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Policy and strategy deployment

based on Hoshin Kanri

-
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What Is Strategy?

Strategy is the way an organization seeks to achieve the mission, vision and goals
A set of goals/objectives
A method involving people resources and processes
(Competitive
(CompetitiveAdvantages
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(Vision & strategies are the key to success in the information age.)

)(Definitions
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? (Mission ): Why we exist
: .
Vision : What we want to be in future .
)(Drivers .
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...

)(Definitions
)( Key Elements
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) (Key performance Indicators
.
) (measures
) ( targets
) (plans

)(Definitions
:

.

Barriers to successful
execution of strategy
: %
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Strategy has never been more important
- Business Week
Barriers to
to successful
successful execution
execution of
of strategy
strategy
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- BSCo Research
Barriers to
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execution of
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strategy
Barriers
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.

WHAT Hoshin Kanri?
Historical Background
Background
Historical
Hoshin Kanri was developed in Japan :
Bridgestone/Komatsu/JUSE
Based on U.S. techniques of Management by
Objectives and the PDCA cycle
Used to communicate company policy to
everyone in the organization
Primary benefit is to focus activity on the key
things necessary for success.
Japanese Deming Prize winners credit Hoshin
as a key contributor to success
Hoshin Kanri
Ho =
Shin =
Hoshin =
Kan =
Ri =
Kanri = administration, management, charge of

.
Source: Hoshin Handbook by Pete Babich

WHAT is
is Hoshin
Hoshin Kanri
Kanri?
WHAT
?
Hoshin Kanri
Hoshin is Japanese for a compass, a course, a policy, or a
plan.
Kanri refers to management control. In English, this is
generally referred to as policy deployment.
Hoshin Process
The company develops a 3 to 5 year plan, and senior
executives develop the current years Hoshin objectives.
Then the process of catchball occurs. This involves reporting
from teams and feedback from management.
Development of the Hoshin plan results in the cascading of
action plans designed to achieve corporate goals.

WHAT is
is Hoshin
Hoshin Kanri
Kanri?
WHAT
?
"Refers to the process of internalizing policies

throughout the company, from the highest to lowest
levels"
"Policy Deployment calls for everyone to interpret
policy in light of his own responsibilities and for
everyone to work out criteria to check his success in
carrying out the policy"
Masaaki Imai
Kaizen: The Key to Japan's Competitive Success
Is Also Referred To As :
Policy Management,
Management by Policy,
Policy Deployment
Hoshin Kanri,
Hoshin Planning.

WHAT is
is Hoshin
Hoshin Kanri
Kanri?
WHAT
?
Progressive US companies, like Hewlett-Packard
and Xerox, have adopted Hoshin as their
strategic planning process
Almost all Baldrige Award winners use some
form of "Hoshin-like" planning process
Hoshin is nothing more than a system of forms
and rules that encourage employees to analyze
situations, create plans for improvement, conduct
performance checks, and take appropriate
action.

WHAT Hoshin
Hoshin Kanri
Kanri?
WHAT
?
What is Hoshin?
System of forms and rules
Provides structure to the planning process
Encourages
Analysis of situations
Development of plans for improvements
Performance checks
Appropriate actions
Focuses the companys efforts on critical issues
impacting success.
PDCA
PDCA
Hoshin Kanri
Kanri based
based on
on PDCA
PDCA cycle
cycle
Hoshin
Hoshin is based upon the cycle of
Plan-Do-Check-Act (PDCA)
This structure assists in sustaining a planning process
Act
Plan
Resolve issues
Examine present
Document
Identify improvements
Standardize
Establish measures/goals
Reflect
Identify alternate solutions
Check
Do
Compare actual to expected
Implement action
Understand root cause
Conduct training on solution
Source: Hoshin Handbook by Pete Babich
WHAT is
is Catchball
Catchball?
WHAT
?
The discussion process that takes place before
policy is finally decided is known as catch ball .
Since the policy ball is thrown back and forth
between top and middle managers before a final
decision is made.
The aim of this process of catch ball is to
convert mandatory objectives set by senior
managers into employees own self-set targets.
WHAT is
is Catchball
Catchball?
WHAT
?
The divisional draft proposal is then discussed in each department of the
division by the department manager, section managers,
and ( if necessary ) subsection managers, and each department
formulates its own revised policy proposal. This departmental proposal is
then discussed and modified in each of the departments sections by the
section manager, subsection managers, team leaders, and so on.
After the opinions of as many people as possible right down to the front
line have been incorporated in this way, the information is fed back up
through the hierarchy to top management, and the companys policy for
the forthcoming year is finally decided after further discussion and
revision as needed.
There are good reasons why many companies carry out this process of
catch-ball enthusiastically despite the fact that it takes a certain amount
of time and effort.
WHAT is
is Catchball
Catchball?
WHAT
?
If catch-ball were no more than a means of implementing top-down policy
deployment, it could be accomplished rapidly without much trouble, for
example, by inputting top managements policy proposals into computer
and using suitable software to break them down.
Why do companies expend so much time and effort on catch-ball? It is
because the discussion that takes place among the people taking part at
the various different levels of organization deepens their understanding of
the policies and enables them to think about both the necessity and
possibility aspects of the proposed targets.
Through this process, companies hope to effect a qualitative change in
top-down mandatory targets, turning them into bottom-up voluntary targets.
This is an extremely effective way of motivating people to achieve their
targets.
Deploying process
process (Hoshin
(Hoshin Kanri)
Kanri)
Deploying
Development
Developmentofof
3-5
3-5years
yearsHoshin
Hoshin
Review Hoshin Process
Senior
Seniormanagement
management
develops
develops1-year
1-year
Hoshin
goals
Hoshin goals
Catchball:
Top management 1-year

