Most organizations have a strategic plan. Few have a reliable mechanism for translating that plan into coordinated action across teams, departments, and the frontline. The strategic plan lives in a binder or a slide deck. The daily work goes in a different direction. The gap between intention and execution is where transformation efforts quietly stall.
Hoshin kanri is the management system designed to close that gap. The Japanese term translates literally as "management's direction" -- the kanji combining the sense of a compass needle pointing toward a destination with the discipline of managing the path to get there. In English, the term gets translated as strategy deployment or policy deployment. The terminology matters less than the practice. Done well, hoshin kanri creates the connection between executive intent and daily improvement work that lets organizations move in a coordinated direction year after year.
This session is the second in a multi-part series Craig Vercruysse and Joanna Omi of Rona Consulting Group are leading on hoshin kanri. The first session, recorded the previous fall, introduced the framework and walked through its overall structure. This session goes deeper into the first two phases of the hoshin cycle: Scan and Plan. Future installments will cover Do, Check, and Adjust. Together the series provides one of the most thorough treatments of hoshin kanri available in webinar form.
The session is hosted by Mark Graban, then VP of Improvement and Innovation Services at KaiNexus and the author of Lean Hospitals, Healthcare Kaizen, Measures of Success, and The Mistakes That Make Us.
Craig and Joanna open by distilling hoshin kanri into two words: what and how. What is the organization's destination, and how is it going to get there? The simplicity is deliberate. Hoshin kanri can become elaborate -- X matrices, cascading A3s, deployment trees, visual management systems -- but the foundation is the same two-word question every organization needs to answer with clarity.
Hoshin kanri is a means of connecting the macro-level strategic view to the micro-level operational details at the frontline. Connecting and aligning are the two functions Craig emphasizes throughout the session. Aligning is what most organizations claim to do and what few actually accomplish. Connecting is the deeper work -- not just naming the strategic priorities at the top, but ensuring that everyone in the organization understands how their daily work contributes to those priorities.
Craig asks a question worth sitting with: what would it mean for your organization if every single person came to work every day understanding how they contributed to the mission, vision, and strategic targets? The honest answer is that it would mean greater sense of purpose, higher productivity, deeper fulfillment in work, and a different relationship between people and the organization's results. That's the human element of hoshin kanri, and it's why the work is worth the effort. The structures and processes of hoshin exist to unlock that human potential.
In Lean methodology terms, hoshin kanri sits at the roof of the Toyota House. The foundation is 5S and daily management. The structure is built on standard work, value stream improvement, and the various tools of Lean. The roof -- the alignment that connects all of that work to a defined strategic direction -- is hoshin kanri. Without the roof, organizations can have all the daily improvement activity in the world without being sure that the improvement is moving toward what Craig calls true north -- the organization's defined long-term direction.
Hoshin kanri is fundamentally a PDCA cycle, the same way daily management is a PDCA cycle and value stream improvement is a PDCA cycle. The difference is cadence. The problems hoshin addresses are bigger. They take longer to solve. The improvement cycles run over months and years rather than days and weeks. But the underlying thinking -- the scientific method of plan, do, check, adjust -- is identical.
The one addition hoshin makes is a scan phase that precedes plan. The S-PDCA framing -- scan, then plan, then do, then check, then adjust -- recognizes that strategic planning at the organizational level requires understanding the environment before attempting to plan within it. External market forces, competitive dynamics, regulatory changes, internal capability constraints -- these all shape what's possible and what's necessary. Skipping the scan and going directly to planning produces plans that don't survive contact with the real environment.
Joanna's framing on this is sharp: scanning before planning isn't always required, relevant, or possible, but the discipline provides the why for the plan that follows. It sets context. It gives the organization a way to provide consistent messaging that interests and engages people. The scan answers a question that planning alone never can: why is this the right direction for this organization at this moment?
Craig and Joanna are direct that hoshin practice varies enormously by organization. The depth of scan that's appropriate depends on the organization's maturity, the size of the decisions being made, and the resources available for the work.
At one end of the spectrum, they describe organizations that have done hoshin at what they call level zero -- the executive team identifying strategic priorities based on their collective best thinking in the moment, with no formal environmental scan at all. This level of practice has remained productive for organizations for more than a year in some cases. It's not the ideal, but it's also not invalid.
