Hoshin Kanri

How to run it

1. 1

   Pre-work (before the workshop): collect the organisation's current strategy documents, previous year's metrics, and any OKRs or balanced scorecard data. Brief senior participants on Hoshin philosophy, especially the distinction between breakthrough objectives (multi-year, transformational) and annual priorities (this year's focus).

2. 2

   Orient the group to the X-Matrix structure (20 min): walk through the four arms and explain the relationship-coding system. Breakthrough Objectives go at the south, Annual Priorities at the west, Improvement Projects at the north, Targets at the east. Relationships between adjacent arms are marked in the triangular relationship spaces between them.

3. 3

   Define Breakthrough Objectives (30 min): facilitate a discussion on the 3–5 year strategic direction. What must be fundamentally different about this organisation in 3–5 years? Push for genuinely transformational statements — not incremental improvements. Capture 3–5 agreed breakthrough objectives.

4. 4

   Derive Annual Priorities (30 min): given the breakthrough objectives, ask 'What are the 3–5 most critical things we must accomplish THIS year to make progress toward those breakthroughs?' These are annual priorities — not all strategic work, just the vital few.

5. 5

   Identify Improvement Projects (20 min): for each annual priority, identify the specific projects, initiatives, or kaizen events that will deliver it. These should be concrete, bounded work packages with owners.

6. 6

   Define Metrics and Targets (20 min): for each annual priority, identify leading and lagging measures that will confirm progress. Assign specific numerical targets and time horizons.

7. 7

   Map the relationships: for each pair of adjacent elements, mark the relationship strength — filled circle (strong relationship), open circle (some relationship), triangle (possible relationship), blank (no relationship). Scrutinise the blanks: any annual priority with no improvement project driving it is orphaned. Any improvement project with no measurable outcome is unfocused.

8. 8

   Review for balance and coherence: step back from the completed matrix. Is the organisation taking on too much? Are the relationships coherent? Flag any structural problems and iterate.

9. 9

   Plan the catchball process: agree on how the matrix will be shared with teams one level down and what the negotiation and response process will look like before final commitments are made.

Tips

• Hoshin Kanri fails most often because organisations fill the matrix in a day and skip catchball. The value of the method is the dialogue, not the document.

• Limit breakthrough objectives to 3–5 maximum. More than that signals an inability to prioritise, which is the core problem Hoshin is designed to solve.

• Annual priorities must be genuinely chosen from the full backlog of strategic work — not everything. If every strategic activity is labelled a priority, none are.

• The relationship matrix is diagnostic: many blanks mean strategy and execution are disconnected. Strong relationships everywhere means the matrix is just cataloguing what already happens, not focusing on what must change.

• Pair Hoshin with a regular monthly review cadence (often called the Hoshin Review). The matrix is useless without a structured review and course-correction process.

Variations

For smaller organisations or teams, a simplified two-arm version (Objectives → Projects → Metrics) can replace the full X-Matrix. For agile environments, Hoshin principles can be applied at a team level with OKRs substituting for the formal matrix structure. Toyota applies Hoshin at every level from the CEO to the shop floor — in knowledge work organisations, three levels (executive, department, team) is typically sufficient.