Improved strategy deployment method or Vision Kanri

Why an improved version of the Hoshin Kanri?


Dans le document « Is the Hoshin Kanri autocratic with a short-term view, or even blind » we show the problems of most existing definitions.
  • It does not explicitly show analyses of the existing situation, either when defining long-term objectives and priorities or within the "Catchball" process
  • Priorities for improvement are defined after the annual objectives: short-term improvements are favoured at all lower hierarchical levels, which contradicts a real "breakthrough".
  • The process is not so participative or too late
We have created a modified method, which not only retains all the key principles but actually applies them to the method.

We call this method "Vision Deployment" or "Kanri Vision" (ビジョン 管理).


Hoshin Kanri: a reminder of its definition and origins

Hoshin Kanri's literal translation (方針管理) is "compass management" or "management of the direction". 
It is a method of deploying corporate policy or strategy, or in a broader sense of deploying "breakthroughs" such as with transformation or change programs.
It was developed in the 1960s and 1970s in Japan, notably by a subsidiary of Hewlett-Packard and Bridgestone. It has multiple origins, a blend of Management By Objectives (by P. Drucker), of the teachings of W. Edwards Deming (notably known for the PDCA) and of Joseph M. Juran at seminars in Japan.


The method has three main pillars

A cascaded deployment starting from the definition of the vision:
  • The management sets the main directions
  • These are applied throughout the organisation ("top-down" process)


An iterative and participative process at each hierarchical level:
  • Process often called "Catchball" (from a child's game with ball exchange)
  • Allows a good understanding, adaptation to reality and appropriation by teams at each level


Tactical and strategic PDCA (Plan-Do-Check-Act) loops
  • A tactical loop enters to guide the deployment of annual objectives at each hierarchical level
  • A strategic loop to guide the deployment of strategic or "breakthrough" objectives
Deployment of the strategy in cascaded and participative way
 



The « Vision Kanri » Strategy deployement method


The process consists of 7 steps, like the Hoshin Kanri, but adapted

Steps of the adapted Hoshin Kanri process
 


Our focus is on the deployment process, not the content.
The Hoshin Kanri method is a deployment method, not a method of defining strategy or breakthroughs. This document therefore focuses on the method of deployment, not the content of the strategy or breakthroughs. Nevertheless, some characteristics of the strategy have a strong impact on the effectiveness of the deployment and are therefore included in the method as such.




1. Establish the vision

This step consists of defining the vision and mission
  • Organisation (strategy deployment)
  • Or the transformation program (deployment of "breakthrough")

The vision is what the organisation wants to be/become; or how the transformation program will change the organisation. The mission is a short definition of what the organisation (or program) wants to do.


Features to facilitate deployment

The definitions of vision and mission are not directly part of the deployment, but they should facilitate deployment with the following characteristics:
  • Clear and simple to be easily understood
  • Be meaningful and realistic to be better adopted
  • Be ambitious and motivating
  • Be at the right level of detail so as not to close doors (too detailed) or be too generic

Similarly, it is preferable that they be defined in a participative way, certainly restricted to the top management or transformation programme teams, in order to be fully adopted, communicated and explained by management.



2. Analyse current state

The analysis of the current situation depends on the subject matter
  • strategic deployment: the analysis focuses mainly on the external environment (customers, markets, competitors, etc.); nevertheless, part of the analysis is internal to fully understand the possibility of executing the strategy, or adapting it, according to internal strengths and weaknesses
  • deployment of a major change ("breakthrough"): the analysis is more, if not entirely, focused on the internal. A change related to a merger-acquisition will still have an external analysis (considering "the other party" as external) while an analysis for an operational efficiency program will be mainly internal


Analysing the current situation is essential for two reasons:
  • An obvious rational reason: this makes it possible to define the strategic or breakthrough axes on a more solid and factual basis
  • A more emotional reason:
    • This allows staff to better believe in and take ownership of the defined axes; this is all the more true for an internal analysis that involves part of the staff in the analysis
    • This is a less obvious reason, but it is at least as important as the rational reason to make deployment more effective


Features to facilitate deployment
Analyse at the "right level of detail".
  • This is the main difficulty in analysing the existing situation
  • The scope is very broad, both for strategic and operational analysis, so we cannot be too detailed.
  • But it takes detail to make the analysis more robust and credible!


Involve staff and communicate results
  • This is especially true for internal analysis; the more visible it is and the more people are involved, the more they will agree with the conclusions and the easier it will be to deploy.
  • For the external analysis, it is the involvement of the members of the management team that counts most; the involvement of the rest of the staff will be limited or even non-existent if confidentiality is required (merger, acquisition...). Nevertheless, the communication of non-confidential elements can be used to prepare for deployment




3. Define breakthrough objectives

This step consists of defining strategic or breakthrough priorities and corresponding objectives
  • Strategy deployment: definition of the strategy, its priorities (or strategic axes) and associated objectives
  • Deployment of "breakthrough": definition of change priorities (or axes of the transformation program) and associated objectives
As with the vision, here are their key features to facilitate deployment
  • Be simple (simply expressed) while relying on a high level of detail of definition
  • Have a clear articulation between the different priorities or axes
  • Have a clear priority and SMART objectives (Specific, Measurable, Achivable, Relevant and Time-related)
  • Define roles and responsibilities for each of the priorities and objectives




4. Deploy breakthrough objectives and priorities

This is the pivotal stage of deployment, it is here that the objectives defined by management meet the increasingly operational reality at each level of the organisation; it is here that the iterative and participative process of "Catchball" is used.

