Policy Deployment: aka Strategy Alignment, aka Hoshin Kanri (Appendix 2 to the Eletter “Lead from the Front, Lead from Behind”)
If we think of the “practice of leadership” as a set of observable behaviors, it’s useful to think how leaders can actualize the thought process of plan-do-check-act (PDCA). At the higher levels of organizations, the common lean process to do that is often referred to as “policy deployment.” Policy deployment aka hoshin kanri, aka strategy alignment is a process that works towards various ends: PDCA at broad organizational levels and mid-to-longer term time horizons, engagement of all levels of the org in setting strategy and plans, focusing attention on what’s important for the year. What’s the real target condition and do we know if we’re making progress in getting there? What evidence of progress should we look for?
Many people emphasize highly detailed “measurable,” often resulting in a workable Key Performance Indicator (KPI) management process. That’s not necessarily a bad thing, but KPI management is NOT hoshin kanri. More than anything, hoshin kanri (HK) is a means of connecting the macro with the micro. This enables you to see the highest levels of organizational objectives being worked at the micro levels, and to understand corporate front-line (micro-level) capabilities, creativity and struggles at the highest levels. That’s the story of NUMMI Group Leader Hyodo.
What’s the most common misconception out there about HK? That it’s some top-down “deployment” process akin to MBO – Management By Objectives. In practice, in a mature HK organization, what you see is a dynamic top-down, bottom-up, middle-out thing of beauty that meshes problems that are technical and social in nature with solutions that are … both social and technical. That’s where Hyodo was determined to take NUMMI.
PDCA occurs at fractals: quick cycle PDCA to run fast learning experiments at the front lines along with macro levels of enterprise-wide organizational learning. At the enterprise level, NUMMI had worked steadily for several years to improve its overall new product launch process. The immediate problems that Hyodo that was focused on were problem-solving capability itself, along with job design skills.
NUMMI had initiated some training to enhance standardized work design and problem-solving skills, but Hyodo saw that the training was too removed from the gemba. Hence his countermeasure – three birds with one stone: (1) teach job design and deep problem-solving skills to the production launch team members, (2) teach the human resource representatives those same skills so they could help infuse them throughout the organization, and (3) cause functional leaders at the highest levels of the organization to communicate and reach alignment by bringing gemba into what could have remained an abstract debate. And it worked, on both levels. A launch ramp-up in the early 1990s had taken 77 days versus the planned 60 while a launch two years later came in at only 48 days. More importantly, ergonomic issues which had been major concerns during previous launches improved greatly through improved skills at job design and problem-solving.
Hoshin kanri is most often translated and characterized as “policy deployment,” a relatively straightforward prioritization process in which the desires and objectives of senior management (the company) are “deployed” throughout the organization (the employees). Such “policy deployment” may be a good first step, but mature hoshin kanri such as Hyodo was exercising was a much more dynamic process, with lower levels of the organization not just executing strategy but formulating it! Alignment around breakthrough objectives can then be more than slogans or plans that are never accomplished. As lean organizations mature, policy deployment should evolve into hoshin kanri, or “strategy alignment.”
Whatever we call it, hoshin kanri, like leadership, does not exist as something isolated and abstract. Like anything that is essential to lean, one must understand how it works from the very detailed, elemental levels of the real work of the business. And like lean leadership, it is to be exercised at every level, every day, by everyone.
Jikku Mohan; Mark Reich