Milliken’s Approach to the Hoshin Kanri Process: Driving Purpose and Long-Term Success

What is the Hoshin Kanri Process?

The Hoshin Kanri process, also known as Hoshin planning, is designed around the idea that you need to achieve short term objectives and reach long term goals. Short-term and long-term goals must be aligned. The seven key steps of Hoshin Kanri help organizations track performance and ensure that each level of deployment is aligned with the strategic objectives:

1. Establish Organizational Vision – Define the long-term vision and strategic direction for the organization.
2. Develop Breakthrough Objectives – Set high-level, long-term goals (typically 3-5 years) that drive significant improvements.
3. Set Annual Objectives – Break down breakthrough objectives into short-term, annual goals that are measurable and achievable.
4. Deploy Objectives Throughout the Organization – Cascade the goals down to every department and team to ensure alignment.
5. Implement the Plan – Execute the strategy at every level, with each team and individual contributing toward the objectives.
6. Track Performance with Regular Reviews – Monitor progress through frequent reviews and adjust strategies if necessary to stay on course.
7. Reflect and Improve – At the end of each cycle, assess what worked and what didn’t, and incorporate lessons learned into the next planning cycle.

Hoshin goals are often thought of as breakthroughs; however, these breakthrough goals can be supplemented with incremental targets. Organizations can struggle to know where to start when implementing Hoshin Kanri, so let’s start at the very beginning with Purpose, Vision and Values.

How does Hoshin Kanri Strategy Deployment Begin?

The act of deploying a strategy throughout an organization must always start with the Purpose, Vision and Values of the organization. At Milliken we know that our work has the power to help save lives, to make the world a better place, and to create a healthier future for generations. In a world that never stops challenging us, our PURPOSE and VALUES have remained constant. Our Purpose motivates us and ignites our curiosity. Our Values guide our culture and inform our every decision. When the purpose of an organization and its employees are aligned, employee satisfaction is significantly higher. Milliken’s purpose is clear; Together we strive to positively impact the world around us for generations to come. Let’s dissect the Milliken purpose, (i) Together we – this means that our purpose involves every single associate within the organization. Its inclusive, all associates regardless of their role, location, or any other human factor have a role to play. (ii) Positively Impact; this what we do, our products should make the world a better place and our daily work enables this (a better place) to happen and (iii) Generations to come; our legacy, why we do, what we do - for the next generation. To leave behind a better world than the one we inherited. A study published by Harvard Business Review found when companies had a clearly articulated purpose which was widely understood in the organization they had better growth as compared with companies which hadn’t developed or leveraged their purpose. Specifically, 52% of purpose-driven companies experienced over 10% growth compared with 42% of non-purpose-driven companies. Purpose-driven companies benefitted from greater global expansion (66% compared with 48%), more product launches (56% compared with 33%) and success in major transformation efforts (52% compared with 16%). Milliken’s Purpose and Values have remained constant through its entire history.

Our values are Integrity, Excellence, Innovation, Sustainability, and People. Each associate lives out these values every day in the work that they do, and we recognize one another based on these values through our recognition system which is a key component of our daily management systems.

our Purpose and Values

Together we strive to positively impact the world around us for generations to come.

 

Integrity

Do the right thing

 

Excellence

Set a high bar for performance

 

Innovation

Reward big thinking

 

Sustainability

Create a healthy future

 

People

Empower exceptional teams

Whilst the Purpose and Values remain constant, the vison, may and sometimes must change depending on circumstances. These changes are infrequent, but the organization must be agile in an ever-evolving world in which we operate. A clear vision provides a framework for decision-making within an organization. It helps to ensure that decisions are aligned with the organization's goals and values, and that they contribute towards the achievement of its long-term vision. A vision statements play three critical roles: (1) communicate the purpose of the organization to stakeholders, (2) inform strategy development, and (3) develop the measurable goals and objectives set to determine whether the strategy is on track, whether the strategy is/has been successful.

Hoshin Kanri Goal Setting for Long-Term Success

Establishing the long-term goals (typically 3-5 years) provides the ‘stepping stones’ that take us closer to our vision. In addition to long-term goals, setting annual objectives is crucial for ensuring that each business within Milliken stays on track and makes consistent progress towards its vision. Each business within Milliken will identify these and these will form the basis of the business plan. Senior leaders within these businesses will come together to establish the goals using a technique called a SWOT analysis. This is where Performance Solutions by Milliken will partner with an organization (external to Milliken) to help them master the goal setting process. The SWOT analysis focuses on internal and external drivers which are categorized as (S) Strengths (W) Weaknesses (O) Opportunities and (T) Threats.