At this stage or after the previous stage, the "strategic priorities" or "breakthrough priorities" must become real "breakthrough projects" with a project plan and organisation, roles and responsibilities and resources.

In our "Vision Kanri" method, the definition of annual objectives is included in this phase (different than the Hoshin Kanri); it does not necessarily come before:
  • This makes it possible to keep a sufficient time horizon and without initial constraints to define "breakthrough projects" compatible with the notion of "breakthrough" (important, often long and difficult change) at the first levels below the general management level
  • Going down the hierarchy this time horizon will naturally shorten within a year, the year being the right time to set objectives because it is compatible with the budget cycle; this moment comes when none of the "breakthrough projects" lasts more than a year
  • For a small organisation, it is possible that the time horizon may already be one year at the first level of the hierarchy under the general direction; but it is important not to make any mandatory limitations



Illustration of the "Deploy breakthrough objectives and priorities" step

Deployment phase of priorities and breakthrough objectives



Analysis of the current situation in more detail

A more detailed analysis of the existing situation than that in step 2 is recommended, for the same reasons, even when the situation of one organisational unit is very similar to that of another that has already been deployed:
  • Small apparent differences often count for a lot according to the adage "the devil is in the detail" or may be greater than expected
  • New opportunities and breakthrough projects can be detected (while remaining aligned with the initial objectives)
  • The "negotiations" of objectives will be fact-based and fairer
  • And, crucially, it improves staff ownership of objectives and breakthrough projects, thus facilitating deployment


The analysis in step 4 consists of an analysis of the gaps between the current situation and what is required by the definition of the objectives and priorities for breakthrough
  • without limiting itself totally to have a more complete analysis of the existing situation and not to miss the opportunities present at this level
  • by including the hierarchical level considered and some lower hierarchical levels (in order to prepare the cascade to the next level)


"Catchball" process

It is at this stage that the iterative and participative "Catchball" process is most commonly used
It begins with a gap analysis that serves as a factual basis for defining breakthrough objectives and priorities, followed by annual objectives for the n-1 level.
Exchanges between the two levels are iterative and bring together top-down and bottom-up approaches for:
  • A mutual understanding of breakthrough objectives and operational constraints
  • An alignment of objectives and priorities, at the long-term and annual level


Illustration of the Catchball process
Top-down and bottom-up approach of Catchball


5. Implement annual objectives

This step is the operational part of the deployment with the implementation of actions to achieve the annual and long-term objectives.
Each organisational level is responsible for implementation at its own level. Nevertheless, an overall "transformation programme" mode must be put in place with a transformation project mode in each organisational level, at least during the first year:
  • Changes are by definition important, therefore difficult and changing staff habits; it is necessary to support them
  • Changes are often multiple, transversal or complex; the project mode must make it possible to manage and coordinate changes with a rigorous methodology
  • Overall coordination between the general management and the various organisational units, as well as the learning loop, is done through the "program".


Actions must be integrated into the operational operating modes of each level to ensure their sustainability and leave the project mode
  • We must not neglect the time needed for individuals to fully embrace and integrate the new modes of operation; each transformation project must continue until it is sustainable
  • Nevertheless, the project mode cannot last too long; it is necessary to find the right balance



6 and 7. Review tactically and strategically  (PDCA)


PDCA loops are essential to drive the right deployment by ensuring proper alignment. There are two different loops:
  • A tactical loop, in each organisational unit, to monitor the achievement of annual objectives
  • A strategic loop, at the level of the general management or the management of the transformation program, which aims to steer the achievement of the breakthrough objectives over the 3 - 5 year horizon (or other)


PDCA Cycle

Given the variety of complexity of organisations and breakthrough topics, it seems illusory to give "unique" periodicities; rather, we will give some recommendations
  • Tactical loop:
    • Initial project mode: weekly steering with monthly reviews by a monitoring committee; if the scope is large and the project has a time horizon greater than one year; there could be an additional loop at the quarterly level (such as a strategic loop)
    • Operating mode: same frequency as operational management, most of the time monthly


  • Strategic loop:
    • At this level, you remain in a "program" mode for the duration of the deployment.
    • Nevertheless, we can have a stronger monitoring during the first year with a monthly "program" steering with quarterly reviews by the management committee; in reality, the first "pilot" deployment(s) can have "program" and "project" levels combined with a weekly steering.
    • The following years may have a quarterly "program" management; but the reviews by the management committee should remain shorter than the year, half-yearly or even quarterly for some subjects.


Summary of  the strategy and breakthrough deployment process steps



The 7 steps of strategy and breakthrough c
the 7 steps of the process
The heart of the deployment
The heart of deployment with the Catchball process




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