Hoshin Kanri - Visual Strategic Planning Student Workbook

TABLE OF CONTENTS
Module 1 – Introduction to Hoshin Kanri _____________________________________________ 6

Learning Objectives _____________________________________________________________________ 6
What is Hoshin? _________________________________________________________________________ 6
Hoshin Defined _________________________________________________________________________ 7
Hoshin Principles _______________________________________________________________________ 7
The Term “Hoshin Kanri” ________________________________________________________________ 7
History of Hoshin _______________________________________________________________________ 7
Matrix Methodology _____________________________________________________________________ 8
Daily Management and Breakthrough Strategies ____________________________________________ 9
Breakthrough Strategies__________________________________________________________________ 9
The Process in a Nutshell________________________________________________________________ 10
Plan, Do, Study, and Act ________________________________________________________________ 10
Who’s Involved in Hoshin? ______________________________________________________________ 11
Critical Rule in Hoshin _________________________________________________________________ 11
Summary of Hoshin ____________________________________________________________________ 12
Review Questions – Module 1 ___________________________________________________________ 12
Module 2 – Gathering Data ________________________________________________________ 14
Learning Objectives ____________________________________________________________________ 14
Organizational Profiles _________________________________________________________________ 14
Where You Can Gather Data _____________________________________________________________ 15
The Environmental Scan ________________________________________________________________________ 16
The Past ______________________________________________________________________________________ 16
The Present ___________________________________________________________________________________ 16
The Future ____________________________________________________________________________________ 16
SWOT Analysis ________________________________________________________________________ 17

Strengths _____________________________________________________________________________________ 17
Strength Questions __________________________________________________________________________ 17
Weaknesses ___________________________________________________________________________________ 17
Weakness Questions _________________________________________________________________________ 17
Opportunities _________________________________________________________________________________ 18
Opportunity Questions _______________________________________________________________________ 18
Threats _______________________________________________________________________________________ 18
Threat Questions ____________________________________________________________________________ 18
The Voice of the Customer ______________________________________________________________ 19

Solicited ______________________________________________________________________________________ 19
Unsolicited ___________________________________________________________________________________ 19
Survey to Leaders ______________________________________________________________________ 23

Measuring the Organization _____________________________________________________________ 26
Measures _____________________________________________________________________________________ 26
Efficiency Measures ____________________________________________________________________________ 26
Effectiveness Measures _________________________________________________________________________ 26
Core Capital Measures _________________________________________________________________________ 27
Human Capital Measures _______________________________________________________________________ 27
Innovation Capital Measures ____________________________________________________________________ 27
Process Capital Measures _______________________________________________________________________ 28
Customer Capital Measures _____________________________________________________________________ 28
Effectiveness Measures _________________________________________________________________________ 29
Efficiency Measures ____________________________________________________________________________ 29
Module 3 – The Hoshin Matrix _____________________________________________________ 31

Parts to the Matrix ______________________________________________________________________ 31
Targets/Means & Whats/Hows ___________________________________________________________ 32
Targets and Means Defined _____________________________________________________________ 32
Importance Ratings _____________________________________________________________________ 33
The Relationship Matrix ________________________________________________________________ 34
Symbols Used in the Matrix _____________________________________________________________ 34
Semantics in Strategic Planning __________________________________________________________ 34
How to Calculate a Matrix _______________________________________________________________ 35
Calculating a Matrix ____________________________________________________________________ 36
Linked from Vision to Action ____________________________________________________________ 37
The X-Matrix___________________________________________________________________________ 37
Module 4 – Rooms in the Hoshin Matrix _____________________________________________ 40
1-Targets ______________________________________________________________________________ 41
Levels of Abstraction ___________________________________________________________________________ 41
2-Importance ___________________________________________________________________________ 41
Hoshin Kanri: Visual Strategic Planning Copyright, LearnFirm.com, 2014.

3-Competitive Assessment ______________________________________________________________ 41
4-Competitive Index ____________________________________________________________________ 42
5-Owner _______________________________________________________________________________ 42
6-Measure _____________________________________________________________________________ 42
7-Actual _______________________________________________________________________________ 42
8-Goals ________________________________________________________________________________ 42
9-Means _______________________________________________________________________________ 42
11-Importance __________________________________________________________________________ 43
12-Organizational Difficulty _____________________________________________________________ 43
13-Owner, Measures, Actual and Goals ___________________________________________________ 43
Examples of Matrices ___________________________________________________________________ 43
Vision vs. Strategy _____________________________________________________________________________ 44
Strategy vs. Objective __________________________________________________________________________ 45
Objective vs. Goals_____________________________________________________________________________ 46
Goals vs. Team Actions _________________________________________________________________________ 47
Total Plan on One Matrix _______________________________________________________________________ 48
Customer Service Example ______________________________________________________________________ 49
Module 5 – Deploying the Hoshin Plan ______________________________________________ 51

Catch Ball _____________________________________________________________________________ 51
The Annual Planning Cycle _____________________________________________________________ 52
A Steering Committee for the Planning Process ____________________________________________ 53
Deploying The Plan ____________________________________________________________________ 54
Complex Deployment___________________________________________________________________ 54
Deploy Down & Review Up _____________________________________________________________ 55
Vision to Action ________________________________________________________________________ 55
Planning Tables ________________________________________________________________________ 56
Contradictions Matrix___________________________________________________________________ 57
Short term, mid-term & Long term _______________________________________________________ 57
Who’s in the Review Process_____________________________________________________________ 58

Module 6 - Leadership in a Hoshin Environment ______________________________________ 60
A Leader’s Role ________________________________________________________________________ 60
Role of a Leader in a Hoshin Environment ________________________________________________ 61
Questions for Setting Strategic Direction__________________________________________________ 62
Creating a Vision & Mission _____________________________________________________________ 62
Questions for Visioning ________________________________________________________________________ 62
Questions for Creating a Mission Statement _______________________________________________________ 62
Creating Change _______________________________________________________________________ 63

Individual Change _____________________________________________________________________________ 63
Team Change _________________________________________________________________________________ 63
Organizational Change _________________________________________________________________________ 63
Environmental Change _________________________________________________________________________ 64
Circle the Words That You Use to Describe Change ________________________________________ 64

Team Building _________________________________________________________________________ 65
Interpersonal Communication Skills _____________________________________________________ 65
Organizational Communication __________________________________________________________ 65
Who Are Your Customers? ______________________________________________________________ 66
Road Blocks to Hoshin __________________________________________________________________ 66
Module 7 - Tree Diagrams _________________________________________________________ 68
What is a Tree Diagram? ________________________________________________________________ 68
When to Use a Tree Diagram ____________________________________________________________ 68
How to Complete a Tree Diagram ________________________________________________________ 69
Guidelines for Creating a Tree Diagram __________________________________________________ 69
Example of a Tree Diagram ______________________________________________________________ 71
Review Questions – Module 7. ___________________________________________________________ 71
Module 8 - Affinity Diagrams ______________________________________________________ 72
What is an Affinity Diagram? ____________________________________________________________ 72
When to Use an Affinity Diagram ________________________________________________________ 72

How to Complete an Affinity Diagram____________________________________________________ 73
Guidelines for Creating an Affinity Diagram ______________________________________________ 73
Example of an Affinity Diagram _________________________________________________________ 74
Module 9 - Cause & Effect Diagram _________________________________________________ 76
What is a Cause & Effect Diagram? _______________________________________________________ 76
When to Use a Cause & Effect Diagram ___________________________________________________ 77
How to Complete a Cause & Effect Diagram _______________________________________________ 77
Guidelines for Creating a Cause & Effect Diagram _________________________________________ 78
Example of a Cause & Effect Diagram ____________________________________________________ 78
Module 10 - Flow Charting ________________________________________________________ 80
What is a Flow Chart? ___________________________________________________________________ 80
How to Create a Flow Chart _____________________________________________________________ 80
Guidelines ____________________________________________________________________________ 81
Example of a Flow Chart ________________________________________________________________ 81
Review Questions – Module 10. __________________________________________________________ 82
Biography of Your Instructor – Karen Roberts ________________________________________ 83

