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Hoshin Kanri is a Lean management tool, "Hoshin" means "compass needle" or "direction" and "Kanri" means "management" or "control". This is a very simple idea that highlights the need to acknowledge that everyone in the organisation contributes to value creation, thus contributing directly to the achievement of strategic business goals. Accordingly, workers' performance results must be constantly monitored by management to ensure the right direction, which is often described as defining and moving towards the “True North”.

A company's objectives are unattainable if they are defined at the highest levels and simply disseminated to the lower levels. For this reason, Hoshin Kanri emphasises initial conversations and goal alignment at different levels of the organisation, going back to the top when necessary. For Hoshin Kanri to be effective, it must be aligned with the three organisational levels in the company:

  • Strategic level: It includes the vision, mission, and annual objectives of the company. Typically, these are created or articulated at the highest executive levels.
  • Middle and tactical levels: A company's projects and initiatives are created and executed at the middle director or manager levels. Company goals must be closely aligned at this level to ensure each project supports and drives each company goal.
  • Worker level: Everyone in an organisation contributes in some way to this operational level. Creation and execution of individual deliverables at this level must also be aligned with the company's objectives. Furthermore, workers following Hoshin Kanri feel much more involved in the success of a company's goals.

Hoshin Kanri is a management approach for strategic plans with a Top-Down strategy, developed in 1965 by Bridgestone Tire. At that time, a report analysing the strategic planning techniques used by the Deming Prize-winning companies was published. These techniques were named Hoshin Kanri, and they were widely accepted and spread in Japan in the mid-1970s, even in Toyota.

Organisations aligned towards a common True North achieve higher performance levels because all their actions focus on driving measurable goals. Wasted time and misdirected efforts are reduced when aligning your planning, processes, resources, and teams. They all work in sync with the company's highest priorities.

  1. Prepare an A3 with your Strategic Plan,
  2. Identify clearly Short- and Medium-Term priorities,
  3. Arrange a waterfall strategy in your organisation with measurable (and achievable) goals.
  4. Use One-to-One Checking systems, remember that everybody contributes to Value creation.
  5. Promote continuous feedback Cycles.
  6. Reach perfection…

Hoshin Kanri carries out an ITERATIVE ADJUSTMENT system in your organisation through transversal involvement of your people, based on STATE-OF-THE-ART PERFORMANCE and DAILY MANAGEMENT PRACTICES.

My recommendation is to take some elements from Hoshin Kanri, and follow this simple process:

  • Participants: owners, directors, key professionals of you team
  • Materials: laptop – wifi / microsoft office tools/ pens and markers
  • Time: 120 minutes (approx.)

1.Identify personal values of your teams’ members and coordinate a subsequent meeting to reflect about them. (See STEP 1 in The 6 Step Lean Plan: A Guide To Face Adverse Contexts by Salvatierra, 2020).

2. As a group, complete the following Table through brainstorming in order to build a True North PLAN, which will begin with unrealistic and challenging Goals that originate all the initiatives developing in the organisation.


True North PLAN

True North Annually Quarterly Monthly
1. Goals
2. Strategic Goals
3. Improvement Priorities
4. Associated Current Resources
5. Initiatives:(Programs, Projects, etc.)
6. Kpis And Follow-Up Form

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José Luis Salvatierra G. is a civil engineer, senior Lean consultant, researcher and professor, who has been associated to the most prestigious universities in Chile, including: University of Santiago, Pontifical Catholic University of Chile and University of Chile. From his PhD at Loughborough University in the UK, he began to specialise in Lean philosophy with a focus on Value Management.