At the other end of the spectrum, scan work can be substantial. Outside planning experts conducting in-depth competitor analyses. Demographic and population health forecasting. Significant time and resource commitments to understanding the external environment in detail.
Most organizations land somewhere in between. The typical scan is a catchball-summarized synthesis of internal subject matter experts and some internally-led research -- more rigorous than shoot-from-the-hip but less elaborate than fully-outsourced strategic consulting. The right depth depends on the stakes of the planning that will follow.
The principle Joanna names matters: scan shouldn't become the end result. Like many things in Lean, the right approach is what she calls harm reduction -- meet the organization where it is, do the scan it's capable of doing in the moment, and continue on to the more important work of setting priorities. An organization that gets stuck perfecting its scan never gets to the planning that the scan was meant to inform.
The scan work gets summarized in what Craig and Joanna call an A3-i, or A3 intelligence report. The format follows the standard A3 discipline -- a single piece of 11x17 paper that forces the entire analysis to fit on one page -- but the content is specifically scan-oriented.
The A3-i has three sections:
Observations of what's happening in the market and internally. This is where the deeper scan tools come in -- whatever traditional strategy frameworks or Lean tools the organization has used to gather information about the external environment and internal capability.
Analysis of the observations. What does the data mean? What patterns emerge? What's actually going on, as distinct from what the organization has been assuming?
Implications for the business. Given the observations and analysis, what does this mean for the organization's strategic options? What does it tell us about where to focus and what to deprioritize?
The A3-i serves two functions. First, it forces the discipline of fitting the scan onto a single page, which prevents the scan from becoming an end in itself. Second, it produces a communication artifact. Pieces of the A3-i can be extracted and used in newsletters, town-hall meetings, leadership communications, and other channels to share the rationale for the strategic direction. Craig is emphatic that this communication work matters: scanning produces the why that the planning needs, and the why has to be communicated for the planning to land.
The best application of the A3-i Craig has seen was at an organization that created the A3-i for use at the board and executive team level, then deliberately took pieces of it and told the story through traditional communication channels throughout the organization. The result was a rally for the why -- a shared understanding across the organization of why the strategic direction was what it was, before the planning work even began.
Craig offers a useful way to organize scan work. Environmental scanning is fundamentally about understanding the supply and demand forces that affect the organization's ability to achieve its vision.
Demand-side scanning looks at the external market. What are customers asking for? What does the competitive intelligence reveal about how the market is moving? In healthcare specifically, the demand-side conversation often centers on cost and reimbursement -- federal regulations, payer dynamics, value-based care arrangements. The demand-side scan answers: what does the world need us to deliver?
Supply-side scanning looks at internal capability. Do we have the skills and expertise we need? Do we need to build new capabilities? Do we need to acquire them? What's the state of our culture, our infrastructure, our financial position, our workforce? The supply-side scan answers: what are we actually capable of delivering?
The strategic question hoshin addresses sits at the intersection of these two scans. Strategy that ignores demand-side reality produces plans for products and services the market doesn't want. Strategy that ignores supply-side reality produces plans the organization can't execute. The scan work brings both sides into view simultaneously so that the planning that follows can address both.
Craig walks through several specific tools that produce the underlying observations and analysis for the A3-i. The toolkit is deliberately eclectic -- traditional strategy frameworks and Lean tools are both relevant depending on the situation.
Traditional strategy tools. Porter analysis, innovation matrices, SWOT, scenario planning, competitive intelligence work -- the standard toolkit of strategy consulting. These have been in use for decades and remain useful for understanding industry dynamics, competitive positioning, and strategic options.
The business model canvas. Craig has used this tool effectively for large service line scans -- perioperative services, for example -- in healthcare settings. The canvas (available at Strategyzer.com) lets organizations dissect down their value proposition, customer segments, channels, customer relationships, key activities, key resources, key partnerships, cost structure, and revenue streams onto a single page. The result is another layer of intelligence that can feed into the A3-i.