MODULE 1 – INTRODUCTION TO HOSHIN KANRI
LEARNING OBJECTIVES
– Understand the basic definition and principles of Hoshin Kanri
– Define the basic philosophy in Hoshin of inclusion, creativity and communication
– Know the history of Hoshin Kanri
– Understand how Deming’s Plan, Do, Study, and Act model fits into Hoshin Kanri
– Identify who is involved in the Hoshin Kanri planning process
WHAT IS HOSHIN?
Hoshin comes from Japan. It was created by Dr. Yogi Akao after Deming, Juran and others talked to the Japanese
about leadership and control. You'll also hear it called Policy Deployment, especially when Hoshin is used for
individual departments.
The foundation for Hoshin is inclusion, creativity and

communication. Inclusion means that everyone in the
organization is involved in either giving input into the
company’s plan or executing action items related to
critical strategies. Communication is critical because
it’s how we make sure that everyone knows what is
going on and how well the organization is meeting
goals and objectives. In Hoshin, we call this “catch-
ball.” And finally, creativity is realized when new
ideas are brought to the table as a result of having
cross-functional teams of people discovering the best
way to get things done.
Hoshins are the breakthrough strategies that create needed change toward continuous improvement. They can
be stretch goals or whatever the organization must do to survive.
The fundamental premise of Hoshin is that the best way to obtain the desired result for an organization is for all
employees to understand the long-range direction and participate in designing the practical steps to achieve the
results. This form of participative management evolved and was influenced by the Japanese refinement of
Drucker’s Management by Objectives (MBO) and through the birth and growth of the quality circle movement.
In order for workers to understand their workplace effectively, they must have performance measures of their
processes and monitor these measures to assure that they are contributing to continuous improvement as well as
closing the gap toward the strategic targets. Policy deployment became the tool that Japanese business leaders
used to align the work of their front-line employees to the strategic direction of their company.

HOSHIN DEFINED
Hoshin is a comprehensive step-by-step planning process that takes a systems approach to change towards
continuous improvement. This unique methodology is founded on the guiding principle of inclusion. Hoshin
planning is the system that orchestrates continuous improvement and breakthroughs. It picks the area that needs
improvement, makes sure all the right people get involved, and that the improvement is implemented. Hoshin is
a data driven, participative methodology that relies heavily on understanding the root cause of a problem.
HOSHIN PRINCIPLES
• Measuring the system as a whole gives management a clear understanding of how the organization is
performing
• Setting targets for the business and communicating, those targets to the entire organization gets everyone
focused
• Everyone, including workers, sets their own monthly and yearly goals
• Understanding the operating environment allows for sound decision making and innovative future
thinking
• Prioritizing resources on key objectives make the organization more effective and efficient
• Back and forth communication, “catch-ball”, is encouraged both vertically and horizontally within the
organization
THE TERM “HOSHIN KANRI”

Hoshin is composed of two Chinese characters, "ho" and "shin." "Ho" meaning method or form, and "shin"
meaning shiny needle or compass. Taken together, the word "Hoshin" means a methodology for strategic
direction setting. It is the guiding strategic process that aids an organization as they make their way through a
foggy environment into a clear and shining future.
Ho = method or form
Shin = shiny needle or compass
Kanri = management or control
HISTORY OF HOSHIN
• 1950 - Dr. Deming presents the “plan, do, study and act” model to Japanese.
• 1954 - Dr. Juran conducts workshop for the Japanese on quality
control.
• 1954 - Peter Drucker’s book which proposes management by
objectives (MBO) is published in Japanese.
• 1962 - Toyota publicizes top-level cross functional management
systems.
• 1964 - Bridgestone Tire Japan introduces the term Hoshin Kanri.
• 1965 - Dr. Akao defines “items of daily management” in relation to
goals and policies in a cross functional management system.
• 1968 - Bridgestone outlines Hoshin Kanri methodology.
• 1970 to Present – An increasing number of companies adopt Hoshin Kanri.

MATRIX METHODOLOGY
Hoshin is a matrix methodology that provides a way to link an organization's top objectives with the goals in
every department in the company. There are numerous types of Hoshin matrices. There are T Matrices, X
Matrices, etc. The type of matrix that this course focuses on is a linked L Matrix. By linking Hoshin matrices, you
can determine where to place resources. Hoshin provides a clean and robust way to ensure that everyone in the
company is working on action items that matter the most to the business and the customer. Although the matrix
is important in a Hoshin process, it is the intent of the process that is more important.

DAILY MANAGEMENT AND BREAKTHROUGH STRATEGIES
Hoshin planning should always include the daily
activities that management must adhere to, in order to
make the organization operate effectively. These
activities include safety, accounting, internal
production, human resources, etc.
Hoshins, or breakthrough strategies, are the aspects to

strategic planning that move the organization into
greater areas of innovation and creativity. These
breakthrough ideas are driven by what the
marketplace is doing, best in class standards, what the
competition is doing and most importantly, what the
customer expects from your company.
Another way to look at this is daily management

activities are tied to the mission of a company and
breakthrough strategies are tied to the vision.
BREAKTHROUGH STRATEGIES
Breakthrough strategies, or Hoshins, can take an ordinary organization
and make it an extraordinary organization. Thinking outside the box
differentiates your organization and provides greater value to your
customers.
However, breakthrough strategies aren’t always absolute

“breakthroughs.” They can also be strategies that will improve the
organization and support the organizational goals.
Examples of Breakthrough Hoshins:
– Implement Lean strategies across the organization

– Create a customer oriented product development process
– Recruit top talent throughout the organization
– Create a paperless system for engineering change notifications
– Improve overall operating performance through the use of online training & testing
– Implement an ISO 9001 quality system
Examples of Stretch Breakthrough Hoshins:
▬ Apply and win the Malcolm Baldrige Award

▬ Eliminate the competition

THE PROCESS IN A NUTSHELL
If you were to look at Hoshin as a systematic process, it

would include the steps of evaluating the environment and
the organization, determining critical issues, holding review
sessions that are called “playing catch-ball.” You would then
implement the plan while holding periodic review sessions.
The final step is taking the positive end result of the activities
and standardizing the actions as policy.
This is a very similar process to a popular quality model

called the plan-do-study-act model.
PLAN, DO, STUDY, AND ACT

Hoshin has been called the application of the plan-do-study-act model to the management process. The plan, do,
study and act model is also called the Deming cycle or the Shewhart Model. The foundation for this model was
created by Dr. Walter Shewhart working in the Bell Telephone Laboratories in the 1920’s conducting research on
methods to improve quality and lower costs.
Shewhart developed the concept of control with regard to variation, and came up with continuous improvement.
Doctor Deming built upon Shewhart’s work and took the concepts to Japan following world war two. There,
Japanese industry adopted the concepts whole heartedly. The resulting high quality of Japanese products is
world renowned.
Plan
Set up and determine organizational objectives and strategies,
means and targets. Create a Hoshin plan.
Do
Get out there and implement the plan
Study
Evaluate the performance and check on the progress being made
Act
Standardize the results and determine what needs to happen if
the solution didn’t work.

WHO’S INVOLVED IN HOSHIN?
Who’s involved in a Hoshin effort? Basically
everybody! Hoshin philosophy encourages that
Customers everyone in the organization be involved in having
and Suppliers input into the strategic direction for the company. It
creates a working communication system that
focuses everyone on common goals.
One of Hoshin's premises is that by listening to the

Voice of the Customer (VOC) and understanding
Everyone in the Strengths, Weaknesses, Opportunities and
the Threats (SWOT) facing your organization, you can
organization! formulate strategies that create innovative
breakthroughs.
CRITICAL RULE IN HOSHIN
A Critical Rule of Hoshin:
Every Hoshin plan must fit to the

organization's individual culture and needs.
What we are suggesting is a template, and
you must tailor the template to
fit to your company’s unique culture.

SUMMARY OF HOSHIN
To summarize, Hoshin is a way to measure the organization from the vision right down to the tactics that teams
execute. Next, Hoshin is a process that includes everyone in the organization. Hoshin provides a “catch ball”
environment where goals, strategies and action items are tossed back and forth between management and
employees. Finally, Hoshin becomes an enabling feature in the continuous improvement process for many
reasons, but the primarily reason is because Hoshin makes it clear where to place the most valuable resources in
order to reach the most critical business objectives.

REVIEW QUESTIONS – MODULE 1
1. What is Hoshin Kanri?
2. What are the three critical guiding principles?
3. What American quality guru introduced quality control to the Japanese after WWII?
4. How does the PDSA model fit into Hoshin?
5. Who should be involved in Hoshin?

