppliers Adverse demographic changes Possibility of employees organizing into their own union
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What obstacles does your organization face now or in the future? What is your competition doing? Is changing technology threatening your ability to compete? Is the economy impacting other firms' ability to purchase your product? Can your product line or market position stand the test of time? What do you fear a competitor might do?
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THE VOICE OF THE CUSTOMER Your customers are the reason you are in business. Does your company have an effective way to listen to customer needs and then determine ways ways you can provide products and/o and/orr services that excite them? According to Noriaki Kano, the customers’ needs can be categorized in three ways: ▪
Basic Quality Performance Quality Excitement Quality
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Basic quality is defined defined as the most basic of quality. Does the product or service have the ccharacteristics haracteristics that meet the customer’s needs? If you want a truck to haul dirt, but the tru truck ck doesn’t have a truck bed to do this, the product has failed the most basic need. Next, performance qual quality ity defines how well the product or service performs what it’s it’s supposed to do. do. Is the process rep repeatable? eatable? The final category, category, excitement quality, quality, is when a product or service meets a customer need that the customer didn’t even realize they had. Providing excitement excitement quality is what your company should be striving to produce.
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Hot lines Customer Surveys Customer Tests of Products Customer Audits Partnerships with Customers/Clients Customer Interviews Focus Groups/Discussion Panels
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Hoshin Kanri: Visual Strategic Planning
Customer Visits Trade Shows Vendors/Suppliers Employees Conventions Sales Force Input Complaint Logs Customer Interviews Focus Groups/Discussion Panels
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Survey to Employees
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SURVEY TO LEADERS
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MEASURING THE ORGANIZATION MEASURES
Core financial measures Human capital measures Innovation capital measures Process capital measures Customer capital measures
EFFICIENCY MEASURES
Process time Resources extended per unit of output Value-added cost per unit of output Wait time per unit Cost of quality Percentage of value-added time
EFFECTIVENESS MEASURES
Appearance
Timeliness Accuracy Performance Reliability Usability Serviceability Durability Cost Responsiveness Adaptability Dependability
What are you currently measuring?
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CORE CAPITAL MEASURES
Gross profit Return-on-equity Earnings per share Growth rank in industry Total shareholder returns
Market capitalization Revenue growth Market share Cost of goods sold Cost of quality Cost of sales
HUMAN CAPITAL MEASURES
Retention of key personnel Ability to attract top talent IT literacy Training expenditures as a percentage of payroll Replacement cost of key personnel Employee satisfactio satisfaction n Employee commitment
Effectiveness Organizational of learning learning transfer to key areas Management credibility Employee wages and salaries as a percentage of cost of sales Percentage of college graduates Employee empowerment Management experience Time in training Percentage of employees with years of service Empowered teams
INNOVATION CAPITAL MEASURES
R&D expenditures Percentage of workforce involved in innovation Product freshness
Number New opportunities exploited of patents used effectively
Planned obsolescence Number of copyrights and trademarks New market development investment R&D productivity Sales on products released in the past five f ive years Research leadership Net present value (NPV) of patents Effectiveness of feedback mechanisms Average age of patents Percentage of R&D investment in product design Direct communication with customers per year Number of new ideas in knowledge management database
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PROCESS CAPITAL MEASURES
Processes mapped and documented Use of documented processes Strategy execution Quality of decisions Percentage of revenues invested in knowledge management
Percentage of the company that effectively engages with customers Process quality (defects, scrap, rework, error rates) Time-to-market Strategy innovation cycle time IT access per employee IT investment per employee IT capacity (such as CPU) IT capacity per employee Operating expense ratio Administrativee expense per total revenue Administrativ Inventory turns
CUSTOMER CAPITAL MEASURES
Customer satisfaction s atisfaction Customer retention Product and service quality Average duration of customer relationship Repeat orders Market growth Customer needs met Marketing effectiveness Annual sales per customer Market share Average customer size in dollars Five largest customers as a percentage of revenues Days spent visiting customers Support expenses per customer Image-enhancing Image-enhancin g customer as a percentage of revenue
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EFFECTIVENESS MEASURES These measures define the extent to which the product or service provided meets the objectives and/or expectations of the organization or a customer.
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Appearance Timeliness Accuracy Performance Reliability Usability Durability Cost Responsiveness Adaptability
EFFICIENCY MEASURES These measures define how an organization is using its resources, such as available funding and staff, to achieve organization objectives. Is it applying these resources in such a way way as to maximize their contribution to organization outputs, i.e., the services it provides?
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Process time Resources extended per unit of output Value-added cost per unit of output Wait time per unit Cost of quality Percentage of value-added time
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REVIEW QUESTIONS – MODULE 2 1. How many ways are there to gather data to support Hoshin planning?
2. What are the components in an environmental scan?
3. What are the critical components in a SWOT analysis?
4. When collecting information from employees, what are the important things to remember?
5. Why is the Voice of the Customer so important to our company?
6. Within your work group, what are you currently measuring and what could y you ou measure to improve efficiency and effectiveness?
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MODULE 3 – THE HOSHIN MATRIX LEARNING OBJECTIVES –
Recognize the difference between a target and a mean
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Identify the stages in a Hoshin Kanri matrix Understand the methodology behind the relationship matrix State the meaning for the symbols used in a Hoshin Kanri matrix Calculate a Hoshin Kanri matrix
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PARTS TO THE MATRIX We're going to be touching touching on five different areas in a simp simple le Hoshin matrix. First, we'll learn about targets and means. Next, we'll cover cover how targets are rated rated in order of iimportance. mportance. We'll look at relationship relationship matrix matrix calculations and finally, we'll learn how to calculate the importance ratings for each mean.
