State-of-the-art management and shaping the future: Hoshin Kanri as the framework for work and management processes

Work and management processes

Hoshin Kanri supports the work of managers

The challenges faced by business processes have changed dramatically; the same holds true for work and management processes. They move more quickly, are more versatile, less predictable, multi-layered; in short, keeping track of them is demanding. They pose a real challenge to company executives, owners, founders, and strategists. Hoshin Kanri helps managers - together with their customers - to take a more future-oriented approach towards their work

Management style in the past and today

In the past, for example, success was often dictated by a management style that was more patriarchal or autocratic. Decisions could be made quickly using a top-down approach because information was manageable. Markets and competition seemed to be transparent and the extensive experience of a few individuals seemed to be adequate. Managers and their skills were not challenged and involved.

Today's corporate strategies define the company’s framework conditions and requirements and its future processes. However, management processes and culture are seldom aligned and adapted to the new challenges, nor are they derived from the new business processes, which would be even better. It’s the same old with respect to management. If processes constantly need to align with and be improved based on the customers, what happens to the management processes and what are they aligned with?

This raises a few issues:
- How did managers become managers?
- Along what criteria do managers measure their success or is their success measured?
- What are the management processes and criteria aligned with?

In summary: How can management change the system under which it has successfully evolved and established itself so that the system is also ready for the future? Because the path from the present to tomorrow’s target vision could require a style of management that is considerably different

 

 

Hoshin Kanri - History

Hoshin Kanri, also called Policy Deployment, has long been part of the standard repertoire of good corporate management in Japanese companies, particularly Toyota  (source: Liker, Jeffrey, The Toyota Way. McGraw Hill 2004, p. 261 et seqq.). Hoshin Kanri describes a strategic process for the precise definition of a target state in the future, based on a clear, long-term, and value-driven vision.

Target picture in 20 to 30 years

Hoshin Kanri, also called Policy Deployment, has long been part of the standard repertoire of good corporate management in Japanese companies, particularly Toyota  (source: Liker, Jeffrey, The Toyota Way. McGraw Hill 2004, p. 261 et seqq.). Hoshin Kanri describes a strategic process for the precise definition of a target state in the future, based on a clear, long-term, and value-driven vision.

Japanese culture looks ahead 20 to 30 years, which means that they are shaping a period over the course of which a manager is most likely no longer going to be with the company in question. (source: Hofstede & Hofstede, Culture and Organizations. McGraw Hill 2005, p. 228 et seqq.). The foundation for the next generation is built on the basis of targeted planning, implementation, and reflection. The PDCA* management method, developed by W. E. Deming in the 1950s in Japan, forms an important component of this; it is a way to regularly check for changes and make adjustments (source: Brunner, Franz J.: Japanische Erfolgskonzepte. Hanser 2008, p. 135 et seq.)

Shaping the future of the company and society by Hoshin Kanri

Hoshin Kanri is a deployment process based on value-oriented management, one characterized by constant reflection and optimization. Originally only quality-oriented, the focus of Hoshin Kanri, however, lies in shaping the future of the organization as much as that of  the company, in the broadest sense.

 

Horizontal and vertical integration of managers

In this way, the company is aligned along all hierarchical levels, from employees to the top of the hierarchy, world-wide. In contrast to traditional strategy approaches, a lot of value is placed on the horizontal and vertical involvement of management and employees. Dialogue and reflection are integral to management culture and are practised regularly.

The achievement of the objective by PDCA

As a result of this approach, all managers and employees are aligned along a common goal or goal description. Each and every person works daily towards achieving this goal. PDCA helps ensure that all employees and managers are familiar with the purpose of the new/adapted approach, that they know that they can contribute towards its contents, and that they accept the approach and its contents (source: Rother, Die Kata des Weltmarkttführers. Campus 209, p. 149 et seqq.).

 

Hoshin Kanri – culture

Toyota has made this process a component of its management and corporate culture (source: Osono, Shimizu and Takeuchi: Extreme Toyota. Wiley & Sons 2008, p. 124 et seq.). To understand this, it is essential to consider what is so distinctive about Japanese culture and why.