MODULE 2 – GATHERING DATA
LEARNING OBJECTIVES
– Comprehend the many ways to collect organizational data
– Know the components included in an environmental scan
– Identify the components in a SWOT analysis
– Understand how to gather information from the employees within your organization
– Know the importance of the “Voice of the Customer”
– Understand how to measure the organization
ORGANIZATIONAL PROFILES
Before you begin gathering information about your organization, it will be important to understand your
company's organizational profile. By understanding the organization's profile, you gain an understanding of the
different types of data you’ll need to collect and analyze.
The model you see on this page comes from the Malcolm Baldrige National Quality Award program. The
Malcolm Baldrige National Quality Award recognizes U.S. organizations for performance excellence. The
Baldrige Award is the only formal recognition of the performance excellence of both public and private U.S.
organizations given by the President of the United States.
The Malcolm Baldrige National Quality Award organization also provides free paper and pencil surveys that you
can download and use to gather information from employees. You can find downloadable copies of these
surveys on the home page of this course. There is one survey for workers and one survey for managers.

WHERE YOU CAN GATHER DATA
Hoshin is a data driven process. Gathering good data is critical to creating a great Hoshin plan. There are many
avenues for data collection. An environmental scan focuses on learning lesson from the past, present and future.
A SWOT analysis helps to uncover areas of weaknesses in both the external environment and internally to the
organization. Surveying of employees brings internal issues to light and understanding the voice of the
customers lets an organization design new products and services that capture market share. Finally,
organizational data should always act as a compass of what is working well within your company and what
needs to be analyzed for change.

The Environmental Scan
THE PAST
▪ What did your organization look like?
▪ What about your competition?
▪ What about the economics of your industry (did you predict that it would
happen?)
▪ Was the company prepared?
▪ Was your competition prepared?
▪ What worked well in the past that isn’t being utilized today?
▪ How did the economy influence your company?
▪ How did technology influence your company?
▪ How did personnel changes either help or hinder your company?
THE PRESENT
▪ What needs to change?
▪ What would happen if we did not change?
▪ What change forces are internal? What change forces are external?
▪ How much time do we have to change?
▪ Who has to change?
▪ What is going right?
▪ What is going wrong?
▪ What needs are not being met?
▪ What resources are unused or under-utilized?
▪ What opportunities are not being exploited?
▪ What challenges are not being met?
▪ What do competitors do better?
THE FUTURE
▪ How do you see it in the future?
▪ What needs to change?
▪ What is the change?
▪ How does the change fit to the overall business strategy?
▪ What will the future state look like?
o For the organization as a whole?
o From the perspective of the customers?
▪ What changes need to happen to our key processes?
▪ If you had a magic wand, what would you like to see it happen?
▪ What trends do you anticipate?

SWOT ANALYSIS
STRENGTHS
▪ A distinctive competence
▪ Adequate financial resources
▪ Good competitive skills
▪ Well thought of by buyers
▪ An acknowledged market leader
▪ Well-conceived functional strategies
▪ Insulated from strong competitive pressure
▪ Proprietary technology
▪ Cost advantages
▪ Competitive advantages
▪ Product innovation abilities
S TRENGTH Q UESTIONS
▪ What advantages do you hold?
▪ What do other people see as your strengths?
▪ What do you do well?
▪ What significant resources (equipment, skilled employees) do you have?
▪ Is there intellectual property that protects your market position?
▪ Does your company have strong brands?
▪ Are there significant barriers to entry in your market?
▪ Does the company have strong financials (balance sheet, cash flows, credit rating)?
▪ Can the employees be cross-trained in order to increase flexibility?
▪ Can incentive plans make sense to boost employee performance?
WEAKNESSES
▪ A deteriorating competitive position
▪ Obsolete facilities
▪ Lack of managerial depth and talent
▪ Missing key skills or competencies
▪ Poor track record in implementing strategy
▪ Internal operating problems
▪ Vulnerability to competitive pressures
▪ Falling behind on R&D
▪ Narrow product lines
▪ Weak market image
▪ Below-average marketing skills
▪ Unable to finance needed changes in strategies
▪ High unit cost compared to competition
W EAKNESS Q UESTIONS
▪ What are your weak brands?
▪ What improvement projects are currently identified but under resourced?
▪ What do you hope that your competition doesn't discover about your organization?
▪ When the organization needs to spend money, is it in a position to pay or borrow?
▪ Are there new and innovative products in the pipeline?
▪ Does your company successfully recruit and retain talent?
▪ What do your customers complain about?
▪ What areas could your organization / department improve?
▪ What do your internal customers complain about?
▪ What do your suppliers complain about?
▪ Why do our customers leave?

OPPORTUNITIES
▪ Serve additional customer groups
▪ Enter new markets or segments
▪ Expand product lines to meet broader range of customer needs
▪ Diversity into related products
▪ Vertical integration
▪ Ability to move to better strategic group
▪ Complacency among rival firms
▪ Faster market growth
O PPORTUNITY Q UESTIONS
▪ What is the competitive position of the company?
▪ Are there new products (yours or someone else's) that leave the buyer needing something else?
▪ Are there significant purchase or trends you are aware of?
▪ Is there technology available that provides a cost reduction in business operations?
▪ Are there attractive acquisition targets?
▪ Can the company take advantage of cheaper marketing channels?
▪ Can the company grow internationally?
▪ Can the company create new relationships (partnering, collaboration)?
▪ Is the economy changing in a way that favors your product line or offerings?
▪ Are there trade shows that might be good places to share your product?
▪ What new relationships can your organization/department build to improve performance?
▪ What could your organization/department do to better meet your customer’s needs?
THREATS
▪ Likely entry of new competitors
▪ Rising sales of substitute products
▪ Slow market growth
▪ Adverse government policies
▪ Growing competitive pressures
▪ Vulnerability to recession and business cycles
▪ Growing bargaining power of customer or suppliers
▪ Adverse demographic changes
▪ Possibility of employees organizing into their own union
T HREAT Q UESTIONS
▪ What obstacles does your organization face now or in the future?
▪ What is your competition doing?
▪ Is changing technology threatening your ability to compete?
▪ Is the economy impacting other firms' ability to purchase your product?
▪ Can your product line or market position stand the test of time?
▪ What do you fear a competitor might do?

THE VOICE OF THE CUSTOMER
Your customers are the reason you are in business. Does your company have an effective way to listen to
customer needs and then determine ways you can provide products and/or services that excite them? According
to Noriaki Kano, the customers’ needs can be categorized in three ways:
▪ Basic Quality
▪ Performance Quality
▪ Excitement Quality
Basic quality is defined as the most basic of quality. Does the product or service have the characteristics that meet
the customer’s needs? If you want a truck to haul dirt, but the truck doesn’t have a truck bed to do this, the
product has failed the most basic need. Next, performance quality defines how well the product or service
performs what it’s supposed to do. Is the process repeatable? The final category, excitement quality, is when a
product or service meets a customer need that the customer didn’t even realize they had. Providing excitement
quality is what your company should be striving to produce.
SOLICITED UNSOLICITED
▪ Hot lines ▪ Customer Visits

▪ Customer Surveys ▪ Trade Shows
▪ Customer Tests of Products ▪ Vendors/Suppliers
▪ Customer Audits ▪ Employees
▪ Partnerships with Customers/Clients ▪ Conventions
▪ Customer Interviews ▪ Sales Force Input
▪ Focus Groups/Discussion Panels ▪ Complaint Logs
▪ Customer Interviews
▪ Focus Groups/Discussion Panels

Survey to Employees

SURVEY TO LEADERS

MEASURING THE ORGANIZATION
MEASURES
 Core financial measures
 Human capital measures
 Innovation capital measures
 Process capital measures
 Customer capital measures
EFFICIENCY MEASURES
 Process time
 Resources extended per unit of output
 Value-added cost per unit of output
 Wait time per unit
 Cost of quality
 Percentage of value-added time

EFFECTIVENESS MEASURES
 Appearance
 Timeliness
 Accuracy
 Performance
 Reliability
 Usability
 Serviceability
 Durability
 Cost
 Responsiveness
 Adaptability
 Dependability
What are you currently measuring?

