hoshin planning: vision-driven leadership for breakthrough improvement
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B R E A K T H R O U G H M A N A G E M E N T G R O U PB R E A K T H R O U G H M A N A G E M E N T G R O U P
Copyright 1999 – 2003, Breakthrough Management Group, Inc. Any Reproduction or Dissemination Strictly Prohibited.
Hoshin Planning: Vision-driven Leadership for Breakthrough Improvement
2Copyright 1999 – 2008, Breakthrough Management Group, Inc. . Any Reproduction or Dissemination Strictly Prohibited.
Our Agenda for TodayOur Agenda for Today
• What Exactly is ‘Hoshin Planning’ ?
• Why use It.
• Metaphors and Key themes: Hoshin made Simple… hopefully!
• The 7 step Hoshin Planning Process
• How Hoshin Planning relates to Performance Excellence
• Benefits
• Questions and Closing
3Copyright 1999 – 2008, Breakthrough Management Group, Inc. . Any Reproduction or Dissemination Strictly Prohibited.
What Exactly is ‘Hoshin Planning’?What Exactly is ‘Hoshin Planning’?
With Hoshin Planning, there are many practitioners, and many different definitions. Here are a few:
‘We define Hoshin Planning as …. an approach to planning for breakthrough improvements towards an organization’s vision. Hoshin Planning draws on systems thinking, teamwork, the PDCA cycle, and a series of creative and logical tools designed to accelerate the achievement of the ‘Hoshin’ objectives.’
4Copyright 1999 – 2008, Breakthrough Management Group, Inc. . Any Reproduction or Dissemination Strictly Prohibited.
What Exactly is ‘Hoshin Planning’?What Exactly is ‘Hoshin Planning’?
‘Strategic planning that selects a breakthrough objective annually, aligns the plans at all levels, and implements, reviews, and improves the plan on a regular and annual basis.’
5Copyright 1999 – 2008, Breakthrough Management Group, Inc. . Any Reproduction or Dissemination Strictly Prohibited.
What Exactly is ‘Hoshin Planning’?What Exactly is ‘Hoshin Planning’?
‘Hoshin Planning is the tool used to facilitate the creation of business processes that result in a sustained competitive advantage in Innovation, Quality, Delivery, and Cost.’
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What Exactly is ‘Hoshin Planning’?What Exactly is ‘Hoshin Planning’?
‘Hoshin’ = the most important annual objective towards the breakthrough.
Before we get ahead of ourselves, a few key terms and definitions:
‘Vision’ = whatever you do, done to perfection.
‘Breakthrough’ = a radical and dramatic improvement in one or more organizational competency. Probably a long-term effort, and will require a fundamental re-thinking of the affected processes and systems.
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What Exactly is ‘Hoshin Planning’?What Exactly is ‘Hoshin Planning’?
So, what’s this word ‘Hoshin’ all about?
First, it’s really Japanese. Origins at the Kobe shipyards and at Bridgestone in about 1965-67.
The Japanese is actually ‘Ho Shin Kan Ri’.
‘Shining Metal Pointing Direction’.
A Compass! A VISION COMPASS!
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Why Use Hoshin Planning?Why Use Hoshin Planning?
Policy Deployment
Breakthroughs
WorldClassPerf.
To Align the Business Strategy and Execution to VOCTo Align the Business Strategy and Execution to VOC
Competitive
Environment
VOC Strategic
Plan
Innovation
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Why Use Hoshin Planning?Why Use Hoshin Planning?
“the way we operate”
StrategyStrategy
SystemsSystems
PeoplePeople
Performance
Excellence
“the way we think and plan”
“the way we lead”
“the way we interconnect”
ProcessesProcesses Outcomes:
PerformanceExcellence
Sustained Profitability
Customer & Employee Satisfaction
Growth & Innovation
To Align Targets and Means throughout an OrganizationTo Align Targets and Means throughout an Organization
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Key Themes of Hoshin PlanningKey Themes of Hoshin Planning
Planning based on prediction is ‘iffy’ at best.
The only way to predict the future is to create it.
Prevention doesn’t equal creation.
‘If everything is a priority, then nothing is.’
Leverage. It’s all about leverage.
Planning vs. ‘The Plan’.
Make it visible what is your ‘moon’?
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Basic ElementsBasic Elements
Hoshin Planning – Key Elements
•Driven by the organization’s vision – not today’s problems.
•A system to translate the vision into tangible and measurable objectives for achieving the breakthrough.
•Alignment created by cross-functional planning to achieve short-term objectives each year.
•‘Smart wedges’ – fewer and fewer more focused efforts, versus more and more and more…
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Basic ElementsBasic Elements
Hoshin Planning – Key Elements
• Fosters learning through the review process… you become better planners every cycle.
