Hoshin Planning: Your Most Common Questions Answered in Just Three Words

By William “Wes” Waldo

In the past, when I have been asked to give a summary of hoshin planning in a few simple principles, I admittedly struggled. After all, many talented and experienced practitioners have spent entire careers designing and executing the hoshin planning process. It can feel like there are so many moving parts — all of which are important. When you couple that with a strong desire to give a thorough explanation, well, the “S” words simple and summary tend to quickly leave view.

Today, I find that as my comfort with the hoshin process itself has grown, summarizing it is really no trouble at all. I quickly think about three new “S” words: Structure, Stretch, and Sustainment. I have also come to realize that most of the typical questions raised with such early zeal are really just mental roadblocks that have been disguised as questions. Knowing the source of these roadblocks helps the practitioner better frame the answer.

Structure

One of the primary purposes of hoshin planning is to directly engage the entire organization, to the appropriate degree, in the achievement of the business strategy and long-term vision. Seldom does any other methodology so encompass an entire staff and grant it near perfect focus on common objectives. The first question that often arises is, “Who should be involved in the hoshin planning process?” This question is a result of the first mental roadblock, which is that only senior level leaders should be designing the execution strategy. After all isn’t that what we pay them for? The truth is that the cascading structure of the hoshin process allows for one of the most empowering aspects: catch-ball. By engaging the middle managers in the creation of the tactics that will enable the long-term strategy to be fulfilled, the typical resistance felt by senior managers can often be eliminated.

The next question that arises is, “Does the senior leader have to be bought into the process?” Simple answer, yes. “Have people done this without the senior leader’s buy-in?” Simple answer, also yes. You can start this somewhere in the middle of the organization and for a while it will work fine, but eventually the business unit that began hoshin will collide with all of the others that have not and then the fun begins. You’ll see the structure of your actual business get in the way of your achievements. At some point, the senior leader will have to demonstrate commitment by using the process himself or herself, otherwise enthusiasm for hoshin will fade. The structure is also vital in overcoming the mental roadblock that the “big boss” can typically have when giving up a little bit of control as it relates to the execution of the business strategy.

Hoshin is not a project management tool, though many organizations have used it as such. The question of, “Shouldn’t we put all of our projects in the X-Matrix?” comes up all of the time. I have even had leaders call me to ask if I have a different version of the spreadsheet, one that had more rows and columns. You see, they could not squeeze all of their pet projects and old ideas into the structure of the version that I gave them. You can only imagine my reply. Hoshin planning is about breakthrough, not managing your budget or departmental KPI’s.

Stretch

A hoshin is often defined as the “true north” for the organization. There is only room for a few of these meticulously selected breakthrough objectives (BTO’s) because of the resources required to make even one occur. The obvious question here is, “How do you know if you have a BTO?” A BTO will simultaneously get you extremely excited and a little bit nauseous. A BTO is something that you know that you have to do but are not sure how you are going to do it. A BTO is something that causes the organization to stretch beyond its normal limits. We do not want to select targets that are 10% better — we want 50%. We do not want to just own the largest share of the market, we want to figure out how to create new markets.

This leads to the question of, “What if we fail?” When you create a stretch goal, it is common to have many months in the red on the bowling chart. That does not make it a failure. The concept of stretch forces us past the mental roadblock that our definition of failure has created. How many times have you set a target of a 10% improvement, made 12%, and then celebrated success? Take the same organization and the same process, select a 50% improvement and then “only” achieve 45%. If your definition of failure will not allow you to celebrate that unbelievable accomplishment, then you are going to struggle with selecting breakthrough objectives. I will take the 45% improvement over the 10% any day and let someone else hold on to their mental roadblock. Hoshin planning should allow you to create a big dream and then put the plans in place to go get it.

Sustainment

If you are at least a little familiar with hoshin planning, then you already know that words like sustainment generally have no place in the process. We’re not trying to sustain anything. Instead, we are striving for breakthrough. The only exception is that we have to sustain the hoshin process itself. Early on, leaders can get excited about the prospect of driving meteoric organizational success. They can envision hoshin being a gateway to the future — connecting incredible strategy with pinpoint execution. Then you get a question about all of the paperwork. The luster is gone.

“Do we have to use the X-Matrix? Why do we need bowling charts, A3 reports, and countermeasures?” These are the questions of leaders that just hit the next mental roadblock. If you are leading this process for your organization, it is important to stay the course. Trust that once you get going, the reporting gets much easier and actually supports your ability to communicate and maintain alignment. It forces collaboration, especially early on when this may be something that the organization normally struggles to achieve.

Once you get past this paper barrier, you then have to deal with the monthly review meetings. You start to hear questions about the needed frequency and, “Can’t we just email the information to each other? Who has time for more meetings?” You must make sure that you have adequately prepared your team for what the effort is really going to look like. Level-setting expectations will allow you the emotional space to push them until a cultural habit has formed. The meetings are not only needed but form the backbone of the organization’s ability to pivot around the long-term strategy as many unanticipated issues threaten to take the organization’s eye off of the prize.

So, as you proceed through your hoshin planning journey, remember the three “S” words of Structure, Stretch and Sustainment. This will prepare you to overcome all of those mental roadblocks treacherously disguised as questions and lead your organization towards your own breakthroughs.

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