CORE CAPITAL MEASURES
 Gross profit
 Return-on-equity
 Earnings per share
 Growth rank in industry
 Total shareholder returns
 Market capitalization
 Revenue growth
 Market share
 Cost of goods sold
 Cost of quality
 Cost of sales
HUMAN CAPITAL MEASURES

 Retention of key personnel
 Ability to attract top talent
 IT literacy
 Training expenditures as a percentage of payroll
 Replacement cost of key personnel
 Employee satisfaction
 Employee commitment
 Organizational learning
 Effectiveness of learning transfer to key areas
 Management credibility
 Employee wages and salaries as a percentage of cost of sales
 Percentage of college graduates
 Employee empowerment
 Management experience
 Time in training
 Percentage of employees with years of service
 Empowered teams
INNOVATION C APITAL MEASURES

 R&D expenditures
 Percentage of workforce involved in innovation
 Product freshness
 New opportunities exploited
 Number of patents used effectively
 Planned obsolescence
 Number of copyrights and trademarks
 New market development investment
 R&D productivity
 Sales on products released in the past five years
 Research leadership
 Net present value (NPV) of patents
 Effectiveness of feedback mechanisms
 Average age of patents
 Percentage of R&D investment in product design
 Direct communication with customers per year
 Number of new ideas in knowledge management database

PROCESS CAPITAL MEASURES
 Processes mapped and documented
 Use of documented processes
 Strategy execution
 Quality of decisions
 Percentage of revenues invested in knowledge management
 Percentage of the company that effectively engages with customers
 Process quality (defects, scrap, rework, error rates)
 Time-to-market
 Strategy innovation cycle time
 IT access per employee
 IT investment per employee
 IT capacity (such as CPU)
 IT capacity per employee
 Operating expense ratio
 Administrative expense per total revenue
 Inventory turns
CUSTOMER CAPITAL MEASURES

 Customer satisfaction
 Customer retention
 Product and service quality
 Average duration of customer relationship
 Repeat orders
 Market growth
 Customer needs met
 Marketing effectiveness
 Annual sales per customer
 Market share
 Average customer size in dollars
 Five largest customers as a percentage of revenues
 Days spent visiting customers
 Support expenses per customer
 Image-enhancing customer as a percentage of revenue

EFFECTIVENESS MEASURES
These measures define the extent to which the product or service provided meets the objectives and/or expectations of the
organization or a customer.
▪ Appearance
▪ Timeliness
▪ Accuracy
▪ Performance
▪ Reliability
▪ Usability
▪ Durability
▪ Cost
▪ Responsiveness
▪ Adaptability
EFFICIENCY MEASURES
These measures define how an organization is using its resources, such as available funding and staff, to achieve organization
objectives. Is it applying these resources in such a way as to maximize their contribution to organization outputs, i.e., the
services it provides?
▪ Process time
▪ Resources extended per unit of output
▪ Value-added cost per unit of output
▪ Wait time per unit
▪ Cost of quality
▪ Percentage of value-added time

1. How many ways are there to gather data to support Hoshin planning?
2. What are the components in an environmental scan?
3. What are the critical components in a SWOT analysis?
4. When collecting information from employees, what are the important things to remember?
5. Why is the Voice of the Customer so important to our company?
6. Within your work group, what are you currently measuring and what could you measure to improve
efficiency and effectiveness?

MODULE 3 – THE HOSHIN MATRIX
LEARNING OBJECTIVES
– Recognize the difference between a target and a mean
– Identify the stages in a Hoshin Kanri matrix
– Understand the methodology behind the relationship matrix
– State the meaning for the symbols used in a Hoshin Kanri matrix
– Calculate a Hoshin Kanri matrix
PARTS TO THE MATRIX

We're going to be touching on five different areas in a simple Hoshin matrix. First, we'll learn about targets and
means. Next, we'll cover how targets are rated in order of importance. We'll look at relationship matrix
calculations and finally, we'll learn how to calculate the importance ratings for each mean.

TARGETS/MEANS & WHATS/HOWS
As you learn more about Hoshin, you'll see that the
terms, "targets" and "means" are used
interchangeably with the terms, "whats" and "hows".
They mean the same thing. The "what" is the target
that you're trying to achieve. And the "how" is the
means for getting there.
TARGETS AND MEANS DEFINED

EXERCISE:
1. Get in pairs.
2. Brainstorm a list of what you would need to do in order to become rich and famous.
3. Now brainstorm a list of how you’re going to accomplish your goal.
4. Be prepared to share your work!
IMPORTANCE RATINGS
Ratings are typically on a one to five scale. A five would indicate very important and 1 would indicate not as
important. These importance ratings are then used as multipliers as we move through the matrix. Each "what"
then receives a corresponding "how." Now we have "what" we want to accomplish and "how" we are going to
accomplish it.

THE RELATIONSHIP MATRIX
The relationship matrix is where the strength of the
relationship between each target and means are
analyzed. Depending on the strength of the
relationship (1, 3, or 9), that value is multiplied by the
importance rating for each need.
The relationship matrix identifies how the "whats"

relate to meeting the "hows." By evaluating each pair
of relationships, determinations are made as to the
strength of the relationship.
SYMBOLS USED IN THE MATRIX
The strength of the relationship between the "whats"

and the "hows" is documented in the relationship
matrix by a symbol. The "fish eye" represents a strong
relationship, a 9; a circle equals 3, representing a
moderate relationship; and, a triangle stands for a
weak relationship, a 1. If there is no relationship, the
cell is left blank. These symbols relate to horse racing
- win, place, or show. We're not quite sure why these
symbols were chosen, but now they are commonly
used in Hoshin Kanri charts.
SEMANTICS IN STRATEGIC PLANNING

As you begin to formulate your own organization's foundation for a Hoshin plan, you may or may not have
words that mean certain things to your company. For some companies, "objective" is a top level definition for
strategic direction, for another company a "strategy" indicates the same thing. If your company already uses
certain terms in relation to strategic planning, use those terms familiar to your management and employee base.
The key to successful Hoshin Kanri planning is not using a cookie cutter approach to applying the process. For
that reason, each deployment of a Hoshin Kanri plan should be customized to fit the needs of the organization.

HOW TO CALCULATE A MATRIX
The need is to "reduce costs." Reducing costs is very important, so it is given an importance rating of 5. Next a
list of ideas concerning "how" to reduce costs is generated. One of the best ways to reduce costs is to "stop
spending." There may be other "hows," but for the sake of this example we're just going to look at a single "how."
Now, for each "what" and each "how," the question is posed, “What is the strength of the relationship between
reducing costs and stopping spending." This is a very strong relationship, so the cell representing that relationship
receives a nine, and a fish eye symbol is entered into that cell. Five, the importance rating, times nine, the
strength of the relationship, equals forty-five. So the value in the intersecting cell is forty-five. All of the values in
each cell are then added up and documented at the bottom of each column.
5 x 9 ( = 9) = 45

CALCULATING A MATRIX
The overall objective or need for this matrix is to
reduce costs. Let's look at the first "what."
Decreasing work in progress has been given an
importance rating of 4. The strength of the
relationship between decreasing work in progress
and flow charting the manufacturing process is
strong, so the intersecting cell has a nine rating.
You see a fish eye in the cell. Four times Nine is 36,
so this cell now has the numeric value of 36. The
next what is improving customer service. It has
been decided that the importance of this what is a
two. The strength of the relationship between
improving customer service and flow charting the
manufacturing process has a moderate relationship,
so two times three is six. That cell now has the
numeric value of six.
The final "what" is "reallocating resources." For the

intent of this project that "what" or need is
considered very important so it receives five as an
importance rating. The strength of the relationship
between reallocating resources and flow charting
the manufacturing process is weak. So the numeric
value for this cell is five times one, or five.
Now we take the values in each cell and add them

up to determine a final importance rating at the
bottom of the matrix. Thirty-six plus six, plus five,
equals 47. Now we know how important it is to
flow chart the manufacturing process. We would
go through this process for each "how" in the
matrix. At the end of this process, we know that the
most important thing we could do would be to
review all job descriptions, because that "how"
received the highest rating, forty-nine.

EXERCISE:
1. Get in team of 3 to 4 people.

2. Brainstorm a list of what you would need to do in order to get fit.
3. Give each of your “whats” a numerical rating of 1 – 5. Five being the most important.
4. Now brainstorm a list of “how” you’re going to accomplish your “whats”.
5. Go through the matrix and evaluate the relationship between the “whats” and the
“hows”.
6. Be prepared to share your work!
LINKED FROM VISION TO ACTION

THE X-MATRIX
The X matrix, also called an A3 Matrix, can be frequently found in Hoshin methodology. It documents
organizational objectives, which processes need to be focused on, but doesn't do a good job in identifying the
priority order for objectives. An X-matrix, like all of the matrixes we've learned about so far, has the unique
advantage of visualizing the design of a strategy on one piece of paper. The prime mover on the X matrix is
strategy, or the "what." This is recorded to the left of the “X” in the middle of the matrix. Once an X matrix has
been completed, there would still need to be a deployment plan, or the chartering of teams to actually get out into
the organization and do the work.

