Question

Hoshin Planning.

This is the Japanese way of planning. It is quite different from the American way. What are some key differences in American vs Japanese planning? Discuss which may be more helpful in an organization.

Answer 1

Hoshin planning is a method of strategic planning that is derived from the traditions of Japanese people in the 1960’s. Hoshin planning helps bring the organization initiatives together through goal identification involving the top management and lower level employees like catch ball game where ideas between the two groups are exchanged. Gemba is a unique aspect of Hoshin planning that refers to the tracking of goal achievement by getting to the factory floor and getting involved with the lower level employees. Based on Gemba, necessary alignments are made to reach the organization goal. The Hoshin planning matrix or X matrix determines the priorities to achieve the objectives.
The difference between Japanese and American planning arise from the cultural differences of the nations. Balanced Scorecard (BSC) is an American planning technique and when this is compared with Hoshin planning, the key differences arise in the manner of approach. BSC follows a logical order while Hoshin planning frames 3 to 5 goals and may focus on any of the goals. BSC focuses on a monthly or quarterly meeting to execute the strategy while Hoshin planning relies on Gemba for strategy execution. The planning decision in an American context is taken in a fast manner with superiors delegating most of the tasks to subordinates while the planning decision in Japanese context takes a long time and follows a hierarchy to finalize the plan after a long process of documentation and meetings. In the case of American planning, individualism dominates while in Japan, collectivism dominates. Americans are known for taking high risks in plans but Japanese are highly risk-averse and they must be convinced 100% to agree and execute the plan. Americans organize a meeting or two to finalize the plans but Japanese organize as many meetings as possible to arrive at a consensus regarding planning. Most of the meetings organized by Americans are remote using internet technology and they feel that more the meetings, more is the likelihood of the plan getting cancelled but Japanese prefer face to face meetings in a frequent manner to discuss and finalize the plan.
The application of planning either American or Japanese is dependent on the context and nature of the organization. If the organization is prone to take high risks, believe on individuals, wants things to be done in a quick manner and align more towards technology, then an American planning style is appropriate. If the organization is risk averse, reserve, conservative, collectivistic in nature, valuing people more than technology, then a Japanese style of planning is appropriate.