Hoshin Planning: The Future Of Strategic Management
Since the 1960s, Japan’s leading automotive manufacturer Toyota has been using Hoshin planning to drive their business from one year to another. This goal setting and management tool was just recently adopted by companies around the world and the interest seems to be only growing. Even if the interest has increased, the adoption rate is relatively slow due to several reasons. Many companies do not have the right internal structure that could support the Hoshin model. The early adopters managed to stay ahead of their competition and the number of companies that started to adjust their management system to embrace the Hoshin model increases constantly. In current use, the model focuses on several aspects of a business.
The top management team needs to assess the state of the business and define a multi-year strategy based on a vision and a plan. During this thought process, the annual objective needs to be defined. With the aid of careful planning, the target needs to be monitored each year and develop new strategies to achieve it whenever the performance falls off behind. Metrics will play an important role. Setting the annual objectives needs to be followed up by monthly reports and performance charts that will track the progress. At the end of the year, all the data needs to be compiled into a single report that will provide vision over the progress of the past year and if the goal targets have been achieved. With each passing year, the goals and metrics will provide enough data to help managers continuously improve the processes and increase the goals. It is also a good opportunity to monitor employee skills in relationship with performance and plan trainings to increase productivity. Hoshin planning offers a better overall picture of the state of the business especially for the management team. It becomes even more efficient when combined with regular meetings that focus on developing action plans in correlation with the performance metrics.












