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Plan and Deploy the Lean Way: Hoshin Kanri

By: Heather Fraizer, Training SpecialistHeather Fraizer

As fall rolls around, many companies start thinking about how they would like their next year to look. We at Training Services are honored that many of them include us in their process. Training Services facilitates and trains on Toyota’s method of strategic planning called Hoshin Kanri. This is roughly translated as “true north” or “direction” and “deployment” or “control.” Often this method is called “strategy deployment.” There are several unique features of this methodology that make it more effective than some more traditional forms of strategic planning.

The primary characteristic of Hoshin Planning that differs from other forms of planning is the A3. A3 simply refers to an 11 by 17-sized sheet of paper. Toyota uses this size paper and a standard organization of it for a variety of purposes including planning, project management, and problem solving. Their thinking is if you cannot explain these things on one sheet of paper, you do not yet understand it well enough.

A typical A3 has a relatively standard format in which metric and reflections are recorded on the left side and the plan looking forward is recorded on the right side. The fundamental purpose of the A3 is two-fold. First, is to prompt systematic thinking as the template is populated. It starts with a review of key performance metrics, including targets and actuals. This is followed by systematic assessment of either last year’s activities including a score of red, yellow, or green and explanation for any yellow or red scores. In some cases, the reflection portion can include a SWOT analysis.

The right side lays out the plan for the coming year in a Gantt chart, which begins with the primary three to five strategic initiatives. We commonly refer to these as “big rocks” coming from the metaphor of filling a jar with big rocks first, then stones, then pebbles, then sand, then water – in order to maximize how much you can fit in the jar, you need to start with the “big rocks first.” Each big rock then has spaces for three to five activities or tasks and a Gantt chart to indicate when you believe each activity should start and end.

The second purpose of putting the strategic plan in an A3 format is to facilitate communication and visual management. Rather than being put in a fancy binder and collecting dust on the bookshelf, the A3 plans are intended to be shared, posted, and continuously referred to throughout the year. Once everyone in the company is accustomed to the layout of the A3, it becomes a kind of communication “currency.” People are very quickly able to understand with complete clarity the plan for the year.

The other feature of Hoshin Planning is alignment of plans from the top organization level down to individual teams. This alignment helps to facilitate effective deployment of the plan. Once the company level or “Mother” A3 or plan is developed, the next layer in the organization creates its own “Baby” A3s that are aligned with the Mother A3. This tiered planning continues until you reach the individual team. Each lower level/group looks at the A3s above it and asks, “What do we need to accomplish to move us closer to these goals?” or “What portion of these goals can we contribute to?” The beauty of this is that every person in the organization contributes to at least one plan directly. The plan that they are directly connected to should be explicitly aligned with the organizational goals. This helps to clarify what each employee should be working on each day and week to move the whole organization closer to its annual goals.

The final feature of Hoshin Planning is something lean practitioners call “Catchball.” This is the process of presenting the proposed A3 to an “interested party” to invite feedback. Examples include presenting the Mother A3 to lower level staff for feedback or presenting a department level A3 to executive leadership. This systematic way of asking for feedback helps to improve communication and alignment within the organization.

As with all lean tools and strategies, adopting and implementing Hoshin planning and thinking is a journey. Many organizations reach out to us for assistance the first time they start any type of strategic planning. Our services include training, facilitation of creating the A3 plans, and coaching throughout the year to help employees learn how to change their behavior to operate in alignment with the plans. Additionally, we have several companies that have been using this form of planning for several years and contract with us simply to facilitate their annual planning meeting, so everyone can fully participate in the session.

You can see Hoshin Planning in action on November 7th at our monthly Lean Learning Consortium (LLC) event. LLC members will visit Britten Studios to see how they have implemented Hoshin Planning. Please contact Lisa Rollin at (231) 995-2005 or to register.

If you would like to learn more about Hoshin Planning facilitation, please contact Vicki Rumbach at (231) 995-2218 or to set up an initial meeting.

Heather Fraizer, Training Specialist
Training Services at Northwestern Michigan College
(231) 995-2200

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