• At the heart of the Hoshin process is the Plan-Do-Check-Act cycle of continuous improvement.
• ‘Catchball’ as the driving force of alignment, clarification, and employee involvement.
• The thought process that drives the plan is called ‘Backwards from Perfect’, or ‘BFP’.
• Use of the ‘MP’ tools to creatively and systematically probe and assess possible strategies.
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Management by Objectives (MBO): Concerned only with results
Hoshin Planning: Concerned with the establishment of results oriented
processes
Hoshin Planning vs. MBO SystemsHoshin Planning vs. MBO Systems
Process is: Result Is: Hoshin Planning says:
MBO Says:
Bad Bad Bad Bad
Bad Good Bad Good
Good Bad Can't Happen? Bad
Good Good Good Good
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Once a Breakthrough Objective is achieved, the process for achieving the objective will become standardized.
Therefore, the processes that are established when achieving Breakthrough Objectives will eventually become part of the Daily Management systems of your organization
Breakthrough to Daily ManagementBreakthrough to Daily Management
Breakthrough Daily Management
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7 Step Hoshin Planning Process7 Step Hoshin Planning Process
1. Establish Organizational Vision
2. Strategic Planning: Develop 3-5 Year Breakthrough Objectives
3. Develop Annual Objectives
4. Deploy Annual Objectives
5. Implement Annual Objectives
6. Monthly Review
7. Annual Review
Catchball
Lean & OtherTools
Self Diagnosis
PD
C
A
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Establish Organizational Vision Establish Organizational Vision
Vision - Where are we going?
Mission - What do we do?
Values - What do we stand for?
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Strategic Planning: The WHATStrategic Planning: The WHAT
Strategic Planning
Time Line 3-5 Years
Pe
rfo
rma
nc
e L
eve
l
Current Situation
The Competition
World Class
What is the Gap?
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Develop Annual ObjectivesDevelop Annual Objectives
Defined:
Annual Objectives are those objectives that we need to achieve this year which will enable us to reach our
overall 3-5 year Breakthrough Objectives
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Develop Annual Objectives: HOW FARDevelop Annual Objectives: HOW FAR
Time Line
Per
form
ance
Current
Comp
WC
Gap
Strategic Planning
Current Situation
World Class
Year 1 = 50% of Gap
Year 2 = 30% of Gap
Year 3 = 20% of Gap
Annual Objectives
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Deploy Annual Objectives: HOWDeploy Annual Objectives: HOW
Current Situation
World Class
Year 1 = 50% of Gap
Year 2 = 30% of Gap
Year 3 = 20% of Gap
Annual Objectives
Top Level Improvement Priorities 1. Ask 5 Why’s and
identify root causes
2. Use Problem Solving to find ways to bridge the gap
3. Identify Key Driver Processes with greatest impact.
4. Use the 7 MP tools to determine priority.
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Deploy: HOW MUCH/WHENDeploy: HOW MUCH/WHEN
0
0.2
0.4
0.6
0.8
2010 Plan 0.65 0.6 0.55 0.5 0.45 0.45 0.4 0.37 0.34 0.31 0.3
2010 Actual 0.68 0.62 0.63 0.51 0.44
JAN FEB MAR APR JUN JUL AUG SEP OCT NOV DEC
0.00%
20.00%
40.00%
60.00%
80.00%
Current Month 65.00% 15% 7% 5% 8%
Last Month 73.00% 12% 5% 4% 6%
Stock OutShort
Promised DateWrong Sales
InfoCustomer Change
All Other
Determine Measures and Track Targets are measures of
the effectiveness of a given process
Think in terms of process capability (statistics)
Improvement Priorities tell “how”, Targets tell “how much” & “by when
Targets should not be established based on “averages
Targets are a means to measure the effectiveness of a given process. Do not confuse targets with objectives!
Targets are a means to measure the effectiveness of a given process. Do not confuse targets with objectives!
