Strategic Vision Reaching The Capillaries

In an organization, everyone might be constantly improving their own work (with a perfect Kaizen mindset). The sales department increases sales, the production department increases speed, and the purchasing department finds cheaper materials. However, if the direction of these improvements is not aligned with the company's strategic vision (for example, if cheap material reduces speed, and speed destroys quality), the inside of the company is highly active, but the organization itself is stagnant.

The management compass that aligns all this local improvement energy (Kaizen) toward the company's main strategic goals like a laser beam is called Hoshin Kanri (Strategy/Policy Deployment).

The Democratization Of Strategy

In traditional companies, "Strategy" is an isolated concept determined by top management during a weekend retreat, while lower levels merely try to hit the numerical targets assigned to them. This "Management By Objectives" style pits departments against each other and prevents the lower echelons from seeing the big picture.

Hoshin Kanri democratizes strategy. Derived from the Japanese words "Hoshin" (Compass/Direction) and "Kanri" (Management/Control), this system breaks down the 3-to-5-year "Breakthrough Objectives" set by top management down to the daily goals of the worker at the lowest level of the organization through a mathematical link.

The Catchball Process

The most distinguishing feature of Hoshin Kanri is the two-way communication process called "Catchball." When top management defines a vision, they do not dictate it to the lower levels as an absolute order. They throw it like a "ball" to the lower level: "Our goal is to reduce production costs by 20% next year. How can your department contribute to this?"

The lower level catches this vision, evaluates their own capacity and the realities on the shop floor, and communicates what they can do and the resources they need back to top management (throwing the ball back). This negotiation process (Catchball) perfectly aligns Top-Down vision with Bottom-Up realities from the field.

Everyone clearly knows how the smallest task they perform (standardized work and Kaizen) serves the True North at the very top of the company. Hoshin Kanri does not merely move the company in one direction; it ensures the entire company moves in that direction together.

Hoshin Kanri And MBO Matrix