It's about being a part of the larger goal

In Japan, it is not considered good etiquette to loudly discuss controversial matters while at an official event and to insist on being right. If there is some conflict, the goal is to find the best possible solution for everyone (source: Coulmas, Florian: Das Land der rituellen Harmonie. Campus 1993, p. 1164 et seqq.). As a result of sharing a common understanding of values and aligning objectives along a future objective, managers learn to always challenge themselves and to listen, rather than putting themselves front and centre and gloating about their personal successes. It’s all about being part of a larger objective.

Idzumi Neumärker, a certified expert in Toyota methods and equally comfortable in German and Japanese culture, explains this as follows, “As a manager, I constantly ask myself, ‘What’s best for the company? What will serve the overarching goal? Who can contribute some ideas to this, and how can we work towards improving this daily?’ If somebody radically questions everything that we’ve done as a part of the process to date and constructively suggests something new, then it’s my place to listen to that person.”

 

Generation Y in the value culture

If we take into consideration the current circumstances, Generation Y adopted this quite easily. Particularly under the current situation, it is apparent how significant the common goal is for the individual. Career-driven managers, however, tend more to ask what’s in it for them. They are worried about losing face, want success to be quick, and often have no long-term goals. They and their career come first - the Generation Y of their future. Hoshin Kanri is based on an understanding of values. When everyone contributes, it is possible for the organization, the environment and the company to adopt a state-of-the-art management approach (source: One-on-one conversation, recorded on March 9, 2020).

Hoshin Kanri is about aligning individuals for the community

Those who recognize the added value of this approach in terms of structure, flow, involvement, and consistency and who would like to reap its benefits have to establish their management approach, one that is adapted to it, and, above all else, they need to work on communication.

What is it that makes a difference? It’s not a matter of everyone understanding everything and being involved in the discussions. Naturally, each person is an individual with their approaches and objectives. With Hoshin Kanri, it’s about aligning these individuals so that they understand the collective and generate added value for it (source: Osono, Shimizu and Takeuchi: Extreme Toyota. Wiley & Sons 2008, p. 129 et seqq.).

 

 

IN and ON work process

Hoshin Kanri means first asking questions and reflecting on them with all managers based on the target picture. In order for the manager to be oriented and thus provide guidance, he or she must not only work IM work process, but also work AM work process.

 

Hoshin Kanri – IN working process

If we consider the key elements of Hoshin Kanri from a successful approach, we can extract the following steps:

1 Create transparency of the ACTUAL state, make it measurable
2 Describe the objective
3 Work through the daily path taken to achieve the objective, monitor it and measure the change
4 Take time to reflect on a regular basis
5 Adapt the path to reach the objective if necessary

 

The more transparent the actual situation of a company is, and the clearer the vision is of the future, the sooner managers and employees will be able to strategically align their behaviour (source: Rother, Kudernatsch).

Meaningful and measurable criteria in the ACTUAL state

This means that the work processes in the ACTUAL state are described in detail and in a meaningful way. Meaningful implies that an outside person would have a clear picture of the situation when reading the description and would understand the contexts. These descriptions must contain measurable criteria, so that later steps in the change process are transparent and their effect on results can be verified. An understanding of values and a description of the current management principles are a key component of this.

The TARGET vision of the future

When adapted to the current situation and the conceivable future, a TARGET vision is assumed to encompass a period of 4 years, for example. In the TARGET vision, the perception of various perspectives moves from external to internal; that is, first, the company's outside world is considered, then the customers’ world, then the company, all the way down to individual sectors, departments, right down to the employees. When working through this, two questions are helpful: “What will be different in 4 years, for example (contents)?” and “How much is different as compared to today (numbers - data - facts)?”

Acceptance via discussion and participation

When considered as a visual, this means that the framework was established, and an outline of the future vision is already visible. The contextual design, that is, the colour scheme of the diagram, starts within the management circle and is tested for plausibility and described across all hierarchical levels, right down to the employee level (vertically as well as horizontally). This ensures that everyone supports the objectives to be achieved. Their contents are understood and accepted, even if it's not clear what the path to the solution looks like. Acceptance is achieved through discussion and participation.

