Your guide to the many names, terms, acronyms and phrases used when talking about delivering breakthrough goals in business.
Written by: Deborah Biscomb, Head of Marketing
At i-nexus, we know that Strategy Execution comes in many forms, and so do the different methodologies which make up each business focus, none-more so important than for Strategy Deployment.
As we speak to strategy and operational professionals across the globe, we find that many people know of the Hoshin Kanri methodology for planning and executing strategic plans, but we don’t always hear the same phrases being used.
Our aim is to help your business achieve more of its strategic goals faster, and with less effort – that’s why we’ve created this quick Hoshin Kanri jargon buster to help beginners and seasoned professionals understand the terms used when talking about Hoshin Kanri!
If you don’t know Hoshin Kanri from Goal Deployment, this is the perfect terminology guide to accompany our deep dive into Hoshin Kanri.
An action plan is a programme or project planning tool that helps you determine if your plan is achievable by listing out the key milestones and the impact each milestone should have on the monthly targets.
Annual objectives / goals are what is required this year to meet the three to five- breakthrough objectives / goals.
A Bowling / Bowler Chart / Performance Dashboard is a visual summary of performance in key strategic metrics based on expected vs. actual performance, which can be used on a monthly or weekly basis. Often there will be a visual management aspect to this chart which shows the distinction between red, amber and green actual performance to allow focus on exception management.
Breakthrough objectives / goals are significant transformations that the organization must make and needs to be achieved in the next three to five years. Think of an objective / goal as breakthrough where there is a recognition within the organization that it cannot be achieved under the existing company norms such as people, process and product.
The Hoshi Kanri methodology is widely credited as a top-down approach developed in 1965 by Bridgestone Tire.
This is the process of taking an objective / goal and communicating it down and across your organization and is commonly referred to as a goal cascade.
A negotiation between organizational layers and across functions as to which area will contribute what to the higher-level goals based on the current state of performance and the change / improvement support on offer. The catchball metaphor is used as the process mirrors that of a game of baseball or rounders.
Read more about the Catchball Process and how to utilize it here.
A countermeasure is an action(s) against a process problem in an immediate sense. Countermeasures eliminate the symptoms of underperformance and are the result of problem-solving techniques such as a root cause analysis. When implemented effectively, the countermeasure will allow the rest of the process to continue smoothly.
A reactive tool that helps you plan your way back to target compliance / expected performance.
Danaher Business System
Originally known as the Danaher Production System, the Danaher Business System was developed by the Danaher organization on the best Lean practices coming out of Toyota in Japan in the mid-1980s. With a focus on Lean, driving waste out of their system, and implementing a toolbox of continuous improvements for every facet of its business, Danaher distills their approach into three areas – Lean, Leadership and Growth. This business system is widely acknowledged as an example of Hoshin Kanri’s unparalleled success, and other organizations have developed their own based on Hoshin Kanri, such as Gardner Denver.
Read more about the Danaher Business System in our Hoshin Kanri eBook, available to download by clicking below:
Whilst the traditional X-Matrix allows you to capture objectives / goals, initiatives and improvement targets, as well as resource accountability and interdependencies, the creation of an X-Matrix in spreadsheets can become cumbersome, especially at multiple organizational levels. The digital X-Matrix allows you to easily apply a hierarchical Hoshin Kanri, allowing you to consolidate multiple files into one location, giving your company, divisions and departments a connected and accurate view of how their actions support your strategy.
Direction and Management
The literal translation of Hoshin Kanri from Japanese to English. The separate words of ‘Hoshin’ and ‘Kanri’ mean direction and management.
East View (X-Matrix)
The East view of the X-Matrix covers the metrics of success, mapping the people who own the improvement priorities and measures of performance for each component of the execution plan.
Exception management (management by exception) is management approach where manager intervene when significant deviations from expected performance arise. This involve setting objectives / goals to establish expected performance, tracking performance against this norm, analyzing metrics to identify deviation and then investigating underperformance and putting in place corrective action to remedy this exception.
Goal Deployment is a synonym of Hoshin Kanri.
Hoshin Kanri – sometimes known as Hoshin Planning, Policy, Goal or Strategy Deployment – is a strategic planning process whereby strategic goals are communicated and translated into action. Originating in Japan in the 1950s and now being adopted worldwide as the de facto Strategy Execution methodology, Hoshin Kanri means “policy management” in Japanese. The characters use elements of the words ‘compass’ and ‘direction’, with the obvious implication that you need to know where you are going, and a map to get there.
Read our definitive guide to 'What is Hoshin Kanri' by clicking below:
A Hoshin Facilitator typically completes a certification program to acquire the relevant skills for working in a strategic planning or Strategy Execution role. The facilitator validates and updates strategy, translates strategy into a robust strategic plan, uses the X-Matrix and catchball process to align the strategic plan with the entire organization, and governs the execution of the strategic plan to keep on track throughout a planning cycle by engaging leadership, management, and employees in a facilitated approach to strategic planning and execution.
Improvement priorities are a list of executable improvements that leverage the most appropriate problem-solving approach to achieve the aligned annual objective / goal.
