Policy Deployment Matrix
What is the Policy Deployment Matrix?
The Policy Deployment Matrix is used to show the relationships between the upcoming 3-5 year objectives, priorities of improvement, targets, required resources and benefits to the organization.
Coming from the Japanese management the Term Hoshin Kanri is well known as an other term for Policy Deployment.
The key question for policy deployment is how you can develop your organization towards a performance level where continuous self-improvement is part of your organizations daily work. One tool, already mentioned, that supports you on your organizational journey is the so called Hoshin Kanri.
In many western countries Hoshin Kanri is still unknown. The Hoshin Kanri Management System is based on lean manufacturing and lean management principles. To get a foot on ground in the west it is getting more and more popular under the flag of Policy Deployment.
To describe the word itself, short translation: The Japanese word Hoshin means “compass” or “compass needle” and the word Kanri stands for “management” or “control”. Together it can be understood as management of objectives towards targeted state. Hoshin Kanri therfore strives to achieve the so called breakthrough targets by using the maximum out of existing resources. In addition to those breakthrough targets Hoshin Kanri aims to build and develop the structure and culture on management level for your organization that are necessary to operate successfully in the market in the long term.
By having this in mind Hoshin Kanri covers two main processes:
Planing Process
In the Planning Process targets are defined and the plans on how to achieve those are described on each level of your organization. All this is based on cross functional and cross departmental agreed objectives.
Implementation Process
The implementation, in which processes and measures are necessary to achieve the agreed targets are constantly and actively controlled.
A central focus of Hoshin Kanri is not the excessive usage of lean management and manufacturing tools existing, much more the management development (leadership) itself to develop skills and know-how at all levels in order to implement the corporate strategy.
Attention Spoiler Alarm, Hoshin Kanri implementation process follows a well known process - the PDCA.
The PDCA cycle plays again a big role in implementing something new. Having the four phases of the PDCA cycle translated in the Hoshin Kanri implementation process will lead to the following picture:
HOSHIN KANRI following PDCA
Planning Phase:
Agreeing on long term strategy and definition of breakthrough targets
No matter what field you are in with your organization, you need to have an idea of where you want it to develop. Coming from Toyota the term North Star or True North has developed in order to guide all activities towards the agreed strategy in order to achieve defined targets and improvements. Within the Hoshin Kanri process, it is up to the top mgmt. level to develop the vision with the incorporation of the next mgmt. level below. Important point at this stage is the analysis of the current situation on site - e.g. on different manufacturing sites. This means that top mgmt. perspective with the help of mid management and external experts are guided towards the development of an organizational wide vision.
After the global vision is defined the same procedure is guiding the definition of the breakthrough targets following the the vision and strategy. The targets are defined by the same steering committee and have a planning horizon of three to five years. The breakthrough targets are always challenging the actual performance levels and their significant improvements. Unlike the Kaizen approach (step-by-step) breakthrough targets aim for far-reaching changes that also require a complete rethinking of existing processes and systems.
Breakthrough targets do not stop at organizational or departmental boundaries and are typically capped at an amount of five in total. To give some guidance to define breakthrough targets a differentiation is made between four main categories consisting out of financial targets (costs), process targets (delivery capability), quality (ppm) and last but not least employee development (education). On the last category, employees development, we are talking about leaving the comfort zone and going the extra mile.
When thinking about annual achievement reviews, KPIs are also needed to be defined. If you can’t measure you can’t control. With Hoshin Kanri KPIs are seen as an instrument to assess and improve personal performance increase rather than reviewing the all over improvement level. To have an organizational wide comparability the form of the report is defined and agreed as well upfront all activities.
Once the framework is defined and targets as well as measures are agreed on departmental level it is time to conduct several cross functional target meetings in order to align all activities and to make sure all of them are going in the right direction. This process of cascading and developing a detailed action plan runs through the complete organization. Each level of the organization goes through their plans on how to achieve the defined targets and reports it summarized to the next higher mgmt. level. This will be from now on a continuous process.
This Process within the Hoshin Kanri Process is the so called CATCHBALL PROCESS.
