Agile strategy implementation with Hoshin Kanri

It is not uncommon for the top management of a company to become frustrated some time after the introduction of a new strategy: the new strategy does not have the desired effect - for example, because the managers and their employees at the operational level only support the strategy to a limited extent, do not know on which (sub-)goals they should focus their activities, or because they lack the competence to implement the strategy in everyday work, and silo thinking dominates in the departments and divisions, which is why they produce "island solutions". The Hoshin Kanri management system helps to avoid these weaknesses in strategy planning and implementation by involving managers top-down in the process of strategy development and implementation planning. Furthermore, so-called "breakthrough goals" are defined on which the entire organization focuses its energy, and there is cross-functional coordination of (detailed) goals and measures between the divisions and departments. Employees are given the competence to successively increase their performance.

Overcoming silo thinking
In Hoshin Kanri, the PDCA cycle known from Lean Management plays a key role. This means that the Hoshin process consists of the four phases

• Plan (agree on goals and measures),
• Do (empower employees and managers),
• Check (make the development visible and check it) and
• Act (implement new standards).

However, top management develops the vision together with all managers at the next level; the same applies to the breakthrough goals derived from the corporate vision and strategy, on which the company will focus its activities in the next three to five years. They are also worked out by top management and (senior) executives in so-called target meetings. The annual hoshin targets are then derived from these, which are the milestones on the way to achieving the breakthrough targets.

After being defined, the hoshin objectives are cascaded to the next levels as in management by objectives. A key difference, however, is that once the objectives have been defined and the plans drawn up, cross-functional coordination takes place at all levels.

Increase leadership competence
In many companies, planning is done diligently, but when it comes to implementation, little happens - also because employees lack important competencies. For this reason, Hoshin Kanri pays particular attention to developing the necessary (leadership) skills among managers and employees in order to manage the strategy implementation process in everyday work with the necessary flexibility and to achieve challenging goals. In addition, employees are given tools to take the agreed improvement initiatives in addition to their day-to-day work. One of these tools are the A3-Re- ports. In these reports, the process of problem solving is made transparent on a sheet of paper - among other things, in order to develop the competence of the employees (alone or in a team) to solve problems independently.

Shopfloor management plays a particularly central role in the Hoshin Kanri check phase. This is because one of Hoshin Kanri's maxims is: instead of administrative tasks, managers should concern themselves with value-creating processes: "go and see" instead of "meet and mail".

The regular presence of managers in the value-creating areas speeds up decision-making. This is also necessary in order to show the necessary flexibility and agility in the event of unexpected problems in strategy implementation.

Install stable processes
An overriding goal here is: Stable processes are to be installed in the organization in order to ensure that the planned results are achieved irrespective of chance. This means that the processes are standardized. However, standardization is seen as an ongoing process. This means that the defined standards are not a
"sacred cows". If necessary, they can be "slaughtered", i.e. thrown overboard. That is why there is also a standardized problem-solving process. It is triggered in the event of (target) deviations or a change in the general conditions. The necessary communication takes place in daily shop floor meetings. In these meetings, the performance of the previous day and the goals for the current day are discussed. In this way, the employees are always focused on the overall (Hoshin) goals.

Under no circumstances, however, should the idea of personnel and management development, which is linked to the Hos- hin Kanri management system, be forgotten when coordinating the goals across departments and hierarchies: Otherwise, the employees, especially on the shop floor level, will lack the necessary supporters when implementing the strategy in everyday operations.