Value stream mapping as a scan tool. This is a relatively recent reframing Craig surfaces, and it's worth pulling out. Many organizations don't start their Lean journey with hoshin kanri at all -- they start with a value stream improvement need. They want to fix the emergency department, or improve patient access, or reduce cycle time in a specific clinical or administrative process. When they do value stream mapping to understand the current state, they are in fact doing scan work. The value stream map reveals what the market wants (the takt time the process needs to meet), what the current capabilities are (how the process actually performs), and where the gaps are. That's a scan. The map becomes another input to the A3-i, and the value stream improvement work becomes part of the planning that follows.
The variety of scan tools matters because organizations come to hoshin kanri from different starting points. The right tool depends on what the organization is trying to understand and where it is in its Lean journey. Forcing a single methodology onto all situations is a common failure mode. Picking the right tool for the moment is part of the practice.
Once the scan is complete, the planning work begins. Craig describes the A3 as "the basic contract in Lean" -- the foundational format for documenting any improvement work. The A3 itself is a PDCA cycle in document form: the left side and upper right of the page hold the plan, the middle holds the implementation (do), and the lower right holds the check and adjust phases.
At the strategic level, hoshin planning often involves bundling together several A3s -- a collection of must-do, can't-fail initiatives the organization is committing to in a given planning horizon. The bundling happens through the X matrix, which connects the must-do strategies to the breakthrough activities, the metrics that will track progress, and the people accountable for each.
Craig's caveat about the X matrix is worth surfacing. Some organizations embrace it immediately and use it productively. Other organizations find that the X matrix distracts more than it helps -- the tool becomes the focus instead of the underlying strategic thinking. The right tool depends on the organization. Some organizations should start with the X matrix. Others should start with a simpler bundle of four or five strategic A3s and add the X matrix later if it adds value.
The visual artifact that holds the planning work is typically a strategy deployment tree, often displayed in an obeya room -- a war room or visibility room where the organization's strategic work is laid out on the walls so leaders can see the full picture at once.
Craig references a quote from Tom Jackson, his and Joanna's sensei: hoshin is just as much about structure as it is about strategy. The structure refers to the discipline of problem-solving at each level, the deployment of strategic intent down through the organization, the cascading of A3s from executive to value stream to unit to staff level. Underpinning all of this is what Craig calls a strong project management discipline -- the work of tracking who is doing what, by when, with what resources, to produce what outcome.
Deployment trees can become extraordinarily complex. Multiple levels, dozens of A3s, hundreds of action items. Craig and Joanna are realistic about this: organizations can only absorb so much at any given time. The right deployment for one organization is not the right deployment for another. The depth of cascade -- how far down the organization the strategic priorities are deployed -- depends on the organization's readiness.
Their advice: when starting out, go inch wide and mile deep. Pick a model line. Deploy the hoshin work all the way to the frontline in one part of the organization first, build the muscle there, and then expand. Hoshin is a multi-year proposition. Trying to deploy everywhere at once produces shallow practice that fails to sustain. Deploying deeply in one area produces practice that other areas can adopt and adapt.
Joanna walks through a framework of conditions that affect whether hoshin will land in an organization. The framework isn't a formal readiness assessment -- it's a set of elements that, when present, create what she calls fertile ground for success.
A strong monitoring practice. The ability to bring people together to set targets, then to see whether those targets are being achieved, then to respond with countermeasures and realignment when they're not. The transparency of regular monitoring is foundational.
A high-functioning leadership team. Not much happens in any organization without a leadership team that works as a team, gets rewarded as a team, and can agree on must-do strategies even when individual leaders' direct roles vary. Joanna names this as the most critical condition. Without leadership team alignment, hoshin fails.
An existing strategic plan. Hoshin doesn't replace broad-based strategic planning. It provides the pathway for executing the priorities the strategic plan defines. Organizations that try to do hoshin without an underlying strategic plan often discover they're trying to invent their long-term direction and execute it simultaneously, which rarely works well.
A culture of accountability. The word accountability has become loaded in many organizations -- code for blame, or a euphemism for punishment. Joanna's framing comes back to this in the Q&A. Real accountability in a Lean organization means people are expected to challenge each other -- challenging up is a positive force -- and that failure to achieve a target doesn't disqualify someone from being challenged again. Three of the five values in the Toyota House (challenge, team, respect) shape what accountability means in a Lean organization.
Decision-making discipline. Crisp decisions. Standards for who decides what and when. The ability to make decisions on the cadence that hoshin requires. Many organizations are so siloed and so consensus-driven that decisions take months when they should take days.
