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How Hoshin Kanri Aligns Your Key Organizational Systems

by Mark Reich
October 16, 2019

How Hoshin Kanri Aligns Your Key Organizational Systems

by Mark Reich
October 16, 2019 | Comments (5)

Connecting your company's people to the purpose of the organization is an essential responsibility for upper management everywhere. But how do you do it? And how can managers build the culture of an organization into one in which management is purposeful in its approach? These questions are at the core of an upcoming LEI workshop in New York City, to be conducted at the Turner Construction gemba itself. Mark Reich, who will help lead this event, and who has been supporting Turner on its journey, has written about the key themes of this work before. Here is a previous Post that explores the importance for any organization to develop complementary systems (like a skeletal structure and muscle) of improvement.

Recently I spent a week at a prominent organization in the Midwest embroiled in a intense discussion about strategy with 45 of their supply chain group's executives.

The topic was hoshin, commonly known as “strategy alignment.” Our focus was how these executives can work together to strengthen alignment across the organization. Everyone agreed that they currently do not have alignment to corporate goals within their function or across functions (like HR or Product Development). 

How did this misalignment happen? In this particular organization, like so many, executives are measured against their department or function’s own unique goals. This results in conflicting priorities. Conflicting priorities stifle the whole organization's drive to create value for the customer. 

But, what a satisfying week for all. Why do I say this?    

1. Everyone involved (all the way up to the CEO) acknowledged there was problem and was willing to speak openly about solving it.   

2. We all spent one morning deeply analyzing the current process for strategic planning and thinking about ways to improve the process.

3. The group agreed that they need to start by aligning supply chain processes first (starting with self-reflection) before fully engaging other groups like HR or Product Development. 

How did they come to this conclusion?  

I’ve been working with this company for a while now. It's taken a couple years of focused effort to develop a culture of lean thinking on the shopfloor where people can bring issues to light, openly discuss problems and work with their team members to tackle them. As we’ve piloted and implemented Standardized Work and Problem Solving, the problems have begun to come to the surface. 

For example, operators struggled to assemble the outer case of the product due to fitting issues caused by the original design. The company came to realize that the work of all (management, engineering, HR) must focus on how to make the process better for the operator. You make life better for the operator by actively engaging the operator in improving his/her work and in so doing, giving him/her a chance to improve the work of the organization.

How do you build a continuous improvement culture?

First, you need some level of top management engagement and drive. In this case, the CEO recognized the issues of organizational alignment and felt the urgent competitive business need to make operations better through continuous improvement.

Next, work with your team members to think about what goals, objectives, problem solving opportunities the organization needs to align around. Aligning to what problems? You find out what problems to solve by going to the gemba. The work on the shop floor brings to light the problems that are getting in the way of the real value-added work.

Think of hoshin (strategy alignment) like the human body. The body needs a strong skeletal structure (hoshin) to hold it together (just like an organization). But a body can’t move effectively if its muscles (continuous improvement) are not kept active and developed.

A body where muscles are left to atrophy is weak, not adaptive and competitive. However muscles need something to connect to, something that connects them to each other. Individual muscles are to be aligned to a skeleton that provides a common purpose and way of thinking. In this way, continuous improvement and hoshin complement each other if practiced correctly. Continuous improvement strengthens the body; hoshin holds it together.

What happened with the organization I visited in the Midwest? They saw a huge benefit to "exposing" their misalignment. As a next step, we'll organize similar events and discussions in other functions to create a common awareness horizontally across the organization.

To Do:

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Strategy Deployment and Alignment through Hoshin
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5 Comments | Post a Comment
Vallinayagam October 16, 2019
1 Person AGREES with this comment

Thank you to Mr. Mark Reich for above article ....... I am a doctoral student in India ,, doing lean reasearch 

I am also witnessing the same non -alignment issues in Indian SMEs ,,.

 

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Mike October 17, 2019

Thank you Mr. Reich for your insightful article.  Currently, I am employed for a company that shows a facade of Continuous Improvement, however, upon deeper reflection, the company is far from aligned across departmental functions.  This is causing deep and ugly sentiment(s) against each area, and is breeding discontent.  This article is refreshing to see other companies succeed!  I hope the fire is all consuming and successful!

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Doug Cooper October 21, 2019
2 People AGREE with this comment

Mark,

Thank you for a great article about strategic alignment using Hoshin.  I cannot reiterate enough the importance of creating a structure that connects everyone within the organization not only to the overall strategies of the organization but also to the resulting problem solving and continuous improvement efforts that are sparked when the team members closest to the work feel connected to the larger picture. Failure to align everyone in an organization to its strategic plan, creates a short circuit in the system that will prevent the organization as a whole from realizing the full benefit of the hoshin effort.

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Sam Morgan October 22, 2019

Doug,

 

This article, along with what you just said makes so much sense. Makes me wonder how companies that are doing Lean miss the importance of connecting the mission/goals of the company from the CEO down to the front line wokers.  Disconnection to the front line workers leads to so many issues...i like the term you use "short circuit."

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Rob Buijtendijk October 23, 2019
1 Person AGREES with this comment

This a very nice article, thanks for this Mr. Reich. I'm working with a Marine Contractor who I introduced Lean Management to 3 years ago. This year we made a huge step by standardizing the way each business unit and staff department makes their year plans. The method is based on a Hoshin cycle which each department/BU conducts (consists of several steps). The result is a X-matrix which mentions long term goals, short term goals, year plan activities and BU/department KPI's. The year plan activities are being detailed via A3's. The quantitative data is consolidated from all A3's into a portfolio overview which is authorised by senior management before the year start. The overview is monitored on progress by senior management on a quarterly basis. Althought this year was pretty succesfull improvements we already found improvements for the Hoshin cycle 2021. 

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Search Posts:
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