The Hoshin Kanri X matrix is a strategic planning tool designed to help organizations align their long-term goals with day-to-day operations. It effectively visualizes the relationship between strategic objectives, necessary breakthroughs, annual objectives, and improvement priorities.
The X matrix serves as a roadmap, ensuring all levels of the organization are moving in harmony towards common goals. The Hoshin Kanri X matrix not only promotes transparent communication across the organization but also focuses on measurable outcomes and continuous monitoring, making it an essential tool for the effective execution of company strategy.
In Lean management, the goal of applying the X matrix is to align long-term needs with strategic initiatives, identify the most important activities along the way, and list the metrics that need improvement.
A typical X matrix would normally look like this:
The name comes from the X that divides the matrix into 4 key quadrants:
- Long-term goals (south)
- Annual objectives (west)
- Top-level priorities (north)
- Metrics to improve (east)
At the corners of the matrix are visualized the dependencies between the activities in each section.
On the far right side of the diagram are placed the names of the people responsible for executing the plan inside.
How to Apply the X Matrix Template?
Typically, your organization's leader is responsible for setting up the matrix (if applied on a grand scale) or any manager who is implementing it on a team level.
When filling the X matrix template, you need to list the most important parts of the diagram closest to the center.
Step 1: Set the strategic vision & goals
You must start with the long-term goals of your team. In Hoshin Kanri, they are normally in the frame between 3 and 5 years.
List them at the bottom quadrant of the X matrix template and have in mind that every initiative will have many smaller tasks that your team will have to process before achieving the goal.
Consider the capacity of your team before rushing into filling 10 long-term goals.
A simple way to calculate the overall number of tasks that your team will have to complete is to break down each initiative into an actual plan for execution to the smallest possible task before listing the next long-term plan in the matrix.
Step 2: Define key mid-term objectives
After your long-term goals are all set, prepare the most important objectives that you aim to achieve in a shorter time frame (e.g., 1 year) and put them in the left quadrant of the Hoshin matrix.
To create these, you’ll want to consider what you need to accomplish first to keep you on track and then build on from there.
Step 3: Set short-term actions and metrics
Next, you need to fill the top quadrant with the most important activities that your team has to complete to achieve the short-term goals. As a Lean manager, this is basically your to-do list for the upcoming months.
The right quadrant is for the metrics that will keep you on track when executing the company’s goals.
Considering that all of your Lean teams have their own distinctive key performance indicators, you need to be very careful when putting the key metrics on the Hoshin Kanri X matrix.
Step 4: Agree on key performance indicators
This is just about the perfect time to apply the Hoshin Kanri Catchball and share your plans with the rest of the stakeholders.
Together you can agree on the most crucial metrics that you need to improve and list them on the diagram without risking drops of morale from people whose work is not considered vital to the project's successful execution.
Following this line of thought, right next to the key metrics, you need to list the key stakeholders responsible for leading the completion of the activities in the matrix's top quadrant.
Although Lean encourages shared ownership of the workflow, for more clarity, we recommend that you list only the people responsible for the successful delivery of the team’s work, or simply said team leaders, managers, and process owners.
Step 5: Connecting the dots – mark the dependencies
Finally, you should complete the picture by specifying the dependencies between every listing in your matrix.
We recommend starting with creating a legend of the different correlation markers that will connect each quadrant to the next.
Although you’ve got plenty of flexibility to customize them, we advise you to keep it simple and add no more than 3 different ways of correlations.
For example, you can list a primary and a secondary way of correlation. To distinguish one from another, use different figures for visualizing them (circles, triangles, squares, etc.).
You can apply all sorts of geometrical figures but remember that the matrix needs to remain transparent, and every person should understand the information inside in a single glance.
To mark the dependencies between the quadrants in your Hoshin Kanri X matrix, you need to place an appropriate figure in the squares on the intersections between each quadrant in the corners of the diagram.
X Matrix Example
Let’s imagine a banking company using the Hoshin Kanri X matrix to align its strategic planning:
Long-Term Objectives (South)
- Expand digital banking services to capture a younger demographic.
- Increase overall customer satisfaction by 30% over the next 5 years.
- Grow the bank's investment management services.
- Become the leading bank in mortgage lending in the region
Annual Objectives (West)
- Launch a new mobile banking app this year.
- Improve customer service ratings by 6% this year.
- Increase assets under management by 15%.
- Increase home loan approvals by 20%.
Top Level Improvement Priority (North)
- Develop and launch an enhanced mobile banking app with features like mobile check deposit and budgeting tools.
- Implement a new customer service training program for all customer-facing staff.
- Roll out targeted marketing campaigns for investment services.
- Launch a competitive home loan interest rate offer.
Metrics (East)
- The number of app downloads and active users is measured monthly.
- Customer satisfaction scores from quarterly surveys.
- Yearly growth in assets under management.
- Monthly home loan approval rates.
In this example, the initiative to develop and launch an enhanced mobile app aims to attract and retain a younger customer base that prefers digital services. This directly supports the annual objective of rolling out a new app and indirectly supports the long-term goal of expanding digital offerings.
Also, the customer service training program is designed to improve interaction quality, directly impacting this year’s objective of better customer service ratings and ultimately feeding into the broader goal of significantly enhancing customer satisfaction over five years.
Using the X matrix, the banking company ensures that all strategic efforts are aligned and contribute effectively to both immediate and future goals.
Going from Strategy to Execution
Continuous improvement is a vital part of Lean management, and you need to find a way to scale the value of Hoshin Kanri as well.
The X matrix is a great way to prepare an actionable plan for achieving your company’s goals and easily monitor progress on a macro level. However, if you want to break large initiatives down into day-to-day tasks and monitor their progress, this X matrix won’t be enough.
Once you have clarified the strategic vision and dependencies, it’s time to turn the strategy into tasks and projects. You can easily do that with Businessmap.
It allows you to break down large projects into smaller initiatives on multiple levels and link them to each other, ensuring absolute transparency of what needs to be done and how your affairs are progressing.
With the help of Management and Team workspaces, you can visualize all strategic initiatives – from top-level goals to daily work activities. For example, you have decided to focus on 2 strategic initiatives in the next 4 years, so you create them on the top-level Management Board.
Next, you determine that there are 3 focused strategies for each of the initiatives and break them down further on the same Management Board.
The Management Board in Businessmap is pretty unique. You can link both all Team boards to a single Management and create a complete hierarchical visualization in your company.
Afterward, you break down the shorter initiatives into 2 key projects for each one that needs to be completed to achieve them.
And finally, the third layer is the one where you have small tasks that your regular team members can start processing and begin the long journey toward completing your long-term goals.
As work items progress toward the Done section of each team board, you will be able to monitor progress constantly on a micro level and achieve unparalleled transparency of your process on the macro level.
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In Summary
The Hoshin Kanri X Matrix is a great tool of the Hoshin Kanri method that allows you to:
- Visualize your long-term strategy and break it down to align goals with actions.
- Put a clear emphasis on the most important initiatives that you need to complete.
- Make transparent the dependencies in your process.
- Bridge Hoshin Kanri to other Lean methods such as Kanban to maximize the effect.
