Goal management

Hoshin Kanri: A proven way to maximize the achievement of strategic goals

Published 1 year ago

Too often organisations fail to realise the goals that have been set. There's a 10-30% success rate, which is clearly just not good enough. Luckily, there is a proven way (Hoshin Kanri) being used by global leaders to deliver their commitments. Read on to find out more about the power of Hoshin Kanri, as James Milsom explores.

Organizations put a lot of energy into the planning of their strategies. However, when it comes to strategy execution, many organizations fail to deliver the results they hoped for. As a Harvard Business review reported around 70% of leading organizations failed to execute their strategies. While we have made a great progress in defining strategy, the execution part still remains the biggest challenge strategy execution practitioners face today. 

So, is poor strategy execution inevitable? - The short answer is no...

As the Harvard Business Review highlighted, failure to execute strategy is the number one reason for Global 500 CEO turnover. In spite of this, strategy execution is consistently listed as a top priority for CEOs within the annual Conference Board survey. Given its importance, it is a paradox that poor execution still plagues the majority of organizations.

Why do many organizations struggle to execute strategy?

At i-nexus we have worked with large organizations for over a decade trying to understand what challenges they face when it comes to executing their strategies. Our analysis shows that out of a variety of challenges, three stand out:

1. The 10% problem. Only 10% of the organization’s employees know what the company strategy is and how they contribute to achieving the strategic goals of the organization. 

2. Fighting the whirlwind of day-to-day operations.
Transforming your organization is hard, especially when you also need to run your day-to-day operations in parallel. How do you simultaneously change your organization and run daily operations? Organisation often ‘forget’ about their strategy execution as the day-to-day priorities take precedence. Finding a way of balancing strategic work with day-to-day activities is of paramount importance here.

3. "Rear-view mirror" problem.
The majority of organizations are only focusing on lagging indicators, the end result of an action or process. These are typically output oriented. For example, a lagging indicators include  can be annual revenue, opportunities closed or performance against targets. Instead, organizations should be focusing on the future performance also known as leading indicators.

Leading indicators are input oriented, easy to influence and can help improve performance. Examples include,  percentage  of incidents not resolved within 2 hours or average backlog of incidents per agent, number of sales call made during the day or number of employees trained fully at a given process. Measuring lagging indicators is important: as you need to reflect on the performance of the past period, but to really influence the direction of the business  leading indicators  will empower your organisation to change, improve and transform in real time.. A  balance is needed between looking backwards or in the rear-view mirror as we like to call it and looking forward and being more proactive by managing leading indicators.

Although the 3 most common challenges, the following list includes some other common stumbling blocks:

1. Too many objectives;

2. Strategy decomposition not deployment;

3. Misaligned priorities;

4. Resource conflicts;

5. Inability to course correct actions to adjust to changing environment;

6. Inability to make the right choices and engage the organization with strategy;

7.  Silo driven thinking;

8. Lack of transparency;

9. Disconnect between planning cycles;

10. Top down only target setting.

How Hoshin Kanri can help achieve goals

Hoshin Kanri, also known as Hoshin Planning, Strategy/Goal/Policy deployment, is a strategic process for ensuring that the top level strategic goals of an organization are communicated and rolled down into individual actions. The aim of this process is to drive progress and actions at every level within that organization. 

Hoshin Kanri originated in Japan in the 1950s and now is being widely adopted as a core strategy execution methodology in large organizations. The words ‘Hoshin Kanri’ mean ‘compass management’. It is a effective way to align and engage your entire organization with strategy.

Here is a short overview of the Hoshin Kanri process steps:
1. Define incremental and breakthrough goals.
2. Ensure alignment of goals and actions using X-Matrix charts;
3. Set, cascade and agree on goals using the catchball process;
4. Measure results using KPIs;
5. Review results, apply course correction if needed.

Hoshin is at the heart of the legendary business systems that enable industry leaders like Danaher and Toyota to consistently outexecute their competition. You may have heard that it is a spreadsheet heavy process that requires effort and discipline to sustain. This is where i-nexus comes in! For the first time, you can access the power of Hoshin without the heavy lifting that implementing the process usually entails.

i-nexus is the leading Hoshin Kanri solution provider. It takes the heavy lifting out of Hoshin/Strategy deployment and execution process. You can easily implement, sustain or scale your Hoshin Kanri process with i-nexus. 

Whether you are thinking about using Hoshin or have been implementing Hoshin before, i-nexus can help you maximize the achievement of your strategic goals. Request i-nexus Hoshin Kanri software demo today to learn how we can help your organization.

Itching to learn more?

We have a wealth of resources freely available to digest, all designed to help you achieve your strategic goals. We've hand picked the below to set you on the right track:

About the author

James is i-nexus' Digital Marketing Manager. Bringing a passion for strategy from a marketing angle, you'll find he loves to intertwine sports and strategy. His background covers industries such as energy, broadband, education and employee benefits.

If you'd like to talk more about your strategic challenges, reach out to James on james.milsom@i-nexus.com or connect with James on LinkedIn for more strategic insights.

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