Issue 20 – Feb 2015


Issue 20 • Feb 2015

Hoshin Kanri and the X- Matrix

This newsletter will touch briefly on Hoshin Kanri, also known as Policy Deployment, or Strategy Deployment. This is the method devised to capture and cement strategic goals as well as insights about the future and develop the means to bring these into reality. In its simplest terms, Hoshin Kanri converts strategy to action. And it does so in a manner that creates horizontal and vertical alignment throughout an organization. Most organizations have a strategic plan, few execute those plans well. Often strategic plans are silo driven and are contrived of tactics without meaningful measures. The tool that assists in deploying corporate strategy is the x-matrix.


The X- matrix delivers the entire strategic plan on one page and contains five elements. The 3-5 year breakthrough objectives based on true north measures, The annual objective supporting the long term vision, the top improvement activities supported by data, the measures of success, and primary and secondary people responsible to deliver the results. This ensures horizontal alignment of objectives.

For those with direct responsibility, the top level priorities are then cascaded down to their direct reports and secondary improvement activities are created that along with the top level improvement priorities. This cascading can do down through the various layers of the organization all the way to line staff. Any improvement that occurs will then align directly with the strategy of the organization. In our consulting work we often see improvements that while well done, have nothing to do with the vision, mission, strategy, and measurement of the organization.

Results and the process to get those results are monitored and reviewed monthly through a formal operational review. The next article will discuss this topic in more detail.

The Operational Review

Measurement is tracked monthly on a balanced scorecard known as a bowling chart. Performance against plan is documented and corrective action is taken when performance deviates from expected.


The operational review occurs at each level of the organization. Each manager or leader with an x-matrix will review their results, plans, and process to deliver results with the output of these reviews rolling up to the corporate level review.

Unlike operational reviews today, which are 80% financial and 20% other business, a policy deployment operational review covers the following suite of activities:

  • Financial Review – 15%
  • Policy Deployment plans, actions, and results – 60%
  • Other business – (IT, new product development, construction, etc.) - 15%
  • People Issues – 10%

If a policy deployment target is missed for the previous month, formal corrective actions are taken to ensure the next month will be back on plan. The actions are supported with data to ensure the underlying assumptions are valid.

The top level operational review is typically an 8 hour meeting. The process to deliver results using the scientific method and experimentation are just as important as the results themselves. A lean organization believes that great results come from following a great recipe. Using the rigor and science of the scientific method assures that improvements are evaluated carefully then implemented quickly.

If your organization is struggling with the execution of your strategic plan, maybe it is time for a new approach. Hoshin Kanri using the X- Matrix, and the Operational Review, when followed properly, leads to a proven way to deliver on your strategic commitments.

Ideal Behavior

by Steve Newlon

I got hit by a ton of bricks the other day.  I've studied the Shingo criteria and transformation model every since the major change took a few years ago.  Many lean practitioners, myself included, look at the change, which focuses on behavior with some uncertainty because of the significance of the change, yet at the same time recognize potential inherent value in the philosophy of the approach.

A quote from the Shingo Institute says, "To get ideal results, you need ideal behavior."  The thought hit me that what if we only focused on changing behavior of leaders, managers and staff?  What if we took this so far as to shift our focus from value stream and process to that of behavior of people in the organization?  Our approach might be quite different.

We would still engage in the effective systems of value stream analysis, kaizen events and in applying the lean principles of pull, flow, and waste removal overall, but we'd do so from the perspective of changing behavior.  To better illustrate the slight, but significant shift in this thought, think of today as focusing on the lean systems and we hope and expect behavior to change as well.  In this shift, our main focus is on changing behavior and we USE the lean systems to help bring about this behavior change, not so much a byproduct of our lean work.  This may be the approach of the lean experts that help and guide us through our lean transformation and perhaps I simply had one of the precious "ah hah" moments.

A recent change is that the institute developed three ideal behaviors for each principle.  For example, under the principle of "Respect Every Individual," the institute provides examples of ideal behaviors:

  • Create a development plan for employees including appropriate goals.
  • Involve employees in improving the work done in their areas.
  • Continually provide coaching for problem solving

I encourage you to visit the Shingo Institute at, click "learn more" and then "Download the Shingo Handbook."  This handbook lists the principles and provides the behavior examples I've mentioned.  In a recent Shingo examiner class, the instructor had groups further identify behavior that would fit each of the examples.  It was an effective exercise for better understanding ideal behavior based on the principle.

Understanding the concept of focusing on behavior begins with understanding ideal behavior and from there we can utilize lean systems to prepare us for challenges we'll face in 2015.

Why Transformations Fail?

John Kotter has well documented the 8 common reasons why large scale transformations fail. These include:

  1. Allowing too much complacency
  2. Failing to create a powerful coalition
  3. Underestimating the power of vision
  4. Under-communicating the vision by a factor of 10
  5. Permitting obstacles to block the new vision
  6. Failing to create short term wins
  7. Declaring victory too soon
  8. Neglecting to anchor the changes firmly in the new corporate culture


Undergoing a lean enterprise transformation is considered a large scale transformation. So what can be done to insure that your transformation doesn’t fail?

Here are many well documented strategies to avoid the common mistakes organizations make. Here are a few:

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