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Jeff Liker

Jeff Liker: Goal setting through Hoshin Kanri

By Jeff Liker, - Last updated: Thursday, January 7, 2010 - Save & Share - Leave a comment

The answer is a qualified yes.  In fact Toyota has an annual goal setting process called hoshin kanri and the office of the CFO is very involved in setting the financial targets for the corporation.  They are then cascaded down throughout the world at all levels and there are regular reviews of progress through the year.  They almost always hit the targets.  My qualification is that Toyota has worked really, really hard to develop the capability to deliver on those targets.  The key is the capability of the people and the process to deliver.  Toyota has invested heavily in that including intensively training leaders in problem solving from the very top of the company down to every leader of a work group.  They have worked to stabilize processes and they are able to develop detailed and well thought through plans for achieving the goals, which is all part of the hoshin kanri process.

What happens in immature organizations that have not learned true lean broadly and deeply is that targets come down from the top and through brute force the numbers are achieved.  Strong armed managers require cuts, which usually means cutting budgets and letting the people and processes somehow struggle to adapt with less.  The people will adapt, but not necessarily in healthy ways.  For example, you can reduce preventative maintenance, reduce quality checks, reduce inventory, all leading to more frequent problems.  There is a big difference between waste elimination and cost reduction and waste elimination requires a much higher level of skill and employee engagement.

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