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Identify the resources with the greatest influence or opportunity to impact the Improvement Priority and Target to Improve
The largest or most available resources will not always have the greatest impact
Deploy: Identify ResourcesDeploy: Identify Resources
30%
30%
20% RelativeImpact On
ImprovementPriority
Monitor the Distribution
Of Resources
Team A
Team B
Resource C
Resource D
Team E
100%
0% 0%
100%
5%15%
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Deploy Annual ObjectivesDeploy Annual Objectives
HO
W
HOW FAR WH
AT
HOW MUCH
Resources
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Deploy Annual ObjectivesDeploy Annual Objectives
l l
l l
l Primary Responsibility
m Secondary Responsibility
Resources
Gillette - Policy Deployment 2003
AnnualObjectives
Benefits
3-5 Year Breakthrough
Objectives
Target to Improve
l l
l l
l Primary Responsibility
m Secondary Responsibility
Resources
Gillette - Policy Deployment 2003
AnnualObjectives
Benefits
3-5 Year Breakthrough
Objectives
Target to Improve
PRIORITY2003 YTD
ACT2003 JAN
2003 FEB
2003 MAR
2003 APR
2003 MAY
2003 JUN
2003 JUL
2003 AUG
2003 SEP
2003 OCT
2003 NOV
2003 DEC
SAFETYPlanAct
QUALITYPlanActPlanAct
DELIVERYPlanActPlanAct
COSTPlanActPlanAct
GROWTHPlanActPlanAct
<Name of Company >Policy Deployment Top Level Bowling Chart
Top LevelBowling Chart
l l
l Primary Responsibility
m Secondary Responsibility
Resources
2nd Level Policy Deployment Matrix
AnnualObjectives
Benefits
Annual Objectives
Target to Improve
PRIORITY 1997 ACT 1998 ACT 1999 ACT JOP2000 YTD
ACT JAN FEB MAR APR MAY JUN JUL AUG
SAFETYPlanAct
QUALITYPlanActPlanAct
DELIVERYPlanActPlanAct
COSTPlanActPlanAct
GROWTHPlanActPlan
<Name of Company >Policy Deployments Second Level Bowling Chart
= Plan x = Progress at Review
Action Step/ Kaizen Events Milestone J an Feb Mar Apr May J une J uly Aug Sept Oct Nov Dec
Core Objective: *
TimelineTarget Improvement
Planned Dates
Status ImpactOw ner
Policy Deployment Action Plan
Review Team: * Next Review : **-**-02
Environmental Situation Summary: *
Improvement Priority Title: *
Department/Location: *
Management Owner: * Date: **-**-02
Second Level Bowling ChartAction Plan
POINT OF
IMPACT
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There is a monthly review process for each level of deployed objectives within the organization
Focus on exceptions only - Countermeasures
Use “Bowling Chart” to track monthly progress
One bowling chart per PD matrix
Monthly Review ProcessMonthly Review Process
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How effective is our Policy Deployment Process.
Do we move breakthroughs to daily management?
Did we apply resources effectively?
Were PD matrices and action plans deployed to proper level?
Did we appropriately use Process Excellence tools?
Did we put in sustainable processes or did we get short-term results?
Were our monthly PD reviews effective or do they need to be changed in structure?
Did we just dust the matrix off at the end of the year, or did we track it month to month?
Annual Review ProcessAnnual Review Process
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A little more . . .A little more . . .
Challenges and Deficiencies Addressed by Hoshin:
•Plans aren’t used – the ‘doing’ isn’t connected to the ‘thinking’.
•Plans are not suited to the realities of the ‘shop floor’.
•Plans aren’t aligned and connected across the system.
•Measures may or may not exist, and may or may not be appropriate.
•‘By what method?’
28Copyright 1999 – 2008, Breakthrough Management Group, Inc. . Any Reproduction or Dissemination Strictly Prohibited.
A little more . . . A little more . . .
Challenges and Deficiencies Addressed by Hoshin:
• Plans aren’t reviewed. Ever.
• Plans don’t take into account a changing environment.
• Plans never lead to the kind of change necessary to truly move ahead.
• Next years’ plan may or may not have anything to do with this years’ plan.
• The planning process itself never improves.
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How does Hoshin relate to Performance Excellence?How does Hoshin relate to Performance Excellence?
First, you need a solid foundation in Quality Improvement.
Hoshin is typically a ‘second generation’ application.
Builds upon early successes (‘low hanging fruit’).
Creates tighter alignment across work systems.
It’s a ‘tonic’, and will take you to the next level:
from improvement to innovation, and from prevention to creation.
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How does Hoshin relate to Performance Excellence?How does Hoshin relate to Performance Excellence?
Performance Excellence is a continuous improvement initiative that, when implemented correctly, will accelerate an organization’s ability to achieve it’s strategic objectives.
Hoshin Planning is a disciplined approach to creative thinking that, when implemented correctly, will ensure the most bold and creative set of strategic objectives possible.
Lean, Six Sigma, TRIZ, Change ManagementLean, Six Sigma, TRIZ, Change Management
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The BenefitsThe Benefits
Focus.
Alignment and synergy of efforts
Enhanced creative problem solving everywhere.
A whole new set of decision making tools.
An objective approach to deal with subjective data.
Radical breakthrough improvement, the likes of which you’ve likely never seen before.
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Remember: ‘F-A-D-I-R’Remember: ‘F-A-D-I-R’
FIND your Hoshin.
ALIGN the organization and your objectives.
DEPLOY the plans.
IMPLEMENT the changes.
REVIEW and improve all along the way.
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Time for ConversationTime for Conversation
QUESTIONS?