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TARGETS/M EANS & WHATS/HOWS As you learn more about Hoshin, you'll see that the terms, "targets" and "means" are used interchangeably with the terms, "whats" and "hows". They mean the same thing. The "what" is is the target that you're trying to achieve. And the "how" "how" is the means for getting there.
TARGETS AND MEANS DEFINED
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EXERCISE:
1. Get in pairs. 2. Brainstorm a list of what you would need to do in order to become rich and famous. 3. Now brainstorm a list of how you’re going to accomplish your goal. 4. Be prepared to share your work!
IMPORTANCE RATINGS Ratings are typically on a one to to five scale. A five would indicate indicate very important and 1 would indicate no nott as important. These importance ratings ratings are then used as multipliers multipliers as we we move through the matrix. Each "what" then receives a corresponding "how." "how." Now we have "what" we want to accomplish and "how" we are going to accomplish it.
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THE RELATIONSHIP MATRIX The relationship matrix is where the strength of the relationship between each target and means are analyzed. Depending on the strength of the relationship (1, 3, or 9), that value is multiplied by the importance rating for each need. The relationship matrix identifies how the "whats" relate to meeting the "hows." "hows." By evaluating each pair of relationships, determinations are made as to the strength of the relationship.
SYMBOLS USED IN THE MATRIX The strength of the relationship between the "whats" and the "hows" is documented in the relationship matrix by a symbol. The "fish eye" represents a strong relationship, a 9; a circle equals 3, representing a moderate relationship; and, a triangle stands for a weak relationship, relationship, a 1. If there is no relatio relationship, nship, the cell is left blank. blank. These symbols relate to horse racing - win, place, or show. We're not quite sure why these symbols were chosen, but now they are commonly used in Hoshin Kanri charts.
SEMANTICS IN STRATEGIC PLANNING As you begin to formulate your own organization's foundation for a Hoshin plan, you may or may not have words that mean certain things to your company. For some companies, "objective" is a top level defin definition ition for strategic direction, for for another company a "strategy" indicates the same thing. If your company already u uses ses certain terms in relation to strategic planning, use those terms familiar to your management and employee base. The key to successful Hoshin Kanri planning is not using a cookie cutter approach to applying the process. For that reason, each deployment of a Hoshin Kanri plan should be customized to fit the needs of the organization.
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HOW TO CALCULATE A MATRIX The need is to "reduce costs." Reducing costs costs is very important, so it is given an importance importance rating of 5. Next a list of ideas concerning concerning "how" to reduce costs is generated. One of the best ways to reduce co costs sts is to "stop spending." There may be other "hows," but but for the sake of this example we're just going to look look at a single "how." Now, for each "what" and each "how," the question is posed, “What is the t he strength of the rrelationship elationship between reducing costs and stopping spending." This is a very strong relationship, relationship, so the cell representing representing that relationship receives a nine, and a fish eye symbol symbol is entered into that cell. Five, the importance ratin rating, g, times nine, the strength of the relationship, relationship, equals forty-five. forty-five. So the value in the inte intersecting rsecting cell is forty-five. forty-five. All of the values in each cell are then added up and documented at the bottom of each column.
5 x 9 ( = 9) = 45
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CALCULATING A MATRIX The overall objective or need for this matrix is to reduce costs. Let's look at the first "what." Decreasing work in progress has been given an importance rating of of 4. The strength of the the relationship between decreasing work in progress and flow charting the manufacturing process is strong, so the intersecting cell has a nine rating. You see a fish eye in the cell. cell. Four times Nine is 36, so this cell now now has the numeric value value of 36. The next what is improving improving customer service. service. It has been decided that the importance of this what is a two. The strength of the relationship relationship between between improving customer service and flow charting the manufacturing process has a moderate relationship r elationship,, so two times three three is six. That cell now has has the numeric value of six.
The final "what" "what" is "reallocating "reallocating resources." For the intent of this project that "what" or need is considered very important so it receives five as an importance rating. The strength of the relationship relationship between reallocating resources and flow charting the manufacturing process is weak. So the numeric value for this cell is five times one, or five. Now we take the values in each cell and add them up to determine a final importance rating at the bottom of the matrix. Thirty-six plus six, plus five, equals 47. Now we know how important it is to flow chart the manufacturing process. process. We would go through this process for each "how" in the matrix. At the end of of this process, we know that the most important thing we could do d o would be to review all job descriptions, because that "how" received the highest rating, forty-nine.
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EXERCISE: 1. Get in team of 3 to 4 people. 2. Brainstorm a list of what you would need to do in order to get fit. 3. Give each of your your “whats” a numerical rating of 1 – 5. Five being the most important. 4. Go Now brainstorm a list of “how” you’re to accomplish your 5. through the matrix and evaluate thegoing relationship between the “whats”. “whats” and the “hows”. 6. Be prepared to share your work!
LINKED FROM VISION TO ACTION
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THE X-M ATRIX The X matrix, also called an A3 Matrix, can be frequently frequently foun found d in Hoshin methodology. It documents organizational objectives, objectives, which processes need to be focused on, but doesn't do a good job in identifying the priority order for objectives. An X-matrix, like all of the matrixes we've learned about so far, has the unique advantage of visualizing the design of a strategy on one piece of paper. The prime mover on the X matrix is strategy, or the "what." "what." This is recorded to the left of the “X” in the middle middle of the matrix. Once an X matrix has been completed, there would still need to be a deployment plan, or the chartering of teams to actually get out into the organization and do the work.