1. What is the difference between a target and a mean?
2. List in order the stops you take to complete a Hoshin matrix.
3. If a target has an importance rating of 3, and a weak relationship to the mean, what is the importance for
that mean?
4. What does a mean?

MODULE 4 – ROOMS IN THE HOSHIN MATRIX
LEARNING OBJECTIVES
– Know that different words may be used to define the same purpose
– Define the term “level of abstraction”
– Know where the specific information goes in a Hoshin matrix
– Review completed Hoshin matrices
– Understand and identify an “X” matrix

1-TARGETS
Let's begin looking at each of the rooms in the Hoshin Kanri matrix. First, a target is what you are working to
achieve. The targets are the company’s objectives, strategies, goals, etc. Remember, organizations will have
different names for what they refer to as a target. To advance through this module, click anywhere on the screen
or use the arrow button on the left hand side of your screen.
LEVELS OF ABSTRACTION
Levels of abstraction start with a very broad statement, like a vision statement, and move into a more detailed
description of activity. When creating "targets" and "means" statements, it's critical that the information remain at
the same level of abstraction.
2-IMPORTANCE
Once targets have been determined, they need to be rated as to their importance. Targets are rated on a scale
from 1 to 5, 1 being of low importance and 5 meaning high importance.
3-COMPETITIVE ASSESSMENT
The competitive assessment is a numeric value that the organization determines for each target, 1.1, 1.2, or 1.3. It
answers the question, "Based on the competition, how much better do we think we need to be to meet this
target?" The criteria for making this decision are based on the understanding of the competition and the
importance rating for the target. If the team feels that they must be a lot better in this area, the target would
receive a 1.3 rating. If the team feels that they are about par with the competition, the target would receive a 1.1
rating.
4-COMPETITIVE INDEX
The competitive index is a measure that corresponds to each target. The Competitive Index is the result of taking
the numeric value for the Competitive Assessment times the Importance Weight for the target. This calculation
creates a numeric value that is the Competitive Index. The information from this room tells the team which
targets are most critical to staying competitive in the marketplace.
5-OWNER
This room in the matrix documents the person who is responsible for working on and updating each target. The
owner has the ultimate responsibility for making sure that his goal is being met. He is also responsible for
tracking the measure, actual and goal information, as well as updating the competitive information. This is
especially important if the competitive landscape changes. Owners of targets and means will be responsible for
reporting on progress made during deployment reviews.
6-MEASURE
A measure gives you a quantifiable way to determine progress towards achieving a target or means. Measures
can also be called metrics or Key Performance Indicators - (KPI’s). Measures generally fall into four different
categories: customer, employee, financial or process.
7-ACTUAL
To provide a clear picture of organizational effectiveness, the actual performance for each target or means is
documented. If a target or means does not have an actual performance value, you may need to benchmark your
competition or take your best estimate based on any information you already know. Then, get busy laying out
how you're going to collect data to validate your best guess. The actual numbers may be a little wobbly at first,
but you can change this room as information changes.
8-GOALS
Goals are what you are trying to achieve in relation to the measures you are tracking. They are your numeric
goals. Goals will move according to how the market and competition are performing. Goals are set in relation to
your competitive assessment or competitive index. Also, before setting a goal, it may be a good idea to review
the information generated in the SWOT analysis or the Environmental Scan.
9-MEANS
For every “target” there is at least one “means.” The “means” is the descriptor of how the organization is going
to achieve the “target." It is the action item. In this area of the matrix, the daily management activities can also
be documented. Just as with targets, it is important to keep the description of the “means” at the same level of
abstraction.

10-Relationship Matrix
This area of the matrix is called the relationship matrix. We spent a lot of time in the last module talking about
the calculations that takes place in the relationship matrix. The relationship matrix is where the strength of the
relationship between each “target” and each “means” are analyzed. Depending on the strength of the
relationship, (1, 3, or 9) that value is multiplied by the importance rating for each target. The question to be
answered in this area of the matrix is. "Will this means contribute to meeting the target?"
11-IMPORTANCE
The importance for each “means” is documented in this area of the matrix. The cell values are added in columns
to determine these importance ratings. “Means” that receive high importance ratings are given a high priority.
Resources are assigned accordingly to these means and they are deployed into other matrixes in the Hoshin
process.
12-ORGANIZATIONAL DIFFICULTY
This room in a Hoshin Kanri matrix gives an indication as to how hard it will be to achieve the means. It is
typically a number from 1 through 5. This number isn't used in any numeric calculation; rather it is just a
discussion point for the teams as they move forward into action.
13-OWNER, MEASURES, ACTUAL AND GOALS

Finally, for each of the “means,” an owner, measure, actual and goal is created. The same definitions apply here
in the columns, for the targets, as they would for the means.
EXAMPLES OF MATRICES
As you preview the different matrices on the following pages, keep in mind that each Hoshin Kanri deployment
is tailored to fit the needs of the individual organization. The first four matrices do not include competitive
information; the company determined that it wasn’t necessary. Again, it’s important to remember that each
matrix and each deployment is different, and that a matrix should be tailored to fit a company’s or the
department’s individual needs.

VISION VS. STRATEGY

STRATEGY VS. OBJECTIVE

OBJECTIVE VS. GOALS

GOALS VS. TEAM ACTIONS

TOTAL PLAN ON ONE MATRIX

CUSTOMER SERVICE EXAMPLE

1. Discuss why objectives and strategies could mean the same thing.
2. Give a concrete example of “level of abstraction” using a term from your day-to-day activities.
3. Anytime safety is involved in a target, what automatic importance rating does it receive?
4. What question do you ask when analyzing a relationship matrix?
5. What does a competitive assessment tell you?

MODULE 5 – DEPLOYING THE HOSHIN PLAN
LEARNING OBJECTIVES
– Define the term “Catch Ball”
– Know the time needed for deploying a Hoshin plan
– Understand who should be involved in the steering committee to support Hoshin efforts
– Describe the necessary organizational configuration for a successful Hoshin effort
– Describe the components found in a Quality Planning Table
– Learn how to recognize actions that could sub-optimize your planning effort
CATCH BALL
Catch ball is a concept used in Hoshin. The definition of Catch Ball is the tossing back and forth of targets and
means, from one level of management to another, until everyone has had a chance to give their input into the
planning process. Rather than just telling people what to do, catch ball gives every manager and team member a
voice. This ensures that the performance expectations of top management are reviewed in the current state of the
organization’s capabilities and that requirements for new investments are identified and communicated
systematically.
The game of Catch Ball proceeds up and down the management hierarchy until every business unit, department,
and process owner has formally committed herself to the company’s strategic intent. Then, the process of
confirmation begins as the “Ball” is set back up the chain of command.

THE ANNUAL PLANNING CYCLE
The annual planning cycle begins with executive management receiving training on Hoshin. They review last
year's plan (if they had one) and the progress that was made. Then, they begin to align the company’s mission
with key objectives, gather data on the organization and identify measures that will help them to understand
their progress. Next, executive management meets with middle management (Catch Ball) and develops
strategies to support the plan's objectives. Middle management then creates the next level of matrices that
involve putting together goals, strategies, budgets and team charters. They meet with executive management
(Catch Ball) to review this work, make any necessary changes, and then set off to charter action teams. Action
teams meet with middle management and receive needed training, refine their team charters (Catch Ball) and
define measures that will help them understand their progress. The review process is done with the appropriate
management personnel, process owners and action teams - - a total Catch Ball. Organizational learning during
the review process is amazing, so documentation of everything that goes on during this process is critical.

A STEERING COMMITTEE FOR THE PLANNING PROCESS
No plan can be successful without a steering committee to lead the way. The steering committee must involve at
least one high level management person who has the authority to make decisions and overcome roadblocks. The
ideal person for the steering committee leader would be the general manager or president of the company. There
also needs to be an administrative clerical person to take care of coordinating information, documenting
organizational leaning, setting meetings, communicating to others about review schedules and meetings and
keeping the matrixes updated and current.
Finally, the other steering committee members need to come from all functional areas within the organization
who are involved in the plan. They should be managers and leaders who have the authority to make decisions
and deal with road blocks. In choosing steering committee members, they should be people well respected
within the organization who are also excellent interpersonal communicators.

DEPLOYING THE PLAN
Deploying a Hoshin Kanri plan into an organization will typically require a top level plan consisting of the
organizations highest priority objectives, and then, for each department, a separate Hoshin Kanri matrix defining
the actions that they will be taking to support the plan.
COMPLEX DEPLOYMENT
When an organization is very

large, hundreds of people working
in numerous business units, the
configuration of matrices on the
right can work very well. Each
business unit would have its own
objectives supported by goals and
action items. A key benefit in
Hoshin planning is eliminating the
duplication of tasks and thereby
increasing the efficiency of an
organization.