Examples of groups within a team compiling their SWOT analysis

Benefits of a SWOT analysis linked to the goals that you have identified are:

• Understanding your and your competitors’ competitive advantages & disadvantages
• Understanding why some aspects of your organization are struggling and how things could be improved
• Prioritizing activities and actions

How to Use the Hoshin Kanri X-Matrix for Breakthrough Objective Deployment

After completing a SWOT analysis, the organization should then look to cascade goals and transfer the outputs onto a formal document that can be used at a series of levels within the organization. These can be a variant of a Y-Chart, X-Matrix OGSM Chart or other strategic planning process tool. This helps with gap analysis but also provides a strategic summary.

X Matrix Template

The next step is to identify the short terms goals that are enablers to achieve the long-term goals. These may be 12-24 months in length, but most organizations will work towards annual goals. These goals and objectives need to be tangible; they must be measurable. Every objective must have at least one measure and vice versa every measure must link to an objective, if not – then why are we measuring it? The next step is to establish where to focus – what are the improvement opportunities. These improvement opportunities can be allocated to individuals and teams (with leaders).

Cascading Hoshin Kanri Goals Throughout the Organization

Once the top-level strategic planning process tool has been populated it is now time to cascade this document down through the levels of the organization to each business, site, or department. What do these functions need to achieve to make the short-terms goals a success? So, subsequently the organization meets the long-term goals and enables the vision. Depending on the levels of deployment and the shape and size of the organization the use of the selected strategic planning process tools will differ. Some organizations may have multi-level X-matrixes whilst others will build an annual plan. The point of cascading the strategy is so that every associate understands their role in delivering the short-term goals and how that links to the bigger picture. So, for example, an associate operating a piece of equipment understands that their productivity measure is linked to the growth aspirations of the business, or that their quality assurance metric is linked to the supplier of choice (customer focused) business goal.

Using Bowler Charts to Track Hoshin Kanri Performance

Action plans are required for each level of deployment. These actions are a result of the review and response process for the indicators that measure the performance at each level of deployment. These documents are often referred to Bowler Charts, these dashboards are highly visible and provide an ‘at a glance’ status of each key measurement versus the target period by period and with a named owner. Without these review and response routines, the process will likely be less successful. These routines should be a component of standard work, whether that is for a leader with their leaders standard work or standard work that is performed at other levels within the organization.

The Benefits of Hoshin Kanri

Implementing Hoshin Kanri offers numerous benefits that can significantly enhance an organization’s strategic planning and execution. One of the primary advantages is the alignment of strategic objectives across all levels of the organization. By cascading goals from senior management down to individual associates, Hoshin Kanri ensures that everyone is working towards the same vision and long-term goals.

Another key benefit is improved communication and collaboration. The Hoshin Kanri planning process encourages open dialogue and feedback, fostering a culture of transparency and shared responsibility. This collaborative approach helps to break down silos and ensures that all departments are aligned and working together towards common objectives.

Hoshin Kanri also enhances resource allocation and prioritization. By identifying and focusing on the most critical breakthrough goals, organizations can allocate their resources more effectively, ensuring that efforts are concentrated on high-impact areas. This strategic focus helps to drive significant improvements and achieve measurable results.

In addition, Hoshin Kanri promotes continuous improvement by integrating regular review and response routines. These routines enable organizations to track progress, identify areas for improvement, and make necessary adjustments to stay on course. This iterative process helps to maintain momentum and drive sustained success over the long term.

Overall, the benefits of Hoshin Kanri extend beyond immediate gains, providing a robust framework for achieving strategic goals, fostering a culture of continuous improvement, and securing a competitive advantage in the marketplace.

Milliken’s Commitment to Success Through the Hoshin Kanri Process

In conclusion - people perform best when they have a purpose. When they understand not just what to do – but why it's important. The greatest benefit of Hoshin Kanri is that it formally solidifies that purpose, providing focus and drive towards specific and important goals. the Hoshin Kanri framework is instrumental in setting achievable goals that propel organizations towards sustained success and competitive advantage. To implement Hoshin Kanri effectively, it is essential to follow a structured approach that aligns strategic goals with execution across all levels of the organization. If you feel that Performance Solutions by Milliken could help you with Hoshin Kanri or any other strategic ambitions, then please get in touch with us.