Hoshin kanri is a Japanese word for strategy deployment. It literally translates to mean “compass management.” It is the process of introducing and aligning the organization’s True North vision down through managers to the frontline staff. It consists of a series of PDSA cycles complete with consensus building (nemawashi) and playing “catchball” along the way.
The first PDSA cycle is undertaken among leadership. It is here that the concept of True North is defined along with the four to six (typically) high-level focus areas and their metrics.
When looked at as a whole, these few focus areas should completely define your practice. In other words, monitoring the metrics of the focus areas should give you a high-level indication of how the practice is functioning. If these metrics are improving, then the practice should be improving, also. The lower level metrics will compliment these metrics by highlighting the more detailed processes.
This a true PDSA cycle in that all of the stages (Plan, Do, Study, Adjust) are completed and what is eventually chosen is not written in stone. It is an attempt at alignment; high-level standardized work. It is an experiment. If the True North statement turns out to be inadequate in some respect, then leadership simply adjusts and starts a new cycle. A3 reports can follow the process in order to keep stakeholders up to speed.
The second cycle is between leadership (Owners, C-suite, etc.) and supervisors (lead receptionist, lead surgery techs, lead hospital tech, lead groomer, lead boarding tech, etc.). Again, consensus building is of prime interest. This is not the typical management philosophy of “command and control.” It is a typical Lean “bottom-up” endeavor with "catchball" input from leaders. Leadership introduces True North focus areas to the supervisors and, then, mentors and coaches them in order to help them to decide what True North would look like at their level.
and what processes they'll need to monitor in order to help ensure the top focus are metrics are positive. Again, this may be subject to adjustment after a period of experimentation. A3 reports are kept current.
The third cycle is between the lead staff and the frontline workers. It proceeds similarly to the cycle just described.
So, what we now have is is an overall alignment of the practice from leadership through lead techs down to frontline staff. How that looks and what metrics are monitored will vary based on the the different areas of the practice.
For example, we might have a True North focus area of "Processes Improvement." This applies to everyone. However, at the lead and frontline level, the metrics are different between, for instance, receptionists or exam techs or surgery techs, etc. Their metrics will be determined by what that focus area means to them from their perspectives.
If all of this is successful, then everyone, from leadership to frontline staff, should have a hold on the same rope, on the same end, pulling in the same direction and at the same time...and winning!
Mark Graban's 4 Hypotheses of Strategy Deployment
Mark has described strategy deployment as a series of four hypotheses in a series of two blog posts - here and here:
1. If we focus our improvement efforts and close performance gaps in our four or five True North areas, we will therefore perform well as an organization, this year and into the future.
For example, if we choose Client education, Staff development, Community involvement, Fiscal responsibility and Hospital improvement as our five True North focus areas, then we posit that if we are successful in these areas, the practice as a whole will be successful. In other words, these five areas are the best five areas to monitor in order for the overall practice to be successful.
Remember, this is your True North statement with your focus areas for your practice with your staff and clients.
Is this the right True North? We don't know. But, we will start with these and experiment. If it is determined these are not the best five, we can adjust them and try again. Just like treating our patients. If one diagnosis or treatment is not working, then we “back up" and try again
What are the four or five focus areas that make up your True North and that, if successful, will results in a high probability that the hospital/clinic will be successful overall.
2. If we can improve and close our performance gaps in these key performance indicators, we will satisfy our need for improvement in our key focus areas, and therefore will be successful as an organization, overall.
What are the metrics (two or three per focus area) that will show that our focus areas are heading in the right direction (which, in turn, indicates that the whole practice is headed in the right direction).
Are these the right metrics? We don't know, but we'll try them for a while and then evaluate our decision. If they are the right metrics, why? If they aren’t, why not? It is important to deeply understand both of these scenarios in order to learn.
Are these metrics still relevant to your organization and staff?
3. If we actually execute and complete these top X initiatives, projects, events and A3s, then we will make the greatest strides toward closing the key focus areas (Hypothesis 2) and therefore we'll be more successful in our strategy.
Not everything can be a high priority. It is easy to get sidetracked and pulled off task. You have already prioritized in the last hypothesis. Stay focused. Close the performance gaps in these focus areas in order to get the greatest gains, then you can start over with other focus areas. Err on the side of too few initiatives (so you can actually get something accomplished), rather than too many (and none of them get done or done right). With experience and reflection, you will get more accurate in choosing the number of areas you can tackle without the whole team becoming overburdened.
4. We actually have the organizational capacity to complete these top X priorities in a year or a given timeframe (and with the right quality).
Do we have the capacity in terms of personnel, resources and capital to actually accomplish these priorities in a timely fashion? If not, then either we obtain them or deselect this priority in favor of another one that can be accomplished at this time.
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