Hoshin’ & ‘Kanri’ are Japanese words that can be literally translated as ‘Compass’ & ‘Management’.
Developed by Yoji Akao, the Hoshin Kanri (also known as Direction Management) is a model designed to ensure strategic goals are embedded throughout operational processes, at every level within an organisation. The model creates a process of an effective flow of information such that goals and key performance indicators (KPIs) are communicated from top down and results are reverted from bottom up.
As opposed to other models, e.g. the Balanced Scorecard (BSC), Hoshin Kanri is not limited to any specific type of management system or measurement framework; it can be adapted to existing strategies and plans that an organization may already have in place. It also allows organizations to
The most important element in the Hoshin Kanri is that it guides employees across an organization to think and work strategically. This requires managers to have a clear understanding of both long-term and short-term goals and then to communicate them effectively down the chain of command. According to the model, managers should be able to clearly define:
As well as having a clear understanding and easy access to this information, other important elements include:
Hoshin Kanri may best be applied by small organizations that need a simple yet effective strategy for driving their direction or mid-sized organizations that need to enhance their current strategy.
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