I nexuspresentation pexconferencejan2013www 130805111843 phpapp01 by Tim Bell

Deploying Hoshin Kanri as a Competitive Weapon!

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What are we going to cover?

• What is Hoshin Kanri and what does it promise? • How does it work (in theory)? • What can go wrong (in practice)? • What’s behind this? • 4 key challenges to overcome

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Hoshin Planning – The Concept

Shin

Kan

方針管理  Direction

 Needle

Direction Needle, or Compass

 Control  Channeling

 Reason  Logic

A ‘Vision Compass’

Management

Hoshin Planning is a systematic and disciplined process to align, communicate and execute strategy by focusing on those few breakthrough objectives that give you competitive advantage.

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Hoshin Planning â&#x20AC;&#x201C; The Process

Hoshin Process in Concept

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Reasons Not to Do This....

And the leaders will say.... We already do this. We do not have enough time to do this. We can not possibly plan that far into the future. We have tried this before. Our corporate leadership (insert board if appropriate) will never give up control. • The way we do it today is just fine. • We will not maintain this process. • Etc, Etc, Etc... • • • • •

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Recognise these symptoms?

And the organisation will see... • • • • • • • • •

Too many bad projects in process. Very long lead-times for improvements. Constantly missed budgets and forecasts. Senior management vision does not match organizational activities. Annual objectives rolled out in March instead of January. Way too many good projects in process. Year to year plans never seem to connect. Most employees never seem to feel a part of the team. Little connection between strategy and continuous improvement.

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The Basic Model....

A simple model.....

Performance Management Systems are really designed to help organisations perform three basic tasks: • Monitor… We have to examine our core activities on a regular basis. Collecting data. • Learn…From that examination we have to better understand what is working and what is not. Turning data into information. • Improve… Take the information and turn it into ACTION! Copyright i-nexus 2012. All rights reserved.

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Hoshin is rapidly becoming the de facto strategy deployment methodology in Corporate America

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Hoshin can clearly be a Competitive Weapon...

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The 10,000 Foot View

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Hoshin and the Balanced Scorecard... Hoshin Plan Strategy Map

Financial Increase Profit

Maximise Utilisation

Customer Retain Customers Low Cost Offer

Objective

Internal Fast Turnaround

Achieve Fast Ground Turnaround

Measure

Target

On Ground Time

25 Minutes

On Time Departure

95% Flights

Initiative Reduce Turnaround Time

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How Hoshin Works (In Theory) â&#x20AC;&#x201C; The X Matrix 3- HOW Use dots to show relationship of Improvement Priorities to Annual Objectives

Top Level Improvement Priorities

2- HOW FAR

Annual Breakthrough Objectives

Targets to Improve

3-5 Year Breakthrough Objectives

1- WHAT

Use dots to show relationship of Targets and Resources to the Improvement Priority

5- WHO

NOTE: Only Solid dots on a resource deploy to the next level

4- HOW MUCH

RESOURCES = Primary Responsibility = Secondary Responsibility

OWNER

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Balanced Scorecard Strategy Map to X-Matrix Example

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How Hoshin Works (in Theory) - Cascade and Action Planning

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How Hoshin Works (in Theory) â&#x20AC;&#x201C; Strategy and Performance Review

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How Hoshin Works (in Theory) Countermeasures

Monthly Miss

Countermeasures are reactive â&#x20AC;&#x201C; they address how to get back to plan when a goal is missed for a period Jump Off Point (JOP) to stretch target

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Some recent data...

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Hoshin Planning in Practice – 4 Key Cultural Challenges to Overcome

#1 – The “Commitment” Challenge #2 – The “Stretch Goal” Challenge #3 – The “Shoot the Messenger” Challenge #4 – The “Bureaucracy” Challenge

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#1) The “Commitment” Challenge – How to ensure leadership stay the course...

• • • •

–

Typical Mistakes....

–

Not starting with/agreeing breakthroughs

Poor discipline in the cascade Constant jerking of the chain Lack of linkage to reward and recognition Misalignment with the budget

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Proven Strategies for Building Commitment... Perception that the effort will deliver improved performance

Degree of Effort

Perception that Improved performance will lead to the outcome

Improved Performance

Value of Outcome

 Three Pre-requisites for Sustained Commitment Perceived value of the outcome

• Clear line of sight to the breakthroughs • Clear evidence that Hoshin approach delivers better outcomes • Reward and recognition is actually linked to executing hoshin plan Slide 20

#2) The “Stretch Goal” Challenge – How to stretch whilst keeping the plan realistic and achievable... We need to double sales by 2015

CEO

A Parody...?

That’s a serious stretch boss. I’m not sure the team will buy it... We’ve got no choice, the stock’s taking a battering and we need to project growth fast, plus the team can always do more... Ok, we’ll give it a go, but don’t be surprised by the result...

The boss needs us to double sales in three years, I’d like achieve that in 2.

SVP

How? Best we’ve ever done in one year was 20% and that was with double the resources we have now... Look, if we shoot for the stars, at worst we’ll hit the moon... I’m not sure this makes sense, but ultimately it’s your call...

XYZ Achieved 200% of quota last year – it shows it can be done – so I’m setting quotas on this basis this year....

VP, Sales

But nothing’s fundamentally different ... What makes you think we’ll get a different result this year? Look we need sales people who can deliver... If that’s not you...

Sales Lead

Time to dust off the CV...

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The objective A3 provides a basis for a constructive dialogue on what can be achieved...

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#3) The “Shoot the Messenger” Challenge – How to ensure the process remains constructive...

Who Screwed Up?

Let me tell you what happened...

I hope he doesn’t blame me...

These numbers aren’t comparable

Better not raise the XYZ issue...

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Proven strategies to ensure the dialogue stays constructive and focused on the future...

Bowling Chart Focus on the ‘forecast’ reds

If not, why not? What’s the root cause and what can we do about it – short and long term?

Are we likely to hit the future targets?

Countermeasure Plan Majority of time should focus on reviewing the countermeasure plan...

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The “Bureaucracy” Challenge – Avoiding the administration getting in the way of the process... Bowling Chart

X Matrix

X Matrix Action Plan

Bowling Chart

X Matrix

Counter Measure

Bowling Chart

X Matrix

Counter Measure Counter Measure Counter Measure

Bowling Chart

Action Plan

X Matrix Action Plan

Bowling Chart

X Matrix X Matrix

X Matrix Action Action Plan Plan

Action PlanAction Action Plan Plan

Bowling Chart Counter Measure

Counter Measure

Bowling Chart Action PlanAction Action Plan Plan Slide 25

Let the right software take the strain....

X-matrices Ideal Hoshin Platform Requirements • Integrated - Brings together all X-matrices, Action Plans/A3s and Bowling Charts in one system. • Simple - As easy to use as the spreadsheets it replaces. • Right Functions - Offers functions that underpin the culture needed to sustain the Bowling ChartsHoshin process. Action Plans/A3s • Hassle Free – Available 24x7, scaleable, installation free.

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Key takeaways...

• Hoshin is rapidly becoming the de facto Strategy Deployment approach. • Executed well, Hoshin can be a real competitive weapon. • Development and reinforcement of a supportive culture is the primary challenge. • Organisations typically achieve more, in less time, with the Hoshin process with external help. • The right software can improve the probability of success by taking the “heavy-lifting” out of the Hoshin process. Copyright i-nexus 2012. All rights reserved.

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Questions? Thoughts?

“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

“There is great power in knowing where you are going and passion in knowing how as an individual you fit in!”

Charles Darwin

Anonymous

Find out more: www.i-nexus.com

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