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REVIEW QUESTIONS – MODULE 3 1. What is the difference between a target and a mean?
2. List in order the stops you take to complete a Hoshin matrix.
3. If a target has an importance rating of 3, and a weak relationship to the mean, what is the importance for that mean?
4. What does a
mean?
5. What does a
mean?
6. What does a
mean?
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MODULE 4 – ROOMS IN THE HOSHIN MATRIX LEARNING OBJECTIVES –
Know that different words may be used to define the same purpose
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Define the term “level of abstraction” Know where the specific information goes in a Hoshin matrix Review completed Hoshin matrices Understand and identify an “X” matrix
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1-T ARGETS Let's begin looking at each of the rooms rooms in the Hoshin Kanri matrix. First, a target is what you are working to achieve. The targets are the company’s company’s objectives, objectives, strategies, goals, etc. Remember, organizations organizations will have have different names for what they refer refer to as a target. To advance through this module, cl click ick anywhere on the screen or use the arrow button on the left hand side of your screen.
LEVELS OF ABSTRACTION Levels of abstraction start with a very broad statement, like a vision statement, and move into a more detailed description of activity. activity. When creating "targets" and "means" stateme statements, nts, it's critical that the information remain at the same level of abstraction.
2-I MPORTANCE Once targets have been determined, determined, they need to be rated as to their impo importance. rtance. Targets are rated on a scale from 1 to 5, 1 being of low importance and 5 meaning high importance.
3-C OMPETITIVE ASSESSMENT The competitive competitive assessment is a numeric numeric value that the organization organization determin determines es for each target, 1.1, 1.2, or 1.3. It answers the question, "Based on the competition, how much better do we think we need to be to meet tthis his target?" The criteria for making this decision decision are based on the understanding of the comp competition etition and the importance rating for the target. If the team feels that they must be a lot bette betterr in this area, the target would receive a 1.3 rating. If the team feels that they are about par with the competition, the target would receive a 1.1 rating. Hoshin Kanri: Visual Strategic Planning
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4-C OMPETITIVE INDEX The competitive index is a measure that corresponds to each target. The Competitive Index is the result of taking the numeric value for the Competitive Competitive Assessment times the Importance Weight for the target. This calculation creates a numeric value that is the Competitive Index. The information from this room tells the team which targets are most critical to staying competitive in the marketplace.
5-O WNER This room in the matrix documents the person person who is responsible for wo working rking on and updating each target. The owner has the ultimate responsibility for making sure that his goal is being met. He is also responsible for tracking the measure, actual and goal information, as well as updating the ccompetitive ompetitive informatio information. n. This is especially important important if the competitive landscape changes. Owners of targets and means will be responsible for reporting on progress made during deployment reviews.
6-M EASURE A measure gives gives you a quantifiable quantifiable way to determine determine progress towards achieving achieving a target or means. means. Measures can also be called metrics or Key Performance Indicators - (KPI’s). Measures generally fall into four different different categories: customer, employee, financial or process.
7-A CTUAL To provide a clear picture of organizational effectiveness, effectiveness, the actual performance for each target or means is documented. If a target or means does not have an actual perfo performance rmance value, you may need to b benchmark enchmark your competition or take your best estimate based on any information you already know. Then, get busy laying out how you're going to collect collect data to validate your best guess. The actual numbers may be a little wo wobbly bbly at first, but you can change this room as information changes.
8-G OALS Goals are what you are trying to achieve in relation to the measures you are tracking. They are your numeric goals. Goals will move according according to how the market and competi competition tion are performing. Goals are set in relation to your competitive assessment or competitive competitive index. Also, before setting a goal, it may be a good idea to review the information generated in the SWOT analysis or the Environmental Scan.
9-M EANS For every “target” there is at least one one “means.” The “means” is the descriptor of how the organization is going to achieve the “target." It is the action item. In this area of of the matrix, the daily management management activitie activitiess can also be documented. Just as with targets, it is important to keep keep the description of the “mean “means” s” at the same level of abstraction.
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10-Relationship 10-Relationshi p Matrix This area of the matrix is called the relationship relationship matrix. We spent a lot of time in the last last module talking about the calculations that takes place in in the relationship matrix. The relationship matrix is whe where re the strength of the relationship between between each “target” and each “means” are analyzed. Depending on the streng strength th of the relationship, (1, 3,area or 9) the importance rating for each target. The question to be answered in this ofthat the value matrixisis.multiplied "Will this by means contribute to meeting the target?"
11-IMPORTANCE The importance for each “means” “means” is documented in this area of the matrix. The cell values are added in columns columns to determine these importance importance ratings. “Means” that receive high importance importance ratings are given a high priority. Resources are assigned accordingly to these means and they are deployed into other matrixes in the Hoshin process.
12-ORGANIZATIONAL DIFFICULTY This room in a Hoshin Kanri matrix gives gives an indication as to how hard it will be to achi achieve eve the means. It is typically a number from 1 through through 5. This number isn't used in any numeric calculatio calculation; n; rather it is just a discussion point for the teams as they move forward into action.
13-OWNER, MEASURES, ACTUAL AND GOALS Finally, for each of the “means,” an owner, measure, actual and goal is created. The same definitions apply here in the columns, for the targets, as they would for the means.