One key element of Hoshin Kanri is that all target definition sessions are based on the so called Catchball Process. Like in a ball game all participants have the chance to throw in ideas and play them back and forth where in the end all agree on defined goals, actions and KPIs. In this process all employees should be involved throughout the complete organizational cascade. Mid Mgmt. like directors or head of dpt. are the “Gamemaster”, it is in their responsibility that everything goes in the right direction, that it is a fair game and in the end that all participants agree on the same targets. For this reason, the catchball process shouldn’t be started until managers have the necessary know-how.
Doing Phase:
In the second phase of the Hoshin Kanri Process it is all about empowerment.
You know how it is, everybody is always pretty busy on the planning, but when it is about the implementation it becomes quite quiet. This is not only because of the “I don’t want to do it” but more because of the “I don’t know how to do it” - therefore a lack of competencies in your organization. It starts with not knowing what PDCA is and ends with not knowing how valuable daily routines can be.
As mentioned before, Hoshin Kanri, strives to develop necessary skills within your organization in order to improve existing processes and to reach desired targets. Therfore Hoshin Kanri is quite similar to the lean leadership approach. It differentiates between four levels of competences.
Develop yourself as a leader
Be able to coach and develop others
Daily support of Kaizen (improvement) actions
Being able to create a vision and define organizational wide targets
Phase No. 3 - The Checking Phase
Make changes visible and constantly review them.
During the check phase, shop floor mgmt. is key. Another part of the Hoshin Kanri maxim is: instead of getting stuck in administration the focus should be on the plain value adding process. GEMBA WALKS are key “Go and See” instead of “mail and meet”. Let’s be honest the value adding is not happening in the office, at least if you have a manufacturing going, which requires regular presence on the shop floor. Here you will see deviations to standards and their effect on the value adding process. Little side effect - having managers on the shop floor and really being interested in what os going on shows that you care and walk the talk.
One main aid to get shop floor mgmt. ahead is visual mgmt. or simply visualization. With the help e.g. of Andon Boards the actual performance at al levels are visualized. KPIs from the Shop Floor up to the C-Level are continuously checked by each team. The achievement of objectives is visualized on Shop Floor Boards or Hoshin Boards in a manufacturing line, can be also a Cell Board and from there through a cascade distilled to up to the head office.
The complete target of this is to install clear transparency and a repeatable methodology with an organizational wide approach to reach individual targets. This means the process is standardized.
Last but not least the Acting Phase:
In the last phase, the act phase, following the Kaizen approach, everything that has been improved has to be secured on this level with the help of standardization. On top of this, with additional PDCA Cycles further improvement steps are already initiated. In case you haven’t reached the planned state you will start over.
If you want to have Hoshin Kanri institutionalized in your organization you will have to focus on developing natural routines in the planning and implementation process where all active players know what will be expected with the PDCA Cycle.
With this in mind most important in the Act Phase is:
Standardization throughout all processes and organizational levels
KAIZEN and KAIKAKU as basis to achieve targets
Mgmt. development to get skills to succeed
Standardization throughout the complete organization is a must to sustainable install Hoshin Kanri. With not following a standard you will have no idea about target state and what the actual deviation is and therefore no starting point for improvement actions. Standardization means nothing more than that a process can be repeated in the same way at any time. Levels of standardization differentiate on the level of complexity of the process. This means that also the mgmt. and Hoshin Kanri process itself will be standardized.
After standardization, KAIZEN can be implemented. To be honest it is just the PDCA Cycle but constantly and repetitive used to achieve a step-by-step improvement process which will continuously raise the level of standards. KAIZEN makes sure that you will keep on improving your standards and not fall back to old routines.
Sometimes it can be that you are stuck. This is when KAIKAKU comes in the game. KAIKAKU is the revolution in thinking and acting. It is a rocket booster to blast chains and mental locks. With this KAIKAKU is also known as Breakthrough Kaizen.
To do this we come back to the ultimate goal of Hoshin Kanri - leadership development. The Act Phase is down to mgmt. and their ambition to reach set targets. Their success must be reviewed constantly. To be absolutely clear: It must be determined how the competencies of mgmt. has to be developed, therefore central questions, based on Lean Leadership are:
How are manager developing themselves?
How well have they developed others?
Do they run daily Kaizen activities?
Do they lead their team towards the agreed strategic targets?
With the help of the Lean Leadership Development Model leaders will improve on internalized lean thinking and develop more and more lean leadership competencies.