A strategy establishes the framework to make decisions, how to conduct business, deliver value to your customers, and achieve target revenues and profits. Strategic planning answers the question, where are we going, and how do we get there?
Hoshin planning or hoshin kanri means strategic policy deployment. It is a process to identify the strategy to follow, develop the objectives, communicate, and execute the plan. Hoshin is one of the various methodologies for strategic planning that emerge from Peter Drucker’s Management by Objectives (MBO). Some of the characteristics of Hoshin are that plans at different timeframes, from short-term to long-term, use PDCA and SMART goals, and establish periodic reviews to assess performance against the plan. In general, Hoshin planning has seven steps.
- Assess the current state and establish the Vision
- Develop breakthrough objectives
- Develop annual objectives
- Deploy annual objectives
- Implement annual objectives
- Monthly and quarterly review
- Annual review
Strategy deployment address critical business needs by aligning the goals with its strategy and the company resources at all levels. This alignment makes it possible to respond quickly to changes in the business environment. The use of the PDCA cycle brings into the mix a structure to deal with those changes. It provides a framework to identify and solve the problem.
Hoshin develops the skills and capabilities of the team by engaging them to answer the question of how do we get there? Leaders are expected to guide their teams based on their knowledge and experience. Aligned goals ensure that everyone is working toward the same ends. The team of problem-solvers that you developed, row in the same direction as you do to accomplish those goals.
Lean is a strategy that has proven effective in responding effectively to unforeseen changes and situations. In the time of the COVID-19 pandemic, it is vital to have a system to analyze the situation, create and implement a new business strategy. You can do this using Hoshin planning. If you decide to use Lean as your strategy, it will be the new framework to make decisions and conduct your business.