How to use the Hoshin Kanri method for strategic planning

Quick note: We've included a graphic PDF template below to help you visualize the Hoshin Kanri Method as a strategic planning option. And while you can use Asana to follow this method, we do not have a current feature or in-product template for this one.

Do you remember when you were younger and you were given a connect-the-dots activity? At first, the page looks like a sea of random dots on the page. But as you connect the dots together, a larger picture begins to form. 

While the Hoshin Kanri method is slightly more complex than a coloring book puzzle, the same philosophy applies. With the Hoshin Kanri method, you can connect the dots between your daily work and your company’s larger strategic objectives in order to see the bigger picture. Here’s how.

What is Hoshin Kanri?

Hoshin Kanri is a strategic planning tool that businesses use to connect company-wide objectives to the day-to-day work of individual contributors. In Japanese, the word “hoshin” translates to “policy” or “direction.” The word “kanri” translates to “management.” The phrase all together roughly translates to, “How do we manage our direction?”

The goal of Hoshin Kanri is for everyone in the company to push towards the same goal at the same time. This happens through a flow of feedback called the Hoshin Kanri Catchball. Here’s how it works:

• The strategic team pushes strategy down to the individual contributor level, providing information and context about how the strategy connects to their daily work.

• Individual contributors then enact that strategy.

• Finally, the rate at which individual contributors produce is provided back up to the strategic team to help them analyze and adjust strategy.

In that way,  Hoshin Kanri isn’t a one-off method of thinking, but rather a continuous cycle of planning and improvement.  

When to use the Hoshin Kanri method

Hoshin Kanri is a good method to use if you’re implementing a company-wide strategy, or if you’re looking to unify your entire team to achieve the same overarching objective. However, it does require a lot of time to plan and implement. 

If you’re looking for a simpler way to align your strategic priorities, try starting with a strategic plan instead. But whether you’re using a strategic plan or a Hoshin Kanri Catchball, make sure you’re always giving your team members the context, clarity, and connection they need to succeed.

The Hoshin Kanri matrix

The Hoshin Kanri matrix (or X-matrix) is a visual representation of the Hoshin Kanri planning process. Teams use it to help keep track of how goals and objectives connect to each other when implementing the Hoshin Kanri method. The goal of the matrix is to identify who is working on what initiative, how strategies connect to initiatives, and how they map back to long-term goals.

How to read a Hoshin Kanri matrix

If you’re using the Hoshin Kanri methodology, you should also be using the Hoshin Kanri matrix. The Hoshin Kanri matrix is an extremely useful tool for individuals to understand how their specific work relates back up to longer-term objectives. When team members don’t have clear goals or understand how their work links back to larger strategic objectives, they may accidentally spend time and resources on unnecessary work. Instead, connecting your work to goals can help your team move in one direction. 

Despite how complex a Hoshin Kanri matrix looks, reading it is actually quite simple. The chart divides information into five main sections in a compass pattern:

• Long-term strategic objectives go in the southern section.

• Annual objectives go in the western section.

• Improvement initiatives go in the northern section.

• Improvement targets or KPIs go in the eastern section.

• Resources go in the far east section.

When reading a Hoshin Kanri matrix, start at the bottom and work your way clockwise. In each corner of the matrix you’ll find small dots to represent how each initiative or objective connects back to each other. The resources on the far right identify which team member is responsible for which improvement initiative and KPI.

Here’s an example. In the above Hoshin Kanri matrix, we’d start in the bottom “Strategic Objectives” section. Following the dots on the left, we can see that the strategic objective of “Become a global company” links to the annual objective “Create new product feature that tailors to international market.” Tracing that column up to the upper left-hand corner, we can see that the annual objective connects to the two improvement initiatives of “Optimize customer success program to tailor to customer needs” and “Conduct international market research.” You can continue this same process to connect KPIs and resources and see how everything pairs together.

The 7 steps of Hoshin Kanri planning

There are seven key steps to take when starting a Hoshin Kanri planning strategy. If you already have a strategic plan completed, you can skip steps one through four. Here’s how to start.

1. Establish your organizational vision

Identify your organization’s key mission, vision, and values. This is commonly done in the form of a vision statement. A vision statement should support your team’s long-term goals and connect them back to your company’s mission statement. 

During the traditional strategic planning process, it’s important to clarify your organizational vision in order to make sure your long-term goals are aligned. However, the Hoshin Kanri method takes it a step further by helping visualize how individual work affects your company’s long-term goals and, by extension, your organizational vision.

2. Develop strategic objectives

Strategic objectives—sometimes called breakthrough objectives—are the changes your organization needs to make in order to achieve the vision you defined in step one. These objectives form the pillar of your strategy. You don’t want to make too many objectives—aim for about three or four that are longer-term and take three to five years to achieve. Having too many objectives can split your team’s focus, making it more challenging to achieve your strategic goals. Once you determine your strategic objectives, add them to your Hoshin Kanri matrix in the far bottom of the chart.

