Is hoshin kanri the secret sauce for process improvements?
Methodology developed by the Japanese in the 1950s taps the collective power of groups to create corporate excellence
I’ve been enthusiastically talking about (and using) the principles of hoshin kanri for many years. From best practices lectures given to the staff of Microsoft’s Quality Business Engineering unit to the development strategies designed to dynamically streamline financial services operations, it’s become a way of thinking that’s almost second nature.
Hoshin kanri is a strategic planning and management methodology that was developed by the Japanese in the 1950s, and taps the collective power of a group to create corporate excellence. By involving all levels of employees in the process of developing new operations, the principles of hoshin kanri can help ensure the success of strategic changes made with an eye toward continuous improvement and the elimination of waste that comes from inconsistent or non-existent communication.
A few shining examples of large companies that have successfully deployed hoshin kanri principles include Bank of America, Toyota and Hewlett-Packard.
So how could the principles of hoshin kanri be used within your banking or financial institution? It could be as simple as using these concepts as a tool to help develop a business plan for a new product, or as complex as creating a multi-level strategic plan to make sweeping changes in customer service.
Let’s take a look at one example. A few years ago, a mid-size U.S. financial recovery organization found that its outdated management structure was a major contributor to the company’s cash flow issues and excessive overhead costs. It needed to completely reinvent the way it conducted its business. By using hoshin kanri methodologies to develop process improvements, it flattened its management structure into a new, less hierarchical one that required 10 percent fewer operational staff members. Its collection rate improved by 100 BPS, and the cash flow this generated helped fund the purchase of a new debt portfolio.
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