Outcomes of Annual Hoshin Planning Process

Outcomes of Policy Deployment

Hoshin Kanri (Policy Deployment), a Japanese strategy and execution approach has been used by many organizations as a framework for their strategic planning. Hoshin Planning can be considered as a the process of setting annual goals for an organization or function and deploying them down the line.

In general, Hoshin Planning covers defining 3 year organizational goals, their quantification and ownership, organizational strategies to accomplish them, strategic projects (aka Hoshins) at organizational level that are helpful to accomplish goals. Many organizations also want to cascade their organizational hoshin plan to functional level.

If you are considering a Hoshin Planning session, following are the tangible deliverable that you can expect out of this exercise:

  • Policy Deployment Document (CEO Level): Also called as X-matrix, this one page document strategic plan of any organization that includes goals, strategies, strategic projects and owners. It is also known as PD1 document in many organizations (representing level-1). Review my articles What is Hoshin Kanri (Policy Deployment) X-matrix? and Demystifying Hoshin Kanri (Policy Deployment) X-Matrix to know more about its elements and construction.
  • Policy Deployment Document (Functional Heads Level) : This is again a one page X-matix document that has been cascaded from the CEO level document. It is also known as PD2 document. There are different ways of cascading strategic plans from organizational level to functional level. Usually each function has a separate PD2 document. The purpose of this document is to act as a strategic plan for the function. Through this document the functional head not only delivers his department’s commitment to organizational goals but also set functional goals and further cascade them to her teams. In addition to explicitly stating the functional goals, this document is also helpful in resource assignment and utilization.
  • Project Management Document : Also known as PM1 in some organizations, it is nothing but a project management document for each Hoshin (strategic project/initiative). It has details of the tasks, responsible person, duration and progress status. This document is owned and updated by the respective hoshin leader. Further, if there are specific strategic initiatives/projects at functional level in addition to organizational strategic projects then, then the Project Management Documents for those functional projects are called as PM2.

There is a lot of rigor that goes into creating these documents. Leadership involvement, ownership and detailing play a critical role in the effectiveness of these outcomes of annual hoshin planning process. Thus I should warn that just completing this documents for the sake of doing so isn’t Hoshin Kanri (Policy Deployment)!

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