In today’s world, especially with remote working, organizational alignment and focus and accountability of agreed goals is paramount to success. This blog looks at a superb tool for helping you to achieve both alignment and focus: the Hoshin X Matrix.
Written by: Carolyn Gibson, Senior Strategy Advisor
In my previous blog, What is Hoshin Kanri, I explained how Hoshin Kanri (sometimes called Policy Deployment) helps organizations to construct, deploy and deliver on their strategic goals.
The X-Matrix is Hoshin Kanri’s powerful visualization aid that is used to manage the detailed strategic planning. It has many similarities with other strategy planning tools such as the Balanced Scorecard, OKRs and OGSM.
However, the X-Matrix has several key differences that make it head and shoulders above the rest in terms of building alignment, accountability and focus. If you are now wondering why, read on.
What is an X-Matrix?
A typical X-Matrix (sometimes simply known as a Hoshin Matrix), as pictured below, is traditionally stored in an Excel file or printed on an A3 piece of paper.
To someone who has never seen an X-Matrix before, it can look complex.
However, it has a simple but powerful underlying structure - what is called a rhetorical wheel.
It unfolds around a point in the center of the square, where the company’s vision is displayed.
It then moves South and clockwise: from your vision, to your three-year objectives, to your one-year objectives, to your next quarter’s priorities or goals.
It has containers for all the elements necessary to plan your strategy, including, on the East face, how the priorities will be measured, and who will be accountable for their achievement.
How to build your X-Matrix
Building the X-Matrix requires both lateral and vertical thinking, both creative brainstorming and logical deduction.
Breakthrough Objectives and the South Face
With an eye on the vision, the management team considers various Breakthrough Objectives (what the company not just wants but needs to do in the next three years to achieve its vision) but must then select only three to place on the South Face.
Annual Objectives and the West Face
The team then brainstorms and debates which Annual Objectives will make the difference or not between success and failure of each Breakthrough, and places just three per Breakthrough on the West Face.
Priorities and the North Face
Often at this point functional leaders and other key team members are brought together to brainstorm and determine the key priorities in the next 100 days to achieve the Annual Objectives - and to agree how success will be measured and who will be accountable.
These are put on the North Face, with the measures and accountable owners on the East Face.
Interdependencies, Catchball and Evolution
In each corner - Southwest, Northwest and Northeast, dots are placed in the intersections to show the causal links and relationships between the strategic elements.
The creative process is in collectively, as a team, adding and subtracting the different elements, within the limitations of the diagram.
Hoshin relies on this process, called catchball, to fully explore potential objectives, detail what each means in terms of measures and actions, and then make the hard decision to select or amend only the ones that are most likely to drive the vision forwards.
Adding, detailing, amending and subtracting elements reveals the strategy over the course of the planning process.
The benefits of using the X-Matrix for strategic planning
The X-Matrix has some powerful features that other strategy planning and deployment tools such as A3s and value stream maps do not:
- It forces your organization to focus on a small number of goals: choosing what not to do is crucial, meaning that priorities are set and resources will be maximized
- Using catchball, it creates both organizational alignment around and individual accountability for those choices
- It shows the clear linkage from vision through to the next quarter’s goals (“improvement priorities”) and, once again, means that any disconnects can be easily identified and goals or projects questioned based on whether they truly support the strategy
- By asking for the clear measurement of success, it forces people to describe and create SMART goals.
As a result, it forces you to ensure your journey towards your vision is supported by focused activity this quarter, and that all activity this quarter is supportive of your vision.
Any other activity (e.g. those ubiquitous pet projects) must be shelved or killed.
Warning: 3 things the X-Matrix doesn’t help you do
The X-Matrix is a planning tool, but time and time again I have seen it used for other purposes to which it is less well-suited. Please be warned that:1. The X-Matrix is NOT a communications tool
The average person in the organization does not want to have to look round and round the X-Matrix to find his or her goal or activity for the quarter.
2. The X-Matrix is NOT a performance management tool
Good performance management requires tracking progress over time, and there is no space for that on the X-Matrix.
