Many companies have tried and failed to mimic the success of Toyota.
They assume that they can just deploy lean tools and they too will be rewarded in the same ways that the Japanese auto giant has. It rarely works out that way.
Toyota’s success stems in large part from its planning and execution system, referred to as hoshin kanri (translated to hoshin planning). This management system ensures Toyota remains at the top of the competitive heap each year by staying focused on the same goals company-wide. By wielding a strategic planning tool that’s comprehensive, consistent and works across all levels, Toyota has forged a unique path in the lean manufacturing industry.
A Look at Hoshin Planning
The Japanese phrase “hoshin kanri” has been thought about in many different ways, the most common of which are “strategy deployment” and “policy deployment.” Strategy deployment formulates clear corporate goals and objectives through the dissemination and alignment of those objectives at all levels of the organization. Finally, plans of action are crafted to achieve said objectives.
When implemented correctly, hoshin planning addresses a range of deficiencies within corporate planning, including processes that are not well suited for the shop floor layout, or plans that don’t accommodate a changing environment, or plans that are implemented but never reviewed, for example.
Here are some key takeaways. Hoshin planning…
- Works to separate trivial problems from truly important ones, organized in way that relates to the organization’s strategy.
- Is fueled by the organization’s vision for the long-term rather than today’s problems.
- Translates that vision into tangible, measurable objectives in order to achieve breakthroughs.
- Creates alignment through cross-functional planning to meet short-term goals annually.
- Hones learning through the review process to become better planners.
- Is rooted in a Plan-Do-Check Act cycle of continuous improvement.
The above objectives form the foundation of Toyota’s success, as they have a keen ability to understand the situation, identify a couple of main obstacles, develop realistic plans to address those obstacles, deploy them, and then review them regularly to ensure they work.
Basics of Strategic Deployment
There are no set-in-stone elements to strategic deployment of hoshin planning across the board. Many companies hold several in common, including the need to need clearly understand and define vision and objectives for the organization.
Think of it as finding the company’s “true north,” but in a way that holds meaning for that particular organization. Ask yourself: What is the foundation of your firm? What are you all about? What do you believe in? What drives you? What is your fundamental philosophy? After getting the answers to this question, you will come up with a guiding light for your whole organization.
Another fundamental part of strategic deployment is PDCA, a four-phase problem-solving process that continuously cycles to inspire greater improvements.
- Plan: Management must understand the current state it is in and come up with a plan to meet objectives.
- Do: Translates those plans into actions at each level.
- Check: Study the results.
Act: Take action in order to standardize and improve the process.
Hoshin planning’s review cycles are one of the most important but often overlooked features. And it’s also important to note that strategy deployment at Toyota doesn’t work with a “do as I say, not as I do” mentality, as you would see in conventional planning. Employees are not just told what to do; rather, they remain engaged in the process through all steps.
Staying focused on key objectives while allocating necessary resources to achieve goals: this is the challenge that breaks a lot of companies. But with access to strategic planning tools, you are able to communicate key strategies to everyone in the company and help them understand how they will be able to make an impact. In the end, the same core strategies should be aligned from the highest to the lowest levels of any organization.
Implementing hoshin planning and other strategy deployment tools has worked wonders for Toyota – so much so that they are the gold standard in lean manufacturing processes that truly work.
Want to learn more?
Schedule a consultation.
About how Incito can help transform your business and tackle your most
important strategic challenges.