EXAMPLES OF MATRICES As you preview the different matrices on the following pages, keep in mind that each Hoshin Kanri deployment is tailored to fit the needs of the individual organization. The first four matrices do not include competitive information; the company determined determined that it wasn’t necessary. Again, it’s imp important ortant to remember that that each matrix and each deployment is different, and that a matrix should be tailored to fit a company’s or the department’s individual needs.
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VISION VS. STRATEGY
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STRATEGY VS. OBJECTIVE
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OBJECTIVE VS. GOALS
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GOALS VS. TEAM ACTIONS
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TOTAL PLAN ON ONE MATRIX
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CUSTOMER SERVICE EXAMPLE
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REVIEW QUESTIONS – MODULE 4 1. Discuss why objectives and strategies could mean the same thing.
2. Give a concrete example of “level of abstraction” using a term from your day-to-day d ay-to-day activities.
3. Anytime safety is involved in a target, what automatic importance rating does it receive?
4. What question do you ask when analyzing a relationship matrix?
5. What does a competitive assessment tell you?
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MODULE 5 – DEPLOYING THE HOSHIN PLAN LEARNING OBJECTIVES –
Define the term “Catch Ball”
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Know the time needed for deploying a Hoshin plan Understand who should be involved in the steering committee to support Hoshin efforts Describe the necessary organizational configuration for a successful Hoshin effort Describe the components found in a Quality Planning Table Learn how to recognize actions that could sub-optimize your planning effort
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CATCH BALL Catch ball is a concept concept used in Hoshin. The definition of Catch Ball is is the tossing back and forth of targets and means, from one level of management to another, until everyone has had a chance to give their input into the planning process. process. Rather than just telling telling people people what to do, catch ball gives every every manager and team member member a voice. This ensures that the performance expectations expectations of top management are reviewed in the current state of the organization’s capabilities capabilities and that requirements for new investments are identified and communicated systematically. The game of Catch Ball proceeds up and down the management ma nagement hierarchy until every business unit, department, and process owner has formally committed herself her self to the company’s strategic intent. Then, the process of confirmation begins as the “Ball” is set back up the chain of command.
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THE ANNUAL PLANNING CYCLE The annual planning cycle begins with executive management management receiving training on Hoshin. They review last year's plan (if they had one) and the progress progress that was made. Then, they begin to align the com company’s pany’s mission with key objectives, gather data on the organization and identify measures that will help them to understand their progress. Next, executive management management meets with middle management (Catch Ball) and develops strategies to support the plan's plan's objectives. Middle management then creates the next llevel evel of matrices that involve putting together goals, strategies, strategies, budgets and team charters. They meet with executive management (Catch Ball) to review this work, make any necessary necessary changes, and then set off to charter action te teams. ams. Action teams meet with middle management and receive needed training, refine their team charters (Catch Ball) and define measures that will help them understand their progress. The review process is done with the appropriate during management personnel, process owners and action teams - - a total Catch Ball. Ball. Organizational learning during the review process is amazing, so documentation d ocumentation of everything that goes on during this process is critical.
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A STEERING COMMITTEE FOR THE PLANNING PROCESS No plan can be successful without a steering committee to lead the way. The steering committee must involve at least one high level management person who has the authority to make decisions and overcome roadblocks. The ideal person for the steering committee leader would would be the general manager or president of the company. There also needs to be an a n administrative clerical person to take care of coordinating information, documenting organizational leaning, setting meetings, communicating to others about review schedules and meetings and keeping the matrixes updated and current. Finally, the other steering committee members need to come from all functional areas within the organization who are involved involved in the plan. They should be managers and leaders who have the the authority to make decisions and deal with road blocks. In choosing steering committee members, they should be people people well respected within the organization who are also excellent interpersonal communicators.
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DEPLOYING THE PLAN Deploying a Hoshin Kanri plan into an organization will typically require a top level plan consisting of the organizations highest priority objectives, and then, for each department, a separate Hoshin Kanri matrix defining the actions that they will be taking to support the plan.
COMPLEX DEPLOYMENT When an organization is very large, hundreds of people working in numerous business units, the configuration of matrices on the right can work work very well. Each business unit would have its own objectives supported by goals and action items. A key benefit benefit in Hoshin planning is eliminating the duplication of tasks and thereby increasing the efficiency of an organization.
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DEPLOY DOWN & REVIEW UP As deployment begins at the top and cascades down, the review process starts at the bottom and works its way to the top levels of the organization. The review process ensures that everyone knows what is being worked on, where the roadblocks are happening and where the needed resources need to be applied. The review process also identifies the duplication duplication of activities. The organization can also create a database of knowledge that can be shared so that learning is maximized.
VISION TO ACTION At a cursory level, the Hoshin process takes the vision and mission of the organization, translates that information into strategies and then deploys those strategies into action. As with any comprehensive organizational effort, action plans or quality tables must be part of the process. Quality tables tables are put in in place based on the most critical Hoshin strategies. strategies. These quality quality tables then become team project charters, Six Sigma projects, or part of someone's someone's personal plan. plan. In the quarterly review process, teams that have been charged with taking action, present their quality tables to the management team for feedback and discussion.
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PLANNING TABLES The planning table takes each Hoshin strategy and action item and documents their status, who is responsible for the action item, comments, the budget for deployment, and finally, when the action item will be completed. Updates on the progress being made are discussed during the deployment meetings as well as any other roadblocks or issues the team may be facing.
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CONTRADICTIONS MATRIX A contradiction matrix will help your organization determine if an action is going to optimize the process (this is a good thing) or sub-optimize the the plan. It is always a good thing to know when two competing competing actions are going to have negative interactions. If two actions are going to impact each other negatively, the steering committee and the process owners can work out a way to minimize any potentially negative fall-out.