Visual management. Hoshin without visual management is not really hoshin. The visibility of the strategic priorities, the metrics, the progress, the obstacles -- all of this needs to be visible for the practice to function.
Planning and execution muscles. The deeper the organization's Lean experience, the easier hoshin becomes. Organizations that have been practicing daily management, value stream improvement, and PDCA at the team level for years bring those muscles to hoshin work. Organizations starting from scratch will struggle more with the practice, not because hoshin is harder than other Lean work but because it depends on all the other muscles being in place.
Joanna's honest framing: she isn't sure she knows of an organization that has all of these elements firing on all cylinders at all times. The framework isn't a checklist that must be fully satisfied before starting. It's a diagnostic of what conditions are strong and what conditions need work. The work of preparing for hoshin is often the work of strengthening these conditions one at a time.
The mechanism that makes hoshin alignment real, rather than top-down dictation, is catchball. The metaphor is literal: senior leaders propose strategic priorities, the next level catches them and responds with what they can contribute, what resources they need, and what constraints they see, then throws the ball back. The conversation continues until there's genuine alignment.
Catchball isn't a formality. It's what distinguishes hoshin kanri from traditional strategic planning. In traditional planning, leaders set targets and pass them down for execution. In hoshin, leaders propose targets and engage in structured dialogue with the people who will execute them, adjusting both the targets and the deployment based on what those people contribute. The result is targets that are both ambitious and achievable, with people across the organization having had genuine input into the work they'll be doing.
The visible cascade Joanna describes -- executive vision in one A3, value-stream-level vision in another, manager-level A3s, staff-level A3s -- is built through catchball at each level. A senior leader's A3 doesn't get translated mechanically into a value stream A3. The value stream leader catches the senior A3, responds with what they believe they can contribute, identifies what resources they need, and proposes how the priority will manifest at their level. The negotiation continues until alignment is genuine.
Joanna introduces nemawashi as the complement to catchball. The Japanese term comes from gardening: before transplanting a plant, each root is examined individually, tended to, and prepared for the move. During the transport and the actual replanting, the roots that were tended are what allow the plant to survive in its new location.
In hoshin practice, nemawashi is the work of preparing the organization for the strategic direction before formally launching it. Engaging with stakeholders. Surfacing concerns. Building shared understanding. Ensuring that the people who will be affected by the strategy have had genuine input into shaping it. The result is a strategy that survives the transplant -- that takes root in the organization rather than withering when it meets the resistance of the real environment.
Nemawashi is continuous. It's not a one-time event before launching the annual hoshin cycle. In larger organizations especially, the practice of obtaining input from everyone affected by the strategy has to be ongoing. Daily improvements, ideas generated by frontline workers, problems being solved at the team level -- all of this is part of the broader nemawashi that keeps the strategic direction connected to the reality of the work.
The size of the organization shapes how nemawashi happens. In smaller organizations, catchball can flow all the way through every level of management as the must-do priorities are identified and the feedback rolls back up. In larger organizations, nemawashi takes a different form -- often through visual management, daily huddles, and the continuous communication infrastructure that keeps everyone connected to the strategic priorities even when direct catchball with the executive team isn't possible for every employee.
Joanna walks through a concrete illustration that shows how the cascade works in practice. The example is a healthcare system, but the structure applies generally.
The executive-level A3 captures the organization's vision for what it's trying to achieve at the highest level. Below that, a value stream-level A3 -- in this case, the emergency department -- shows how the executive vision translates into a more granular direction for a specific operational area. Below that, a unit-level A3 might focus on triage in urgent care, or on discharges to outside care, or on another sub-component of the broader value stream. Below that, a staff-level A3 holds the specific improvements being tested by the people doing the work -- can we eliminate triage in urgent care, can we ensure that anyone needing point-of-care testing gets it within the first 15 minutes of arrival, and so on.
The cascade flows down through these A3s, with each level translating the level above into more specific work. The roll-up happens through visual management and tiered metrics derived from each level of A3. The whole structure operates as a giant PDCA cycle, with the strategic priorities at the top connected to the daily improvement experiments at the bottom and the learning flowing back up to inform the next cycle.
