Step 1: Establish the Vision and Values of the Organization
An effective vision statement is inspirational/aspirational, visualizing the future state of an organization. A vision statement should challenge and inspire employees. If the organization were to achieve all of its strategic goals, what would it look like 10 years from now? It can also be grouped as a set of missions and values important to the organization.
Step 2: Develop Breakthrough Objectives (3-5 years)
Breakthrough objectives (BTO) address a futuristic view (3-5 years) of the organization. This could be acquiring a new line of business, disrupting markets, developing new products etc… BTO’s are revolutionary, achieved through the support, sponsorship and aspirations by the C-suite of the organization.
Step 3: Develop Annual Goals
Establishing annual goals means breaking down your breakthrough objectives into goals that will need to be achieved by the end of the year. Moving from the long-term to short-term requires that your organization successfully define the medium-term. The organization must stay on course to ultimately build shareholder value and meet quarterly expectations.
Step 4: Deploy Annual Goals
A goal expresses intent. Achieving goals requires taking actionable steps to stay on course by doing what is right on a weekly, monthly and quarterly basis (Execution). Each goal should have an owner with the skills and authority to see the goal through conclusion by using analytics to track progress. Support and understanding of the goals throughout the middle management / front-line is vital for daily administration. The principle of catchball applies, to ensure small improvements will get the organization even closer to the annual goals. These goals should be accessible and help team members make decisions about what work needs to be prioritized.
Step 5: Implement Annual Objectives (Hoshins / Programs / Initiatives / AIPs etc…)
For operational excellence leaders, achieving the annual objectives is an essential daily management discipline. Management is once again breaking this down into a series of strategic change programs involving a myriad of initiatives i.e kaizen, 5S, gemba, 7W, agile (IT transformations) etc… At this level of the Hoshin Kanri planning process, mid level management teams plan out the details to implement the tactics. Hoshin Kanri planning software helps link these initiatives back to the overarching goals for medium to large enterprise organizations.
Step 6: Monthly Performance Review
Steps 1-5 cover how objectives are defined at the corporate level and cascade through the management level, all the way to the plant level. Step 6 requires holding a monthly review to continuously track progress and monitor outcomes. HoshinCloud makes it easy to stay in sync and manage review cycles, create and track progress towards completing goals, and manage a shared agenda or action items for one-on-one meetings. Leadership will be notified of any roadblocks or red flags that may occur through out the course of the year.
Step 7: Annual Performance Review
At the end of each year, it is time to reflect on the Hoshin Kanri plan. This annual ‘check up’ is to diagnose the overall health of the organization. It is an opportunity to establish the corporate goals for the following year and begin the hoshin planning process once again.
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