Hoshin goals, targets,
measurements to ensure
alignment
Catchball:
Product management
Product
Productmanagement
management
develops
develops1-year
1-year
Hoshin
goals
Hoshin goals
Senior
Seniormanagement
management
action
actionplans
plans
Product
Productmanagement
management
action
actionplans
plans
Review
Reviewby
byCEO
CEO
Review
Reviewby
bysenior
senior
management
management
Yes
No
Problems
Problems
Yes
Quarterly

WHAT IS BSC?
Historical Background
Background
Historical

) -
(KPMG

- .
Harvard Business Review

The Balance
Balance Scorecard
Scorecard
The

.
looking backwards
looking from the

outside in
looking ahead

Looking from the
inside in
BSC
BSC
)(BSC FRAMEWORK
)FRAMEWORK
(BSC

Vision
and
strategies

WHY Hoshin ?
.
If you cant measure , you cant manage it
Why we exist
Whats important to us

What we want to be
Our game plan
GAP

What we must improve

What I need to do

.
.
.
.
.
.

.
.
.
.
.
.
.

Catchball .

Make Strategy Everyones Job

CORP
SBU
The Strategy Focused Workforce
HR processes are essential for moving

strategy from the top to the bottom
Hoshin Kanri :
Mapping the Road to Success

(Hoshin Framework)
)(

SWOT
Loose
break

)
(

) (

WTO

%

.

)
(
vision

Cascade strategy down the Organisation
EFQM
Vison
Vison
Hoshin Kanri
(Policy
(Policy and
)and Strategy
)Strategy
--
)(Leadership
-
.
-

.
-
.
-
.

Customer

Customer Focus Objectives

.

) ( time to market


Customer expectations

.

.
.

.
!
Customer Indifference
How good are we?

perceived performance is often more
important than actual performance.
If the customer perceives that we are poor
when we are good there is no point in making
improvements.
We need to change the perception!.
How do we know other peoples

perceptions without asking?

?What do our customers want
. :

.

.

.
Example
Customer Related needs analysis
For each product identify the key elements in the
supply chain
Example automobile components
Supplier Transportation Iran Khodro

Stock
Quality
Production
Service
Customer

Customer

.............

Are we customer focused?
CSI
Number of customer suggestions
implemented
Customer needs analysis
Customer exposure throughout the
organization
Build-to-order time and delivery time
Number of customer complaints
Customer praise
Customer Expectations vs. Perceptions
% calls transferred or passed up the
organization
Average weekly calls per service area
Rate of parts outage
Number of on-time deliveries
Number of returns
Price relative to competitive market price
Customer willingness to pay for products
Extent products are more user friendly
compared to competition
Number of repeat complaint calls
Positive press index
Negative press index
Dealer satisfaction index
Quality ratings
Warranty costs

( User friendly)

Employees
:
.
:
.
....

.

Employees
.........

) (best-practice

)(cross functional

) (


Finance

.................

GDP

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) / (
) / (

) (
Set up


Processes & Organization

.

.

... .

................

/ .

Suppliers

%

%

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Design & Innovation

.
.

/

% R&D

) (

R&D
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% R&D

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Technology

) (

% R&D


society

-
-
-
-
-
- ) (
-
-
-
..........
........
......
....

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Policy and strategy deployment

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Kanri = administration, management, charge of

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"Refers to the process of internalizing policies

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Identify alternate solutions

Compare actual to expected

Understand root cause

Conduct training on solution

Source: Hoshin Handbook by Pete Babich

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Review Hoshin Process

Top management 1-year

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looking from the

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Our game plan

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Make Strategy Everyones Job

The Strategy Focused Workforce

HR processes are essential for moving

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