DEPLOY DOWN & REVIEW UP
As deployment begins at the top and cascades down, the review process starts at the bottom and works its way to
the top levels of the organization. The review process ensures that everyone knows what is being worked on,
where the roadblocks are happening and where the needed resources need to be applied. The review process
also identifies the duplication of activities. The organization can also create a database of knowledge that can be
shared so that learning is maximized.
VISION TO ACTION
At a cursory level, the Hoshin
process takes the vision and mission
of the organization, translates that
information into strategies and then
deploys those strategies into action.
As with any comprehensive
organizational effort, action plans or
quality tables must be part of the
process. Quality tables are put in
place based on the most critical
Hoshin strategies. These quality
tables then become team project
charters, Six Sigma projects, or part
of someone's personal plan. In the
quarterly review process, teams that
have been charged with taking
action, present their quality tables to
the management team for feedback
and discussion.

PLANNING TABLES
The planning table takes each Hoshin strategy and action item and documents their status, who is responsible for
the action item, comments, the budget for deployment, and finally, when the action item will be completed.
Updates on the progress being made are discussed during the deployment meetings as well as any other
roadblocks or issues the team may be facing.

CONTRADICTIONS MATRIX
A contradiction matrix will help your organization determine if an action is going to optimize the process (this is
a good thing) or sub-optimize the plan. It is always a good thing to know when two competing actions are going
to have negative interactions. If two actions are going to impact each other negatively, the steering committee
and the process owners can work out a way to minimize any potentially negative fall-out.
SHORT TERM, MID-TERM & LONG TERM

As you are creating your planning tables, try and determine the length of time needed to accomplish each goal.
Add these columns into your Excel sheet. These definitions should be totally dependent on your organization’s
current culture and business needs.

WHO’S IN THE REVIEW PROCESS
Coordination is critical to the success of the plan and the
deployment of the plan as well as the review process.
The people involved in the review are the steering
committee and anyone who has been assigned
responsibility for an objective, strategy or action item.

1. What does the term of Catch Ball mean?
1. Briefly describe the annual cycle for Hoshin planning?
2. Who should be on the Hoshin Kanri steering committee?
3. Explain why there are numerous matrices in a complex Hoshin Kanri configuration?
4. What components are found in a Quality Planning Table?
5. When using a contradiction matrix, what is more important to focus on? Is it actions that support each
other or those that sub-optimize each other? Why?

MODULE 6 - LEADERSHIP IN A HOSHIN ENVIRONMENT
LEARNING OBJECTIVES
– Understand the role that a leader plays in a Hoshin Kanri environment
– Identify a leader's customers in a Hoshin Kanri environment
– Understand the four components to change
– Explain why team building is a critical skill
– Identify effective organizational communication channels
– Recognize the roadblocks to creating an environment that supports Hoshin Kanri
A LEADER’S ROLE
Setting strategic direction for a company is by far the most critical role for any leader within an organization.
Leaders must be multi-talented and have many skills and a great wealth of knowledge. A leader must
understand how to create change at each level of the organization. They must also know how to build strong
teams and provide effective organizational communications.

ROLE OF A LEADER IN A HOSHIN ENVIRONMENT
In setting strategic direction for a company, it's important to begin with a good vision and mission statement. This
provides the foundation for organizational goals and sets the overall strategic direction for the organization.
Teams then have the opportunity to brainstorm a limited number of Hoshins that support the goals. Analysis to
determine the priority for each Hoshin can be time consuming, but knowing where to place resources is priceless.
Therefore, it uncovers information by analysis and helps to identify the best path to take to accomplish the
organization's vision.
Take a few minutes and define your organization’s vision and mission and your role in that mission.

QUESTIONS FOR SETTING STRATEGIC DIRECTION
 How do you conduct strategic planning to include the key strategic planning process steps?
 How do you include participants in the process?
 How do you identify potential blind spots during the strategic planning process?
 How do you ensure that strategic planning addresses: (a) your organization’s strengths, weaknesses,
opportunities and threats (SWOT); (b) potential major shifts in technology, markets, products, customer
preferences, competition, or the regulatory environment; (c) long-term organizational sustainability; and (d)
your ability to execute the strategic plan?
 What are your current strategic objectives, the goals for each, and the timetable for achieving them?
 How do these objectives address your strategic challenges and advantages, opportunities for innovation, core
competencies and the needs of all stakeholders?
 How do you develop and deploy action plans to achieve your strategic objectives?
 How do you ensure that financial, human and other resources are available to support the accomplishment of
your action plans?
 How do you establish and deploy modified action plans as circumstances change?
 What are your key human resources plans to accomplish your strategic objectives?
 What measures do you use to track the achievement and effectiveness of your action plans?
CREATING A VISION & MISSION

 Be the dream.
 State what the organization wants to be, not what it is.
 Identify future product or service concepts, not specific products and services.
 Identify a future market area.
 A simple one-sentence statement created by top management (or interested others) and understood by the rest of
the organization.
QUESTIONS FOR VISIONING
 Why is your organization in business?

 What will your future look like?
 Who will your customers be?
 What will your customers expect?
 What could you do to make this organization / department better?
QUESTIONS FOR CREATING A MISSION STATEMENT
 What do we need to do to survive?

 What are the opportunities or needs that we must accomplish in order to exist?
 What principles or values exist that help us to do our job?
 What are we doing to address these opportunities, accomplishments and challenges?
 Where are we now? (Strengths, Weaknesses, Opportunities, Threats analysis)

CREATING CHANGE
INDIVIDUAL CHANGE
 What individual skills and knowledge need to be present in order to make the change happen?
 What training will be required?
 How will the change effect individual’s jobs?
 What current perceptions or biases need to be changed?
 In general, how have people reacted to change in the past?
 What are the demographics of the individuals involved in the change process?
TEAM CHANGE
 What is the motivation for teams to make changes?
 What is the incentive?
 Is the team trained in how to work together?
 In general, how do people work in teams in your organization?
 What resources will be needed to make the change happen?
 How can change work be done so that it doesn’t have a negative effect on others?
ORGANIZATIONAL CHANGE
 What is the degree of support for the change?
 What degree of on-going operations needs to run while the change is being implemented?
 How complex is the change?
 How should we view the organization as a system?
 Which organizational systems and processes need to be analyzed in order to make the change possible?
 What aspects of the organization should be included and how much time should it take?

ENVIRONMENTAL CHANGE
 What outside resources are available?
 What is the current state of the environment for your industry?
 How fast will competition exploit vulnerabilities or copy your strategy?
 What is the urgency of the situation?
 To what degree will technology influence the change?
 How will this change affect suppliers, the local community, your board of directors, the corporate office you’re your
customers?
CIRCLE THE WORDS THAT YOU USE TO DESCRIBE CHANGE
Adjust Different Opportunity
Alter Disruption Rebirth
Ambiguity Exciting Replace
Anxiety Fear Revise
Better Fun Stress
Challenging Grow Transfer
Chance Improve Transition
Concern Learn Uncertainty
Death Modify Upheaval
Deteriorate New Vary
Circle all the words that you use to describe change. How many were positive? And how many were negative?

TEAM BUILDING
The one word that best describes a key concept in Hoshin
planning is inclusion. Employees must feel that they are
part of a team that will work to carry out the Hoshin
plan. Therefore, building strong teams at all levels of the
organization is critical to the successful implementation
of Hoshin.
Team building is pursued via a variety of practices, and

can range from simple bonding exercises to complex
simulations and multi-day team building retreats
designed to develop a team, including group assessment
and group-dynamic games. Team building can take place
before or during a Hoshin effort, the important thing is
that an ongoing effort is in place to make sure that teams are working well together and performing optimally.
INTERPERSONAL COMMUNICATION SKILLS

Leadership is influence in action. In order to influence people, you need to have great interpersonal
communication skills. Your communications skills will be needed to effectively influence others. Leaders at
every level must understand, motivate and communicate. No matter how brilliant the thought or the approach,
convincing others to work together to accomplish a goal requires well-developed interpersonal skills. A big part
of interpersonal communications is how well you listen. As you move through the Hoshin implementation
process, listening and communicating with others is paramount.
ORGANIZATIONAL COMMUNICATION
While face-to-face communication is preferred, it is not always realistic, particularly in companies that may be
based in multiple locations--even around the world. Fortunately, there are tools that make it possible to
approximate face-to-face communication,
allowing even the largest companies to create
personal connections between staff and
management.
The key to change is communication. You

must make sure that everyone in the
organization knows what the company's key
objectives are and how they fit into the plan.
Leading a Hoshin effort requires that you have
excellent interpersonal and organizational
communication understanding.