The NASA janitor story Joanna references applies here: the janitor at NASA who, when asked what his job was, answered "I helped put a man on the moon." That's the kind of alignment hoshin kanri is trying to produce. The frontline worker who, when asked what they do, can connect their daily work to the organization's strategic purpose. The cascade through A3s is the infrastructure that makes this connection real rather than aspirational.
The connection between Craig and Joanna's framework and the KaiNexus platform is unusually direct because Craig spends time in the session explicitly discussing how the platform supports hoshin work.
The scan card visualization Craig references is one specific feature. The platform can hold the observations, analysis, and implications that an A3-i would contain, with the supporting scan tools and data attached. The scan work doesn't have to live as a single static document -- it can be structured as a set of connected cards that capture the components and can be updated as new intelligence emerges.
The cascade Joanna describes -- executive A3s, value stream A3s, unit A3s, staff A3s -- maps directly onto the platform's strategy execution structure. Each level of A3 can live as a separate but linked piece of work in the platform, with the cascade visible and the rollup of metrics automatic.
The X matrix that Craig discusses as the strategic-level bundle of must-do initiatives is supported in the platform's strategy execution features. For organizations ready to use the X matrix, the platform can hold it. For organizations that aren't ready, the same platform can hold a simpler bundle of strategic A3s without the X matrix overhead.
The strategy deployment tree -- the visual artifact that traditionally lives in an obeya room on physical walls -- can live in the platform as a visualization that's accessible to leaders across distributed locations. Craig is explicit that the traditional obeya room is becoming harder to maintain in many organizations because work is distributed, leaders are remote, and physical visibility rooms in one location don't serve people who aren't in that location. Virtual tools for hoshin visualization are increasingly important, and Craig directly references the platform's capabilities here.
The visual management infrastructure that Joanna names as a condition for hoshin success -- the visibility of priorities, metrics, progress, and obstacles -- is what the platform's dashboards and reporting features are built for. Without this infrastructure, hoshin practice depends on people remembering to look at static documents. With it, the strategic work is visible continuously, by default, to anyone who needs to see it.
None of this substitutes for the practice Craig and Joanna describe. The catchball conversations, the nemawashi work, the leadership behaviors that hold the system together -- these are organizational practices that no platform performs. The platform provides infrastructure on which the practice operates. The practice is what produces the alignment.
Craig Vercruysse is a Consulting Partner at Rona Consulting Group, the Lean practice of Moss Adams. He is a 20+ year leader across multiple industries and functional areas including operations, information technology, and sales and marketing. He served as a regional healthcare system executive for Sutter Health in COO and CIO roles, contributing to several awards and consistently high dashboard performance. He also served as Chief Process Officer at Sutter Health, where he pioneered the development of a Lean management system. He has deep knowledge of IT and electronic health record systems integration in conjunction with Lean management. Craig's educational background focused on systems theory grounded in organizational and interpersonal communication, capped with an MBA.
Joanna Omi is a Consulting Director at Rona Consulting Group, the Lean practice of Moss Adams. She held senior roles in the public hospital system and the Mayor's Office in New York City, as well as in community-based organizations in the San Francisco Bay Area. As an SVP and AVP at New York City Health+Hospitals, Joanna led efforts to implement a Lean operating system, redesign and rebuild multiple campuses, improve access to ambulatory care, and secure funding for new programs. She has built consensus among diverse internal and external stakeholders, developed training programs, and encouraged innovative approaches to emerging healthcare needs related to primary care, the emergency department, HIV/AIDS, and managed care. Joanna was an editor and contributing writer to Lean in Behavioral Health (2014).
What is hoshin kanri?
A management system for connecting strategic intent to daily improvement work. The Japanese term translates literally as "management's direction" -- the kanji combining the sense of a compass needle pointing toward a destination with the discipline of managing the path to get there. In English, the term is also translated as strategy deployment or policy deployment. The terminology matters less than the practice. Hoshin kanri is fundamentally a PDCA cycle at a longer cadence than daily management or value stream improvement, with a scan phase added in front to ensure that planning happens with an understanding of the environment. Done well, hoshin creates alignment across the organization so that everyone's work connects to the strategic direction.
Why does scan come before plan in hoshin practice?