SHORT TERM, MID -TERM & LONG TERM As you are creating your planning tables, try and determine tthe he length of time needed to accomplish each goal. Add these columns into your Excel sheet. These definitions should be totally depen dependent dent on your organization’s current culture and business needs.
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WHO ’S IN THE REVIEW PROCESS Coordination is critical to the success of the plan and the deployment of the plan as well as the review process. The people involved in the review are the steering committee and anyone who has been assigned responsibility for an objective, strategy or action item.
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REVIEW QUESTIONS – MODULE 5 1. What does the term of Catch Ball mean?
1. Briefly describe the annual cycle for Hoshin planning?
2. Who should be on the Hoshin Kanri steering committee?
3. Explain why there are numerous matrices in a complex Hoshin Kanri configuration?
4. What components are found in a Quality Planning Table?
5. When using a contradiction matrix, what is more important to focus on? Is it actions that support each other or those that that sub-optimize each each other? Why?
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MODULE 6 - LEADERSHIP IN A HOSHIN ENVIRONMENT LEARNING OBJECTIVES –
Understand the role that a leader plays in a Hoshin Kanri environment
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Identify a leader's customers in a Hoshin Kanri environment Understand the four components to change Explain why team building is a critical skill Identify effective organizational communication channels Recognize the roadblocks to creating an environment that supports Hoshin Kanri
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A LEADER’S ROLE Setting strategic direction for a company is by far the most critical role for any leader within an organization. Leaders must be multi-talented and have have many skills and a great wealth of knowledge knowledge.. A leader must understand how to create change at each level level of the organizatio organization. n. They must also know how to build strong teams and provide effective organizational communications.
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ROLE OF A LEADER IN A HOSHIN ENVIRONMENT In setting strategic direction for a company, it's important to begin with a good vision and mission statement. This provides the foundation for organizational goals and sets the overall strategic direction for the organization. Teams then have the opportunity to brainstorm a limited number of Hoshins that support the goals. Analysis to determine the priority for each Hoshin can be time consuming, but knowing where to place resources is priceless. Therefore, it uncovers information by analysis and helps to identify the best path to take to accomplish the organization's vision.
Take a few minutes and define your organization’s vision and mission and your role in that mission.
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QUESTIONS FOR SETTING STRATEGIC DIRECTION
How do you conduct strategic planning to include the key strategic planning process steps? How do you include participants participants in the process? How do you identify potential blind spots during the strategic s trategic planning process? How do you ensure that strategic planning addresses: (a) your organization’s organization’s strengths, weaknesses, opportunities opportunit ies and threats (SWOT); (b) potential major shifts in technology, markets, products, customer preferences, competition, or the regulatory environment; environment; (c) long-term organizational organizational sustainability; and (d) your ability to execute the strategic plan? What are your current strategic objectives, the goals for each, and the timetable for achieving them? How do these objectives address your strategic challenges and advantages, opportunities for innovation, core competencies and the needs of all stakeholders? How do you develop and deploy action plans to achieve your strategic objectives? How do you ensure that financial, human and other resources are available to support the accomplishment of your action plans? How do you establish and deploy modified action plans as circumstanc circumstances es change? What are your key human resources plans to accomplish your strategic objectives? What measures do you use to track the achievement and effectiveness effectiveness of your action plans?
CREATING A VISION & MISSION
Be the dream. State what the organization wants to be, not what it is. Identify future product or service concepts, not specific products and services. Identify a future market area. A simple one-sentence statement created by top management (or interested others) and understood by the rest of the organization.
QUESTIONS FOR VISIONING Why is your organization in business? What will your future look like? Who will your customers be? What will your customers expect? What could you do to make this organization / department better?
QUESTIONS FOR CREATING A MISSION STATEMENT
What do we need to do to survive? What are the opportunities or needs that we must accomplish in order to exist? What principles or values exist that help us to do our job? What are we doing to address these opportunit opportunities, ies, accomplishments and challenges? Where are we now? (Strengths, Weaknesses, Opportunities, Threats analysis)
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CREATING CHANGE INDIVIDUAL CHANGE
What individual skills and knowledge need to be present in order to make the change happen? What training will be required?
How will the perceptions change effectorindividual’s What current biases needjobs? to be changed? In general, how have people reacted to change in the past? What are the demographic demographicss of the individuals involved in the change process?
TEAM CHANGE
What is the motivati motivation on for teams to make changes? What is the incentive? Is the team trained in how to work together? In general, how do people work in teams in your organization? What resources will be needed to make the change happen? How can change work be done so that it doesn’t have a negative effect on others?
ORGANIZATIONAL CHANGE
What is the degree of support for the change? What degree of on-going operations needs to run while the change is being implemented? How complex is the change? How should we view the organization as a system? Which organizational organizational systems and processes need to be analyzed in order to make the change possible? What aspects of the organization should be included and how much time should it take?
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ENVIRONMENTAL CHANGE
What outside resources are available? What is the current state of the environment for your industry? How fast will competition exploit vulnerabilities or copy your strategy? What is the urgency of the situation? To what degree will technology influence the change? How will this change affect suppliers, the local community, your board of directors, the corporate office you’re your customers?
CIRCLE THE WORDS THAT YOU USE TO DESCRIBE CHANGE
Adjust
Different
Opportunity
Alter
Disruption
Rebirth
Ambiguity
Exciting
Replace
Anxiety
Fear
Revise
Better
Fun
Stress
Challenging
Grow
Transfer
Chance
Improve
Transition
Concern
Learn
Uncertainty
Death
Modify
Upheaval
Deteriorate
New
Vary
Circle all the words that you use to describe change. How many were positive? And how many were were negative?
