The Secret of Master Planning
No Secret Really: It Simply Helps Your Staff Members Work Better Together
By Steven A. Reed
Strategic planning doesn’t have to be an oxymoron. Hewlett-Packard, Motorola and others pioneered hoshin kanri — a way of powerfully integrating planning and management — in this country as part of the quality revolution. It incorporates an intense, goal-driven focus on metrics and measurement, an emphasis on the voice of the customer, and alignment of the organization through deployment, catchball and visual communication processes that concentrate resources on breakthrough strategies.
In essence, hoshin kanri is a way of making dramatic improvements in an organization in a short time. It goes by many names and comes in many forms. We call it Master Planning and have developed ways of bringing the power of what was originally a manufacturing-oriented process to knowledge-based organizations.
Why should an organization consider upgrading its current planning processes to encompass hoshin kanri principles?
Here are five reasons:
- You can improve existing processes and gain dramatic improvements without imposing traumatic change.
- You can significantly improve your ROI from the time and money you currently spend on strategic planning and associated activities.
- You can clarify roles, helping leaders to lead, managers to manage and doers to do.
- You can align your organization.
- You can motivate and manage through a system of measures for all efforts at all levels.
Is Strategic Planning an Oxymoron?
What began as a budget exercise for corporate America in the 1950s and became an obsession in the following decades is now being recognized as an oxymoron.
In his definitive and revealing history, “The Rise and Fall of Strategic Planning,” Henry Mintzberg concludes that strategy cannot be planned because planning is about analysis and strategy is about synthesis. That is why, he asserts, the process has failed so often and so dramatically. Mintzberg argues that conventional strategic planning processes themselves can destroy commitment, narrow an organization’s vision, discourage change and breed an atmosphere of politics.
While planning remains absolutely essential for managing today’s economic, technological and environmental challenges, it requires a different approach, a different set of tools and a different mindset.
With economic shifts, healthcare organizations must be prepared to respond quickly and transform to maintain viability. Only the nimble will succeed, and hoshin can help organizations achieve substantial change in a systematic and orderly process.
World Demands Dynamic Processes
The Foundation of the American Society of Association Executives conducted an environmental scan that identified trends and new rules for strategic planning. These are:
- Planning is an ongoing learning process that never ends.
- Environmental scanning is the highest priority, and adjustments should be made on an as-needed, ongoing basis.
- Incremental change is challenged, while multiple futures are explored. This requires organizations to reshape themselves responsibly.
- Organizations pursue creative searches for emerging opportunities, abandoning old assumptions about their strengths and weaknesses.
As economic shifts occur, organizations must be prepared to respond quickly and transform in order to maintain leadership and viability. Only the nimble will succeed, and hoshin can help organizations achieve substantial change in a systematic and orderly process.
How Can Strategic Planning Work Right?
The current disenchantment with strategic planning partly stems from a lack of a clear definition of what the words together actually mean. Strategy is often thought of as a direction, guide, or course of action that gets you from Point A to Point B. To some people, planning is thinking about the future, while for others it means choosing a direction and making decisions based on that direction.
H. McConnell points out that if not managed properly, the planning process may corrupt the development of strategy, or if strategy is developed, planning may impede the strategy to such a degree to render it minimally effective.
Although thinking strategically about the future of the organization is clearly an ongoing responsibility of the Board, every employee in an organization must be able to clearly articulate the strategic plan and understand how it affects that individual’s daily activities. It must be a simple-to-understand, clear, actionable road map that has been developed in concert with the staff and not left to a professional planner or the Board. Board and staff should be highly collaborative and continually engage in a dialogue about how the future and the organization’s strategy are unfolding.
The Essence of Master Planning: Using Metrics to Move the Organization
What makes hoshin-based planning and management systems so effective is the power of measurement. To put it simply, you get what you measure.
What truly distinguishes a hoshin-based planning and management system from conventional strategic planning is how the principles inherent in the hoshin approach integrate planning throughout all aspects of the organization. In essence, hoshin planning provides a better way for people to work together. Unlike conventional strategic planning, which is a once-every-so-often effort, hoshin engages the entire organization in an iterative, ongoing process that acts as a highly visible management compass.
Hoshin-based planning is neither a top-down, nor a bottom-up system. Rather it is both, with a cascading technique that encourages multi-level dialogue throughout the planning process.
Clarifying the Roles
Hoshin principles focus the responsibility for planning each specific element of the plan on the people who will have the responsibility for that portion of the plan. Hoshin is sometimes spoken of as a “policy deployment” process. The organization’s top leadership sets the key goal and strategies, and that goal and those strategies become “policy” that is then deployed throughout the organization for implementation. One of the hoshin principles is that planning is a function of all levels of the organization and that the people who will be responsible for carrying out the action plans should make them.
Many organizations still grapple with management issues surrounding the ambiguity between board and volunteer leadership roles and those of the chief staff executive and his or her staff in running the organization. Hoshin’s multi-level cascading structure naturally channels the board and volunteer leadership toward strategic issues while empowering the paid staff to determine how to best implement the overarching strategy.
Rigorous Prioritization: The Job of the Organization’s Leadership Body
The principle of rigorous prioritization continually focuses the leadership of the organization as a whole on its job of making good strategic decisions. The board’s principal concern becomes setting the organization’s one Breakthrough Goal, or a very limited number of overarching goals (depending on which goal-setting model is employed), and then determining the best way to measure success through a time-bound and quantified target. This is a critical endeavor, which should occupy the board’s time and attention to the exclusion of other, more tactical, concerns.
Rigorous prioritization means having to select the organization’s focus from among many appealing alternatives — each of which is worthwhile and many of which may have sizable constituencies. In the military, the principle is called concentration of force. Some hoshin-based plans incorporate multiple goals and more than 10 strategies. We prefer the “breakthrough” model, which requires selection of one five- to 10-year Overarching Goal and a three- to five-year target.
Achieving Organizational Alignment
But in addition to creating a natural delineation between the role of the volunteer leadership and that of the paid staff, hoshin makes the efforts of both pay higher returns through organizational alignment. Alignment is that shared sense of direction that allows an organization to be greater than the sum of its parts. In aligned organizations, objectives are clear and top of mind at all levels. Roles and responsibilities are well defined and empowered. The right things are accurately measured and rewarded.
Hoshin kanri principles promote alignment in three ways:
- By using disaggregation as the basis of all planning once the top-line goal and target have been determined. Disaggregation is the art of breaking a problem, in this case a goal, into its key components: smaller goals, which in this case we call strategies.
- By using deployment and catchball techniques to cascade planning responsibilities throughout the organization. Deployment is simply the process of determining the right channel for handing off planning responsibilities to the group or individual who will take the planning to the next level of detail. That individual or group will be charged with the responsibility to take a strategy and an accompanying measure, look at them as a goal and target, and then figure out the two to four key strategies that will best achieve that target. Catchball is the term applied to the dialogue—and sometimes negotiation — that occurs after a deployment hand-off between planners at two levels of detail. This process is why hoshin is described as both top-down and bottom-up.
- By making the plan visible—and relevant to daily management. One of the most obvious ways a hoshin-based plan is different is that you usually find it on a wall rather than on a shelf. The hoshin kanri philosophy is to make the state of the organization and the plan visible. Sounds simple, but it is a powerful difference.
Although thinking strategically about the future of the organization is clearly an ongoing responsibility of the Board, every employee in an organization must be able to clearly articulate the strategic plan and understand how it affects that individual’s daily activities.