The best strategy? Less, but consistent! 

Stommel: When you look back now over the past 18 months, since we have introduced Hoshin Kanri in your company, what has changed? How would you describe the current strategy implementation process at Illies?  

Illies: We use Hoshin Kanri as a framework for setting goals, pursuing goals, and ultimately also achieving them. For us, Hoshin Kanri is a very helpful and versatile set of tools, which we use to determine suitable goals, to create cascading plans for implementation, to keep an eye on progress, and to manage deviations. I would describe the entire method with the two keywords: framework and toolbox. 

Stommel: Yes. The method has proven itself, largely because it is transparent and effective. During the first step, one derives 3 to 5 breakthrough goals on the basis of the vision, which are designed to take the company to the next level. The breakthrough goals are broken down into annual goals and the related strategic projects defined. During the third step, a KPI-system is then set up, which constantly monitors the progress of the projects, so that one can recognize early on which projects are not achieving the desired effect and where one may need to provide support.  

Illies: Cascading all of the goals allowed the entire organization to introduce momentum to the change process throughout all teams. One could say: Previously, the locomotive left the station without all the cars attached. Today, all the cars are coupled, and it is not only the locomotive that does the pulling, but each individual car. To achieve this, however, a lot of good communication is necessary. With the newly introduced reporting methods, we were able to very successfully accomplish this.  

Stommel: In order to permanently change a company, all employees must be included and turned into participants. Together with them, one must determine how they can integrate the strategic initiatives into their daily work. What is your conclusion regarding this after 18 months of Hoshin Kanri? 

Illies: I can already say that the process we initiated was worth it. We now have a much stronger correlation between the goal set for a year and the daily work of our team and thus also a much higher level of identification on behalf of each individual employee with our long-term company goals.  

In addition, the early indicators we have introduced have increased our awareness of our degree of goal achievement. The derived KPIs provide orientation at all points in our company. For example, our sales and service teams now recognize in a timely fashion whether the sales funnel is still sufficiently full and whether the related sales goals can be achieved and whether additional activities are necessary.  

Stommel: What would you say companies should pay attention to when introducing Hoshin Kanri?  

Illies: My advice to anyone asking themselves the question “How can I better implement my strategic goals effectively throughout the entire company?” is: pay attention to resource management. Because when you determine your goals and think about what resources are necessary to achieve them, you should also carefully weigh how much change you want to undertake and what is the correct amount to reach the goal most effectively.  

Recently, one of my colleagues said, “We overestimate what we can achieve in a year, but we underestimate what we can achieve within five years.” That could be a good approach.