KPIs (Key Performance Indicators) are the most important measurable values to demonstrate how effectively an organization is performing against key strategic objectives / goals.
Lean Management, also known as Lean Enterprise or Lean Thinking, is the management philosophy behind the Continuous Improvement structure developed by Toyota. An important element of Lean Management is that an organization must strive for flow, in other words, a process without interruption.
Metrics track the status of a specific business process, but, crucially, are not the most important metrics to evaluate an organization’s performance against its key strategic objectives / goals.
North View (X-Matrix)
The North view of the X-Matrix captures the key improvement priorities to achieve the annual objectives.
PDCA (Plan-Do-Check-Act) is a four-step business management method to continuously improve processes and products. It is also referred to as the Deming circle/cycle/wheel, the Shewhart cycle, the control circle/cycle, or PDSA (Plan–Do–Study–Act) or OPDCA (Observe-Plan-Do-Check-Act). PDCA is incorporated into the seven steps of Hoshin Planning.
Policy Deployment is a synonym of Hoshin Kanri.
Resource interdependence is the phrase used to refer to the relationship between different resources (human, money, technology etc.) and their contribution or impact to an initiative / project / goal / KPI / metric.
Root Cause Analysis
A root cause analysis is a method of problem solving used for identifying the root causes of faults or problems in a process.
An X-Matrix rotation is the means by which you cascade your objectives throughout the levels of your organization, with each rotation meaning a different level of cascade.
South View (X-Matrix)
The South view of the X-Matrix captures the three to five-year breakthrough objectives and defines the ‘what’ your business is trying to undertake.
Strategic planning is a process of documenting and defining your organization’s direction by assessing your current and desired future state. A strategic plan is where you will record your mission, vision, and values, as well as the long-term objectives / goals and action plans you will execute to achieve your objectives / goals.
Strategy Deployment is a synonym of Hoshin Kanri.
Strategy Deployment Methodology
Hoshin Kanri is not the only methodology to deploy strategic plans. In fact, other popular approaches include:
- Balanced Scorecard (BSC)
- Four / 4 Disciplines of Execution (4DX)
- Management by Objectives (MBO)
- Objectives, Goals, Strategies and Measurements (OGSM)
- Objectives and Key Results (OKR)
Read more about how Hoshin Kanri compares to other methodologies in our comparison available here.
Strategy Execution Management
As defined by Gartner, Strategy Execution Management is the process of Strategy Execution in many of the following ways:
- Managing the outcomes to business process impacts
- Visualizing the organization's strategies, goals, missions, objective, or other conceptual or contextual guidance relative to metrics, people, plans, projects and assets
- Prioritizing any continuing, upcoming and in-flight investments relative to strategies and metrics
- Continuous planning and project selection based on resources
- Capturing actual metrics of strategic execution attainment based on continuing investments
- Providing continuous monitoring of the state of projects and their resources against targeted strategies and metrics once executed
- Formalizing a scenario planning process for re-examining strategic plans whenever necessary
- Providing the ability to reprioritize in-flight projects in light of plans and continuing investment relative to strategies and goals
Targets to Improve
Targets to Improve are also known as ultimate metrics, the means by which you are measuring success.
The Seven Steps of Hoshin Planning
The seven steps of Hoshin Planning refer to the systematic approach to delivering Hoshin Kanri, they are:
- Establishing a vision
- Developing 3-year breakthrough objectives
- Developing annual objectives
- Deploying annual objectives
- Implementing annual objectives
- Monthly review
- Annual review
This is the metaphor of Hoshi Kanri, the idea that your entire organization should align to achieving its vision, or True North.
Also known as a company’s True North, this is a long-term vision for the company’s future – this is based on goals, long-term, and flows from your mission, it is the where you want the business to be and what that will look like.
West View (X-Matrix)
The West view of the X-Matrix identifies annual objectives / goals – so, how far do we plan to get this year towards those three to five-year breakthrough objectives?
A visual planning tool that allows you to decompose your Vision into the Breakthrough Objectives, Annual Objectives, Improvement Priorities, Targets and Accountable Owners. This tool takes time to learn but is unparalleled in its ability to quickly see if the plan holds together down through the planning levels.
Learn more about Hoshin Kanri
With this comprehensive jargon busting guide to hand, you can move forward on your Hoshin journey, and these are some of the best resources to take those next steps:
- What is Hoshin Kanri? Explore the origins of Hoshin, the seven steps of execution, common fail points, resources and more to help your organization succeed with driving breakthrough results from its plans.
- Hoshin Kanri - OGSM - OKR: A case of apples and oranges?: Uncover the similarities between Hoshin Kanri, OGSM and OKR in our comparsion feature.
- Download our Hoshin Kanri eBook: Read how Hoshin Kanri is supporting organizations to drive great business results, how two businesses have used the methodology to perfect their own business systems, case studies and more.
About the author
Deborah Biscomb is i-nexus’ Head of Marketing. Deborah has wide-ranging experience of markets such as retail, manufacturing, financial services, public sector, telecommunications, energy and utilities, distribution and logistics. As Head of Marketing, her drive is to raise awareness and understanding of the challenges facing enterprises in controlling their strategy and driving superior results.