Maximising Benefit by Aligning Improvement with Strategy

Director Consultant, Mick Lyons, discusses how the Hoshin Kanriprocess can become a game-changing addition to any organisation.

Is it your experience that sometimes it can be challenging to see the connections between the improvement activities being carried out and the overall objectives of your organisation?

Can it feel that resources are being allocated to improvement activities without a clear understanding of what is to be accomplished? 

It doesn’t have to be like that…

Previously I worked with a large global organisation which included manufacturing, service and logistics functions. Initially the approach to improvement showed the symptoms described above.

A large number of Lean Six Sigma Green Belt and Six Sigma Black Belts were trained and let loose on a wide range of locally identified problems. They had some notable successes and some significant gains were made, but overall, the benefits were less than anticipated.

Following a review of the programme, we observed that many of the projects identified were poorly aligned with the strategy of the organisation and, as a result, often had little leadership support and only limited benefits associated with them. In addition, some projects had failed to look at the larger system and had actually created additional problems, either upstream or downstream, as a result of the changes they had introduced.

We also saw significant problems associated with cross-functional resourcing and ownership. They clearly needed a solution to re-align the sub-optimal deployment we were observing.

They were fortunate that they had a function which was regarded as a Centre of Excellence due to its mature Lean culture. This operation had applied a Hoshin Kanri approach to the identification, prioritisation and strategic alignment of improvement activities and following my study of their successful process, the decision was made to deploy Hoshin Kanri across the entire global organisation.

Hoshin Kanri flow, PMI

Hoshin Kanri, often translated as “Direction Setting”, is a systematic approach for the deployment of an organisational strategy. The development of a good clear strategy is obviously a prerequisite for the approach! In brief, the strategy is used to identify a small set of clear key objectives (“Hoshins”) which are cascaded into the organisation. The actions to be taken to realise this strategy are identified locally and agreed through a negotiated process which involves the workforce at all levels.

I was fortunate enough to spend a number of years overseeing this deployment. Seeing the transformational leap that took place due to the alignment of improvement approaches with the core business strategy was hugely satisfying and had a significant impact on my own personal improvement philosophy.

So what is it about Hoshin Kanri that makes the difference…?

The core of the Hoshin Kanri process involves the translation of a robust strategic plan into a set of clear objectives. These objectives are then realised through the execution of precisely defined tactical actions and projects. There is a wide range of benefits to adopting this approach, but in my opinion the main value of the process is twofold:

Communicable
The clear and visible alignment between activity and goal is easily communicated. It allows everyone in the organisation to be able to see how their activities will deliver the objectives of the organisation.

This ability to communicate succinctly cannot be underestimated. Failure to bring the employees of an organisation along with an improvement initiative is one of the key causes of the failure of such initiatives.

Failure to communicate the benefits and gains of improvement activities to leaders and stakeholders is another. The clarity given by a well-designed Hoshin Kanri structure facilitates both.

Actionable
Within an organisation following Hoshin Kanri, tactical plans are created at a local ‘actionable’ level as a response to the strategic objectives required by the organisation. This means that although the required direction for the organisation is cascaded downwards from the leadership, it is translated into a form that is appropriate to each part.

The response to the strategic objectives is then developed through a localised process within which tactical actions are identified and executed at each level rather than delivered from above. This is an important difference to standard “command and control” and results in ownership and alignment being automatically generated at each level of the organisation, more successfully utilising everyone’s knowledge and expertise.

At first glance, Hoshin Kanri can seem a daunting prospect to organisational leaders. It’s a field that, at least in the initial roll-out and learning phase, requires expert and experienced guidance to navigate the pitfalls and dead ends that can be encountered. However, it’s worth remembering that many leading organisations (Hewlett-Packard, Toyota, Westinghouse, Xerox, HSBC, to name a few), have made significant gains using the approach.

Like any new approach, it takes practise, but once the new process is embedded it can become a game-changing addition to your organisation.

It’s hard to argue that aligning your organisational improvement initiative with your organisational strategy is not a sensible way forward. Hoshin Kanri is a tried and tested method to make that happen.

SOURCE: pmi.co.uk