Hoshin Kanri: X-matrix & 7-step planning guide

Quick note: We've included a graphic PDF template below to help you visualize the Hoshin Kanri Method as a strategic planning option. And while you can use Asana to follow this method, we do not currently have a feature or in-product template for it.

Remember doing connect-the-dots as a kid? At first, the page looked like a bunch of random dots, but once you connected them, a bigger picture emerged.

The Hoshin Kanri method is more complex than a coloring book puzzle, but the concept is similar. It connects your daily work to your company's larger strategic goals, helping you see the whole picture. In this article, you'll learn what Hoshin Kanri is, how to read the X-matrix, and the seven steps to use this method in your organization.

What is Hoshin Kanri?

Hoshin Kanri is a strategic planning tool that connects company-wide objectives to the day-to-day work of individual contributors. In Japanese, "hoshin" means "direction" and "kanri" means "management," roughly translating to "compass management."

The goal of Hoshin Kanri is for everyone in the company to push towards the same goal simultaneously. This happens through a feedback loop called the Hoshin Kanri Catchball:

• Top-down: Leadership shares strategy and context with teams.

• Execution: Individual contributors enact the strategy.

• Bottom-up: Results flow back to leadership for analysis and adjustment.

Hoshin Kanri isn't a one-time process. It's a continuous cycle of planning and improvement.

When to use the Hoshin Kanri method

Hoshin Kanri is especially useful in certain situations. Use it when:

• Company-wide alignment: You need to unify your entire organization around shared objectives.

• Long-term planning: You're setting strategic goals for 3 to 5 years.

Keep in mind that Hoshin Kanri takes time to plan and implement. If you want something simpler, try starting with a basic strategic plan.

The Hoshin Kanri matrix

The Hoshin Kanri matrix, also known as the X-matrix, is a visual tool for the entire planning process. It helps teams see how goals connect across the organization by showing:

• Who is working on each initiative?

• How strategies connect to specific initiatives

• How initiatives map back to long-term goals

How to read a Hoshin Kanri matrix

If you use the Hoshin Kanri method, you should also use the matrix. It helps everyone see how their work connects to long-term goals. Without this clarity, teams might spend time on tasks that don't support the main strategy.

Even though the Hoshin Kanri matrix looks complicated, it's actually easy to read. The chart splits information into five sections arranged like a compass:

To read a Hoshin Kanri matrix, start at the bottom and move clockwise. Each corner has small dots showing how initiatives and objectives connect. The resources section on the far right shows which team member is responsible for each improvement initiative and KPI.

Here's an example using the matrix above:

1. Start at the bottom "Strategic Objectives" section: "Become a global company."

2. Follow the dots left to the annual objective: "Create a new product feature that caters to the international market."

3. Trace up to the improvement initiatives: "Optimize customer success program" and "Conduct international market research."

4. Continue the process to connect KPIs and resources.

The 7 steps of Hoshin Kanri planning

There are seven main steps to follow when starting Hoshin Kanri planning. If you already have a strategic plan, you can skip the first four steps. Here's how to begin.

1. Establish your organizational vision

Identify your organization's key mission, vision, and values. This is commonly done in the form of a vision statement. A vision statement should support your team's long-term goals and connect them back to your company's mission statement.

During the traditional strategic planning process, it's important to clarify your organizational vision to ensure your long-term goals are aligned. However, the Hoshin Kanri method takes it a step further by helping visualize how individual work affects your company's long-term goals and, by extension, your organizational vision.

2. Develop strategic objectives

Strategic objectives, sometimes called breakthrough objectives, are the changes your organization needs to achieve its vision. Aim for three or four objectives that take three to five years to achieve. Too many objectives can split your team's focus, making it harder to reach your strategic goals.

Once you determine your strategic objectives, add them to the bottom section of your Hoshin Kanri matrix.

3. Develop annual objectives

Once you've identified the main breakthrough objectives you want to accomplish, focus on setting the annual goals your team should achieve. Because a strategic objective takes about three to five years to achieve, breaking it down into smaller short-term goals makes the large goal feel more manageable.

Aim to set two to 10 annual goals using the SMART goals framework: specific, measurable, achievable, realistic, and time-bound. For each objective, define a key performance indicator (KPI) to track progress. Add annual objectives to the left-hand section of your Hoshin Kanri matrix.

4. Cascade goals throughout the organization

Before you start working, break your annual goals into smaller, actionable tasks. Divide your broad yearly objectives into specific initiatives for each team or department. This way, everyone understands both the big-picture goals and the smaller steps they'll take to help the company succeed.

At this stage, your team will see what work is needed to reach your yearly goals. These improvement initiatives go in the top section of the Hoshin Kanri matrix. Each team's or member's matrix may look a bit different, since everyone handles a different part of the initiative.

