Hoshin Kanri – Toyota’s Lean take on policy deployment – is an excellent tool to align Squad missions and Tribe purpose in an Agile organization. When traditional organizations in Financial Services transform into Agile organizations, new challenges will arise. One of these challenges could well be: how to keep the improvement efforts of all the autonomous Squads aligned with the Tribe’s purpose?

Hoshin Kanri Policy Deployment starts with formulating break-through goals for 3 to 5 years ahead. These are the goals that will make a real impact on the purpose of the tribe. Second step is to translate these break-through goals into one-year goals. This is the annual plan for the tribe, with challenging but achievable goals. Third step is to translate these goals to Squad Missions. These missions describe the processes that need to be improved. Final step is to determine which metrics will show the progress of the improvement. Translating the squad’s improvement goals into KPI’s and targets makes it possible to steer on output and still make sure things are moving in the right direction. The picture below illustrates this.

Hoshin Kanri aligns squads with the tribe purpose

The outcome of the Hoshin Kanri Policy Deploycement gets a prominent place on the “Plan” wall in the Obeya Room of the tribe, and the improvement can start within the squads. Squads can be autonomous, because alignment is ensured through the Hoshin Kanri.

Each squad will get to work improving what needs to be improved. They can use their Improvement Kata for small, incremental improvements. Larger improvements require a Kaizen approach. For problems where the solution isn’t clear, DMAIC projects can be started. And the biggest changes require redesign or innovation. But whatever the approach is, the overall progress can be monitored in the KPI’s. This is show in the second picture.

Hoshin Kanri aligns the improvement efforts of squads

All these elements together ensure that the squads start improving in the right direction. Of course, it wouldn’t be Agile if there wouldn’t be room to make changes along the way. But this shouldn’t be needed too often. All in all, I’m very excited about using Hoshin Kanri Policy Deployment to align autonomous agile squads with their tribe’s purpose.

Menno R. van Dijk.