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TEAM BUILDING The one word that best describes a key concept in Hoshin planning is inclusion. inclusion. Employees must feel that they are part of a team that will work to carry out the Hoshin plan. Therefore, building building strong teams at all levels of the organization is critical to the successful implementation of Hoshin. Team building is pursued via a variety of practices, and can range from simple bonding exercises to complex simulations and multi-day team building retreats designed to develop a team, including group assessment and group-dynamic games. Team building can take place before or during a Hoshin effort, the important thing is that an ongoing effort is in place to make sure that teams are working well together and performing optimal optimally. ly.
INTERPERSONAL COMMUNICATION SKILLS Leadership is influence in action. In order to influence people, you need to have great interpersonal interpersonal communication skills. Your communications communications skills will be needed to effectively influence others. Leaders at every level must understand, motivate and communicate. No matter how brilliant the thought or the approach, convincing others to work together to accomplish a goal requires well-developed well-developed interpersonal interpersonal skills. A big part of interpersonal communications communications is how well you listen. As you move through the Hoshin implementation process, listening and communicating with others is paramount.
ORGANIZATIONAL COMMUNICATION While face-to-face communication communication is preferred, it is not always realistic, particularly in companies that may be based in multiple locations--even around the world. Fortunately, there are tools that make it possible to approximate face-to-face communication, communication, allowing even the largest companies to create personal connections between staff and management. The key to change change is communication. communication. You must make sure that everyone in the organization knows what the company's key objectives are and how they fit into the plan. Leading a Hoshin effort requires that you have excellent interpersonal and organizational communication understanding.
Hoshin Kanri: Visual Strategic Planning
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WHO ARE YOUR CUSTOMERS? In a Hoshin environment, a leader MUST treat all five groups of people as customers--valued customers. Think about it, if you don't have people willing to buy your product or service and you don't have people willing to work with you to make this happen, you don't have a company. company. Your emplo employees yees are also your your customers. The most successful organizations on the the planet treat employees as respected and honored members of the overall overall plan. By gaining each group's group's trust and respect, implementing a Hoshin plan will be a lot easier.
ROAD BLOCKS TO HOSHIN
Not having top management “cheer leading” the effort Lack of a committed “steering committee” consisting of top-level, highly respected managers and/or professionals Ineffective training and organizational communication on the Hoshin process Lack of administrative support for the Hoshin effort Not addressing managers who have their own agendas or are not team players Making planning just another “thing to do” when the workforce is already bogged down with more than they can get done in a 40+ hour work week Lack of consensus on a Hoshin methodology that best fits the organization Taking on too many targets / means when first introducing Hoshin planning into an organization Not having regular reviews - - once a month or quarterly!
Take the next couple of minuets and make some notes on other road blocks that you can see happening within your organization.
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
REVIEW QUESTIONS – MODULE 6 1. What are the key roles that a leader plays in a Hoshin Kanri environment?
2. Who are a leader’s customers?
3. Briefly describe the 4 components to change.
4. What principle of Hoshin Kanri amplifies teambuilding?
5. Discuss at least 3 communication channels found in an organization.
6. List at least 5 roadblocks to successful implementation of Hoshin Kanri.
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
MODULE 7 - TREE DIAGRAMS LEARNING OBJECTIVES – – – –
Identify the meaning for a tree diagram Understand when to use a tree diagram Identify the steps needed to create a tree diagram Recognize the guidelines for successfully creating and using a tree diagram
WHAT IS A TREE DIAGRAM? Tree diagrams help the team to define and analyze problems. Using tree diagrams allows a team to discover additional details and map out the full range of possibilities and thinking. Tree diagrams are based on levels of abstraction: primary, secondary and tertiary. The primary data level is typically the initial term or issue to be analyzed. The tertiary level is the lowest level of abstraction. Tree diagrams take the most generalized information and create a logical linear progression of thinking. They are good for operationally defining terms, as well as documenting tasks. Using tree diagrams in concert with other quality tools gives a team a great way to objectively dissect and define issues. Tree diagrams are typically used with an intact team to capture the team's thinking.
WHEN TO USE A TREE DIAGRAM
Hoshin Kanri: Visual Strategic Planning
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HOW TO COMPLETE A TREE DIAGRAM 1. 2. 3.
Choose a statement to be analyzed. a nalyzed. Paraphrase it using only a few words. words. This will be the primary data. Tape two to four pieces of flip chart paper together. On the far left hand side of the flip chart paper, write down the paraphrased statement. 4. Brainstorm secondary data by asking appropriate questions like, “Why is this happening? Or, What does this mean?” Ask what, why or how as many times as it takes to exhaust the p point. oint. 5. For each secondary data point, again identify tertiary data by asking what, why, when, where, or how. 6. Study the final results for correlations, logic or sequencing. sequencing. Also, look for areas that have been duplicated and make appropriate corrections.
GUIDELINES FOR CREATING A TREE DIAGRAM
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
Hoshin Kanri: Visual Strategic Planning
From This….
To This…
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Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
EXAMPLE OF A TREE DIAGRAM
REVIEW QUESTIONS – MODULE 7. 1. How do tree diagrams help to define and analyze problems?
