Hoshin Kanri – an approach for integrated strategy execution
In today’s business world, one can often see that top management plans carefully and precisely. However, when it comes to the implementation of these plans, the desired impact oftentimes is not observed - not due to poor planning in the first place but because:
• The managers (and their employees) do not fully go along with the strategy.
• The employees do not know what goals to focus on.
• They lack the necessary competencies to implement the strategy in daily business.
• The departments and business units are dominated by silo thinking and, thus, generate isolated solutions.
The management system Hoshin Kanri addresses these managerial weaknesses by involving lower level managers in the process of strategy development. This allows for a deeper understanding of the strategic goals on lower levels and helps to pull in the same direction. Another central item of Hoshin Kanri contains the definition of Breakthrough Goals. These strategic targets are supposed to challenge the company and align all the company’s activities with the strategy for the upcoming three to five years. In order to achieve this alignment of strategic activities, Hoshin Kanri fosters a cross-functional coordination to avoid the infamous silo mentality and sometimes even competition between business units and departments. Lastly, a crucial concern of Hoshin Kanri is to develop the managers’ (leadership) competencies as well as the required culture and structure within the organization in order to succeed sustainably in the market.
For a more detailed insight into the central elements of Hoshin Kanri, have a look at Dr. Daniela Kudernatsch’s article in the German business journal Management & Qualität.