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Tuesday, January 17, 2012

Sharpen Your Focus by Selecting the Vital Few Breakthrough Objectives with Hoshin Kanri

In any given year, there are many opportunities to advance toward the vision. While all contributions are welcome, the purpose of Hoshin Kanri is to select those annual objectives that will give the organization the greatest possible advantage.

To this end Hoshin Kanri recognizes and distinguishes two kinds of annual contributions:

1. Incremental improvements to existing processes or methods (“kaizen”), and
2. Activities aimed at making dramatic improvements in strategically vital business systems and processes (“kaikaku”).

Incremental, non-breakthrough activities improve the health of the key business processes. However, some performance gaps are large and cannot be closed using an incremental approach to improvement. A plan to achieve the vision must include both sets of activities.

The Hoshin Kanri process identifies and concentrates resources on the vital few stretch achievements that support the vision. It separates those performance issues that require dramatic improvement from the many incremental improvements that can achieved at the local level. All the changes that the leadership believes to be incremental are skimmed out of the strategic plan and addressed through quality in daily work. The remaining category of contribution – the vital few breakthrough achievements – becomes the heart of the Hoshin Kanri process.

Does this mean that managing strategic breakthroughs is more important than managing daily work? Not at all! Breakthrough activities and daily maintenance are necessary parallel processes to ensure the health of the business. They both need to be managed in a disciplined way. Each manager needs to ensure that the basic processes that support the business are healthy. At the same time, each manager needs to ensure that the fundamental changes and competencies necessary for the long term health of the organization are being implemented.

Annual objectives can either work toward the vision or confound the process. Linking annual objectives with the strategic intent brings focus and control to the change process.

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