WHO ARE YOUR CUSTOMERS?
In a Hoshin environment, a leader MUST treat all five
groups of people as customers--valued customers.
Think about it, if you don't have people willing to buy
your product or service and you don't have people
willing to work with you to make this happen, you
don't have a company. Your employees are also your
customers. The most successful organizations on the
planet treat employees as respected and honored
members of the overall plan. By gaining each group's
trust and respect, implementing a Hoshin plan will be a
lot easier.
ROAD BLOCKS TO HOSHIN

 Not having top management “cheer leading” the effort
 Lack of a committed “steering committee” consisting of top-level, highly respected managers and/or
professionals
 Ineffective training and organizational communication on the Hoshin process
 Lack of administrative support for the Hoshin effort
 Not addressing managers who have their own agendas or are not team players
 Making planning just another “thing to do” when the workforce is already bogged down with more than
they can get done in a 40+ hour work week
 Lack of consensus on a Hoshin methodology that best fits the organization
 Taking on too many targets / means when first introducing Hoshin planning into an organization
 Not having regular reviews - - once a month or quarterly!
Take the next couple of minuets and make some notes on other road blocks that you can see happening within
your organization.

1. What are the key roles that a leader plays in a Hoshin Kanri environment?
2. Who are a leader’s customers?
3. Briefly describe the 4 components to change.
4. What principle of Hoshin Kanri amplifies teambuilding?
5. Discuss at least 3 communication channels found in an organization.
6. List at least 5 roadblocks to successful implementation of Hoshin Kanri.

MODULE 7 - TREE DIAGRAMS
LEARNING OBJECTIVES
– Identify the meaning for a tree diagram
– Understand when to use a tree diagram
– Identify the steps needed to create a tree diagram
– Recognize the guidelines for successfully creating and using a tree diagram
WHAT IS A TREE DIAGRAM?

Tree diagrams help the team to define and analyze problems. Using tree diagrams allows a team to discover
additional details and map out the full range of possibilities and thinking. Tree diagrams are based on levels of
abstraction: primary, secondary and tertiary. The primary data level is typically the initial term or issue to be
analyzed. The tertiary level is the lowest level of abstraction.
Tree diagrams take the most generalized information and create a logical linear progression of thinking. They are
good for operationally defining terms, as well as documenting tasks. Using tree diagrams in concert with other
quality tools gives a team a great way to objectively dissect and define issues. Tree diagrams are typically used
with an intact team to capture the team's thinking.
WHEN TO USE A TREE DIAGRAM

HOW TO COMPLETE A TREE DIAGRAM
1. Choose a statement to be analyzed.
2. Paraphrase it using only a few words. This will be the primary data.
3. Tape two to four pieces of flip chart paper together. On the far left hand side of the flip chart paper, write
down the paraphrased statement.
4. Brainstorm secondary data by asking appropriate questions like, “Why is this happening? Or, What does this
mean?” Ask what, why or how as many times as it takes to exhaust the point.
5. For each secondary data point, again identify tertiary data by asking what, why, when, where, or how.
6. Study the final results for correlations, logic or sequencing. Also, look for areas that have been duplicated
and make appropriate corrections.
GUIDELINES FOR CREATING A TREE DIAGRAM

From This….
To This…

EXAMPLE OF A TREE DIAGRAM
REVIEW QUESTIONS – MODULE 7.
1. How do tree diagrams help to define and analyze problems?
2. List at least three different ways that you see using a tree diagram.
3. What are the types of data distinction used in a tree diagram?
4. How would you use a tree diagram in the Hoshin Kanri process?

MODULE 8 - AFFINITY DIAGRAMS
LEARNING OBJECTIVES
– Define the meaning of an affinity diagram
– Identify when to use an affinity diagram
– State the steps for affinitizing data
– Describe the guidelines for using affinity diagrams
WHAT IS AN AFFINITY DIAGRAM?
Affinity diagrams were created in the 1960s by a Japanese anthropologist, Jiro Kawakita. He was
involved in studying hundreds of facts about societies and social institutions. When he had completed
his research, he faced the monumental task of trying to organize the information and draw conclusions
from his research. He created a tool called KJ methodology®, which is also called an affinity diagram.
Affinity diagrams have several purposes. First, they spark a team to generate information. Then, they
help organize and categorize the information. Affinity diagrams are usually a team facilitator's first
choice for problem solving because they are such a great tool for generating and organizing
information. Since the team is usually involved in generating data that will later be organized, team
members are allowed to be creative and express their gut reactions to issues or problems. This can be
very informative! Think of it like brainstorming with structure.
Also, they are one of the quickest team tools around. A team can sift through and organize large
volumes of data in record time.
WHEN TO USE AN AFFINITY DIAGRAM

HOW TO COMPLETE AN AFFINITY DIAGRAM
1. The facilitator defines the topic that the team will be investigating.
2. In silence, each team member works for ten to fifteen minutes writing one idea or thought on a sticky note..
3. Sticky notes are posted on flip chart paper and placed on a large table in the center of the room or taped to a
wall.
4. Once all ideas have been exhausted, the team stops and surveys sticky notes for related or like items.
5. They eliminate duplicates and clarify fuzzy terms they don't understand.
6. At this point, the affinitizing begins and the team starts to group sticky notes according to like themes or like
categories.
7. Once the notes have been grouped, a header note is created that best describes the group of sticky notes.
Sometimes a single note from the group that best represents a common theme can be used.
8. If the team feels that groups can be grouped, create an additional header note and place it
above the grouped sticky notes.
GUIDELINES FOR CREATING AN AFFINITY DIAGRAM

EXAMPLE OF AN AFFINITY DIAGRAM
We asked our customers what they wanted on a great cheese burger. And we found that the
information came back with individual pieces of data on sticky notes that looked something like this!
There was a lot of data and all different types of categories. When you ask for data in no particular
order, it is confusing and doesn't make a lot of sense. This example demonstrates how confusing
random information can be. We REALLY need to use an affinity diagram to make sense of this data!
Fresh Lots of cheese Thick patty
All meat Not greasy
Good selection
Melted cheese
of cheese
Bun not larger than

Fresh meat
the meat
Our job was to take these random pieces of data and group them into common themes. Once the data
has been grouped, identify headers for the groups. Headers are the main titles that a name for the data
in the group. Our headers in this case were "Toppings," "Bun," and "Hamburger Meat."

1. What are the two primary purposes of an affinity diagram?
2. Why do you think it’s important for the team to initially work in silence as they are creating their sticky
notes?
3. What is a header note?
4. What does the term piggybacking mean?
5. When one group of data becomes very large, what does it typically mean?

MODULE 9 - CAUSE & EFFECT DIAGRAM
LEARNING OBJECTIVES
– Define a cause and effect diagram
– Understand when to use a cause and effect diagram
– Define the steps in creating a cause and effect diagram
– Identify the guidelines for using a cause and effect diagram
WHAT IS A CAUSE & EFFECT DIAGRAM?
A cause & effect diagram provides a visual documentation of potential causes related to a specific effect. A team
can use cause and effect diagrams as a way to analyze a problem or plan a complex change. Cause and effect
diagrams are also called fishbone diagrams and/or Ishikawa diagrams. A completed diagram does resemble a
fish and Dr. Kaoru Ishikawa came up with the methodology for this great quality tool.
Both problem situations and project definitions can be analyzed using a cause and effect diagram. Use of the
diagram reduces the tendency to look for the one true root cause at the expense of ignoring other causes and/or
interactions of causes. The diagram indicates the relationship of each "cause" and "sub-cause" to each other and to
the "effect" being addressed.

WHEN TO USE A CAUSE & EFFECT DIAGRAM
HOW TO COMPLETE A CAUSE & EFFECT DIAGRAM

1. Choose an "effect" to be studied.
2. Develop an operational definition for the "effect.”
3. Tape two to four pieces of flip chart paper together. On the far right hand side of the flip chart paper write
down the "effect."
4. Draw the skeleton of the diagram using the classic headings for causes: materials, environment, management,
man/woman, measurement, methods, and machines. 5.
5. Brainstorm ideas that may be contributing to the effect. For each category ask, "Why does it happen?" Place
responses under the headings of materials, environment, management, man/woman, measurement,
methods, and machines.
6. Continue brainstorming for links to each category until the team feels that everything is out on the table.
7. Look for commonality between causes that appear repeatedly. The next step is to determine the frequency of
"causes" that show up under several categories.