Because strategic planning that ignores the environment produces plans that don't survive contact with reality. The scan phase forces an understanding of external market forces, competitive dynamics, regulatory changes, and internal capability constraints before the planning work begins. The scan provides the why for the plan that follows. Without it, plans tend to reflect the organization's internal assumptions rather than the actual conditions in which the strategy will have to operate.
What is an A3-i?
An intelligence report in A3 format -- a single 11x17 page that captures the scan work in three sections. Observations of what's happening in the market and internally. Analysis of what those observations mean. Implications for the business strategy. The format forces the entire scan synthesis onto a single page, which prevents the scan from becoming an end in itself. The A3-i also serves as a communication artifact -- pieces of it can be extracted and shared through newsletters, town halls, and other channels to build organization-wide understanding of why the strategic direction is what it is.
What is catchball?
The structured back-and-forth dialogue between organizational levels that produces genuine alignment on strategic priorities. Senior leaders propose targets, the next level catches them and responds with what they can contribute and what they need, leaders adjust based on the response, and the ball goes back. The conversation continues until alignment is real rather than imposed. Catchball is what distinguishes hoshin kanri from traditional top-down strategic planning. The result is targets that are both ambitious and achievable, with the people who will execute them having had genuine input into shaping the work.
What is nemawashi?
The Japanese gardening metaphor for preparing roots before transplanting a plant -- examining each root individually, tending to it, and ensuring it's ready for the move. In hoshin practice, nemawashi is the work of preparing the organization for a strategic direction before formally launching it. Engaging stakeholders, surfacing concerns, building shared understanding. The practice is continuous, not a one-time event before annual planning. It's particularly important in larger organizations where direct catchball with the executive team isn't possible for every employee.
What is the X matrix and when should an organization use it?
The X matrix is a visual tool that connects must-do strategic initiatives to the breakthrough activities required to achieve them, the metrics that will track progress, and the people accountable for each. It's a standard tool in hoshin practice, but Craig and Joanna are explicit that not every organization should start with it. Some organizations adopt the X matrix immediately and use it productively. Others find that the tool becomes a distraction -- the work of completing the X matrix overshadows the underlying strategic thinking. The right approach depends on the organization's readiness and culture. Organizations that aren't ready for the X matrix can start with a simpler bundle of strategic A3s and add the X matrix later if it adds value.
What are the conditions that make hoshin work?
Joanna identifies several. A strong monitoring practice. A high-functioning leadership team that works and is rewarded as a team. An existing strategic plan that hoshin can deploy. A culture of accountability that doesn't conflate accountability with blame. Decision-making discipline. Visual management infrastructure. Lean experience that has built the daily management and improvement muscles hoshin depends on. No organization has all of these elements firing perfectly at all times. The framework is a diagnostic of what's strong and what needs strengthening, not a checklist that must be fully satisfied before starting.
Who should start the conversation about hoshin in an organization?
It can start anywhere. Craig and Joanna describe organizations where hoshin started at the C-suite and board level, organizations where it started with a VP who had significant span of control and recognized that the improvement work wasn't connected to a strategic rudder, and organizations where it started in a single hospital within a larger health system. The New York City public hospital system example Joanna describes is striking: hoshin started in one of the eleven acute care hospitals, the visibility that hospital's hoshin work received prompted the corporate-wide system to adopt the practice, and the cascade rolled upward rather than downward. Hoshin is both top-down and bottom-up.
How is accountability different in a Lean organization?
The word accountability has become loaded in many organizations -- often used as code for blame. In a Lean organization built on the Toyota Production System, accountability is shaped by the underlying values of challenge, team, and respect. People are expected to challenge each other, and challenging up is a positive force rather than a violation of hierarchy. Failure to achieve a target doesn't disqualify someone from being challenged again. The CEO's tone matters. When the senior leader models accountability as a shared discipline of rowing the boat together rather than as a tool for punishment, the rest of the organization can engage with it productively.
How long does it take to build a hoshin practice?
A multi-year proposition. Craig and Joanna are direct that hoshin can't be deployed completely in a single year. The right approach is to start with what the organization can manage with confidence, then go deeper and wider in subsequent iterations. Their phrase for the right initial scope is "inch wide, mile deep" -- pick a model line or a single area of the organization, deploy hoshin all the way to the frontline there, build the muscle, then expand. Trying to deploy hoshin everywhere at once produces shallow practice that fails to sustain.
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