Aligning Short- and Long-Term Goals with Hoshin Kanri

Distinguish between short-term and medium- to long-term goals. Some well-managed companies apply the Japanese Hoshin Kanri concept developed at Toyota. This concept combines short-term operational goals with a long-term focus and is excellent for supporting implementation. Applying the Hoshin Kanri concept prevents work on the long-term strategy from being crowded out by day-to-day operations. Both are important, and both must be pursued in parallel.

According to Hoshin Kanri, work on goals in day-to-day business is done in parallel with so-called “focal points” for long-term development. The focal points are made measurable according to the SMART principle. This turns them into Smart Focal Points. The measures for achieving the Smart Focal Points are kept in the Rolling Action Item List and tracked on an ongoing basis. Each action item should make a contribution to achieving the long-term goal. Therefore, this contribution must also be defined. These contributions are aggregated in a “Driver Tree” via a hierarchy. In this way, it is possible to continuously track the extent to which an organization is approaching the long-term goals set.

The Hoshin Kanri principle is a valuable addition to the integrated Balanced Scorecard concept. Both Hoshin Kanri and the Balanced Scorecard are methods that can simplify controlling.

Setting goals means making decisions. Decision making is perhaps the most important management task. Therefore, it is worthwhile addressing decision-making processes.


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