5. Execute annual objectives

Finally, you're ready to implement. Because you split your annual objectives into smaller goals, different teams will have different strategies. But ultimately, all of these strategies come together to ensure your organization meets its annual objectives.

The exact way you execute against your initiatives is up to you. Some ways you can do this are by using continuous improvement strategies such as the Six Sigma DMAIC model, the Kaizen methodology, or the PDCA cycle.

As production starts and results come in, feedback will flow from the production floor up to the strategic team.

6. Implement monthly reviews

Too often, goals sit in documents while daily work happens somewhere else. Set up a monthly review system to keep goals and execution aligned.

During each monthly review, ask:

• What's going well?

• What can be improved?

• Are we on track to meet our annual objectives?

A project management tool can make this process even easier. For example, Asana lets you create and track goals in the same place your team stores and tracks their day-to-day work. You can also set up automated reminders to prompt you to update and review your goals monthly.

7. Conduct annual reviews

After 12 months, evaluate your team's progress with these questions:

• Did you achieve your goals?

• What could be changed next time?

• What lessons learned can you apply to the next cycle?

Use what you learn to set new goals for the next year and start the Hoshin Kanri Catchball process again.

What is the Hoshin Kanri Catchball process?

The Catchball process is a two-way communication method that encourages dialogue between leaders and teams at all levels. Unlike traditional top-down strategies, it builds alignment through collaboration.

It's like tossing a ball back and forth. Leaders share strategic objectives with teams, who respond with insights and proposed initiatives. This exchange continues until everyone agrees on the goals and how to achieve them.

How Catchball creates alignment

Catchball works because it creates shared ownership from the beginning. When team members help shape how goals reach their level, they're more committed to achieving them. Here's how the process usually works:

• Top-down communication: Leadership shares strategic objectives and the reasoning behind them, giving teams the context they need to understand priorities.

• Bottom-up feedback: Teams assess what's realistic, identify potential obstacles, and propose initiatives that align with their capabilities and resources.

• Iterative refinement: Through multiple rounds of discussion, objectives and initiatives are adjusted until there's genuine alignment, not just compliance.

This collaborative approach helps spot issues early, before they become problems during execution. It also makes sure the people doing the work have a say in how success is defined and measured.

Using PDCA for continuous improvement

Hoshin Kanri doesn't stop once goals are set. It uses the PDCA (Plan-Do-Check-Act) cycle to continually improve throughout the year. Here's how PDCA fits with Hoshin Kanri:

• Plan: Define your strategic objectives, annual goals, and improvement initiatives using the Hoshin Kanri matrix.

• Do: Execute your initiatives while tracking progress against your key performance indicators.

• Check: Conduct regular reviews (monthly and annually) to assess what's working and what isn't.

• Act: Make adjustments based on your findings, then feed those lessons into the next planning cycle.

By using Catchball with PDCA, Hoshin Kanri becomes a living strategy that adapts to change and keeps everyone focused on what matters most.

Pros and cons of the Hoshin Kanri methodology

Before you start using Hoshin Kanri, it's important to know its strengths and limitations.

Pros of the Hoshin Kanri methodology

• The Hoshin Kanri matrix is easy to read. At first, it might look complicated, but once you get used to it, it's a simple and effective way to manage responsibilities and see how initiatives connect to the company's bigger goals.

• Hoshin Kanri makes it easy to break down big-picture strategy. When teams discuss overall strategy, the matrix helps them see how smaller initiatives can affect the company's larger goals.

• Know who is responsible for what. Using the Hoshin Kanri matrix, managers can quickly see who is responsible for each initiative. This helps everyone stay accountable for their goals.

Cons of the Hoshin Kanri methodology

• The Hoshin Kanri matrix is only helpful with minimal information. The more information you add to the matrix, the less legible the graphic becomes. If you're building more complex dependencies and responsibilities, the Hoshin Kanri matrix might not be the best method for your team. If you want to get more specific with dependencies, try using the critical path method (CPM).

• Hoshin Kanri only narrows strategy down to four layers of specificity. If your team wants to break goals and strategies into more than 4 layers, the Hoshin Kanri method won't work. If you want to break a project down into more sections, try the waterfall methodology instead.

• The Hoshin Kanri matrix is static. If strategies and responsibilities change significantly, the Hoshin Kanri matrix is difficult to adapt. If you anticipate larger changes within a project, it may be best to use an Agile methodology.

Bring your Hoshin Kanri matrix to life with work management tools

The Hoshin Kanri matrix is a useful static reference, but a work management tool tracks objectives in real time. With Asana, your team can see exactly how their daily work connects to company goals.

Get started with Asana to bring your Hoshin Kanri strategy to life.

Frequently asked questions about Hoshin Kanri