2. List at least three different ways that you see using a tree diagram.
3. What are the types of data distinction used in a tree diagram?
4. How would you use a tree diagram in the Hoshin Kanri process?
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
MODULE 8 - AFFINITY DIAGRAMS LEARNING OBJECTIVES – – – –
Define the meaning of an affinity diagram Identify when to use an affinity diagram State the steps for affinitizing data Describe the guidelines for using affinity diagrams
WHAT IS AN AFFINITY DIAGRAM? Affinity diagrams were created in the 1960s by a Japanese anthropologist, anthropologist, Jiro Kawakita. He was involved in studying hundreds of facts about societies and social institutions. When he had completed his research, he faced the monumental task of trying to organize the information and draw conclusions from his research. He created a tool called KJ methodology®, which is also called an affinity diagram. Affinity diagrams have several purposes. First, they spark a team to generate information. Then, they help organize and categorize the information. Affinity diagrams are usually a team facilitator's f acilitator's first choice for problem solving because they are such a great tool for generating and organizing information. Since the team is usually involved in generating data that will later be organized, team members are allowed to be creative and express their gut reactions to issues or problems. This can be very informative! Think of it like brainstorming with structure. Also, they are one of the quickest team tools around. A team can sift through and organize large volumes of data in record time.
WHEN TO USE AN AFFINITY DIAGRAM
Hoshin Kanri: Visual Strategic Planning
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HOW TO COMPLETE AN AFFINITY DIAGRAM 1. The facilitator defines the topic that the team will be investigating. 2. In silence, each team member works for ten to fifteen minutes writing minutes writing one idea or thought on a sticky note. . 3. Sticky notes are posted on flip chart paper and placed on a large table in the center of the room or taped to a wall. 4. Once all ideas have been exhausted, the team stops and surveys sticky notes for related or like items. 5. They eliminate duplicates and clarify fuzzy clarify fuzzy terms terms they don't understand. 6. At this point, the affinitizing begins begins and the team starts to group sticky notes n otes according to like themes or like categories. 7. Once the notes have been grouped, gr ouped, a header note note is created that best describes the group of sticky notes. Sometimes a single note from the group that best represents a common theme can be used. 8. If the team feels that groups can be grouped, create an additional header note note and place it above the grouped sticky notes.
GUIDELINES FOR CREATING AN AFFINITY DIAGRAM
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
EXAMPLE OF AN AFFINITY DIAGRAM We asked our customers what they wanted on a great cheese burger. And we found that the information came back with individual pieces of data on sticky notes that looked something like this! There was a lot of data and all different types of categories. When you ask for data in no particular order, it is confusing and doesn't make a lot of sense. This example demonstrates how confusing random information can be. We REALLY need to use an affinity diagram to make sense of this data!
Fresh
Lots of cheese ll meat
Thick patty Not greasy Good selection of cheese
Melted cheese Bun not larger than the meat
Fresh meat
Our job was to take these random pieces of data and group them into common themes. O Once nce the data has been grouped, identify headers headers for for the groups. Headers are the main titles that a name for the data in the group. Our headers in this case were "Toppings," "Bun," and "Hamburger Meat."
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
REVIEW QUESTIONS – MODULE 8.
1. What are the two primary purposes of an affinity diagram?
2. Why do you think it’s important for the team to initially work in silence as they are creating their sticky notes?
3. What is a header note?
4. What does the term piggybacking term piggybacking mean? mean?
5. When one group of data becomes very large, what does it typically mean?
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
MODULE 9 - CAUSE & EFFECT DIAGRAM LEARNING OBJECTIVES – – – –
Define a cause and effect diagram Understand when to use a cause and effect diagram Define the steps in creating a cause and effect diagram Identify the guidelines for using a cause and effect diagram
WHAT IS A CAUSE & EFFECT DIAGRAM? A cause & effect diagram provides a visual documentation of potential causes related to a specific effect. A team can use cause and effect diagrams as a way to analyze a problem or plan a complex change. Cause and effect diagrams are also called fishbone diagrams and/or Ishikawa diagrams. A completed diagram does resemble a fish and Dr. Kaoru Ishikawa came up with the methodology for this great quality tool. Both problem situations and project definitions can be analyzed using a cause and effect diagram. Use of the diagram reduces the tendency to look for the one true root cause at the expense of ignoring other causes and/or interactions of causes. The diagram indicates the relationship of each "cause" and "sub-cause" to each other and to the "effect" being addressed.
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
WHEN TO USE A CAUSE & EFFECT DIAGRAM
HOW TO COMPLETE A CAUSE & EFFECT DIAGRAM 1. 2. 3.
Choose an "effect" to be studied. Develop an operational definition for the "effect.” Tape two to four pieces of flip chart paper together. On the far right hand side of the flip chart paper write down the "effect." 4. Draw the skeleton of the diagram using the classic headings for causes: materials, environment, management, man/woman, measurement, methods, and machines. 5. happen?" Place 5. Brainstorm ideas that may be contributing to the effect. For each category ask, "Why does it happen?" responses under the headings of materials, environment, management, man/woman, measurement, methods, and machines. 6. Continue brainstorming for links to each category until the team feels that everything is out on the table. 7. Look for commonality between causes that appear repeatedly. The next step is i s to determine the frequency of "causes" that show up under several categories.
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
GUIDELINES FOR CREATING A CAUSE & EFFECT DIAGRAM
EXAMPLE OF A CAUSE & EFFECT DIAGRAM
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
REVIEW QUESTIONS – MODULE 9. 1. How would you define a cause and effect diagram?