GUIDELINES FOR CREATING A CAUSE & EFFECT DIAGRAM
EXAMPLE OF A CAUSE & EFFECT DIAGRAM

1. How would you define a cause and effect diagram?
2. When do you use a cause and effect diagram?
3. Define the steps in creating a cause and effect diagram.
4. Identify the guidelines for using a cause and effect diagram.
5. How would you use a cause and effect diagram in a Hoshin planning session?

MODULE 10 - FLOW CHARTING
LEARNING OBJECTIVES
– Define flow charting
– Understand when to use a flow chart
– State the different uses for flow charting
– Identify the different symbols used in simple flow charting
– Describe the guidelines for flow charting
WHAT IS A FLOW CHART?
Flow charts are a graphic depiction of sequences of events or operations. Using a flow chart also defines the
boundaries of a process, making this quality tool an invaluable method for defining a new process. Flowcharting
should be the first thing a team does in order to analyze a process, both because it generates a lot of great
information in a relatively short amount of time, and because it creates details that a team needs to understand
where to begin improvement efforts.
Flow charting can define the relationships in a work process. Flow charts describe the process detail and make the
whole thing viable. Using a flow chart to document a complex process helps a team understand where resources
are and how information flows through the organization. Flow charts also identify who the operators are in the
process, where data and/or resources come from and go to, any gaps in a process, and how much time is
associated with this step in the process.
There are several types of flow charts. They range from very detailed charts involving the documentation of time
and functional area to much simpler "top down" charts that only capture high levels of activity. Graphically, steps
in the process are documented using shapes that indicate meaning. These shapes are usually rectangles,
diamonds, or ovals. Shapes are then connected with flow arrows.
HOW TO CREATE A FLOW CHART
1. Using sticky notes brainstorm a list of all the activities tied to the process under study.
2. Write a brief description of how the process begins by documenting it on a sticky note, and then drawing an
oval around it. Document all remaining activities with rectangles.
3. Anywhere there are decisions along the way, document those with a diamond.
4. Lay the sticky notes on flip chart paper that is taped together either on a wall or on a large table.
5. Arrange the sticky notes (activities) in the order that they occur within the organization.
6. Determine what decisions are being made along the way. You can use a different color of sticky note for
decisions and turn them at an angle to indicate a decision symbol.
7. Using a pencil or marker begin to connect the activity boxes and decision triangles with connector arrows.
8. Review your chart to make sure that all steps are captured and that each activity box has a connector coming
in and one going out.
9. When the process has been accurately documented, end the activity with an oval symbol.

GUIDELINES
1. Work as a team using sticky notes and flip chart paper.
2. To get started, brainstorm answers to these questions:
 "Who are our suppliers?"
 "Who are our customers?"
 "What do we supply to them?"
 "What do we do with it?"
 "What are our outputs?"
 "Who gets our output?
3. The pattern of information should go from left to right.
4. Using flow chart symbols connect steps indicating the beginning, ending, tasks, and decision points.
5. Symbols should be connected with arrowed flow lines indicating a direction of movement. Each symbol
should have one flow line going in and another flow line going out. The exception to this rule is a decision
box, which will have a "yes" line or a "no" line.
6. Try not to cross flow lines in a flow chart.
7. Rectangles indicate a step in the process.
8. Ovals indicate the beginning or ending.
9. Diamonds indicate a decision point.
EXAMPLE OF A FLOW CHART

1. How would you define flow charting?
2. When do you use a flow chart?
3. State the different uses for flow charting.
4. Identify the different symbols used in simple flow charting.
5. Describe the guidelines for flow charting.

BIOGRAPHY OF YOUR INSTRUCTOR – KAREN ROBERTS
Karen Roberts has worked in the field of Hoshin, quality and strategic planning for the past twenty-six years. Her
consulting practice concentrates on consulting to the industries on ways create effective strategic planning
methodologies.
A comprehensive corporate life has given her the knowledge and skills necessary to help organizations create
positive improvement. She has sought out the most effective methodologies available for creating excellence.
Her broad scope and varied experience has made her a sought after advisor to organizations across the country.
Her more recent experience includes facilitating organizational effectiveness teams for NASA, Methode
Electronics (Malta), Windsor Industries, McDonald Douglas, Emerson Electric and Johnson & Johnson
Medical. She has also facilitated strategic planning sessions for the Department of the Interior and provided
leadership training, strategic planning and group development to executive level management groups at Amgen,
Exabyte, Cordis de Mexico (a division of Johnson & Johnson) and Roche Chemicals.
She is a past adjunct faculty member at Regis University, teaching courses for the American Society for Training
& Development on "Measuring the Effectiveness of Organizations." She has an MBA and an MA from the
University of New Mexico in Organizational Communication.
Professional Affiliations
 Member of the American Society of Training and Development

 Member of the American Society for Quality
 Member of the QFD Institute
Professional Training
 Advanced Quality Function Deployment Practices, Dr. Yogi Akao (the co-creator of Quality Function
Deployment and creator of Hoshin Kanri), Novi, Michigan, 1998.
 Hoshin Kanri Practices, Dr. Yogi Akao (the creator of Hoshin Kanri) Novi, Michigan, 1998.
Karen makes her home at the base of Pikes Peak in Colorado. In her spare time, she studies and teaches yoga.
She currently teaches yoga at the Olympic Training Center in Colorado Springs and is the creator of the Neuro
Semantic Yoga.

Blank Hoshin Matrix

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Workshop
Instructors: Date:
A. The objectives for this workshop were clear.
1 2 3 4 5 6 7 8 9 10
Disagree Agree
B. The organization of the workshop was clear and sensible.
1 2 3 4 5 6 7 8 9 10
Disagree Agree
C. The presenter(s) were knowledgeable.
1 2 3 4 5 6 7 8 9 10
Disagree Agree
D. The group discussions were helpful in giving me new information and insights.
1 2 3 4 5 6 7 8 9 10
Disagree Agree
E. The presenter(s) encouraged participants’ questions and comments.
1 2 3 4 5 6 7 8 9 10
Disagree Agree
F. The exercises were helpful.
1 2 3 4 5 6 7 8 9 10
Disagree Agree
G. The workshop manual was well organized and helpful.
1 2 3 4 5 6 7 8 9 10
Disagree Agree
H. Overall rating for this workshop.
1 2 3 4 5 6 7 8 9 10
Disagree Agree

I. Please indicate how the workshop could be improved.
J. Which parts of the workshop were the most helpful?

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TABLE OF CONTENTS

Module 1 – Introduction to Hoshin Kanri _____________________________________________ 6

SWOT Analysis ________________________________________________________________________ 17

The Voice of the Customer ______________________________________________________________ 19

Survey to Leaders ______________________________________________________________________ 23

Review Questions – Module 2 ___________________________________________________________ 30

Module 3 – The Hoshin Matrix _____________________________________________________ 31

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Review Questions – Module 4 ___________________________________________________________ 50

Module 5 – Deploying the Hoshin Plan ______________________________________________ 51

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Creating Change _______________________________________________________________________ 63

Circle the Words That You Use to Describe Change ________________________________________ 64

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The foundation for Hoshin is inclusion, creativity and

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THE TERM “HOSHIN KANRI”

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Hoshins, or breakthrough strategies, are the aspects to

Another way to look at this is daily management

However, breakthrough strategies aren’t always absolute

Examples of Breakthrough Hoshins:

– Implement Lean strategies across the organization

Examples of Stretch Breakthrough Hoshins:

▬ Apply and win the Malcolm Baldrige Award

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If you were to look at Hoshin as a systematic process, it

This is a very similar process to a popular quality model

PLAN, DO, STUDY, AND ACT

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One of Hoshin's premises is that by listening to the

CRITICAL RULE IN HOSHIN

A Critical Rule of Hoshin:

Every Hoshin plan must fit to the

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1. What is Hoshin Kanri?

2. What are the three critical guiding principles?

4. How does the PDSA model fit into Hoshin?

5. Who should be involved in Hoshin?

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▪ Hot lines ▪ Customer Visits

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What are you currently measuring?

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HUMAN CAPITAL MEASURES

INNOVATION C APITAL MEASURES

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CUSTOMER CAPITAL MEASURES

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2. What are the components in an environmental scan?

3. What are the critical components in a SWOT analysis?

5. Why is the Voice of the Customer so important to our company?

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