The Hoshin Kanri Management Method

Hoshin Kanri is a Japanese management method, sometimes rendered as “policy deployment” or “direction management”. It serves to define a company’s strategic goals and to ensure those goals are carried out at every level of the organization.

The term “hoshin” means “direction” or “compass needle”, while “kanri” stands for “management” or “control”. Hoshin Kanri was developed in Japan in the 1960s and has gained importance worldwide since.

The Hoshin Kanri model runs through several steps. First the company’s strategic goals are defined, often called “breakthrough objectives”. Those goals should be ambitious but realistic, and they should reflect the long-term direction of the company.

Those goals are then translated into an action plan. The plan covers the concrete measures that have to be taken to reach the strategic goals, with responsibilities and timelines clearly defined.

The next phase carries the action plan into every level of the organization. That happens through communication and dialogue between leaders and staff. Everyone should understand how their work contributes to reaching the strategic goals.

While the action plan is being carried out, regular reviews and adjustments make sure the goals are actually reached. That process is usually called the “PDCA cycle”, which stands for plan, do, check, and act.

Hoshin Kanri encourages a holistic, long-term perspective on running a company. It lets companies define their strategic goals, align activity at every level, and monitor progress continuously. Organizations that use the method improve their performance and strengthen their long-term competitiveness.

Hoshin Kanri and Scrum are two different management approaches used in different contexts. Here is how they can be brought together:

Hoshin Kanri is a method for planning and steering a company strategically. It concentrates on defining company goals, developing action plans, and monitoring execution at every level. It is comparatively hierarchical and aims to point the whole organization in one direction.

Scrum, by contrast, is an agile project management framework used frequently in software development. It rests on iterative, incremental work and emphasizes teamwork, flexibility when requirements change, and continuous improvement. Scrum sits at the operational level and lets teams work together effectively to deliver projects.

Although Hoshin Kanri and Scrum take different approaches, they can be used to complement each other and enable a holistic way of running a company. Here are several ways they work together:

1. Translating Hoshin goals into Scrum action plans: the strategic goals defined in the Hoshin Kanri process can be translated into concrete action plans delivered through Scrum. Those plans are organized as backlogs and sprints to make execution easier.
2. Scrum as the delivery mechanism for Hoshin goals: Scrum teams can be tasked with delivering specific goals from the Hoshin plan. They work in sprints to produce the desired outcomes and give feedback regularly, which speeds delivery up.
3. Continuous improvement through Scrum: Scrum encourages a culture of continuous improvement and lets teams reflect regularly and adjust how they work. The same can be applied to the Hoshin Kanri process, making sure strategic goals get reviewed and adjusted as new insight arrives.

Here too we are dealing with two different methodological approaches that can be used in running a company and in project management.

Kanban is a system for visualizing and steering the flow of work. It rests on the concept of cards that show the progress of tasks or projects. Kanban supports transparency, work-in-progress limits, and continuous improvement.

Hoshin Kanri and Kanban can be connected in several ways:

1. Visualizing Hoshin goals with Kanban: the strategic goals defined in the Hoshin Kanri process can be visualized on Kanban boards. Each goal becomes its own card carrying information such as the objective, the progress, and who owns it, which gives clear visibility and transparency.
2. Linking Hoshin goals to Kanban tasks: the Hoshin goals can be broken down into concrete tasks and activities managed with Kanban. Each goal splits into smaller tasks shown on the cards, which makes tracking and monitoring progress at the operational level easier.
3. Applying Kanban principles to the Hoshin Kanri process: principles such as limiting work in progress and encouraging continuous improvement can be applied to Hoshin Kanri itself. The number of goals pursued at once can be capped, for instance, and regular reviews used to assess progress and make adjustments.

These three approaches can be combined in various ways to enable effective company management and project delivery.

Hoshin Kanri principles can be used to set and monitor strategic goals, for example, while Kanban and Scrum serve as the operational tools for delivery and improvement.

How exactly you apply them depends on the needs and the culture of the company.