Hoshin Kanri has other tools available for Strategy Execution which I will introduce in upcoming blogs.
3. The X-Matrix is NOT suitable for tracking business as usual or Continuous Improvement activities
It is for managing major strategic initiatives.
It is perfectly reasonable that each area of the business has key improvements it wants to make, regulatory requirements to meet, and other daily work to deliver.
All of these are important to the day to day running of the business, but they do not need to appear on the X-Matrix, they can indeed appear in a Bowling Chart / Targets To Improve dashboard.
Common challenges with a traditional Hoshin Matrix execution
The process is designed to ensure the right people are engaged at the right time to make the right choices. It is resource intensive by design, creating commitment and alignment.
When executing the Hoshin X-Matrix using traditional tools such as Excel or A3 paper, you typically face challenges such as:
- Some companies require visibility of Breakthrough targets on their X-Matrix.
In a static Excel X-Matrix, it becomes near impossible to visualize the breakthrough targets, and cascaded annual targets without conflating both the objectives and the targets.
- For large organizations it can be difficult to visualize the overlap of activities between different business areas, meaning that gaps in the strategy are easily missed
Be sure to download our X-Matrix template and how-to guide for more challenges to be wary of.
X-Matrix Excel Templates and Software
Due to its format, the X-Matrix can be awkward to manage and display in Excel, although it can be done.
For a detailed guide on how to create an X Matrix in Excel, and accompanying template, be sure to download our Hoshin X-Matrix pack:
Instead, Hoshin Kanri / Policy Deployment software has been designed as part of Strategy Execution Management platforms to more easily manage it.
An example of the digital X-Matrix in the i-nexus platform can be seen below:
Aside from the formatting improvements, it means that much more information can be stored against the objectives (e.g. a detailed description) and the metrics (e.g. collection method and frequency, data sources, etc).
Such packages also usually provide links from the X-Matrix to other tools such as the Bowling Chart.
Software that allows you to rotate the X-Matrix around its central point has several advantages:
1. Goals are cascaded more effectively and supports the catchball process for total engagement
2. It allows you to assign accountable owners and measurements to any objective or goal, not just the quarterly priorities, providing additional rigor and buy-in
3. For larger organizations, it creates the opportunity to decompose quarterly priorities from the organization level down to the division or even team level, while maintaining alignment all the way up the vision
4. Hoshin / policy deployment software through i-nexus allows you to connect multiple X-Matrices to ensure that the rigor and method is present down throughout your organizational layers
Adapting the X-Matrix format
Just as organizations tend to rename Hoshin Kanri / policy deployment to fit their internal terminology, they also tend to adapt the X-Matrix to their own requirements.
I have seen that instead of Breakthrough Goals, Annual Objectives and Improvement Priorities, organizations may call them Aspirations, Strategies and Tactics.
I have also seen organizations try to use the Southeast corner to tie their quarterly metrics back to their Breakthroughs.
While there are many different variations, the key purpose of using it remains the same: alignment, accountability and focus.
Get the most out of your X-Matrix
The X-Matrix is a key weapon in the arsenal of a strategic planner, and used wisely, is extremely effective. In the context of Hoshin Kanri however, it is just one of several superior visual aids.
Click here for further information on Hoshin Kanri, and stay tuned for the next blog on how Hoshin Kanri Action Plans are the essential bridge from strategy to execution.
And for those that have created their X-Matrix and Action Plan, download a copy of our Bowling Chart Excel template to execute and track your strategy.
For more, continue your policy deployment journey with these recommendations:
- Build your Bowling Chart: Download our Bowling Chart Excel template and PDF guide, the perfect accompaniment to the X-Matrix.
- 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 build their business systems, case studies and more.
About the author
Carolyn Gibson is a senior strategy advisor and certified Hoshin Kanri facilitator working with Fortune 500 companies on building their Strategy Execution capabilities. Her career spans disciplines, industries and locations for over twenty years, with a golden thread running throughout of an obsessive focus on the mechanical detail of how organizations achieve their goals.