3. Develop annual objectives

Once you’ve identified the main breakthrough objectives you want to accomplish, focus on setting the annual goals you want your team to achieve. Because a strategic objective takes about three to five years to achieve, breaking it down into smaller short-term goals makes the large goal feel more manageable. 

Aim to set anywhere from two to 10 annual goals. Keep in mind that these goals should be SMART goals, meaning they’re specific, measurable, achievable, realistic, and time-bound. To track your team’s progress towards these goals, you should also decide on a key business success metric to use as a key performance indicator (KPI) for each objective. On the Hoshin Kanri matrix, this is the section on the left-hand side of the chart.

4. Cascade goals throughout the organization

Before you can begin executing on work, you need to break down your annual goals even further into smaller, more actionable tasks. To do this, segment your relatively broad yearly objectives into actionable initiatives that are specific to each team or department. As a result, your entire team will not only understand the big-picture goal—that is, your annual and strategic objectives—but also the smaller goals they will work towards in order to help the company hit its larger goals. 

During this step, your team will begin to understand the work necessary to accomplish your yearly objectives. These improvement initiatives are the top section of a Hoshin Kanri matrix. Each team or team member’s matrix may look a little bit different since everyone is responsible for a different part of the initiative.

5. Execute annual objectives

Finally, you’re ready to implement. Because of the way you split your annual objectives into smaller goals, different teams will have different strategies. But ultimately, all of these strategies come together to ensure your organization is able to meet your annual objectives. 

The exact way you execute against your initiatives is up to you. Some ways you can do this is by using continuous improvement strategies such as the Six Sigma DMAIC model, the Kaizen methodology, or the PDCA cycle. 

As production begins and results start to pour in, feedback will begin flowing from the production floor up to the strategic team.

6. Implement monthly reviews

Too often, goals and strategy information live in stagnant documents like spreadsheets or slide decks, while your team’s day-to-day work lives elsewhere. To connect the dots, start by implementing a monthly review system to ensure that everyone is on the same page. Check in on your goals and the work being done towards them to ensure the two are aligned.

The Hoshin Kanri method makes this even easier. Once you begin doing your yearly work in step five, the results of production will begin flowing back up to your strategic leadership team. Using this information, take a step back from the day-to-day work and look at how you’re currently maintaining progress. What’s going well? What can be improved? 

A project management tool can make this process even easier. For example, Asana lets you create and track goals in the same place your team stores and tracks their day-to-day work. You can also set up automated reminders that prompt you to update and review your goals on a monthly basis.

7. Conduct annual reviews

Once you’ve completed a full 12 months of progress, it’s time to look at everything your team has accomplished. Were you able to make your goals? If you didn’t achieve your goals, what could be changed next time? What are things you learned this year that you can implement for the next project cycle? 

Once you determine lessons learned from the previous year, you can start the process over and set new goals for the coming year. Going forward, you can shift tactics to address past roadblocks or pain points—then start the Hoshin Kanri catchball flow all over again.

Pros and cons of the Hoshin Kanri methodology

As with every strategy, there are both benefits and drawbacks to the Hoshin Kanri method. Here’s what it does well and things you should consider when implementing this strategy.

Pros of the Hoshin Kanri methodology

• The Hoshin Kanri matrix is easy to read. At first glance, the Hoshin Kanri matrix looks complex. But when you get the hang of it, it’s actually a simple and effective way to manage responsibilities and understand how initiatives connect back to higher company objectives.

• Hoshin Kanri clearly breaks down a big-picture strategy. When teams are discussing big-picture strategy, the Hoshin Kanri matrix is an easy way to look at smaller initiatives and how they can affect larger company goals. 

• Know who is responsible for what. Managers can quickly identify who is responsible for which initiatives by using the Hoshin Kanri matrix. This helps people stay accountable for the goals they’re responsible for.

Cons of the Hoshin Kanri methodology

• The Hoshin Kanri matrix is only helpful with minimal information. The more information you add to the matrix, the less legible the graphic becomes. If you’re building more complex dependencies and responsibilities, the Hoshin Kanri matrix might not be the best method for your team. If you want to get more specific with dependencies, try using the critical path method (CPM). 

• Hoshin Kanri only narrows strategy down to four layers of specificity. If your team wants to break up goals and strategies into anything more than four layers, the Hoshin Kanri method won’t work. If you want to break a project down into more sections, try the waterfall methodology instead.

• The Hoshin Kanri matrix is static. If strategies and responsibilities change at a drastic level, the Hoshin Kanri matrix is challenging to change. If you anticipate bigger changes to happen within a project, it may be best to use an Agile methodology.

Bring your Hoshin Kanri matrix to life with work management tools

While the Hoshin Kanri matrix is a good static reference to have, having a tool that tracks objectives in real-time is even better. Utilizing a work management tool like Asana can align your team towards one common mission. When teams clearly understand how their work contributes to the company as a whole, they’re empowered to deliver measurable results.