Via milestones to the TARGET target

The TARGET vision then precisely describes all relevant processes and challenges that will be experienced and are measurable over 4 years. The actual work starts with this target vision because annual targets are derived from this, so-called “milestones.” The sum of the milestones, in turn, result in the target vision. The operationalization of the milestones occurs through results and process indicators, defined projects, cascading shop floor management and regular result checking. Each day, work is done towards reaching the milestone and, as a whole, the target vision of achieving customer and business improvement.

 

Hoshin Kanri - ON the management process

In the next step, this TARGET vision, in turn, becomes the foundation from which management principles and a shared understanding of values are derived. Here, the following questions can be helpful:

  1. „How should I manage, so that the target vision is successfully implemented?”
  2. “What do I need to be able to do as a manager, so that I am successful with respect to the target vision?”

Let us use the following example for clarification:

In the past, in the last 100 years or so, technology and product knowledge were placed at the top of the priority list in manufacturing companies. The more prominent these skills were, the higher a manager would climb up the hierarchical ladder. We can all think of examples of typical managers who can do it all and who are their own best expert. Their main task was to devote every second to the technology, that is, to work IN** the process. Nowadays, a manufacturing company can no longer survive if technology is its unique selling point; rather, it requires cunning and clever process solutions as well as transforming, adaptable manufacturing strategies that noticeably improve lead time, efficiency, and costs as compared to their competitors. What are managers who evolved through technology to do when they meet up against issues that they are not familiar with and know nothing about? How does a manager deal with having to focus mainly on management and strategy because they had to work ON** the process? This skill cannot be learned in books. Extensive outside support is required to help transform previously “successful” patterns. The transformation starts in the manager’s head and is apparent in how they manage the shaping and organization of the processes based on the target vision

Hoshin Kanri means to ask questions and reflect

Above all else, Hoshin Kanri is about asking questions, and to reflect on these questions with all managers based on the target vision. What is important to understand here is that there are no standard answers, nor is there a repository of prefabricated tasks, topics, skills, etc. to choose from - like a Toyota method toolbox. Every corporate culture, every management circle, has to work through their answers and reflect on them (source: Becker, Helmut: Phänomen Toyota. Springer 2006, S. 129 et seqq.).

It takes courage to create transparency

It takes courage for those who take this path and who truly wish to be target-driven and work selflessly for businesses and companies. Courage to create transparency and clarity and to act consistently. Transformation starts in the head and the heart, and the processes and employees are reflected in their actions.

It takes courage to persevere on this path. It is hard work to manage; there are many dead ends and countless challenges that can be overwhelming. How can a single person find direction, when that person is seeking direction?

From seekers to future shapers

Hoshin Kanri is a way to transform lonely (poor) decision-makers into a team of seekers and, possibly, future shapers. The shared quest searching for answers can happen by asking the following questions:

  1. How do I shape collaboration, so that the required speed and precision are achieved?
  2. What skills do I need so that I can contribute towards a successful target vision? What skills do my employees need?
  3. What abilities do I need?
  4. How do I share information so that the information comes across as intended, and how do I ensure this happens?
  5. How and based on what do I prioritize all activities and how do I synchronize these with other tasks? And most importantly: what can I eliminate?

Every day a little bit better

Those who decide to consistently pursue the Hoshin Kanri path have to be ready to, first and foremost, work on themselves. The best is to take time for reflection on a daily basis. A few minutes will suffice. It helps to admit that not everything works immediately and exactly, that you will make mistakes, and that self-transformation is difficult and painstaking. And to acknowledge that not everyone will understand right away what this new type of management is all about. However, the effort is worth it. Not only work and company results will improve. It is rewarding to see daily improvements in behaviour, steering, and shaping; this is what it means to be part of a learning organization.

 

In summary:

 

  • Everyone is part of the process. Hoshin Kanri cannot be delegated.
  • The approach is driven and steered by management.
  • All departments are integrated.
  • The content-related work is done by the participating managers and employees.
  • The support of a consultant helps in the process of reflecting on the structure and methods.
  • Hoshin Kanri is not for those lacking patience: it can take years until it runs itself.