2. When do you use a cause and effect diagram?
3. Define the steps in creating a cause and effect diagram.
4. Identify the guidelines for using a cause and effect diagram.
5. How would you use a cause and effect diagram in a Hoshin planning session?
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
MODULE 10 - FLOW CHARTING LEARNING OBJECTIVES – – – – –
Define flow charting Understand when to use a flow chart State the different uses for flow charting Identify the different symbols used in simple flow charting Describe the guidelines for flow charting
WHAT IS A FLOW CHART? Flow charts are a graphic depiction of sequences of events or operations. Using a flow chart also defines the boundaries of a process, making this quality tool an invaluable method for defining a new process. Flowcharting should be the first thing a team does in order to analyze a process, both because it generates a lot of great information in a relatively short amount of time, and because it creates details that a team needs to understand where to begin improvement efforts. Flow charting can define the relationships in a work process. Flow charts describe the process detail and make the whole thing viable. Using a flow chart to document a complex process helps a team understand where resources are and how information flows through the organization. Flow charts also identify who the operators are ar e in the process, where data and/or resources come from and go to, any gaps in a process, and how much time is associated with this step in the process. There are several types of flow charts. They range from very detailed charts involving the documentation of time and functional area to much simpler "top down" charts that only capture high levels of activity. Graphically, steps in the process are documented using shapes that indicate meaning. These shapes are usually rectangles, diamonds, or ovals. Shapes are then connected with flow arrows.
HOW TO CREATE A FLOW CHART 1. Using sticky notes brainstorm a list of all the activities tied to the process under study. 2. Write a brief description of how the process begins by documenting it on a sticky note, and then drawing an oval around it. Document all remaining activities with rectangles. 3. Anywhere there are decisions along the way, document those with a diamond. 4. Lay the sticky notes on flip chart paper that is taped together either on a wall or on a large table. 5. Arrange the sticky notes (activities) in the order that they occur within the organization. 6. Determine what decisions are being made along the way. You can use a different color of sticky note for decisions and turn them at an angle to indicate a decision symbol. 7. Using a pencil or marker begin to connect the activity boxes and decision triangles with connector arrows. 8. Review your chart to make sure that all steps are captured and that each activity box has a connector coming in and one going out. 9. When the process has been accurately documented, end the activity with an oval symbol.
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
GUIDELINES 1. Work as a team using sticky notes and flip chart paper. 2. To get started, brainstorm answers to these questions: "Who are our suppliers?" "Who are our customers?" "What do we supply to them?" "What do we do with it?" "What are our outputs?" "Who gets our output? 3. The pattern of information should go from left to right. 4. Using flow chart symbols connect steps indicating the beginning, ending, tasks, and decision points. 5. Symbols should be connected with arrowed flow lines indicating a direction of movement. Each symbol should have one flow line going in and another flow line going out. The exception to this rule is a decision box, which will have a "yes" line or a "no" line. 6. Try not to cross flow lines in a flow chart. 7. Rectangles indicate a step in the process. 8. Ovals indicate the beginning or ending. 9. Diamonds indicate a decision point.
EXAMPLE OF A FLOW CHART
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
REVIEW QUESTIONS – MODULE 10. 1. How would you define flow charting?
2. When do you use a flow chart?
3. State the different uses for flow charting.
4. Identify the different symbols used in simple flow charting. char ting.
5. Describe the guidelines for flow charting.
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
BIOGRAPHY OF YOUR INSTRUCTOR – KAREN ROBERTS Karen Roberts has worked in the field of Hoshin, quality and strategic planning for the past twenty-six years. Her consulting practice concentrates on consulting to the industries on ways create effective strategic planning methodologies. A comprehensive corporate life has given her the knowledge k nowledge and skills necessary to help organizations create positive improvement. improvement. She has sought out the most effective methodologies available for creating excellence. Her broad scope and varied experience has made her a sought after advisor to organizations across the country. Her more recent experience includes facilitating organizational effectiveness teams for NASA, Methode Electronics (Malta), Windsor Industries, McDonald Douglas, Emerson Electric and Johnson & Johnson Medical. She has also facilitated strategic planning sessions for the Department of the Interior and provided leadership training, strategic planning and group development to executive level management groups at Amgen, Exabyte, Cordis de Mexico (a division of Johnson & Johnson) and Roche Chemicals. She is a past adjunct faculty member at Regis University, teaching courses for the American Society for Training & Development Development on "Measuring the Effectiveness Effectiveness of Organizations." She has an MBA and an MA from the University of New Mexico in Organizational Communication. Professional Affiliations Member of the American Society of Training and Development Member of the American Society for Quality Member of the QFD Institute
Professional Training Advanced Quality Function Deployment Practices, Dr. Yogi Akao (the co-creator of Quality Function
Deployment and creator of Hoshin Kanri), Novi, Michigan, 1998. Hoshin Kanri Practices, Dr. Yogi Akao (the creator of Hoshin Kanri) Novi, Michigan, 1998. Karen makes her home at the base of Pikes Pikes Peak in Colorado. In her spare time, she studies and teaches yoga. She currently teaches yoga at the Olympic Training Center in Colorado Springs and is the creator of the Neuro Semantic Yoga.
Hoshin Kanri: Visual Strategic Planning
Copyright, LearnFirm.com, 2014.
Blank Hoshin Matrix
Hoshin Kanri: Visual Strategic Planning
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Blank Hoshin Matrix
Hoshin Kanri: Visual Strategic Planning
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Hoshin Kanri: Visual Strategic Planning
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Hoshin Kanri: Visual Strategic Planning
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Hoshin Kanri: Visual Strategic Planning
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